IF'' 'sm^ vi H.GX04 i^tatc djolbge of AgricuUutc J^t (Jarnell IniBetBitH ffitbracg Cornell University Library HG2041.A6 Agricultural cooperation and rural credi 3 1924 014 053 791 <\ '^, Cornell University Library The original of this book is in the Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924014053791 63d Conqebibs 1 QTT,Tj A rrr. j Document IttSeasim / SEJ^ATE ^ ^^ 214 AGRICULTURAL COOPERATION AND RURAL CREDIT IN EUROPE INFORMATION AND EVIDENCE SECURED BY THE AMERICAIl COMMISSION, CONSISTING OF DELEGATES FROM DIFFERENT STATES IN THE UNITED STATES AND DIFFERENT PROVINCES OF CANADA, ASSEMBLED FOR THE PURPOSE OFJN- VESTIGATING IN EUROPEAN COUNTRIES COOPERATIVE AGRICUL- TURAL FINANCE. PRODUCTION. DISTRIBUTION. AND RURAL LIFE; AND THE UMTEDJJATES COMMISSION, APEOmTED, BY PRE5IDENT_WJLS0N ^TO COOPERATE WITH THE AMERICAN COMMISSION ASSEMBLED UN^R THE. AUSPICES OE^THE SOUTHERN "COMMERCIAL CONGRESS TO INVESTIGATE AND STLDY IN EUROPEAN COUNTRIES COOP- . ERATIVE LAND-MORTGAGE BANKS. CcfoPERATIVE RURAL CREDIT UNIONS. AND SIMILAR' ORGANIZATIONS AND INSTITUTIONS DEVOTING THEIR ATTENTION TO THE PROMOTION OF AGRICULTURE AND THE BETTERMENT OF RURAL CONDITIONS" (H. R. 28283. APPROVED MARCH 4, 1913) WASHINGTON GOVERNMENT PRINTING OFFICE 1913 63d CoNOREsa \ ct-,,.-, . T,!-, ( Document 1st Session f SJiNAlJi j jf^ 214 AGRICULTURAL COOPERATION AND RURAL CREDIT IN EUROPE INFORMATION AND EVIDENCE SECURED BY THE ^ERICAN COMMISSION, CONSISTING OF DELEGATES FROM DIFFERENT STATES IN THE UNITED STATES AND DIFFERENT PROVINCES OF CANADA, ASSEMBLED FOR THE PURPOSE OF IN- VESTIGATING IN EUROPEAN COUNTRIES COOPERATIVE AGRICUL- TURAL FINANCE, PRODUCTION. DISTRIBUTION. AND RURAL LIFE; AND THE UNITED STATES COMMISSION, APPOINTED BY PRESIDENT WILSON "TO COOPERATE WITH THE AMERICAN COMMISSION ASSEMBLED UNDER THE AUSPICES OF THE SOUTHERN COMMERCIAL CONGRESS TO INVESTIGATE AND STUDY IN EUROPEAN COUNTRIES COOP- ERATIVE LAND-MORTGAGE BANKS, COOPERATIVE RURAL CREDIT UNIONS, AND SIMILAR ORGANIZATIONS AND INSTITUTIONS DEVOTING THEIR ATTENTION TO THE PROMOTION OF AGRICULTURE AND THE BETTERMENT OF RURAL CONDITIONS" (H. R. 28283, APPROVED MARCH 4. 1913) WASHINGTON GOVERNMENT PRINTING OFHCE 1913 A-G , f'^^o RESOLUTION BY MR. FLETCHER. In the Senate of the United States, Odoler 20, 1913. Resolved, That there be printed as a public document the evidence secured by The American Commission in cooperation with the United States Commission on their inquiry into the agricultural credit and cooperative systems of European countries, made between April 26 and July 26, 1913, including special reports of sub- committees, statements and addresses pertaining to the subjects, submitted to the commissions, or either of them, all printed matter prepared for the commissions, or either of them, a bibliography of any literature used as material for the reports of said commissions, translations of laws and statutes under which the various institu- tions studied operate in the different countries, translations of constitutions, by-laws, rules and regulations, and business forms of institutions investigated, special statistical data showing the extent to which each system or set of institutions is found to exist in each country, and other material bearing on the work of the commissions. Attest: James M. Baker, Secretary. In the Senate of the United States, November 20, 1913. Ordered, That the maps accompanying the manuscript of Senate Document No. 214, Sixty-third Congress, entitled "Information and Evidence on Agricultural Cooperation and Rural Credit in Europe," shall be priated therewith. Attest: James M. Bakee, Secretary. ORGANIZATION OF THE COMMISSIONS. THE UNITED STATES COMMISSION. Duncan U. Fletchbe, Florida, Chairman. Thomas P. Gore, Oklahoma. Kenyon L. Butteefibld, Massachusetts. Ralph W. Moss, Indiana. Ciarence J. Owens, Maryland. Harvie Jordan, Georgia. John Lee Coitlteb, Minnesota, Secretary. THE AMERICAN COMMISSION. EXECUTIVE OFFICERS. Duncan U. Fletcher, Florida, Chairman. Kenyon L. Butterfield, Massachusetts, Vice Chairman. Thomas S. Southgate, Virginia, Vice Chairman. Harris Weinstock, California, Vice Chairman. S. A. Lindsey, Texas, Vice Chairman. California : Harris Weinstock. E. J. Wickson. Connectictjt: Edward Chapman. Colorado: Gordon Jones. A^ ' -' Florida: Duncan XT. Fletcher. John G. Huge. F. J. H. von Engelken. Georgia: C. W. Hillhouse. Harvie Jordan. Illinois : George W. Woodruff. Indiana: Ralph W. Moss. Massachusetts: Kenyon L. Butterfield. J. Lewis Ellsworth. Charlotte Barrell Ware. Maryland: Clarence J. Owens. Michigan : William B. Hatch. Minnesota: James C. Caldwell. John Lee Coulter. Mississippi: Thomas J. Brooks. Alberta: Alwyn Bramley-Moore. Henry Marshall Tory. Clarence J. Owens, Maryland, Director General. Harvie Jordan, Georgia, Secretary Treasurer. members by states. Missouri: Garland B. Miller. Nevada : J. E. Stubbs. l; New York: Frederick H. Allen. Albert B. Roberts. R. B. Van Cortlandt. North Carolina: E. L. Daughtridge. John Sprunt Hill. A. E. Tate. Ohio: William M. Brown. John Cunningham. Marshall E. Thrailkill. Oklahoma: Thomas P. Gore. Oregon: Hector MacPherson. H. G. Starkweather. Pennsylvania : Robert L. Munce. James G. McSparran. South Carolina: T. B. Thackston. E. F. Woodside. R. I. Woodside. MEMBERS BY CANADIAN PROVINCES. Ontario: Charles F. Bailey. Lionel Smith-Gordon. Nova Scotia: Arthurs. Barnstead. Tennessee: Lilian W. Johnson. H. A. Morgan. Ernestine Noa. James Allen Smith. Mary Temple. Texas: Charles B. Austin. W. W. Dexter, c' S. A. Lindsey. Clarence Ousley. J. S. Williams. Francis W. Wozencraft. Utah: Robt. J. Glendinning. Vermont: Charles Otis Gill. Virginia: R. W. Dickenson. LeRoy Hodges. Thomas S. Southgate. Washington: Clark G. Black. Ralph Metcalf. Sarah S. McMillan. West Virginia: Joseph F. Marsh. Wisconsin : Porter L. A. Ferguson. District op Columbia: Milton V. Richards. Saskatchewan: John H. Haslam. Edmund Henry Oliver. CONTENTS. Page. Organization of the Commissions 3 Map Showing Countries and Places Visited by the Commissions 4 Introduction yj Information and Evidence 19 ITALY. Rome, May 12-15: Hon. Luigi Luzzatti 21 Address 21 Questions 22 Land Mortgage Institutions, special statement by the Minister of Agriculture ^ 24 Cooperative Insurance, by Com. Enea Cavalieri 25 Statement 25 Questions 25 Rural Banks, address by Hon. Leone Wollemborg, ex-Minister of tlie Treasury 25 Italian Rural Life, address by Mr. Roggi, secretary general of tlie Italian Society of Agriculturists 27 Land Reclamation in the Roman Campagna, statement by Prince Boncompagni 27 Agrarian Credit Institute of Latium, statement by Mr. G. Venti, director 28 Cooperative Dairying, by Dr. Casalini 29 Statement 29 Questions 29 Cooperative Insurance, by Dr. Casalini 3O Statement 30 Questions 31 Agricultural Cooperative Associations, by Mr. Cannello 32 Statement 32 Questions 33 Naples, May 14: Agricultural Cooperation, statement by Prof. Bordiga, of the Royal High School of Agriculture and-Rural Economics. . 33 Italian Banking System, by Mr. MiragUa, director general of the Bank of Naples 34 Statement 34 Questions 34 Cooperative Associations for Distribution and Production, by Mr. Azimonte, representative of the Federation 34 Statement 34 Questions 35 Land Credit, by Prof. Graziani, professor of political economy in the University of Naples 35 Statement 35 Questions 35 Palermo, Sicily, May 15: Rural Credit in Sicily, by the manager of the Bank of Sicily 37 Statement 37 Questions 38 Florence, May 15: Florence Savir^s Banks, statement by Com. MartelU, director 41 Institute of Cooperative Credit, statement by Mr. Forti, codirector 42 Monte Dei Paschi Credit Institute, by Mr. Ciabatti, director 42 Statement 42 Questions 42 Land Tenure Systems iu Tuscany, statement by Prof. Delia Volta, vice president of the Royal Academy of the Patrons of Agriculture 43 Extension Schools of Agriculture, statement by Prof. Cori Montanelli 43 Metayer System in Tuscany, Prof. Ferrari, director of the Agricultural Associations and Mutual Insurance Association Against Accidents 43 Statement 43 Questions ^ Agricultural Association of Florence, statement of Prof. Ferrari 45 Cooperative Insurance, by Prof. Ferrari 45 Statement ^° Questions 5 6 AGEIOTTLTXTEAL COOPEBATION IN EUROPE. Information and Evidence — Continued, Milan, May 16-17: Page. Agricultural Cooperation in Lombardy, statement by Prof. Alpe - 46 People's Banks and Rural Credit, by Prof. Sitta 47 Statement 47 Questions 48 Agricultural Conditions in Lombardy, by Prof. So'resi, traveling professor of agriculture 49 Statement '. 49 Questions 50 Collective Leases and Cooperative Farming, by Prof. Samoggia 50 Statement 50 Questions. . 51 Federation of Rural Cooperative Societies in Lombardy, statement by Mr. Bussola 51 "Agricultural Family " of Cornaredo, statement by ilarquis Punti 52 Constitution and By-Laws of the Cooperative Store 53 Agricultural High School at Milan, report of a subcommittee 53 PiACENZA, May 18: People's Bank of Piacenza, by the president 54 Statement 54 Questions 54 Savings Bank of Piacenza, by the president "55 Statement 55 Questions 55 Cooperative Oil-Cake Factory at Piacenza, evidence of the manager 56 Bologna, May 18: Savings Bank of Bologna, evidence of the president and officers 57 Rural Banks in the Province of Bologna, report of a .^inbcommittee 58 Small Credit Bank of the District of the Romagna, report of a subcommittee 59 Altedo (near Bologna'), May 16: Cooperative Farm of Altedo, report of a subcommittee 61 Questions 61 Rice Cultivation at Altedo, evidence of the manager of the cooperative farm 62 Reggio-Emilia, May 17: People's Banks of Reggio-Emilia, evidence of Jlr. Acquaticci, manager 63 Catholic Rural Bank of Villa Canali, report of a subcommittee 65 Constitution of the Rural Bank for Deposits and Loans in Villa Canali 65 Blank Forms Used by the Bank 67 Albegnasego (near Padua), May 18: Rural Bank of Albegnasego, report of a STibcommittee 70 ViGONOvo (near Padua), May 18: Rural Bank of Yigonovo, report of a subcommittee 71 Constitution of the Bank 72 Form of Annual Financial Statement 74 Regulations Governing Annual Financial Statement 74 Blank Forms Used by the Bank yg Cremona, May 16: Agricultural Cooperative Society of Cremona, evidence of Dr. Liiigi Fornaciari, director 79 SoKESiNA (near Chemona), May'17: Cooperative Dairy at Soresina, by the director gO Statement on Questions oi Bergamo, May 18: Little Credit Society of Bergamo, statement by the director 03 Cooperative Bank at Bergamo, by the director 04 Statement g< Questions g^ Agricultural Society of Bergamo, statement by the president g4 Humanitarian Society of Bergamo, by Mr. Valli, president 04 Statement o . Questions „, Agricultural Conditions in Central and Western Italy, report of a subcommittee ge Agricultural Credit and Cooperation in Italy, statement by International Institute of Agriculture on I. Agricultural and Land Credit in Italy „« II. Cooperative Purchase Societies no III. Cooperative Production Societies „„ IV, Collective Farms ,„„ V. Mutual Insurance Societies , , ~„ VI. National League of Cooperative Societies -tr^ Fonn of By-Laws Cooperative Riu-al Banks with Unlimited Liability -.qj CONTENTS. EGYPT. Information and Evidence — Continued. Alexandbia: Page. Production and Marketing of Egyptian Cotton, report of a subcommittee 109 ROUMANIA. Cooperative Movement in Roumania, special statement submitter' to the commissions by Mr. Pobin Eneaco, director general of Roumanian Popular Banks 117 HUNGARY. Budapest, May 23-24: Riiral Credit and Cooperation in Hungary, statement by the Royal Hungarian Department of Agriculture 121 Introduction 121 Agricultural Credit System 129 Farmers' Cooperative Associations 145 Distributive Cooperative Societies 148 Hungarian Land Credit Institution, by Count Hoyos, director 155 Statement 155 Questions 156 National Small Holdings Land Mortgage Institute, by Mr. Kalman Imredy 159 Statement 159 Questions ^ 159 Evidence, of Mr. Coloman de Szill, vice president 159 Statistics for 1912 162 Cooperative Production in Hungary, by Mr. Ambrus Seidl 163 Statement 163 Questions 163 Agricultm:al Banking, evidence of Baron Koranyi, director general of the Central Cooperative Credit Bank 164 Condition of Small Tenants in Hungary, by Mr. Odon Miklos : 165 Statement 165 Questions '. 165 Hungarian Parndng, evidence of officials of the Department of Agriculture •. . . . 166 Higher Agricultural Education in Hungary, by Robert Dubravszky, councillor 166 Statement 166 Questions 168 Raiffeisen Bank at Monor, report of a subcommittee 169 Cooperative Distributive Societies, by Dr. Julius Hayden, secretary of the Hangya 171 Statement 171 Questions 173 ToTMBGTER, May 24: Cooperative Village of Totmegyer, statement submitted to the commissions 174 AUSTRIA. Vienna, May 27-31: Certain Aspects of Cooperative Agiiculture in Austria, statement by the Austrian Ministry of Agriculture 177 Real Property in Austria 177 Organization of Agricultural Land Credit — 179 Cooperative Organization 181 Legislation i 186 Disposal of Live Stock 187 Provincial Mortgage Institution of Lower Austria 188 Administration of the Imperial and Royal Agricultural Society of Vienna 190 Vienna Dairy - - 191 Obligatory Live-stock and Meat Foundations 191 Imperial and Royal High School for Agriculture 192 Rural Credit and Cooperation, evidence of Baron Fuher von Mainendorf 194 Provincial Mortgage Institute of Lower Austria, by Friedrich Redl, director 197 Statement ^97 Questions ^^^ Land Registry, report of a subcommittee 201 Government Measures for Protection of Agriculture, by Mr. von SchuUern von Schrattenhofen 201 Statement ^"^ Questions 202 Imperial and Ro> al Agricultural Society of Vienna, by Prof. Hausler, secretary general 203 Statement ^^^ Questions ^^ Vienna Central Cattie Market, report of a subcommittee 207 Raiffensen System in Austria, evidence of Dr. M. R. von Erve, of the Ministry of Agriculture 209 Raiffeisen Bank of Krems, report of a subcommittee 211 Statement of the President 212 Evidence of Officials Krems Agricultural District Society, report of a subcommittee 214 8 AGEICULTUEAL COOPEEATION IN EUBOPE. Information and Evidence -Continued. Prague, May 27: Page. Organization of Rural Credit in Boliemia, address by Dr. Emil Roos, councillor of the Provincial Diet 214 Agricultural Mortgage Credit in Bohemia, by Dr. Hugo Miiller, assistant secretary of the Mortgage Bank of the Kingdom of Bohemia _. 217 Statement 217 Questions 218 Agricultural Cooperation and Government Aid in Austria, by Dr. Moritz Weden, attorney at law 219 Address 219 Questions 221 Bohemian Raiffeieen Bank of Stransnice, report of a subcommittee 222 German Central Association of Cooperative Agricultural Societies in Bohemia, report of a subcommittee 224 Ry-Laws of P'rancis Joseph Credit Institution at Prague '. 226 RUSSIA. St. Pbteksbueg, May 26-27: Agricultural Credit, evidence of officials of the Treasury Department 233 Russian Agriculture, by Mr. V. E. Bruiist of the Department of Agriculture 234 Statement 234 Questions 234 General Demographic and Economic Statistics 234 Agricultural Cooperation in Russia 236 Nikolskoe-Teoizkoe, May 28: Cooperative Institutions at Nikolskoe-Troizkoe, evidence of the officials 249 Cooperative Loan Association 249 Cooperative Butter and Cheese Factory 251 Local Cooperative Store 251 Kharkoff, May 28 : Kharkoff, Kiev, and Neighboring Districts, report of a subcommittee 251 Kharkoff Agricultural Society 251 Credit Institutions Around Kharkoff 253 Private Land-Mortgage Systems 255 Peasants Land-Mortgage Bank 255 Nobility Land-Mortgage Bank 256 Volschansk, May 29: County Bank and Store at Volschansk 256 Kiev, May 30: Agricultural Society at Kiev 257 Kiev Branch of the State Bank 257 Moscow, May 29-30: Peoples Cooperative Bank of Moscow, evidence of the officials 258 Central Union of Distributive Societies, statement by the officials •. 259 Imperial Bank of Moscow, evidence of the officials 259 Rural Credit Bank of the District of Moscow, evidence of the officials 260 Zemstvo of Moscow, evidence of the officials 260 A Credit Association Near Moscow, evidence of the officials: 261 GERMANY. Munich, June 2-3: Agriculture and Land Credit in Bavaria, address of Baron von Cetto-Reichertshausen, president of the Bavarian Council of Agriculture 267 Development of German Agriculture, address of Dr. Nikola Kaumanns, sometime German imperial special commissioner of agriculture to the United States 269 ( 'ooperation in Bavaria, by Baron von Herman-Schorn, formerly agricultural expert of the German Embajisy at Washington . 270 Address ; 270 Questions 271 Bavarian Central Cooperative Bank, by Baron Riederer von Paar zu Schonau 273 Address 273 Questions 274 Mortgage Credit in Bavaria, statement liy Dr. A. Schlesinger, United States vice consul and deputy consul general at Munich 276 Cooperative Production, Distribution, and Rural Life in Bavaria, evidence of officials of the Bavarian Central Bank and of the National Union 277 Crop and Live-Stock Insurance in Bavaria, by Dr. von Englert 279 Address 279 Questions 280 Royal Land Improvement Institute of Bavaria 281 I. Prof. Dr. Spoettle, imperial councillor 281 Statement : 281 Questions 281 II. Dr. Brand, imperial councillor 282 Statement 282 Questions — 284 CONTENTS, 9 Information and Evidence— Continued. Munich, June 2-3— Continued. Page. Bavarian Savings Banks, by Count Spretti, superior councillor 284 Address 284 Questions 287 Agricultural Organization and Rural Life in Bavaria, evidence of Prof. Kraus 288 Rotation of Crops for Land Improvement in Bavaria, evidence of Prof. Dr. Spoettle 289 Stuttgart, June 4-5: Rural Cooperative System in Wurttemberg, by superior councillor Baier, president of the Association of Rural Cooperative Societies in Wurttemberg 290 Address 290 Questions 297 Credit Union of Wurttemberg, address of Mr. von Seitz, managing director 300 Strassburg, June 6-8: Agricultural Credit in the Grand Duchy of Baden, by Mr. Robert Haecker, councillor and managing director of the Fed- eration of Agricultural Credit Associations at Freiburg 302 Address 302 Questions : 306 Schulze-Delitzsch Federation of Baden, evidence of Mr. Rudolf Haendel 307 Central Association of Agricultural Societies of Alsace-Lorraine, evidence of the manager 311 By-Laws of the Association 312 Agricilltural Organizations in Alsace-Lorraine, statement submitted by Mr. MUo A. Jewett, United States consul at Kehl.. 314 DossBNHBni, June 9: Raifteisen Bank at Dossenheim, report of a subcommittee 319 Heidelberg, June 10: German Agricultural Organization, evidence of Mr. William C. Teichmann, United States consul at Mannheim 320 Mannheim, June 10: Land Mortgage Bank of the Rhine, statement by Mr. Wolf 322 Frankfort, June 10: Imperial Federation German Agricultural Cooperative Societies at Darmstadt, statement submitted to the commissions. . . 323 Cooperative Organization, address of Dr. Grabein, General Secretary, Imperial Union of German Agricultural Cooperative Associations 327 Nassau Union of Raiffeisen Rural Cooperative Societies, by Mr. Eyermann, director 329 Address 329 Questions 333 Wiesbaden, June 10: Nassau Mortgage and Savings Bank, by Mr. Reusch, councillor 337 Statement 337 Questions » 338 Schulze-Delitzsch Bank at Wiesbaden, report of a subcommittee • 342 Geisenhbim, June 11: Geisenheim Horticultural School, by Dr. Woertmann, director 343 Statement 343 Questions 343 Neuwied, June 12: Frederick William Raiffeisen, address by Hon. David Lubin, delegate of the United States to the International Institute of Agriculture'. Bonn, June 13: Agriculture and Cooperation in the Rhine Province, report of a subcommittee •. 344 Hannheim, June 13: German Banking, evidence of Dr. Paul Landenburg, of the Joint Stock Discount Bank 348 DiESKAU, June 14: Rural School at Dieskau, evidence of Mr. Tunze, principal 349 Halle, June 15-18: Cooperative Steam Dairy of Stennowitz, evidence of Mr. Schulze, manager 351 Agricultural Savings and Loan Bank of Niemberg, report of a subcommittee 352 Questions ■ 353 Landschaft System, by Dr. Brodnitz, professor of political economy in the University of Halle 354 Address 354 Questions 355 Relations of the Government With the Landschaften, evidence of Prof. Steinbruck 363 Landschaft of the Province of Saxony, statement by Baron von Gutstadt, director 363 Landschaft Bank of Halle, by the director 364 Statement 364 Questions 365 Chamber of Agriculture at Halle, by Dr. Landers, of the Chamber 367 Statement 367 Questions ^^^ ■ This address is not included in this volume, as it is printed separately as S. Doc. No. 114, 63d Cong., 1st sess. 10 AGEICTJLTTJBAL COOPEBATION IN ETJEOPB. Information and Evidence — Continued. Halle, June 15-18 — Contmued. Paee. Organization of the Chamber of Agriculture, statement translated from the German by Mr. Goede 370 Agricultural Associations of Saxony, by Dr. Raabe 372 Statement 372 Questions 372 Agricultural Education in the German Empire, address of Dr. Wohltmano, president of the Agricultural Institute of the University of Halle 373 Trading Society of the Cooperative Union of Saxony, report of a subcommittee 375 Organization and Operation of the Ivocal Rural Bank at Ritzan, evidence of the officials 375 Berlin, June 18-22: Agricultural Central Loan Bank of Germany, report of a subcommittee 377 Statement 377 Questions 379 Organization of the Prussian Landschaften and Public Life Insurance, address by Dr. Kapp-Konigsberg, general director . 381 Mortgage and Other Cooperative Banks, address of Dr. M. Augsbin - 390 Raiffeisen Bank at Ragon, report of a subcommittee 394 Raiffeisen Bank at Bornim, report of a subcommittee 395 Organization of Agriculture in Germany, by Dr. Dade, secretary general, German Council of Agriculture 399 Statement 399 Questions 399 Organization for Credit, Distribution, Supply, and United Action on Raiffeisen Principles, address by Mr. A. Buchrucker, general secretary. General Union of Rural Cooperative Societies of Germany 400 Prussian Central Land Credit Joint Stock Company, by Herr Wegener, director 404 Statement 404 Questions 407 Operations Prussian Central Land Credit Company, evidence of Herr Schwarz, director 408 Manorial Land Mortgage Bank of Kur and Neuwark, by Herr von Schurman 411 Statement 411 Questions 412 German Agricultural Association, by Dr. Thiol 414 Statement 414 Questions 414 Prussian Central Cooperative Bank, by Dr. Hartmann 415 Address 415 Questions 418 Savings Bank of the Teltow District, statement submitted to the commissions 419 Stettin, June 21: Warehouses and Credit Society of Stettin, report of a subcommittee. 425 Dresden, June 23: Agriculture in Saxony, I)y Herr Otto Steiger Leutewjtz 425 Address 425 Questions 428 Agiicultural Cooperation in the Kingdom of Saxony, .statement submitted to the commissions 429 y. Agricultural Credit and Cooperation in Saxony, address by Geh. Hofrat Bach 432 Long-term Credit Society for Manors in Hereditary Lands of Saxony, statement submitted to the commissions 434 Agricultural Credit Association of Saxony at Dresden, statement submitted to the commissions 435 Provincial Bank of the Royal Saxon Margraviate Oberlausitz, statement submitted to the commissions 437 Dresden Cooperative Milk Purveying Co. ; Dresden Municipal Slaughterhouse, report of a subcommittee 438 Hamburg, June 24: German Financial Methods, statement submitted by Mr. Robert P. Skinner, United States consul general at Hamburg 438 Hanover, June 25: Agricultural Organization of Hanover, address by Herr Bussen, general secretary Union of Hanover Agricultural Associations 44O (lerman Savings and Loan Banks, statement by Mr. A. Fricke 445 Central Bank of the National Associations, address by Mr. H. Steiger, counsellor of economy 445 Agricultural Organization in Germany, evidence of Dr. Johanusen, director Hanoverian Chamber of Agriculture, and Prof. Veith, director Dairy Institute of Hameln 459 Oldenburg, June 26: Association for Milk Control at Oldenburg, report of a subcommittee 453 Egg Societies in Oldenburg, report of a subcommittee 453 Agriculture iu the Province of Oldenburg, report of a subcommittee 454 State Credit Institution of the Duchy of Oldenburg, statement by the director 455 Cooperative Movement in Oldenburg, statement by Mr. Brenning, general secretary Oldenburg Agricultural Society 456 Cooperative Dairy at Striickhausen, report of a subcommittee 457 CONTENTS. 11 SWITZERLAND. Information and Evidence — Continued. Zurich, Mat 20: Page. Legislative Foundations of the Swiss Credit System, address by Dr. Laur, of Brugg 461 Canton Banks, evidence of Prof. Dutterwiller, director Canton Bank of Zurich 462 Zurich, Mat 29-31: Savings Banks, by Mr. Hofer, director Mortgage Bank of th'e Canton of Aargau 464 Statement 464 Questions 464 Development of Agricultural Cooperative Societies, statement of Prof. Moos 467 Raifteisen Banks, statement by Rev. T. Traber, founder of the Raiffeisen system in Switzerland 468 Wholesale and Provision Supply Societies, statement by Mr. Schramh, business director East Swiss Association 468 Milk and Cheese Associations, statement by Prof. Laur 469 Agricultural Education, report of a subcommittee 470 Bovine Breed of Switzerland, special report of Swiss Union of Cattle Breeders 471 By-Laws Swiss Brown Cattle Cooperative Breeding Association 484 BELGIUM. Brussels, June 9: Cooperative Credit, Production, and Purchase Societies, statement by Mr. Louis Pien, Department of Agriculture 489 Agricultural Education, statement by Mr. Wauters, Department of Agriculture 490 LouvAiN, June 10: Terbanck Raiffeisen Bank, report of a subcommittee 491 Ghent, June 11: Organization of a Rural Bank on Raiffeisen System in Belgium, by Rev. J. F. Mellaerts, general secretary of Belgium League of Peasants 491 Central Cooperative Agricultural Credit Society of Liege 507 Extract from Letter of Directors Inviting Membership 507 Rules of the Central Credit Society 507 By-Laws Rural Cooperative Bank of Liege 509 Agricultural Belgium, statistics furnished by Department of Agriculture 513 HOLLAND. The Hague, June 12-16: Survey of Agricultural Credit in the Netherlands, by Mr. F. B. Lohnis, inspector of agriculture 519 Statement 519 Questions 521 Agriculture in Holland, address by Mr. P. Van Kock, director Department of Agriculture 524 Cooperative Auction Markets, report otu subcommittee 527 Cooperative Agricultural Credit, statement by Mr. J. F. Berk vens, director Cooperative Central Bank of Eindhoven 528 Land Mortgage Bant of Holland, evidence of Mr. J. F. Berkvens, director Cooperative Central Bank of Eindhoven 529 Raiffeisen Central Bank, evidence of Mr. J. B. Westerdyk, president board of supervisors of the Utrecht Bank 531 Organization of a Peasants' Cooperative Loan Bank, statement by Mr. C. Van Den Hurk, head inspector Central Raiffeisen Bank of Utrecht 534 By-Laws Farmers' Cooperative Bank and Trading Socio ty at Steenwikerwold ^ 537 By-Laws Cooperative Steam Dairy at Leeuwarden 540 DENMARK. Copenhagen, June 23-26: Cooperative Wholesale Society, by Mr. F. Neilson, manager 545 Statement 545 Questions 546 Cooperative Egg Export Society, by Mr. C. T. Madsen, manager 547 Statement 547 Questions 547 Cooperative Organization, by Mr. F. Neilson, manager Cooperative Wholesale Society 548 Statement 548 Questions 549 Cooperative Law. statement by Mr. Bulow 550 Mortgage Credit, statement by Mr. H. B. Hajby 551 Small Holders and Government Loans, statement by Mr. Waage. 551 Credit Institutions, evidence of Mr. Cohn, statistician Department of Agriculture 551 Agricultural Organizations, by Mr. H. C. Larsen 554 Statement 554 Questions 554 People's High School, statement by the president 555 Two Typical Cooperative Stores, report of a subcommittee 555 Danish Credit Societies, reprint of article by Mr. M. P. Blem, president. Credit Society of Estate Owners in Danish Island Diocese Districts 556 By-Laws Credit Society of Estate Owners in Danish Island Diocese Districts 559 Statistics of Agricultural Cooperation 565 Agreement Between Seed Purveyors and Cooperative Societies 1 578 12 AGKICULTUKAL COOPERATION IN EUROPE. Information and Evidence — Continued. Copenhagen, June 23-26 — Continued. Paee- Laws and Constitution of Cooperative Mortgage Banks ^^ Appendix 5^5 Application for Membership in a Mortgage Bank "°^ Form of Mortgage Bond ^^^ Form for a Mortgage Made Out in Favor of iae Mortgage Bank of Danish Landowners So' NORWAY. Christiana, June 25-27: General Conditions in Norway, report of a Bubcommittee 589 Mortgage Bank of Kingdom of Norway, laws and constitution 590 By-Laws Norwegian Bank for ^^'orkmen's Credit 593 SPAIN. Agricultural Credit and Cooperation in Spain, report of a subcommittee 601 I. Introduction 601 II. Rural Credit Institutions in Spain 603 III. Suggestions for the Improvement of the Rural Credit System 611 IV. Abstract of Calbeton's Introduction to Proposed Rural Credit Law 614 V. Proposed Agricultural Credit Law 616 VI. Production 619 VII. Distribution and Marketing 624 Meat Supply of Madrid 626 Federacion Naranjera at Valencia 634 By-Laws of the Citrus Fruit Growers' Federation of Valencia 635 Torre Melinas at Barcelona 638 Granja la Ricarda at Barcelona 638 Conclusion 638 VIII. Rural Life 638 FRANCE. Paris, June 30 to July 5 : History of Agricultural Credit, address by M. Jean Codet, senator 645 Short-Time Agricultural Credit, statement by M. Ren6 Worms, chief, bureau of information, Ministry of Agriculture 647 Collective Long-Term Credit, statement by M. Louis Tardy,chief inspector for agricultural credit, Ministry of Agriculture . 647 Long-Term Individual Credit, statement by JL Vinreux-, of the Credit Foncier 648 Organization of Agricultural Insurance, statement by M. Ren6 Worms, chief, bureau of information. Ministry of Agri- culture 649 Mutual Cooperative Insurance Societies, statement of M. Tourman, member of the Chamber of Deputies 650 Reinsurance Associations, statement of M. Albert Viger, senator, president National Federation Mutual Agricultural Cooperative Associations 651 Relations Bank of France with Agiicultural Credit Banks, address by M. Aupetit, chief of the department of economic studies to the Bank of France 651 Organization and Operation of the Credit Foncier, by M. Vinreux, of the Credit Foncier 653 Statement 653 Questions 654 Credit Foncier, evidence of M. Jules Lucas, chief of bureau, officer of the secretary general 655 Credit Foncier and the French Farmer, statement by M. Albert Viger, senator, president National Federation Mutual Agricultural Cooperative Associations 660 Land Credit and Cheap Dwellings, statement by M. Georges Risler, president Central Society for Real Estate Credit and Cheap Dwellings 660 Agricultural Credit in France as Compared with Other Countries, address by M. Louis Dop, delegate of France and vice president the International Institute of Agriculture at Rome 661 Cooperation in French Agriculture, address by M. Louis Tardy, chief inspector for agricultural credit, Ministry of Agri- culture 664 Etampes (near Paris), July 2: Regional Bank at Etampes, leport of a subcommittee 666 Questions 668 Lyons, July 1 : Union of the Agricultural Syndicates of the Southeast Provinces, statement submitted to the commissions 669 Questions 674 Regional Bank of the Rhone, report of a subcommittee 675 Questions 675 Arles, July 2: Organization of the Aries Regional Bank, statement submitted to the commissions 677 Questions 679 Cooperative Irrigation Power Plants in the Vicinity of Aries, report of a subcommittee 679 Cooperative Wine Cellar at Frontignan, report of a subcommittee 680 MONTPELLIER, JuLY 3: St. Georges Cooperative Wine Producers' Society, statement submitted to the commissions 680 CONTENTS. 13 Information and Evidence — Continued. Patj, July 1: Page. Federation of Farmers' Mutual Fire Insurance Association of Basses-Pyrenees, statement submitted to the commissions. . 685 Traveling School of Domestic Science, statement submitted to the commissions 688 Bordeaux, July 2: Detailed Working of the Credit Agricole in the Gironde, translations of documents submitted to the commissions 692 General Organization 692 Form of Registry of Attendance at Original Meeting of a Local Bank 693 Form of Resolution to be Adopted at Initial Meeting of a Local Bank 693 Form of Resolution for Committee of Management 694 Form of Rules for a Local Bank 694 Form of Application for Shares 697 Form of Official Report of Alterations of the Rules of a Local Bank 697 Rules of the Regional Bank of Cooperative Agricultural Credit of the Gironde 699 Specimen Agricidtural Warrant 701 Specimen Request for Current Credit Account by an Individual 703 Specimen Request for a Special Credit Account 703 Specimen Request for a Long-time Loan 704 Specimen Request for Special Loans to Wine Growers 705 Specimen Memoranda Addressed to Regional Bank by a Local Bank 706 Tables and Extract from Report of Annual General Meeting of Regional Bank, February, 1913 708 CirculaiB Addressed by Regional to Local Banks 711 NiORT, Jtjly 3: Central Cooperative Dairy Association of Charentes and Poitou, statement submitted to the commissions 717 Chartres, Jttlt 1: Regional Bank of Beauce and Le Perche, evidence of M. Egasse, president 719 Agricultural Syndicate for Chartres, Chateaudun, and Nogent-le-Rotrou, statement submitted to the commissions 721 Mutual Agricultural Society of Chartres, statement submitted to the commissions 723 Cooperative Agricultural Society of Dreux-Sud, statement by M. Faber, president 724 Cooperative Creamery of Gault St. Denis, statement submitted to the commissions 725 Reproduction of Pocket Tally Book of Members 726 Farmers' Cooperative Electrical Society of Prouais-Rosay, statement submitted to the commissions 727 Le Mans, July 1: Regional Bank of Le Mans, evidence of M. Dalmagne, president 729 Farmers' Syndicate of Sarthe, statement submitted to the commissions 730 Agricultural Credit in the Department of Sarthe, statement submitted to the commissions 732 La Sarthoise Farm Laborers' Accident Insurance Society, statement submitted to the commissions 734 By-Laws of La Sarthoise ^ 735 Risks and Charges of La Sarthoise 738 Mutual Insurance Associations Against Death of Animals, statement of officials of Farmers' Syndicate of Sarthe 739 Specimen By-Laws for Mutual Cattle Insurance Society 740 By-Laws of the Federation of Mutual Cattle Insurance Companies of Sarthe 742 Insurance for Horses in Sarthe, statement by officials of Farmers' Syndicate of Sarthe 743 By-Laws of Mutual Horse Insurance Society in Sarthe 743 TouES, July 2: Regional Bank of Indre-et-Loire, evidence of officials 746 Local Agricultural Credit Bank of Langeais, evidence of M. Gosnier, treasurer 747 Farmers' Mutual Accident Insurance in Indre-et-Loire, statement by M. T. B. Martin, president of the Association for Rein- siurance 748 Cooperative Creameries in Indre-et-Loire, statement submitted to the commissions 749 Blois, July 2: Agricultural Syndicate of Loir-et-Cher, by M. Riverain, president 750 Statement 750 Questions 752 Regional Bank of Loir-et-Cher, evidence of the officials 753 Orleans, July 3: Regional Bank of Loiret, evidence of the officials 754 Chateauroux, July 3: Regional Bank of Chateauroux and Work of Agricultural Syndicate, evidence of Judge Farrichon, first president of the Courtxjf Cassation 755 Rhems, July 1-2: Regional Bank of Rheims, statement by the president 757 Agriculture in Vicinity of Verzy, report of a subcommittee 759 Ohaumont-sur-Marne, July 3: Dairy Farm at Chaumont-sur-Marne, report of a subcommittee 761 Agricultural Conditions in Southern France, report of a subcommittee 762 Forest Conservation and Agriculture, address by Mr. Theodore S. Woolsey, jr., assistant district forester, United States Forest Service 766 14 AGBICULTUBAL COOPBEATION IN BUBOPB. ENGLAND. Information and Evidence — Continued. London, July 8-10: ^*se. English Agricultural Organization Society, statement by Mr. J. Nugent Harris, secretary Agricultural Organization Society 773 Method of Organizing Cooperative Societies 782 Cooperative Agricultural Credit in England and Wales, statement by Mr. J. Nugent Harris, secretary Agricultural Organi- zation Society 784 Cooperative Wholesale Society, statement submitted to the commiflsions 787 Ipswich, July 9: Notes on Essex Agriculture, statement submitted to the commissions by the British Board of Agriculture and Fisheries 791 Terling, July 9: Eastern Counties Farmers' Cooperative Association, statement submitted to the commissions 792 Framlingham and District Agricultural Cooperative Society, statement submitted to the commissions 793 Rayleigh Farms, statement submitted to the commissions 796 WALES. Bangor, July 11: Development Societies in Agricultural Organization, by Mr. Rupert Ellis, chairman North Wales Branch, Agricultural Organization Society ». 801 Statement 801 Questions 802 Cooperation and Business Organization of Agriculture, by Col. Henry PilkingtonJ member executive committee, North Wales Branch, Agricultural Organization Society 803 Statement 803 Questions 805 Importance of Cooperative Marketing of Farm Produce, by Col. the Hon. R. Stapleton-Cotton, member executive com- mittee. North Wales Branch, Agricultural Organization Society 806 Statement 806 Questions 808 Department of Agriculture in University College of North Wales 809 Statements 809 Questions 810 University College of Wales and Agricultural Cooperation, statement by Prof. C. Bryner Jones 810 Promotion of Agricultural Cooperation, by Mr. A^'alter Williams, organizer for Wales, Agricultural Organization Society . . . 812 Statement 812 Questions 816 Penllyn Cooperative Society, statement by Mr. E. W. Jones, secretary North Wales Branch, Agricultural Organization Society 817 scotland. Dublin (Ireland), July 12: Agricultural Organization in Scotland, address by Mr. Charles Douglas, president Scottish Agricultural Organization Society 821 Glasgow, July 14: Rural Credit in Scotland, statement submitted to the commissions by Mr .J. N. McCunn, United States consul at Glasgow. 824 .Annon, July 14: Commercial Bank of Scotland, evidence of Mr. John Roddick ^ 826 IRELAND. Dublin, July 12-16: Suggested Solution of the Rural Problem, address by the Right Hon. Sir Horace Plunkett, president, Irish Agricultural Organization Society 831 DiflBculties in Organizing Farmers, statement by Mr. J. Nugent Harris, secretary, Agricultural Organization Society of England 841 Problems of Organization, statement by Mr. R. A. Anderson, secretary, Irish Agricultural Organization Society 842 Value of Organization, by Capt. L. A. Bryan, member of committee, Irish Agricultural Organization Society 842 Statement 842 Questions 843 Rural Credit in Ireland, address by Rev. T. A. Finlay, vice president, Irish Agricultural Organization Society and profes- sor of political economy in the National University 843 General View of Rural Credit, address by Mr. H. W. Wolff, author of "People's Banks" 846 Rural Credit, statement by Mr. J. R. Cahill, author of "Rural Credit and Cooperation in Germany " 848 Agricultural Cooperation, evidence of officials, Irish Agricultural Organization Society 849 Department of Agriculture and Technical Instruction, address by Mr. T. P. Gill, secretary 850 Organization of Agricultural Education in Ireland 852 Statements 852 Questions 856 The Rural Community, address by Mr. George W. Russell, editor, the Irish Homestead 857 United Irishwomen, statement by the Countess of Fingall, president 864 Small Holdings at Roscommon and Castlereagh, report of a subcommittee 865 CONTENTS. 15 Information and Evidence — Continued. Page. Wezfoed, Jult 16: Cooperation in Waterford and Wexford, report of a subcommittee 867 Ardmire Dairy Farm 867 Ballycanew Cooperative Agricultural Society 868 Enniscorthy Cooperative Agricultural Society 868 Agricultural Cooperation 869 Benefits of Cooperation 870 Need of District Credit Banks 870 Laborers' Cottages Built Under Board of Guardians Act 871 Wexford Meat Supply and Bacon Factory 871 Glenmore Cooperative Creamery Society 871 Cushinstown Agricultural Credit Society 872 Bansha, July 16: Bansha Cooperative Agricultural and Dairy Society, by Mr. R. D. Barry, manager 873 Statement 873 Questions 873 Drombanna, July 17: Drombanna Cooperative Creamery, evidence of Mr. P. Lynn, manager 876 LiMBBicK, July 17: Irish Cooperative Agency Society, statement by Mr. D. L. Riche, secretary and general manager 878 Rules of the Society 879 Irish Agricultural Organization Society 882 Work of Irish Agricultural Organization Society and Why Agricultural Organization was Necessary in Ireland 884 Need of Rural Banks in Ireland 889 By-Laws of Irish Cooperative Farm Implement Societies 891 Tables of Weights, Measures, and Money 895 Index 899 INTRODUCTION. APPOINTMENT OF THE COMMISSIONS. The American Commission on Agricultural Coo^ratign in Europe was assembled under the auspices of The Southern Commercial Congress and was composed of delegates from difiFerent states as well as representa- tives of important associations. Seven delegates, representing four Provinces of the Dominion of Canada, formed a part of the American Commission, and cooperated in every possible way in the studies and business of the Commission. The United States Commission was appointed by the President of the United States, under act of Congress, and cooperated with the American Commission. The Commissions sailed from New York April 26, 1913, and arrived in New York on the return July 25. METHODS OF WORK OF THE COMMISSIONS. The general plans for the work of the Commissions were arranged almost wholly in advance by the Inter- national Institute of Agriculture at Rome, under the leadership of Hon. David Lubin, delegate to the Institute from the United States, and his able assistants. In each country to be visited the Government itself, usually through its Minister of Agriculture cooperating with the officials of various important agricultural organizations, had arranged detailed programs. As a rule these programs were followed to the letter. Two methods ot work were followed. The first, which took the larger share of the time of the Commissions, was in the nature of hearings. These were called "Juries of Inquiry." They consisted essentially in the pre- sentation, by experts, of statements of the services performed by Governments and by voluntary agencies in the various forms of agricultural cooperation. At each hearing opportunity was given for questions by questioners appointed by the Commission. In most cases stenographic notes were taken of statements and of questions and answers. Whenever the testimony was offered in a foreign language, it was interpreted at once into English. The American Commission divided into four sections, on Finance, Production, Distribution, and The Organi- zation of Agriculture and Rural Life. Each section had its own officers and prepared its own questionnaire. The chairmen of the sections were members of the daily program committee ot the Commission. A second method of investigation, used as frequently as possible, was the inspection, by the Commissions or by subcommittees of the Commissions, of cooperative institutions themselves, and conferences with the officials in charge. No attempt was made to secure complete reports from aU of these visits, but typical reports were preserved and have been incorporated in the "evidence." It is unnecessary to say that this plan of inspec- tion proved exceedingly interesting and useful. To some degiee the material accumulated by the Commissions is the result of conferences between indi- vidual members of the Commissions and responsible officials. Many documents and addresses in foreign languages have been translated in full and appear for the first time in English. Constitutions and by-laws of representative cooperative societies have been translated and nse rted in the report. COOPERATION BETWEEN THE UNITED STATES AND AMERICAN COMMISSIONS. The United States Commission, under the act creating it, was charged with the duty of cooperating with the American Commission. The United States Commission decided that its province lay only with the credit question, whereas the American Commission investigated other forms of agricultural cooperation as well. The responsibility for the "Juries of Inquiry" was definitely accepted by the American Commission; the United States Commission, however, cooperating in the expense of reporting and compilation. PLAN OP THE REPORT. The American Commission, by vote, decided upon the following plan of report : Part I, the "evidence" gathered in Europe. Part II, general report, to consist of chapters covering general agricultural conditioM in Europe which form the background to agri- cultural cooperation, a discussion of rural credit, of cooperative production, of cooperative distribution, and of the organization of agricul- ture and rural lite; also a chapter intended to summarize the work of the Commission under the head of "Observations." 14174'— S. Doc. 214, 63-1 2 17 18 AQMOULTURAL COOPEEATION IN BUBOPE. The present volume consists of Part I, or the "evidence" gathered at the "Juries of Inquiry" and at con- ferences. The "evidence" has been carefully examined. Nothing presented in the daily progiams has been omitted that had a bearing on the work of the Commissions. It seemed wise to omit welcoming speeches and responses and other material not germane to the objective of the Commissions. It is quite possible that some important evidence has not been included. In the great mass of material submitted while on the trip, there may be portions that for some reason or other were not placed at the disposal of the Compilation Committee. In' a few cases translations of the material gathered at the "Juries of Inquiry" have been inadequate, or appa- rent conflicts have occurred which could not be remedied, in which cases it was considered that it was prudent to omit this evidence entirely. Every effort has been made, however, to incorporate every item of ' ' evidence ga,thered by the Commissions bearing on the subject of their investigations in Europe and to edit it as carefully as possible, to the end that it will stand as a correct representation of the material submitted by the European authorities and developed at "Juries of Inquiry." It is expected that Part II will be prepared later and presented in a series of chapters or as a second volume, as circumstances may require. The table of contents serves also as a guide to the itinerary of the Commissions. The index serves as a guide to the places visited, the authorities who furnished the evidence, and the subjects investigated. The map indicates the routes of travel and the principal stopping points. A full bibliography is being prepared, covering all the printed documents gathered by the Commissions in the various countries in lEurope and available for the further use of students. ACKNOWLEDGMENTS. It is to be hoped that the many European friends whose constant courtesies and unbounded hospitalities made the journey of the Commissions so thoroughly pleasant and profitable will understand that it is impossible to acknowledge individually all the aid received, or to express the appreciation of the members of the Com- missions individually and collectively for the great kindnesses shown. Careful plans had been perfected for utilizing the time of the Commissions to the best advantage. High officials and other experts gave freely and fully of their testimony and, without hesitation, submitted themselves to rigid questioning. In some cases important and lengthy documents had been prepared and often translated into English especially for the Commissions. In addition to these arrangements to facilitate the main work of the Commissions, the members were constantly reminded of the cordiality of their welcome everywhere received, the courtesy of officials in opening sources of information, and the marked hospitality as exemplified in personal and official greetings and in social entertainment. It would be invidious to mention by name all those to whom the Commissions are under the deepest obligations. We venture to say that few groups of Americans have received from Euro- pean countries greater consideration than was given these two Commissions, traveling in quest of the latest information concerning the methods by which the European farmers and Governments have endeavored to meet the pressing problems of agriculture and country life. Sincere thanks are extended to all who assisted in making this journey memorable to all members of the Commissions and, it is hoped, of value to the American farmer. The significant service of the Southern Commercial Congress in assembling the American Commission was r6cogoized in resolutions adopted in New York on April 25. In this report to the American people the members of the American Commission can not refrain from indicating their great obligation to the Hon. David Lubin, the instigator of the International Institute of Agri- culture, and the man without whom the American Commission and its European work would have been impos- sible. In recognition of the appreciation by the Commission of Mr. Lubin's services he was presented in Rome with a silver loving cup, on which occasion appropriate words of appreciation were voiced on behalf of the Commission. The Committee on Compilation of the American Commission desire to express their appreciation for the aid rendered by the United States Commission in- performing what has really been a great task in editing the mass of material within the short space of time allotted to the work. In this connection, too, great praise must be given to the efficient and loyal employees of the Committee. INFORMATION AND EVIDENCE, MAY 12 TO JULY 18, 1913. 19 ITALY. HON. LUIGI LUZZATTI. ADDRESS. EOMB. Allow me to extend to you at Rome, in the International Institute of Agriculture, the fervent greetings of Italian agricultural cooperation in all its gradations; of the liberal, which is also the neutral, section, open to all who work, save, and strive to redeem themselves by banding together their honorable poverty, regard- less of religious or political distinctions ; of the Catholic, for I know that it will be equally happy to extend to you its cordial hospitality; and, finally, of the socialist, which can also show you some characteristic and novel features — the collective leasings of land and the associations for great agricultural enterprises. As in Germany, the cradle of agricultural cooperation, so in Italy, the small farmers, the laborious tillers of the soil, have made of the several forms of credit cooperation truly wonderful applications, such as it has not been possible to secure in the vaster and more tumultuous hfe of great cities. The rural bank, for instance, which arose without capital, rich only in its invisible treasure of mutual trust and human solidarity, is the fruit of the modest, unrecognized virtues of the country folk, bound together by bonds of mutual affection, who assist and watch over each other with the subtle vigilance of neighbors. And, lo and behold, these humble folk, void of economic lore, have accomplished a miracle — due to the fact that a moral and not a material impulse guided their work — the miracle of creating capital out of nothing. They have succeeded in coining their simple good faith and their honor, and in transforming into concrete credit — so rebellious to aU idealistic considerations — promises of payment guaranteed only by their obscure immortal souls. And now in Germany, and in all the other countries which have followed in its footsteps, the business transacted by these banks, founded without capital and which have laboriously built up their own reserve funds, amounts to several billions each year, and they represent the billionaires of agrarian poverty. We are not the masters of rural cooperation; we have been at school in Germany. My revered master, whose name I can not pronounce without deep emotion, was Schulze-Delitzsch, whose paternal image looks down on me in my study. The master of my friend and colleague, WoHemborg, was Raiffeisen. But allow me to say, without a shade of pride or vanity, that we too have done something new and notable, and we flat- ter ourselves that, on returning to your great and wise Republic, you will be able to make use also of some of the results of our experience. I trust that you will be able to study in the heart of our prosperous farming districts of Emilia and Loin- bardy from what humble origins the Peoples' Banks of Lodi and Cremona arose and developed; how the savings of the towns were spread, by means of the provident channels of credit, through the rural districts; how the small and medium farmers freed themselves from the cruel usury which came to them as an inheritance from their fathers and from their fathers' fathers; how, after receiving the benefits secured by the savings of the cities, rendered prosperous by credit and by technical instruction, the country has in its turn returned these benefits to the towns; and how, finally, when large amounts of capital were required for great agrarian drain- age works, the Peoples' Bank of Cremona, for instance, was able to assist with the powerful means at its dis- posal in facilitating the building of Villorati, which has multiplied over and over again the wealth of the agricultural population. The autonomy enjoyed by cooperative credit institutions, the confidence felt in the absolute security of local savings, the union of rural economic forces with those of the towns, the native and sterhng worth of those sagacious rural populations explain these unique results unequalled even by the cooperative banks of Ger- many. AUow me to state frankly that, in this field of fertile derivations of the cooperative principle, the pupils have outstripped the master. Similarly, our independent savings banks at Bologna, Cuneo, Ravenna, etc., are proud of the flourishing circle of rural cooperative societies which has grown up around them and which they assist, tend, and watch over. I regret that you will not have the time to study all the debt agriculture owes to our savings banks, both large and small, from that of Milan, which is the first in the world, to those many others which materially foster the spirit of goodness in business, placing financial means at the service of social and economic ends. 21 22 AGBICULTUEAL COOPEBATION IN EUBOPE. You will also find original and new features to study in the way in which the Bank of JN'aples and the Bank of Sicily, differing in their economic personahty but one in substance, promote and assist agricultural credit without deviating from those rigid principles which should guide the issue of paper money by a circulating bank. We are ready to give you on these most delicate technical points aU the information which you may require. Allow me also to call your special attention to the various systems of collective leasings, which I will not say are an Itahan discovery, for the expression might seem to you boastful, but which show how a body of landless men, by associating their forces, are working out their own redemption along with the redemption of the land. These associations now aspire to reclaim our marsh lands which they would themselves cultivate, thus performing a twofold task — reclaiming the soil of their country and reclaiming themselves from poverty. If these hopes of ours attain realization, if they materialize, the current of Itahan emigration toward your Repubhc will be stemmed, not as the result of prohibitory laws, which always have a taint of economic or social persecution, but by virtue of our own efforts. And, meantime, allow me to send in your presence a word of greeting to the Itahan emigrants in the United States, who have taught you how to cultivate the vineyard and the orange, who send to the home country their hard-earned savings, who have contributed more than we ministers of the treasury to the conversion of our funds, rendered possible by the upward march of our credit. I hope that you will be able to examine at Reggio-EmiUa an extraordinary instance of cooperative daring, a railway run by the same society of workers which built it. But you are famed for being the most hard-headed, practical men in the world, and I do not wish for one minute to leave you under the impression that I am making a panegyric, or that I wish you to suppose that rural cooperation in Italy is a rustic idyl and its members a company of saints, not men, and therefore sinners. We also have our shady side, our faults, our failures ; we will tell you of them bluffly and frankly, and we wiU also inform you of the legislative measures which we are studying in order that the State, acting as the provi- dent guardian of the weak, may enlighten our people, remove stumbhng blocks from their path, assist them, but at the same time watch for and promptly repress abuses. It is now your turn to speak, you who are masters of the art of cross-examination which you have learned from your Anglo-Saxon forefathers, and which has not yet become familiar to our Latin ingenuousness, an ingenuousness not altogether free, however, from a spice of malice. Interrogate us. On the pretext of imperfect understanding, dispute our statements if you wiU. We are here ready to tell you the truth and nothing but the truth, confiding in your absolution and not despairing but that we may yet deserve from you a word of praise. QUESTIONS. Q. Please explain the tenure of land in Italy. How is it held ? A. The land is equally divided among all the direct heirs. We have no system of entails in Italy. The land does not go to the eldest son as is the custom in Germany and other countries, and we have not a "home- stead" law as in the United States, so the tendency is for the land to become greatly subdivided. Q. Is it easy for a small farmer to buy land iu Italy ? A. Yes; it is easy. However, owing to an artificially created demand for land and consequent rise in land values, the price has risen to an excessive rate, and it is difficult for emigrants returning from America to pur- chase farm lands; therefore cooperative banks are making special provision to assist the emigrants to purchase farm lands. Q. Please give us the valuation of land, high and low limit ? A. That question could be better answered by the president of the institute, and I suggest he be requested to reply. A. (Maechese Cappelli.) This is a very difficult question to answer because the price of land varies widely according to the demand and competition. There is land in oranges, lemons, and other citrus fruit which is worth as much as 40,000 francs per hectare; there is also poor land for cultivation which sells at a minimum price of 200 francs per hectare. Therefore, there is a vast difference existing in Italy between the value of land according to the crops raised on it. In some parts the competitive demand for land has artificially raised its value; for instance, there is land in mountainous districts under forage crops, perhaps small irrigated plats, worth as much as 16,000 francs per hectare. Other poor lands are worth only 200 francs per hectare. Q. Axe deeds recorded and how are the records kept ? A. (Lxjzzatti.) Mr. Poggi, general secretary of the Italian Society of Agriculturists, who is present, is better able to answer that question. A. (Mr. Poggi.) There is a land register in Italy in which titles are recorded and measurements kept. The new register is not yet completed. ITALY. 23 Q. Are land titles indisputable ? A. (LuzzATTi.) Italy is still far from having an effective system by which titles to land may be so recorded as to circulate freely. Q. Please state the ratio between the valuation of land and the loan granted on it in Italy. A. The ratio between loans and value of land in Italy is one-half. Recently, in the case of cooperative building societies, a new law was passed under which loans may be made up to two-thirds of the value of the property. Q. Who appraises the value ? A. The value is determined by the bank which makes the loan through its experts, as is customary every- where. Q. Are mortgage bonds on land easily negotiable ? A. These land-mortgage bonds have been issued by credit institutions, especially by savings banks of high standing; they have even been quoted at higher rates than government bonds and have always been in competition with them. _ Q. Do small investors in Italy buy such bonds ? A. No; these land bonds are not bought by sma'U investors or small concerns; they are bought by large capitalists who look upon them as gilt-edge securities. Q. Are these bonds issued in large or small denominations ? A. They are issued in different denominations, as low as 500 francs. Q. Kindly explain the method by which the Savings Bank of Milan issues these bonds. A. Such bonds are never issued except upon mutual demand ; and this is true of the Bologna Savings Bank and of those in many other cities. These bonds are not thrust upon the public; they are bought up by depositors in the savings banks. Q. Are these bonds issued by the savings banks on aggregations of small mortgages ? A. No; they are issued directly on the lands; they are individual mortgages. Every mortgage bond is secured by the general reserve of guaranty of the savings banks and by the lands mortgaged. Q. Is the collective bonding of land according to the Ijandschaften system in vogue in Italy ? A. No; Italian land-mortgage bonds are not on the collective Landschaften system. Itahan law would allow of such a system, but it has not yet arisen here. Q. Is the loan made upon written application ? A. Yes; and the bank sends an inspector to value the lands. Q. Are the banks that make these loans cooperative institutions ? A. No; under the Italian system such loans are generally made by public-utility corporations, such as savings banks, which are institutions without shareholders, and consequently with no distribution of dividends. Q. What becomes of the surplus of such banks and to whom does it belong ? A. The surplus is added to the reserve fund and guarantees all the operations of the banks. These large reserve funds are the strongholds of the credit of the banks. Q. Have these mortgage bonds a fixed time for maturity, or are they indefinite or called for by lot ? A. There is no lottery feature about these bonds. The interest and amortization rates are fixed when the loan is made, and there is no chance feature about them. The bonds mature at a fixed time. Q. What is the duration of a loan ? A. The general duration of these loans is from 20 to 40 years. If anyone desires to' pay off his loan before the time fixed for maturity, provision is made whereby he can do so. Q. What provision is made in these bonds for foreclosure ? A. There is no special provision under this head. Q. Are there any losses on these loans ? A. There have been some losses due to the agricultural crisis which led to a slump in the price of land, but since then greater prudence exercised in maldng these loans has reduced losses to a minimum, and the land- mortgage business now goes on successfully. Q. In the event of failure to pay, can the banks foreclose the mortgages without process at law ? A. No ; in case of expropriation legal proceedings are resorted to ; but it is extremely rare to have to resort to actual expropriation of land, as great prudence is exercised in making these mortgage loans. Q. What is the rate of interest on those mortgage bonds ? A. (Marchese Cappblli.) The interest on such loans is generally 3^ per cent, but now stands at 4 per cent, owing to the present bad state of the money market. To this must be added the charge for amortization. The Milan Savings Bank charges 4.88 per cent on its mortgage loans, inclusive of everything. It can afford to make loans att this low rate because it is a public-utility corporation without shareholders, and therefore does not distribute dividends. The charge made by other banks issuing such bonds is 5.77 per cent. 24 AGEIOULIUBAL COOPEEATION IN EUBOPB. Q. What is the cost of management of the savings banks — what are the salaries and expenses 1 A. (LtrzzATTi,) The cost of administration varies very considerably. I made a study many years ago showing that the cost of administration was rather higher in the case of pubhc-utility corporation banks than in that of private banks; but, on the other hand, the pubhc-utility banks have no dividends to distribute. Q. What rate of interest is paid to depositors in these savings banks ? How is their capital obtained 1 A. There is a fundamental difference between a commercial bank and these savings banks. The com- mercial bank obtains its capital from the shares subscribed by shareholders. The savings bank is founded with donations made by the communes and provinces and by benefactors' foundations. The banks thus founded receive savings deposits; on these they pay a rather lower rate of interest than they charge the parties to whom they loan the money. By this means they have accumulated large reserve funds which enable them to carry on their work. I would call the attention of the commission to the fact that, in the case of the rural banks (WoUemborg banks), their capital has been created practically out of nothing; yet the small difference between the rate of interest they pay on deposits and the rate they charge on loans has enabled them to accumulate considerable reserve funds. In Germany the Raiffeisen banks, built up 'on this system, did last year 7,000,000,000 marks worth of business. Q. Is the area of operation of these savings banks restricted, or do they work all over Italy ? A. Some of these savings banks work all over Italy. The Savings Bank of Milan and some others do land-credit business thi'oughout the Kingdom. Others hmit their operations to certain towns and provinces. Q. Please state the relation of the Government to these banks — are they under Government supervision ? A, Savings banks in Italy are subject to Government supervision; that is to say, the Government inspects them to see that they observe the law which prescribes a certain relation between the amount of the reserve funds and the amount of loans made. But the real, effective control over these banks is that exercised by their active officers. LAND-MORTGAGE INSTITUTIONS. Special Statement by the Minister of AaRicui/ruRB. EOME. Mortgage credit, or rather the grants by mutual guaranty of first mortgage with amortization for periods of 10 to 50 years against the issue of mortgage bonds, is exercised in Italy by the following seven institutions: 1 . The Savings Bank of the Province of Lombardy, at Milan. 2. The Italian Institute of Land Credit, at Rome. 3. The Monte dei Paschi, at Siena. 4. The Institute of the Pious Works of St. Paul, at Turin. 5. The Savings Bank of Bologna. 6. The Savings Bank of Verona. 7. The Sardinian Mortgage Bank, at Milan. The sum of the mortgage bonds is guaranteed by the sum of the mortgages taken, all of which must be given on first mortgage; and the earnings derived from the loans are first applied to the payment of interest and amortization of the bonds. When to this is added the stability of the institutions exercising mortgage credit, among which figure the three largest savings banks of the Kingdom, it is easy to comprehend the credit enjoyed by the mortgage bonds. With regard to the degree of security, investment in mortgage bonds is equal to that of Government bonds, not only in public estimation, but legally. In fact, the societies, the ethical insti- tutions, the benevolent associations, and other associations which are allowed by law to invest their funds in whole or in part in securities issued or guaranteed by the State have the right to invest from one-quarter to the whole in bonds issued by the institutes of mortgage credit. Moreover, the mortgage bonds can be accepted with the security of the administration of the State, of the Provinces, of the communes, of the public institu- tions of charity, of the savings banks, and of the city pawnbrokers at a valuation regulated by nine-tenths of the average prices of the bourse for the preceding semester. As to the prices of the mortgage bonds, it is not exactly accurate to affirm that they are always higher than the State bonds. Account must be taken of the variations of the rates of interest, which fluctuate between 3i and 5 per cent. The equality of the rates of interest is a reason tending to prevent the rise of prices of the mortgage bonds above par, and also the possibility of repayment every semester — a reason not applicable to the deeds of the " Consolidated funds," which are not redeemable. What can be affirmed is that the mortgage bonds always maintain a high level and a rate not superior to the nominal value. Only lately, when there has been a rising tendency in all rates of interest, the mortgage bonds issued at low rates (3^, 3|, 4 per cent) have suddenly been sensibly depressed. The institutes of mortgage credit which have the right to issue bonds of various t5rpes are, however, rapidly suspending the issue of bonds at low rates and taking up or initiating bonds at higher rates of interest. ITALY. 25 COOPERATIVE INSURANCE. Com. Enba Cavalibei. STATEMENT. Rome. There are several forms of cooperative insurance in Italy, namely, mutual associations for the insurance of live stock, mutual associations for insurance against hail and against fire, and mutual associations for insur- ing farm workers against accidents. In many parts of Italy the small farmers depend largely on the profits they realize on the sale of the milk produced by their cows; consequently, the death of their stock is a severe loss, and they have formed mutual insurance associations to insure against this. These associations have existed for many years past, organized on several plans, the foundation of which is that the policy must be applied for by the owner. QUESTIONS. Q. France is now contemplating legislation by which life insurance policies will be accepted as collateral for long and short time loans. Can you tell me whether this is done in Italy? A. (LtrzzATTi.) The system of accepting life insurance policies as collateral for loans was first suggested by the French economist Saurier, but the principle was first given practical application in Belgium and Italy. In 1903 I introduced into the Italian Chamber a law by which life insurance policies could be accepted as guaranty for loans made for the purchase of workiugmen's dwellings through cooperative building societies, so that, if the head of the family dies before the purchase is completed, the life insurance policy wipes out the debt. When minister of the taterior I strongly favored the priuciple of mutual associations for cattle insur- ance, as in their case it is the members themselves who exercise vigilant inspection over the transactions of these societies in their own interests. Having been long connected with the Government, I know what value to attach to Government inspection, which is often perfunctory. RURAL BANKS. Address by Hon. Leone Wollbmborg, ex-Minister of the Treasury. Rome. His excellency Luigi Luzzatti referred to the rural banks as having performed the miracle of creating capital out of nothing. But nothing comes out of nothing. A mathematical explanation can be given of the way in which these rural banks bring their capital together, and this is what I will now try to set forth. Suppose you have before you 100 small working farmers; they aU possess the qualities of honesty, industry, and labor capacity; this is their only capital. Now, a capitalist having a hundred such men before him might with safety, under certain conditions, make them a loan of 50 francs each. The conditions with which the capitalist has to reckon are these: Of these 100 men, some will certainly be afilicted with sickness, death, or lack of employment. It is a well-known fact that some of these men will certainly suffer from these causes, but it is impossible to say which man it wiU be, whether the tenth, fiftieth, or hundredth man. It is impossible, in short, to foretell which individual of the group will be incapacitated and thus rendered incapable of repaying his loan. But one thing is certain, it will not be the whole group — only a certain proportion. Past experience indicates that out of 100 two individuals are likely to be incapable of repaying their loan, while the others wiU be able to meet their obligations. Now, in order to meet the liabiUty, the group must undertake to become responsible for the two members who are Hkely to be unable to pay; they must become, in short, severally and collectively responsible for the total loan made to the group. There will thus be 98 men to repay the loan made to the 100. They will thus be able to assume responsibility for a loan of 49 francs each instead of 50, for they will have to assume responsi- bility for the 2 per cent who will be unable to pay; and, by making themselves collectively responsible for the loan, they will be able to make it for 49 francs multipUed by 100. It is thus seen that the mathematical formula on which these banks are able to secure their capital is nothing more than an application of the same principle which governs insurance. Therefore, this principle of unlimited liability is the first principle underlying the rural banks. The other principle is that of limitation of the area of operations, restricting it to certain villages or localities, and this limitation of area of operation also constitutes the justification of the principle of unlimited liability. It would not, indeed, be fair to expect a man to make himself responsible for a loan the use of which was beyond his control. But, when the loans are strictly limited to people residing in the same locality, all can become vigilant and act as inspectors for their own protection. And you wUl find that inspection thus exer- cised by the members of the rural banks is far superior to any government inspection, since each man has been rendered personally liable and is acting as inspector in his own interest. As one of the farmers once said to me, "We are 100, all acting as spies on the others to see that nobody does anything wrong." 26 AGBICTJLTTJEAL OOOPBBATION IN EUBOPE. But there are yet other guaranties for the safety of these banks. One of these is that the loans are only made for stated purposes, and, in a small locahty, it is very well known whether the purpose for which a loan is applied is likely to prove profitable. This control over the use to be made of a loan, exercised by the mem- bers of the bank, is a further guaranty of its safety. There can be no better guaranty to insure the safety of a loan than its apphcation to a productive purpose. The rural bank never makes loans to be used for general household purposes; it always requires that its loans shall be applied to a specified productive use, and the judgment of the community as to whether the loan is being applied to the proper purpose affords the surest guaranty. The use of credit in agriculture may be compared to the use of water. If the water is brought into the field at the right time, in the right way, and in proper quantities, it will be valuable; but if the field is flooded or if the water is appMed at the wrong time, it will be destructive. In the same way, if credit be applied to a good productive purpose it becomes a blessing to the community. Therefore the committee of th« rural banks is required to see that the loans are appUed to the purposes for which they were granted. There is yet another psychological factor which goes to insure the safety of these banks, and that is pubhc opinion. It is a well-known fact that pubhc opinion is nearly always inchned to side with the weak as against the strong, and as, rightly or wrongly, the debtor is generally considered the weaker party, he usually has pubhc opinion on his side. But in the case of the rural bank the situation is reversed. The heads of families in the village constitute the membership of the rural bank, and, as they are all interested in seeing that the loans for which they are severally and collectively responsible are paid, pubhc opinion in this case is on the side of the creditor and not of the debtor. I will now give a few facts bearing out the statements made. There are now 2,000 of these rural banks in Italy, so that, although each individual bank is only a small factor, taken together they constitute an economic force of considerable importance. The first of these banks was created in 1882, and, as is generally the case in such undertakings, they were at the start practically the initiative of one man [WoUemborg]. During the first 10 years their growth was slow, but when the period of incubation was over, in 1892, they began to develop rapidly, especially as the powerful organization at the service of the Catholic Party came into the field and took them up. Those members of the commission who will be going to Bergamo will be afforded an opportunity of acquainting themselves with the really remarkable work done by the Catholic Party in promoting and organizing these institutions. For this work the Catholic Party has availed itself of its admirable and formidable organization, which, centering in the Vatican, reaches out to the humblest villages. The rural banks organized by the Liberal, or Neutral, Party have not had behind them such an organization, and, there- fore, they only represent a comparatively small proportion of the 2,000 rural banks. The defect of the Liberal Party is that, when its members get together to do something, they always start in discussing; the strength of the Catholic Party is that, when it starts in to do something, its members obey. In this way the Catholic Party has won the day. However, it must be said for the neutral banks, as compared to the catholic, that, though inferior in quantity, they claim not to be so in quahty. The rural bank founded at Loreggia in 1882 has been in existence now for 30 years. Very few of these neutral rural banks have wound up their affairs. Those whi«h failed have done so without loss to the members, and this can not be said of the catholic banks. In speaking of neutral as opposed to catholic banks, it should be quite clearly understood that the neutral banks are in no sense of the word composed of freethinkers or opponents of Catholicism; they are simply nonsectarian, and make no inquiry into the religious beliefs of their members, most of whom, as a matter of fact, are catholics. On the other hand, the catholic banks exercise a censorship on the religious opinions of their members, and loans can only be made to practicing members of the church. Of course, no one can deny the powerful influence which can be exercised by a religious party in promoting organization along certain lines, just as in the case of a poUtical party. But the question can be looked at from two points of view; the influence of religious feeling can be a great impulse to bring about the foundation of an institution, a much more powerful impulse than a cold appeal to the reasoned interests of the persons concerned. More especially is it a much quicker means of doing the work. The neutral banks are slower to organize, but, on the other hand, when they are once organized, they are generally more solid and of more vakie as a working body than the cathoHc banks. The result is that the catholic banks make a better showing in a table of statis- tics than in actual fact. In conclusion, there is also this to be said of the cathoMc banks. There is the valuable side of the religious spirit, but it must not be forgotten that it has a reverse side, that of superstition and hypocrisy, just as in political parties you get the destructive, factious spirit. Moreover, the supporters of the neutral banks are liberals because they believe in the beneficent influence of liberty. On the whole, the competition between the sectarian and the nonsectarian banks has worked for the good of the p«)ple. Each has acted as a stimulus and a control over the other, and the result has been advantageous to all. ITALY, 27 ITALIAN RURAL LIFE. Address by Mr. Rogoi, Secretary General of the Italian Society of Agriculturists. KOME. In the first place, in considering agricultural conditions in Italy, it must be borne in mind that, though Italy is not a very large country, the conditions prevailing in the several regions are widely different. There is as much difference between conditions prevailing in the north, the center, and the south as in those prevailing in different countries ; in fact, often more. These differences are so great that they play a very great part in influ- encing the life of the farmers, landowners, and agriculturists in general. Italy divides geographically into three sections: High, mountainous country, hill country, and plain lands. The plains, which are the most fertile section, represent only a small portion of the total farm lands ; the Alps in the north and the Apennines which run right down through Italy form the two great mountain chains, on which is found a scattered population living mostly on the products of their pasture lands, forage crops, and forests. In the hilly country there are good fertile lands and the vine is one of the most profitable crops. In this section the population is thicker and more prosperous, and the tenure of land is generally founded on the m6tayer system, or equal crop sharing between owner and tenant. In the two great plain districts of Lombardy and Apulia the priacipal crops are cereals, and the land is held almost exclusively in large estates. In the south of Italy the land is largely arid and very woody. In the north of Italy you get a severe winter, whereas south of Rome there is practically no winter, and agricultural conditions are almost reversed from what they are in summer, in that there is little vegetation. So much for the geographical distribution of the country. Considered socially, we have large, medium, and small landowners, and a class of people who cultivate the soil without possessing it. In central and southern Italy there is not only extensive agriculture, but intensive agriculture also flourishes, conducted on large estates instead of on small ones. The laboring agricultural population is divided into two big classes — the peasantry holding land on long leases, or on the crop-sharing system, and hired agricultural laborers, who travel from one part of the country to another, wherever they can find work. The condition of the agricultural population of Italy has greatly im- proved during the last 30 years, more especially as the result of applying science to the furtherance of agriculture. The introduction and use of chemical fertilizers and agricultural machinery, most of which comes from America, have greatly improved the conditions. The result is that destitution among the agricultural classes may be said to have disappeared, with few exceptions. But, in spite of these great improvements, much still remains to be done to improve the conditions of rural life. There are various forms of agricultural association in Italy which must be distinguished one from the other. With the improvement of agricultural conditions rural organization has developed rapidly. The first and oldest form of agricultural organization in Italy was the agricultural assembly. These were educa- tional bodies chiefly for pro^moting the introduction of technical improvements in farming. They were of value in their day, but it must be said that at present many of them are not in a A'ery flourishmg condition. These assemblies have been succeeded by another form of organization, known as the agricultural associations. These organizations are on a cooperative basis and their main purpose is the cooperative purchase and sale of farm requisites, such as seeds, fertilizers, machinery, etc. Besides these there are regional agricultural societies working in certain districts. These exist mostly in Lombardy. Mention must also be made of the Italian Society of Agriculturists, which numbers about 3,000 members, established mainly for the purpose of carrying on a propaganda for the introduction of agricultural improvements. In conclusion it may safely be said that agricultural progress in Italy is keeping pace with the general progress of the country. LAND RECLAMATION IN THE ROMAN CAMPAGNA. Statement by Pkincb Boncompagni. Rome. The problem of the reclamation of the land of the Roman Campagna has perplexed the various powers which have governed the country for the past thousand years. The deserted condition of the land around Rome is due to the dreaded malaria and other diseases which attack both men and animals, but the recent discoveries of medical science have made it possible to live the whole year round -v^^ith safety in the Roman Campagna. This, however, made it necessary to compel the landowners to provide housing accommodation for the rural population. With this end in view laws were enacted in 1893 and 1910 for the purpose of facUitating land reclamation and the settlement of the lands in the Roman Campagna. The 1910 law conferred on the Gov- 28 AGEIOULTUEAX OOOPEBATION IN EUBOPE. ernment the power to expropriate by compulsory sale the lands of those owners who refused to take the nec- essary steps for building dwellings for the working population, draining the marsh lands, and building stabling for the hve stock, which latter made it possible to introduce better breeds than those which existed when the animals were left unsheltered. By this means landowners have been forced into bringing their lands into cultivation. On its side the Government suppHes the capital necessary for land-reclamation projects at the very low rate of 2 J per cent interest, and the Government has granted other very valuable assistance for the drainage of the land. This 1910 law, introduced by his excellency, Luigi Luzzatti, has been very successful in its operation. Not one single landowner has placed himself in a position to incur expropriation, for they have all undertaken land reclamation. Another benefit conferred by this law has been the provision for building villages so as to provide rural centers in the immediate neighborhood of Rome. These villages for a certain number of years are exempt from taxation. A great many secondary institutions have been started- as a result of this initial step, such as institutions for the improvement of breeds of Kve stock. To summarize, the building of houses for the accommodation of the working population and the drainage of lands are now practically completed. The work of introducing new and improved methods of agriculture and of transforming the kind of cultivation is slower, but with the help of the educational institutions now at work it is hoped that the law will soon be successfully carried out in this respect also. Efforts are now being made to introduce the system of seed selection so successfully applied in Sweden, so as to obtain the grade of seed best suited to the climate and soil, and it is hoped that much good will result from the efforts in this direction. In the four years which have passed since the passing of the act in 1910 more has been accomplished toward the reclamation of the Campagna than in the preceding thousand years. AGRARIAN CREDIT INSTITUTE OF LATIUM. Statement by Mr. G. Venti, Director. Rome. The Agrarian Credit Institute of Latium was founded under the provisions of a special law 10 years ago, which endowed the institute with a capital of 1,000,000 lire. This sum has not been given by the ItaUan Gov- ernment, but the Government invited the Bank of Italy and the Savings Banks of Milan and Rome to provide the capital. The Bank of Italy contributed 500,000 Ure, the Savings Bank of Milan 300,000 lire, and that of Rome the remaining 200,000 Ure. Under its charter the Bank of Italy can not donate money, so the Agrarian Credit Institute of Latium must pay the bank on its annual profits a percentage proportionate to the capital provided. The rest of the profits belongs to the agrarian institute for the formation of a reserve fund, which, in about 10 years, has reached the amount of 109,000 lire. The Agrarian Credit Institute of Latium may only transact business in the Province of Rome, and it sup- plies credit to agriculturists through the agency of various cooperative organizations and associations. Much of its activity has been devoted to promoting the organization of such bodies, through which it carries on its work. Still another main branch of its work has been that of educating the rural population to an understanding of the use of credit, as when you get out to these small townships and villages of one, two, and three thousand inhabitants you find very little understanding of financial or business methods. The small rural banks and cooperative associations send their bUls to the Agrarian Credit Institute of Latium and the institute discounts them by charging 1 per cent more on the rate of discount. The interme- diate association may also charge an additional 1 per cent, so that the total charge for the loan may not exceed 2 per cent over the rate of the Bank of Italy. The Agrarian Credit Institute of Latium has been of great service to the Province of Rome, as it supplies a large proportion of the money required for agriculture. The loans made have to be repaid within one year, but three years are allowed if the money is required for machinery or live stock. The agrarian institute can also lend money directly to the farmers, especially when the latter reside in a district where there is no coopera- tive association. Various precautions may be taken to insure the safety of loans. For instance, a farmer comes to the office and states that he has prepared his land for sowing and requires money in proportion to the produce the cultivated land will yield. The office sends an expert to investigate and find out whether the investment is likely to prove safe for the farmer; and, in the event of a favorable report, the loan is made. When harvest time comes a representative of the institute inspects the crop, and when the produce is sold the farmer pays the bill to the institute. Sometimes the farmers ask for loans after harvesting, and in such cases the loans are secured by the produce of the land. ITALY. 29 COOPERATIVE DAIRYING. Dr. Casauni. statement. ROMB. Cooperative dairying represents one of the oldest forms of cooperation in Italy. Ever since the fourteenth and fifteenth centuries cooperative associations for dairying have existed in the north of Italy. These associa- tions are organized in three ways. The oldest is known as the "turno familiare," when all the milk of the associated farmers is worked in turn in the dairy of one of the members, whUe each member sells his own product on his own account. The second system is that by which the associated farmers rent a common dairy building and employ a head dairyman, to whom aU the milk of the associated farmers is consigned to be transformed into butter and cheese, but the product is still sold by each individual member. But these two primitive forms of cooperative dairying are being rapidly replaced by the more perfected system of cooperative dairying under which all the members of an association bring their milk to a common dairy where it is worked up and sold by the dairy on account of all the members. There were in 1910, 1,035 cooperative dairies in Italy. Of these 526 were in Venetia, 180 in Piedmont, 221 in Lombardy, 94 in Emilia, 3 in Liguria, and 11 in the other parts of the country. The largest cooperative dairy in Italy is that at Soresina near Cremona, which works daily 420 quintals of milk and is the biggest enterprise of its kind anywhere. QUESTIONS. Mr. LuzzATTi. I should like to call the attention of the commission to the great technical improvements in the dairying industry and in the quality of the output which have resulted from cooperation iu this field. Q. Do the dairying associations have cow-testing associations connected with them ? A. So far such cow-testing associations have not been formed, but their organization is now being con- sidered. Q. Do the members of these cooperative dairying associations do general farming or only dairy farming ? A. General farming. Q. What is the average number of cows to an average dairy ? A. One hundred to one hundred and fifty to the dairy. Each individual farmer probably has from two to three. It is only a large dairy, such as that at Soresina, which works for a few farms, each possessing a large number of live stock. Q. Do farmers send the whole milk to the dairy ? A. They are supposed to send the whole milk. Q. Are dairying associations assisting farmers in the purchase of other farm requisites, such as fertilizers, etc., or only the things necessary for the dairy ? A. A few of these cooperative dairies assist farmers in the purchase of manures and other farm requisites, but they are a minority. Some of these dairies have organized among their members cattle insurance societies. The tendency, however, is for dairies to Umit themselves to dairy operations. In a few places they attend to the purchase of commodities, but the general tendency is not to branch out. Q. Do cooperative dairies sell other products as well as butter and cheese ? A. A very small minority sell milk also, but they are mostly limited to the sale of cheese, and sometimes also of butter. Q. Do such cooperative dairies distribute milk in cities? A. The sale of milk in cities is carried on by private parties and by large commercial companies. In Genoa and Milan cooperative societies have been formed which purchase mUk from the farmers in order to distribute it in the cities. Q. Are the farmers paid individually for the butter and cheese produced from their milk, or are these products sold cooperatively and the profits distributed t A. The farmers are paid for their milk by weight. At the end of each week they receive from 10 to 15 centimes per kilogram of mUk supplied, and at the end of the year the profits realized on the sale of the butter and cheese are divided up amongst the members according to the amount of mUk each has supplied to the dairy. A certain sum is set aside and placed in the reserve fund of the association. Q. How lai^e a zone in miles (diameter) does the average cooperative dairy cover ? A. Some few dairies receive nulk from outlying districts, but, as a rule, it is obtained within a radius of 2^ to 3 miles from the dairy. There are industrial dairies which receive their milk from a distance of 25 and even 45 miles, but they are the exception. Some of the milk sold in Eome comes from Milan. Q. Approximately, how much more do the farmers receive by this cooperative method of selling than they did by the primitive method ? 30 AGKICULTUBAL COOPERATION IN EUBOPE. A. It is difficult to reply to that question on account of the great fluctuation in tlie price of milk in late years. Milk has risen m price from 9 centimes per kilogram to as much as 24 centimes per kilogram. It may be said, however, that farmers selling their milk to the cooperative dairy now receive from 17 to 18 centimes, while others ia the same district selling to private parties receive only 15 centimes. It should also be borne in mind in this connection that the organization of the cooperative dairies has provided a market for milk in many localities where formerly it was an unsalable product. Q. Does milk with a higher percentage of fat bring a higher price ? A. There is no distinction drawn in the price paid for milk based on the fat it contains. That method of testing is not employed. It must be remembered that the milk is obtained from cows of the same breed, in the same district, fed on the same pasture lands, and therefore the quality of the milk is fairly homogeneous. Q. Do dairy farmers buy much commercial feed, or do they feed their stock on forage grown on their farms ? A. The average small farmer who supplies milk to the cooperative dairy feeds his stock on his own forage. On certain large estates artificial feeds are used, but as a rule the animals are fed on the produce of the farm. Q. Is the breed of cattle of a specific dairy type, or are they used for beef as well as milk ? A. This differs in different parts of the country. In the Alpine districts the cattle are used exclusively for dairy purposes, but in other districts they are used for farm work as well as milk. Q. What is done with the calves ? Are they sold for veal, or are they kept for use on the farm ? A. There are sections where calves are sold for veal. It is only in exceptional cases that they are kept to be fatted. Q. Can we get any reports on the average production of milk per cow per year ? A. The average production of mUk in Italy is from 2,500 to 3,000 kilograms per cow per annum. Q. Is there any cooperative effort for selling mUk in the cities ? A. Efforts have been made in this direction at Bergamo and Piacenza, but they failed. The city of Aquila has begun the municipal sale of milk supplied by mutual cattle-insurance socioties. COOPERATIVE INSURANCE. Dr. Gasalini. STATEMENT. EOME. I will now give a few facts on agricultural mutuality. The most developed form is that of mutual insurance societies for live stock. There are also mutual associations for insiu^ance against &re, hail, and accidents to farm workers. The principal feature of these mutual insurance societies is their limited area of operation. The members all belong to the township in which the association is formed. The idea of this limited area of operation nms counter to the law of insurance, which is to extend the basis of operation, but this is compensated for by the fact that the cost of operation is reduced by this means to a minimum. A very close control can be exercised by the members over the liquidation of claims. In these mutual cattle-insurance associations the premiums for losses are apportioned according to the total number of cattle insured, and are assessed after the losses occur. An effort, however, is being made to replace this assessment system by a system of fixed premiums. Efforts are also being made to federate these small societies, so that they may reinsure their risks. Th«re is now in Milan a society for the reinsurance of these mutual associations of northern Italy, and in Rome there is another society for the reinsurance of live- stock risks connected with the Federation of Italian Agricultural Mutual Societies. The aim which Italian mutual insurance has in view is to form in each commune a small cooperative insurance society for the insur- ance of live stock, then have them federate into regional or district societies for reinsurance, and then to organ- ize a national association of mutual insurance societies which would reinsure the risks of the regional societies. The central board of health, under the minister of the interior, does all it can to assist the work of these insurance societies by linking up their efforts with those of the Government for checking the spread of cattle diseases. In central and southern Italy, where these live-stock insurance societies are now being formed, the tendency is to connect them with the credit institutions which assist the farmers to purchase live stock, so that the insxu*- ance policy on the live stock may serve as a guaranty for the loans advanced for the purchase of the same. To facilitate control, all animals insured are marked so that they can be recognized. There are about 1,000 mutual live-stock insurance societies in Italy, most of which are in the north. ITALY. 31 The mutual fire insurance societies are also mostly in the north of Italy; there are 300 of them, of which 200 are in Piedmont. The insured risks of these societies amount to 400,000,000 francs. Their poHcies are issued at the same rates as those by commercial insurance companies in other locaHties. By this means the mutual insurance societies hare accumulated such large reserves that now, in some cases, the members no longer have to pay premiums, as the interest on the reserve is sufficient to pay the poUcies as they fall due. This clearly proves that, even when operating over a hmited area, it is possible to apply the cooperative prin- ciple to fire insurance and yet work with safety. But the national committee of agricultural mutual associa- tions is promoting the federation of these mutual societies as a further measure of safeguard, and has formed a central federation with which the mutual fire insurance associations may reinsure their risks. No legislative provision exists in Italy for the insurance of farm workers against accidents, but some societies have been formed by landowners in certain provinces for insuring their laborers. When Luzzatti was president of the Council of Mioisters he introduced a bill for the compulsory insurance of farm workers against accidents, and it is hoped that this measure will shortly be taken up again. Mutual insurance societies against accidents to farm workers exist in Turin, Vercelli, Milan, Bologna, and Florence, and they insure against death and permanent incapacitation by accident. The society at Vercelli this year extended its policies so as to cover temporary disability with good results. The premium charged by these insurance societies is reckoned at so much per hectare of land worked. The mutual society of Vercelli charges 5 francs per 1,000 francs insured capital, and the premiums are calculated not in respect to the number of laborers employed but to the area cultivated, the charge being from 50 to 70 centimes per hectare of land, according to the crops raised thereon. There are also two mutual insurance societies against injury to crops by hail, one at Bergamo and one at Vercelh. There is another similar society in the south of Italy, at Lari, formed by tobacco growers to insure their crops against hail. It has been in existence for the past three years and has given very excellent results. Finally I will mention two associations formed to insure the regular working of the farm in case of illness on the part of the farmer. The members of these associations are pledged to work the land of any member who is temporarily incapacitated by illness. QUESTIONS. Q. Is there any government inspection or control of these insurance societies? A. These mutual insurance associations are not subject to government inspection, but the federation of these societies is now calling for legislation which will place them under government inspection. Q. Did I understand the gentleman to say that these cooperative societies insure against total disability resulting from accidents incurred by farm laborers at their work ? A. Yes; they insure against death and total disabihty. The society at VerceUi also insures against tem- porary disability, but only pays insurance after 20 days' disability. Q. Is there an employers' liability act in Italy ? A. There is such an act for industrial workers, but employers are under no legal obligation to insure farm workers, except those employed on machinery or as foresters. Q. In the case of hail insurance, how are losses adjudicated ? A. These hail insurance companies reinsure their risks, and when the reserve or their reinsurance does not cover the losses, then they reduce the compensation paid fox losses within the hmits of their possibilities. Q. Are these losses adjusted by a committee on adjustaient? A. The amount of the loss is determined by experts employed by the mutual association. Q. Are the premiums of the mutual hail associations fixed in advance or are they paid on a loss basis at the end of the year? A. There are only two hail insurance societies which are reaUy mutual (though there are others which call themselves such) and these s.oci©ties charge fixed premiums, which the members pay at the beginning of the year. Besides this the members get a statement from the association setting forth the maximum Uabihty which they are liable to incur at the end of the year in accordance with the losses sustained. Of course, the premiums charged by these mutual societies vary according to the nature of the crop insured; for instance, a farmer insuring cereals pays much less than a farmer who insures vinos. 32 AGEIOULTUBAL OOOPEEATION IN EtTBOPE. AGRICULTURAL COOPERATIVE ASSOCUTIONS. Mr. CanmeuiO. STATEMENT. KOME. The agricultural associations, which grew out of the agricultural committees founded in 1865, have become very powerful organizations within the past 25 years. A great impulse was given to their organization in 1884, when special legislation was enacted encouraging this form of cooperation. These societies come under special provisions of the commercial code; they are limited liability cooperative associations, and the shares they issue are of low denominations, varying from 10 to 50 francs per share. They count among their mem- bers all classes of farmers, both small and large, who are only responsible for the liabilities of the association to the extent of the value of the shares they hold. All speculative features are excluded from the business done by these societies. No member may hold shares to a value exceeding 5,000 francs, while no share may exceed a value of 100 francs. The shares are personal, unnegotiable, and only transferable by the express consent of the general assembly and the administration of the associations. Some few of these associations have elected to organize themselves as unlimited liability concerns, as is done by the rural banks in Italy. The latest and most important of these unlimited liability associations are in the Province of Brescia. The prime purpose of the agricultural cooperative associations is the collective purchase of agricultural requirements. They also undertake to test machinery, fertilizers, etc., which they sell, and they thus effect- ively promote agricultural development. They also assist their members in the purchase of these require- ments by supplying them with credit on easy terms. The question of credit is so vast that I can only briefly summarize that aspect of the question in the time at my disposal. The form most generally adopted by these associations is that by which the members receive the requisites they order and pay for them partly in cash and partly on time. In order to afford their clients credit on their purchases the associations have to obtain money, which they generally get on promissory notes for which the associations become liable. Another form of credit of which well-estabHshed associations can avail themselves is that of an open account with a cooperative credit bank. The association also accepts from its members promissory notes for the portion of their accounts not paid in cash, and these notes are dis- coiinted by the association at the credit bank with which it deals. Again, credit is given by accepting from the purchaser the signed invoice for the goods which he has not paid for, which invoice is indorsed by the association and discounted by it. The association can obtain the use of money on open account to the extent of 200,000 francs each from the credit banks. In the north of Italy it is generally the savings banks and the people's banks which give open accounts to the associations. In central and southern Italy special legisla- tion provides credit for them on better terms than they could obtain on the open market; for instance, in Umbria there are special institutions for providing credit to these associations. In southern Italy and Sar- dinia the Bank of Naples has been authorized by special legislation to devote a portion of its reserve to grant- ing agricultural credit. The Bank of Sicily has also been authorized to do likewise. The rate of interest charged by these different institutions varies greatly. The savings banks and the people's banks of northern Italy charge a rate which corresponds to the rate of discount of the Bank of Italy. But in central and southern Italy and in the islands which come under special legislative provisions, the rate of interest charged is as low as 3J per cent and may not exceed 4 per cent. The time is from six months to one year. The guaranty is regulated by special legislative provisions. The loans are guaranteed sometimes on the farmer's crops and sometimes by mortgage security. There are about 1,500 of these associations of different types. Some are very small and work within a very limited area of operation; others, again, are large, doing business over a large area and selling goods to a value of 3,000,000 lire a year. In Sicily the associations are not organized as separate societies; their work is performed by the rural banks and the business thus done progresses with the progress of the banks. Besides these cooperative associations there are other societies, known as "agricultural imions," which are on the same lines as the associations and doing the same kind of work, only they are organized by the Cath- olic Party and are sectarian institutions. About 700 of the agricultural cooperative associations are united with the federation at Piacenza, which has branch offices in Rome and Naples and in Catania, Sicily. An idea of the activity of these associations can be obtained by an examination of the statistics of the federation. Unfortunately the most recent balance- sheet available is that for 1909, but it gives a fair idea of the activities of the federation. The figures for 1909 show 650 associations belonging to the federation (this number has since increased to 700), with 125,000 members, and a capital and reserve fund amounting to 13,000,000 francs. The business done amounted during the year 1909 to some 80,000,000 francs. As the number of federated associations has since increased, it may ITALY. 33 be safely said that they are now selhng machinery, fertihzers, seeds, and other requirements to a value of over 100,000,000 francs a year. The federation makes collective purchases and sells its goods to the federated soci- eties, but these latter are not bound to make their purchases of the federation. The federation was foimded in 1892. As a rule the credit granted to these associations is short-time credit, but in the south of Italy they get credit for as long as two or three years. QUESTIONS. Q. What is the average proportion of farmers in each community doing their purchasing through the associations ? A. These associations are sometimes quite small, with only 20 or 30 members ; the larger ones number from two to three hundred members, all making purchases. As I stated, 125,000 members belonged to the federa- tion in 1909. There are still, however, a large number of associations outside of the federation, so that the number of persons who are members of both the federated and the unfederated associations may be safely placed at 250,000. Now, the census gives the agricultural population of Italy, inclusive of women and children, at 13,000,000. Q. It woxild appear, then, that a comparatively small number of farmers in Italy resort to the cooperative plan of purchasing their farm requisites. Does this comparatively small number represent 250,000 farmers of the class requiring credit, while those who make their purchases by other means represent farmers who are not in need of such facilities ? A. No; these associations do as much business with large farmers as with small, for the large farmers, by purchasing their requisites in large quantities through the associations, obtain better terms. It should be borne in mind that the total agricultural population of 13,000,000 includes, besides women and children, the large body of agricultural laborers who do not possess farms and who, therefore, have no need to purchase farm requisites. When this is taken into consideration, it will be seen that the number of 250,000 members is not so small a ratio to the agricultural population as it might seem by merely comparing 250,000 to 13,000,000. Q. Is there any combination in Italy to maintain or boost the prices charged for farm machinery and requisites ? A. Before the associations came into existence there was an understanding among the suppliers of machinery to keep prices high; that was one of the reasons which led to the organization of the associations. They have succeeded in preventing combinations and in regulating the market. Q. Do manufacturers now compete for the trade of these associations ? A. There is competition among the different machine-supplying agencies to sell to the associations. A great many of the associations buy through the federation, but they are at liberty to go outside and buy if they prefer." The work of the associations tends to keep prices fair. Q. About what percentage of the purchase price is saved by buying under the cooperative method ? A. The great value of the work of the associations has been that it has brought prices of commodities on the local markets into due relation with the prices prevailing on the world markets. Q. Do the associations sell to farmers who do not belong to the organization ? A. Not all of the associations sell exclusively to members. Some sell also to nonmembers, but in that case they generally have two prices, one for members and one for nonmembers, so as to induce the farmers to join the associatipn. AGRICULTURAL COOPERATION. Statement by Prof. Bobdiga, of the Royal High School of Agriculture and Rural Economics. Naples. The first rural associations in the world were founded in Italy, and more especially in Lombardy. These were associations of landowners who got together to reclaim land and irrigate it some twelve or thirteen centmies ago. wAgricultural cooperative associations as now understood, i. e., associations of small landowners or tenant farmers, are a recent development in Italy dating back only some 20 years. These associations of small farmers are formed for a variety of purposes, many for the purchase of machinery and fertilizers, etc. Other associations have been formed to market farm products, but so far they are few in number and not very suc- cessful. Then there are many dairying associations in Italy, more especially in Lombardy; some of these are very important. One of the most powerful is that at Agroda. Cooperative associations are most numerous in northern Italy; there are some in central Italy, but very few ia southern Italy. In Sicily there is a special form of agricultural cooperation known as associations for collective leasing of land and cooperative farming. These associations are formed by small farmers and tenants who come together for the purpose of renting large estates and farming them. 14174°— S. Doc. 214, 63-1 3 '^^ AGEICTJLTUEAL COOPERATION IN EUBOPE. ITALIAN BANKING SYSTEM. Mr. MiRAGLiA, Director General of the Bank of Naples. statement. Naples. In Italy there are over 2,000 rural banks which are organized on the Raiffeisen system with unlimited liability of the members. In some villages there are as many as two or three of these associations. The mem- bers all know each other, and so can command more credit from the bank. Then we have in Italy other kinds of banks which are not business corporations but public utility or benevolent institutions, and to this class belong the Bank of Naples, the Bank of Sicily, the Savings Bank of Milan, and other important savings banks. These institutions having no shareholders do not have to pay dividends, and aU the profits of the business go to increase the working capital and build up the reserve fund. These banks make a special feature of encour- aging the formation of rural banks by placing money at their disposal. These banks are large deposit banks. The Savings Bank of Milan at the present time has over 800,000,000 lire of deposits; the Bank of Naples has over 2,400,000 lire of deposits. QUESTIONS. Q. We know in America that a man will work on his own land a great deal better than he will for his landlord. We believe that nation is the strongest which has the largest number of landowners in its bound- aries and that the nation is the weakest which has within its boundaries the largest number of tenants. In America we have an increase of tenants, and one of our problems is how to convert these tenants into land- owners. We would like to know if j'-ou have been able to solve it and if you have any measures pending regarding this matter. A. In Italy there were many estates which belonged to the State (Government lands), and laws have been passed to provide for selling these lands to the peasants, who can pay off the purchase money in small yeai'ly installments. Then there is a land-credit institution, known as the "Credito Fondiario" (Land Credit Bank), which loans money at 4^ per cent to men who want to buy land and who possess assets or standing sufficient to command credit. Besides this there is a form of credit available for agricultural laborers, and this special kind of credit is supplied by the Bank of Naples, which advances money on land at 3* and 4 per cent, but it does not make such loans directly to the farmer. The bank makes the loan to a local organization, which, in its turn, loans the money to the actual farmer at a rate not to exceed 6 per cent. This system also exists in Sicily and is carried on by the Bank of Sicilj''. COOPERATIVE ASSOCIATIONS FOR DISTRIBUTION AND PRODUCTION. Mr. AziMONTi, Representative of the Federation. STATEMENT. Naples. The largest cooperative associations in Europe are those for the purchase of farm requisites, such as fer- tilizers and agricultural implements and machinery. There are other associations for marketing farm prod- ucts, but they are not as important as the first kind. The cooperative association buys collectively farm requisites, seeds, and fertilizers. This movement started in the south of Italy as a result of the work done by the traveling professors of agriculture, who went around the farms telling the landowners that they should use fertilizers on their lands. After a while a few of the landowners found out that fertilizers were necessary, and after they had had their first experiences the number of members who joined these cooperative associations for collective purchase increased. At first they only bought fertilizers, then they began to buy agricultural ma- chinery also, and now there are a great number of such associations buying machinery extensively from the United States. These cooperative purchasing associations come under the general provisions of the law regulating com- mercial associations. They enjoy no special privileges of any kind. If their capital does not exceed 30,000 lire, they are exempt from taxation during the first year of their existence; if their capital does not exceed 10 000 lire, they are exempt from taxation during the first 10 years of their existence. This is the only privilege granted them. Besides these cooperative purchasing associations there are cooperative dairying associations, many of which are important, the two foremost being those of Agroda and Soresina. These associations have a large membership, and each member brings to the dairy from 3 to 10 hectoliters of milk per day, according to the number of cows he owns. ITALY. 35 QUESTIONS. Q. What proportion of your peasants are illiterate ? A. In some places over 50 per cent. In some provinces the last census showed 50 per cent of illiterates, whereas in other provinces there were only 8, 10, or 12 per cent. During the last three years the Government has taken serious steps to fight illiteracy, having opened over 6,000 schools for illiterate adults. In this Prov- ince, in which illiteracy is very large, over 450 schools for emigrants have been opened since 1911. In the provinces from which there is a large current of emigration, schools have been opened not only to teach them to read and write, but also to teach the history and customs of the United States. A special study of American agriculture is also made. Q. We would hke to know if the Bank of Naples conducts an agricultural department ? A. Yes, the Bank of Naples loans money to farmers through intermediary institutions at 3^ per cent. It deals with the agricultural population through the local institutions. Q. What are the conditions under which the Bank of Naples grants loans to these intermediary institutions? A. The Bank of Naples makes such loans to the intermediary institutions when they are duly org-anized in accordance with the requirements of the law and when their members are of good moral standing. Q. Are the intermediary institutions required to keep a line of deposits ? A. No, sir. Q. Do the intermediary institutions grant their loans on the security of mortgages or on real estate ? A. The loans are not granted on mortgages but on personal notes. Q. Are the notes indorsed by the neighbors of the borrower ? A. The local intermediary institutions that apply to the Bank of Naples send the note signed by the presi- dent of the local institution and by the man who is asking for the loan. Q. What length of time do these notes run ? A. As a rule from one to two j^ears. If they are for the purchase of machinery, for three years. Q. How does the Bank of Naples help the farmer to buy his land ? A. The Bank of Naples does not do this; it does not make loans on land. The credit it gives is for the purpose of working the farm, not for purchasing the farm. There is the I^and Credit Bank which loans money on land. Q. Mention has been made of intermediary banks. What is to be understood by an intermediary bank which gets the money from the Bank of Naples at 3^ per cent? A. There are three parties to these transactions : The Bank of Naples, the local intermediary institution, and the individual farmer who appHes for the loan. The local organization is the intermediary. The Bank of Naples loans to the local associations and the farmer gets the money from the local organization. LAND CREDIT. Prof. Graziani, Professor of Political Economy in the University of Naples. STATEMENT. Naples. It must be borne in mind that our social conditions are different from those prevailing in America. Whereas in America you have plenty of land, we in Italy have not so much land. We are overpopulated. You have the possibility of solving your agricultural problems by transforming your tenants into landowners, but how can an Italian peasant without one cent of property become a buyer of land ? Our institutions are organized mainly for the purpose of helping the landowner to improve his lands and to place him in a condition to farm his estates. There are three kinds of such institutions. There are the institutions which loan money on mortgages, and one of their purposes is to grant mortgage loans on farms so as to enable the settlement of claims being made between the several direct heirs to an estate, all of whom have an equal claim on the land under the Code Napoleon, a claim which must be bought off if the land is to remain undivided. Such institutions loan money on mortgage at 4 per cent. Then we have other institu- tions which loan money on notes, on personal security, and these are divided again into two classes. The first class deals with owners of land who want to make permanent improvements, irrigation, etc., and the other class deals with the men who want money only to enable them to work their farm year by year. QUESTIONS. Q. In order to belong to a local association must a member have material assets? A. These local institutions are organized under the ordinary commercial law of the land. Q. What qualifications must a member have in order to join such a local association ? 36 AGRICULTUBAL COOPEKATION IN EUKOPE. A. No special qualification. A fanner applies to become a member of the association and, if the board thinks that he is a suitable man, he is admitted. That is, the members pass upon his application. Q. It is a moral qualification ? A. Yes; one of character. In some villages you wiU find as many as three local associations, so that the members belonging to each are well known to one another. Membership is given by the assent of the association. Q. IThese local associations are organized on the Railfeisen system ? A. Yes; on the same lines as the Raiffeisen system. Q. It has been explained that the Bank of Naples loans money to these local banks at a rate not to exceed 3J or 4 per cent, and that the local banks in turn loan money to the individual at a rate not to exceed 6 per cent. What becomes of the difference between the 6 per cent and the 3^ or 4 per cent ? Does it go for expenses ? A. Yes ; that margin pays the expenses of the bank — expenses for salaries, bank offices, etc. Q. The difference then goes for operation, and the margin of profit goes to the owners of the intermediary bank? A. Yes; to the shareholders and private individuals. Q. What percentage of the members of the Federation of Agricultural Cooperative Associations for Pro- duction and Distribution, are landowners and own their farms ? A. The proportion varies in the case of the different associations, but most of the land belongs to large landowners. Q. Then most of the land is cultivated by peasants who rent the land from large owners — is that a fact ? A. We don't call the man who rents the land a peasant. The peasant is the man who works the land by the day and who is paid by the day. The peasant, in short, is a farm laborer. Q. What is the average size of the holdings around Naples ? A. In southern Italy we have small holdings of about 1 hectare and large holdings of 5,000 hectares. There are also medium-size holdings. Q. In the neighborhood of Naples are the holdings as a rule large or small ? A. Around Naples they are mostly small or medium size. The small holding averages from one to two hectares, and the medium size from 8 to 15 hectares. Q. What are the principal crops grown on these small and medium-size holdings ? A. Holdings of more than two hectares are usually planted to vines and produce wine. Q. Where is the wine marketed ? A. A lai^e quantity is exported abroad. Q. To what countries ? A. Much to Germany; it is also sold in other parts of Italy. Q. Is it sold to local dealers or to cooperative associations ? A. It is sold to merchants in Naples. Q. Have you any information as to the difference between the price which the farmer gets for his product and the price at which it is sold in Germany ? A. No. Q. You have no information as to how much the local merchant makes out of the transaction ? A. The product is sold direct to the wholesale merchant; there are no local agents. It is all cash business. The farmer goes to the merchant, sells his product, and that is all. Q. What does a farmer have to pay for hired help ? What are the wages ? A. From 2J to 3 lire per day. Q. How long do the laborers work ? How many hours a day ? A. From sunrise to sunset. Q. Do these laborers Uve in the same villages as the small farmers, or do they five in the citv and go out to their work ? Where do the laborers Uve ? ' ' -A. They all live in villages. Some of these villages are as large as cities. We have in Sicily villages with a population of 40,000, consisting entirely of men who work on farms as laborers. Q. Do the landowners Uve in the same villages ? A. If the landowner is a large owner he lives in Paris, Naples, or some other large city. If he is a small owner be lives in the village. Q. Are most of the farms around Naples small or medium size ? A. Only men owning less than 2 hectares till their own soil. The larger landowners just rent the land. Q. Many of your roads are in good condition. How are they kept up ? A. We have some good roads; they are kept up by the state, the province, and the municipality. ITALY. 37 Q. And the necessary taxes for their upkeep are paid by the whole community ? A. Yes, sir. Q. Your schools are located in the villages. Is school attendance compulsory ? How many years must a child attend school ? A. School attendance is compulsory. Q. What is the legal school age ? A. We have no school age. We have a determined number of classes which must be attended covering four years. Q. These classes must be gone through ? A, Yes. Then we have from 6 to 12 years more — six more classes. Q. What is the penalty on the parent for not sending the child to school ? A. Fifty lire. Q. The people in each of these villages have one church in that village, have they not? A. Yes, sir. Q. Each priest knows practically all the people in the village ? A. Conditions here are different from those in America. The priest there must get his hving from the people among whom he lives and he knows that they contribute to his maintenance. In Italy the priests are paid by the state. Q. What inducement is there for the people to keep their land in a good state of fertihty ? A. It is to their own interest. Q. What does the Government do toward stimulating productivity? A. We have agricultural schools and traveling professors of agriculture paid by the Government to go around and instruct the people along agricultural hues. Then we have 50 high schools of agriculture. Q. Do these travehng teachers visit the small farms and give personal instruction to the farmers ? A. Yes, sir. They go to a place and meet the peasants and tenants; then they go to the farm and give them practical advice. Q. Are these traveling professors trained in the agricultural schools ? A. Yes, sir. Q. Are members of local cooperative associations confined to large landowners, or does the membership consist of both large and small landowners. A. It consists usually of small and medium-size landowners; that is to say, in the case of associations organized on the Raiffeisen system. The members of the cooperative purchasing societies are both large and small landowners. RURAL CREDIT IN SICILY. The Manager of the Bank of Sicily. STATEMENT. Palermo. In Sicily rural credit is organized by the Bank of Sicily, which has its main office in Palermo. This bank works in the interior of the island through intermediary institutions, which now number about 280. These intermediary institutions have been organized during the last six years. From a legal point of view, in almost all these institutions the members assume unlimited liability; it is a kind of partnership. Some of the insti- tutions have limited responsibility. In others, again, a few members assume unlimited responsibility and the other members limited responsibility. These institutions at present have over 40,000 members. Credit is given on notes which are made payable at the time of harvesting crops, so that the farmers may get the mpijiey when they need to work the farm and may pay the note when the crop has been sold. During the past few years the notes have been paid regularly, and the Bank of Sicily does not give credit to those institutions which do not honor the notes that they have given. The rate of interest of the Bank of Sicily is 4 per cent, and the intermediary institutions charge 6 per cent. They can not charge over 6 per cent. As a matter of fact, a large majority of these notes are charged less than 6 per cent, say 5 or 5J per cent. The Bank of Sicily is working with great activity to increase the number of the intermediary institutions, and it is hoped that in a few years there wUl be no village in Sicily that will not have one of these institutions for the agricultural popiilation. These institutions are inspected by officers from the Bank of Sicily, who go around once in a while to see how the business is conducted; and the purpose of the inspectors is to see not only that the books are properly kept, but also that credit is given exclusively to agricultural people, because 38 AGEICXTLTUEAL COOPEEATION IN EUEOPE. the Bank of Sicily wished all the money it advances to these institutions to be invested exclusively in the land. Tjast year the Bank of Sicily loaned to these institutions 12,0C0,000 lire. It should be remembered that many of these institutions run savings-bank departments of their own, and the money which is collected as dsposits in these savings-bank departments is invested in the work of the land. QUESTIONS. Q. Is the Bank of Sicily the originator and the parent of the local association, or was the local association in existence first ? Does this system work from the bottom to the top or from the top to the bottom ? A. In 1895 the movement for the organization of local rural institutions started in the interior of Sicily, and in 10 years, that is to say by 1906, there were over 100 of these rural institutions organized by tenants and agricultural laborers. In 1906 the Bank of Sicily, which is organized on the same principle as the Bank of Naples and has no stockholders, was authorized by law to open a special branch to help the foundation of these special institutions; so, you see, the movement was started from the bottom. After it was started the Bank of Sicily helped it. Q. You say it took 10 years for the local banks to get the aid of the Bank of SicUy. Where did they get the money before the Bank of Sicily came in ? A. The members were all small owners of land. They got together and they put their money together, opened savings banks on the Raiffeiseii sj-stem, and, with this money that they collected through the savings bank, they opened the credit department of their banks. The members knew each other and, with the money thus obtained, they opened the cooperative associations. Q. Has Italy a postal savings bank? A. Yes, sir; the system was established in 1876. Q. Are the local banks confined in their dealings to the Bank of SicUy ? A. They are not organized to deal exclusively with the Bank of Sicily; they can transact other kinds of business. Q. Are the notes of members indorsed by the association ? A. Yes; the same as is done by the Bank of Naples. Q. Does the Bank of Sicily loan on collective paper or on individual notes ? A. The note is indorsed by the intermediary institution and sent to the Bank of Sicily with a letter explaining everything about it. Q. Is there cooperation in assuming unhmited habihty between the landowner and the tenant 1 A. These associations are composed of tenants, landowners, and even laborers owning no property. Some of these laborers by the aid of these institutions have been transformed into tenants. In some places members of these associations are also largo property holders who join the association not in order to enjoy the credit it affords, but to help the association and give credit to it. Q. To what extent have the local credit banks displaced local conmiercial banks ? A. There were no private banks before these cooperative banks were opened. Q. Can you point to specific transformation which rural credit has brought about ? A. Formerly the farmers were charged 60 per cent interest; now thej- are charged 6 per cent. The main results are due to obtaining loans from the intermediary banlcs. Formerly no intermediary banks existed between the man who tills the soil and the man who owns the soil. Now these intermediary institutions have destroyed the usurer wherever they existed and have also increased production because the land is now worked by better men, whereas formerly there was no incentive to improvsment. Besides, the money loaned by the intermediary institutions is for the purpose of working the land, not only for land improvement. Formerly those landowners who had money of their own were not obliged to invest their money in their land or to work their land. These intermediary institutions now enabb small capitahsts to use their money for the betterment of their land and they apply to these institutions to get what money they require for working it. This has made it possible to introduce fertilizers and machinery. Q. How are the postal-savings deposits used by the government ? What interest does it pay ? A. The savings are used to build roads and other public works. The interest rate is 2.60 per cent. Q. Is provision made for paying off loans at the convenience of the borrower, or must he await the termi- nation of the period of the note ? A. He may pay off his debt, whatever he can, at any date on which interest falls due. Q. How are intermediary institutions organized ? A. They are based on the Raiffeisen system. Q. Are these what are called the confessional banlcs ? A. Some are confessional and some are not. ITALY. 3 9 Q. In what respect do rural cooperative banks aid other cooperative institutions ? A. Some of these institutions have selling departments also. That is to say, they look after the marketing of the farna products of thqir members, but there are very few of these. Q. What conditions are required for membership ? A. The only condition required is that applicants for membership must be known to be respectable, honest men of good character. Q. Is the Bank of Sicily a national or a private bank ? Does it receive state aid ? A. A special law passed in 1907 authorized a special tax which by 1911 had aggregated in Sicily 4,000,000 lire. This was turned over to the Bank of Sicily for agricultural credit purposes. This law referred only to southern Italy. Q. Do these intermediary banks furnish money with which to start cooperative stores ? A. There are very few of these cooperative credit associations which have started stores. Q. Do they loan money to the cooperative stores ? A. Very few of them have done so; it is not the rule to do so. Q. Do these cooperative rural banks have a plan of loaning money to a man possessing strength of muscle , industry, and intelligence, in an amount sufficient to buy a small farm ? A. No. Q. When the Bank of SicUy receives an individual note issued through the farmers' associations to the Bank of Sicily, does the Bank of Sicily retain that note in its safes or does it put it on the market ? A. The bank puts it in the safe, holding it until it matures, and then presents it for payment. Q. What is the maximum length of time for which the Bank of Sicily will loan, money to these organ- izations ? A. Three years for loans to buy material and machinery. To provide funds to work the farm the maximum length is one year. Q. What is the maximum time for which money can be borrowed from the land-credit bank and what is the maximum rate of interest ? A. Fifty years is the length of time and 3^ per cent is the rate of interest. Q. Does that 3^ per cent at the expiration of the 50 years pay both principal and interest, or does it cover one pr the other at the expiration of 50 years ? A. It pays only interest. Suppose in June, 1913, you take $1,000 on mortgage. On this you pay $35 interest; then you pay 2 per cent or more or less according to the length of time, for amortization in addition. You pay really 5^ per cent, which covers interest and amortization. Q. What percentage of agricultural people take advantage of rural cooperative credit ? A. This question can not be answered off-hand. Q. Why is it that those who have not taken advantage of it do not do so ? A. Because they do not need it. Some have enough money to work their land and do not need to borrow more. The Bank of Sicily sends its agents into ^11 the Sicilian villages where the agents have not succeeded in organizing intermediary banks. Q. What is the total amount of savings deposits in Sicily ? A. The total deposits in Sicily in all savings banks amount to about 500,000,000 lire. Q. What effect have the aid and effort of the church and the interest of the church's representatives had upon the success of the credit organizations ? A. In Sicily there was always a spirit of association. Among the peasants, the tenants, and the tillers of the soil cooperative associations were formed as early as 1882. In 1894 there was considerable social unrest among the small landowners and the wage-earners of the country, and this socialist movement helped to further such cooperation. The sociaHst movement was followed by a confessional movement organized by the church. AU this helped to form the cooperative spirit, so there is no doubt that the church has helped. But it is equally certain that the church has not been the only factor in this formation. It can not be said that the church has been the exclusive spirit in this movement. There have been many factors working over a large number of years which have helped the formation of these associations, but the church has given very material assistance to this end. Q. Are there any insurance features in connection with loans ? In other words, are loans ever granted upon the security of a life-insurance pohcy ? A. No. The Bank of Sicily has a special department connected with large warehouses managed by the intermediary rural banks. In these warehouses individual farmers may deposit their products and may get a loan up to three-fourths of the value of their crop. 40 AGEICULTUBAL COOPEEATION IN EUEOPE. Q. How is the value of crops estimated ? A. On the basis of the ruliag market price. Q. After the stuff is deposited in the warehouse does the Bank of Sicily control the sale, or does the indi- vidual control the sale ? A. The rural banks have these warehouses and they keep the crops on deposit and the Bank of Sicily loans on three-fourths of their value. Most of the crops are handled by the local association itself. Q. Are they marketed by the association or by the individual ? A. Frequently by the association. The Bank of Sicily, besides loaning money on the notes signed by the individual and indorsed by these associations, loans money direct to the association itself to enable these associations to buy fertilizers, seed, and machinery for the purpose of dividing what they have bought among the members. So there is one credit upon the iadividual farmer through the association and another credit upon the association. There are two kinds of associations of farmers. When I speak of farmers I mean tenants, landowners, and tillers of the soil. Of these associations of farmers which sell theii- crops on a cooperative basis one is at Aderna and the other at Sortina, niid those spU oranges. The individual members gather the crops and the association markets them. Q. How does the grower get just what his crop has brought ? How do they prorate it ? A. The money received is divided proportionately to the number of oranges that each member has brought to the association. The oranges are sold by the thousand. The quality is about the same. Q. I waiit to know what provision is made m this country for the man who raises perishable crops ? A. No provision exists in Sicily. There are no associations which take charge of perishable crops. Q. Do the banks assist the man who raises perishable stuff the same as the man who raises fruit ? A. There are a few banks which do this. If you are a member of an association of which several members grow grain, then the question is not raised ; the credit is given to the man to work his land, no matter what he grows. In some instances, however, the credit is open only for those crops which can be put in the warehouses. Q. How much money does it take to finance the average tenant ? A. Not including the price of the land, to put 1 hectare of land in working condition as a vineyard takes about 450 lire. Q. That makes him a home ? A. Yes ; he can borrow this. These rural associations do not give any help to better the general condition of the land, but only to work it. For instance, if I have 1 hectare of vines that I must cultivate, and I need 300 lire, they will lend me the 300 lire; but if I have 1 hectare and I wish to put the vineyard on it, I can not do it. Q. Have you any statistics showing the farm value of the yearly products of Sicily and the amount that is paid for such products when bought by consumers ? A. No, sir. The crops we produce are sold in the international market. Our products are wines, oranges, lemons, and fruits, so there is no local price, except as regulated by the international market. We have some lists of prices gathered by the chambers of commerce of the cities of Italy. In a general way, prices are the same as you have in the United States. There are merchants who buy our agricultural products and in turn sell them to other merchants. For some products we have the broker, who works on the commission basis. Q. Through how many hands does the product sent into Palermo by rail or boat pass before reaching the consumer ? A. The agricultural products which are raised around Palermo are brought into the market and sold directly to the merchant, or the merchant goes to the farm and buys them. Wlien they are in the market, they are bought by another merchant, who retails them; so sometimes those products go through two and sometimes through three hands. Q. Does it ever happen that buyers combine and agree upon prices to be paid to the growers ? A. We have had such combinations; but they have not yet done anything in a practical way. iQ. What information has the farmer to aid him in inteUigently disposing of his crops ? A. Farmers have no organization for supplying this information. Q. In other words, the farmer sells blindly ? A. You see, the oranges, lemons, and wines are produced principally in this part of Italy. When the farmer knows the condition of the surrounding country, he lias information of what the market ought to be. The farmers are informed of the condition of the market i)i this way, but there is no special organization for this. Q. Where products are exported to the United States, such as oranges or lemons, to be sold at auction in New York or elsewhere, why can not the growers combine, as they do in California, and get all the products realized at public auction ? ITALY. 41 A. The growers of lemons sell their products here in Palermo to merchants who have been in the business a long time and who take care of the exporting of the merchandise. They do not know the name and address of merchants in New York to conduct business with them, so they prefer to sell to the exporting firms here in Palermo. Many growers sell their products on the trees before they are ripe. Some producers send their products direct to the market. Q. With what effect ? A. I know of two producers who have followed this practice for several years; but one, as I understand, has stopped doing so. The other began last year and is satisfied. Q. Do the loan associations make a feature of keeping up soil fertility? Do they supervise in any way the care of the soil and crops ? A. Some of these associations are managed by men very competent in agriculture, and some of the societies have agricultural schools. This work has given satisfactory results. They have also experimented in the use of fertilizers, and in this way they have rendered great service. Q. In the case of the collective leasing of large estates, do the men operate cooperatively, or do they divide up the land separately as individuals 1 A. Every renter places his needs in the care of the association; the association divides the land between the members, and every member cultivates a piece of land. When there is need for the use of machinery, then the machinery is used cooperatively. Q. How many traveMng teachers of agriculture are employed by the Government in Sicily? A. I have not this information here, but can send it to you. In Sicily there are now 12 of these traveling teachers. Some places have three teachers. Then we have 10 schools of agriculture. I don't know the exact number of teachers for each school. Besides this we have technical schools, where agriculture is taught. Q. Do you hold agricultural fairs in Sicily? If so, under what auspices ? A. Yes; we do have cattle shows. Fifty are held annually. We also have flower fairs for improving hor- ticulture; but such shows are not- held oftener than once every four or five years. Q. What is the average size of holdings in Sicily ? A. I do not know. Q. How much labor is required in vineyards, in orange and lemon groves, and in market gardens, and what wages are paid ? A. Normally there are required 100 days of labor for oranges and 200 working days for lemons. Wages for women, for light work, run from 1^ to 4 hre a day; men's wages, from 3 to 8 lire a day. These wages include board. Q. Do they work seven days a week ? A. They do not work on Sunday except in the harvesting season. Q. What were the wages 10 years ago ? A. They averaged from 1 to 2 hre per day. Q. What accounts for this large advance in wages ? A. One cause is emigration and another is the increase of credit faciUties. FLORENCE SAVINGS BANKS. Statement by Com. Mabtbi,li, Director. Florence. The Florence Savings Bank was founded in 1827; it opened its doors for the savings of all classes of depositors. Until recently its capital was used almost exclusively for land-mortgage credit. This form was adopted as it offered a safe security, although it is not easy to get in the money quickly. The ratio between the loans and the valuation of lands has been one-half — that is to say, when application is made to a savings bank for a loan, the land is valued by an expert, and the savings bank wiU make a loan up to 50 per cent of the value of the land. In case of first mortgage, this is a very simple matter; if it is not a first mortgage, the value of the previous mortgage is reckoned to determine whether it already amounts to one-half of the value of the estate. The maximum length of time for which a loan is made is 35 years. The loan is repay- able in a lump sum if for less than 10 years, and with amortization in the case of loans made for a longer period. In the latter case annual payments are made, including interest and amortization. The rate of interest, as a rule, is 4 per cent, but it rises sometimes to 41 per cent, and sometimes as high as 5 per cent, according to the state of the money market. To this must be added a charge for income tax. In case of long-time loans, made for 35 years, the regulations provide that the rate of interest may vary, always remaining at one-haK per cent higher than the rate of interest paid by the savings bank to its depositors. 42 AGKIOULTUEAL COOPEBATION IN EXJEOPE. The savings hank has uitroduced a novel feature of great benefit to the farmers — i. e., it grants loaps on mortgage security in the form of open accounts. The borrower imder this system does not withdraw all the money he is entitled to by his mortgage, but is given a check book. The borrower can return to the bank any part of the loan for which he has no use, and he only pays interest on that portion actually in use. This is of great benefit to the farmer. Such loans are made for agricultural and other purposes; but as the savings bank is particularly desirous of promoting agriculture, it gives special advantages to borrowers who can show- that the money is required for farm-improvement purposes. One advantage is that the money is loaned at a lower rate of interest. The Savings Bank of Florence has now out on loans in various forms 36,000,000 lu'e. This amount can not be exceeded, because the law does not allow the bank to loan more than 30 per cent of the capital deposited with the bank. The bank thus has 138,000,000 lire deposits and thirty-four to thirty-six millions loaned on mortgage securities. INSTITUTE OF COOPERATIVE CREDIT. Statement by Mr. Forti, Codirector. Florence. The principal work of the Florence institute is discounting bills given by cooperative societies which could not directly obtain credit from the commercial banks. These cooperative banks rediscount them \\ath the bigger commercial banks. The cooperative bank also makes loans on pledge, as well as loans for the acquisition of farm require- ments, and to cooperative associations of laborers in order to enable them to undertake contracts for public works. The banks advance the money required as guaranty by the government on contracts taken by the associations of laborers. In this way cooperative associations of workmen in the Province of Milan have been able to undertake large government contracts for the building of railways and embankments of rivers, etc. They have thus been insured a much higher rate of pay than in the case of the work being assigned to a con- tractor. The government is so impressed by this movement in the country that it is going to take up the idea of founding a labor bank with a nucleus capital of 9,000,000 lire to be advanced by the government and public utility corporations. MONTE DEI PASCHI CREDIT INSTITUTE. Mr. CiABATTi, Director. STATEMENT. Florence. This is the oldest institution of its kind in Italy, having been founded in 1569 by the Grand Duke of Tuscany, with a capital of 1,500,000 lire. In 1833 it founded the savings-bank section for receiving deposits. This section of the work is taking the upper hand over all other branches and is likely to become the main feature of the work. In 1865 the insti- tution organized a section for agricultural credit by issuing land-mortgage bonds. It has now in circulation 73,000,000 lire of mortgage bonds. The institution has 120,000,000 lire in savings deposits. It has branch offices all over Tuscany and outside. The land-credit bonds issued by the institution are of three kinds: Some bear interest at 3^ per cent, others at 4^ per cent, and others at 5 per cent. When the rate of interest on Italian Government bonds was reduced there was a call for paper bearing a higher interest and land-credit bonds were issued to meet this demand. Business is done mostly in 5 per cent bonds. The 3^ per cent land bonds sell at 470 plus interest; the 4^ per cent bonds at 490, and the 5 per cent bonds sell at 496 — all repayable at 500. The Monte dei Paschi also discounts bills, especially for other banks. The central bank of this institution at Siena does an ordinary banking business besides these special features. QUESTIONS. Q. Please inform me whether interest is paid on the full value of a mortgage loan on open account ? A. (Martelli.) a farmer can either obtain a mortgage loan from the savings bank on his land up to 50 per cent of its value and pay interest on the entire sum borrowed, or he can obtain a loan on current account guaranteed by a mortgage, when he only pays interest on the amount of money actually used. When the loan is repaid the mortgage is automatically released. ITALY. 43 Q. Do landowners ever give collective land mortgages as security for credit ? A. (Prof. Ferrari.) No; Allien the landowner takes a mortgage he does so individually. There is no cooperation for that purpose. As between the landowner and the farming families there is an arrangement whereby, if the farmer's share be insufficient to cover his current year's expenses, the landowner advances him the money on which he charges no interest, the capital only being repaid. Q. In case of mortgage loans obtained in theform of open accounts, what is the nature of the guaranty? A. (Martklli.) The mortgage guaranty is exactly the same as in the case of an ordinary mortgage loan. Q. Would such a loan only be made to the landowner and not to the farmer? A. Never to the farming family; always- to the landowner. The bank will make loans on open account to other than landowners against the deposit of public securities, bonds, etc. The actual working farmer secures his money on other security than the farm. It should be borne in mind that the farming family never takes a loan except from the landowner who supplies the money required. Q. Why are loans made at lower rates for agricultural purposes than for other purposes ? A. The lower rate of interest is granted practically as a bonus to encourage agricultural improvements because those are considered of great value to the community. LAND TENURE SYSTEMS IN TUSCANY. Statement by Prof. Dblla Volta, Vice President of the Royal Academy of the Patrons of Agriculture. Florence. In order to get a proper understanding of Tuscany's rural-credit systems, the peculiar land-tenure systems prevalent there must be always borne in mind. It is not a system of leasing, but a crop-sharing system which is in itself a form of cooperation between the capital and labor required for the land. The landowner supplies the capital required for the working of the farm, and this system has made the need for rural banks less felt in Tuscany than in other parts of Italy. This remark applies to short-time credit. Long-time credit is sup- plied by the savings banks, and also by an institute known as the Monte dei Paschi of Siena, which employs more than 10,000,000 lire in long-time credit. The institution of cooperative banks for short-time credit has not been developed so far in Tuscany. Another form of cooperation is that of building and loan societies which has lately acquired considerable importance. There exists in Florence an agricultural academy known as the "Georgofili" (Patrons of Agriculture), founded in 1753; it is the second oldest agricultural association in existence, founded shortly after the Agri- cultural Society of Dublin. EXTENSION SCHOOLS OF AGRICULTURE. statement by Prof. Cori Montanelli. Florence. The travehng schools or extension prof essorships of agriculture carry to the farmers technical information on the most recent modes of cultivating crops. The professor goes into the field and gives practical lessons in plant- ing, pruning, etc. He also acts as a propagandist for cooperation and for the agricultural associations. He pro- motes by means of lectures and talks with the farmers the formation of cooperative societies for carrying on their business. The extension professorships of agriculture are supported by contributions from the state, the province, the municipahty, and the savings bank. They are administered by representatives of these different bodies. The travehng professor of agriculture makes a special point of teaching farmers how to avoid disease and of giving them any other information which may be of assistance to them. V,, '-■-•- METAYER SYSTEM IN TUSCANY. Prof. Febeahi Director of the Agricultural Associations and Mutual Insurance Association Against Accidents. statement. Florence. Here in Tuscany the prevailing system of land tenure is that known as the crop-sharing or metayer system, which more-than any other concihates the conflicting interests of the capital and labor of the farm. The estates here generally consist of from 3 to 60 farms, each farm covering as a rule from 3 to 20 hectares. Each of these 44 AGKICULTUBAL COOPBEATIOlSr IN EUEOPE. farms is worked by a farming family proportionate in number to the size and needs of work on the farm. These farming families undertake the entire cultivation of the farm, the landowner placing them in possession of the necessary means for doing so — i. e., housing and stabhng accommodations, implements, live stock, and the feed necessary for the stock. Thus all necessary capital stock is supplied to the farming family by the owner of the land, and all expenses for seed, fertiUzers, feed for cattle, etc., are divided equally between the farming family and the landowner. The entire value of the crop raised is also divided in half between them at the end of the year when settlements are made. This system has estabhshed a real copartnership between landowner and farmer, as each is equally interested in the prosperity of the farm. Thus a large estate of from 50 to 60 farms, covering froni four to five hundred hectares of land, is cultivat('(l by these farming famihes; is thus practically divided into small holdings, and thus makes possible the carrying on of intensive agriculture by the farming famihes working simultaneously on the different farms. It is this system of copartnership which has led to the tranquility and contentment prevaihng in the agri- cultural districts of Tuscany, where harmonious relations prevail between landowners and farmers — relations which do not exist so amicably in other parts of Italy where the different interests confUct. Thanks to this system we do not have in Tuscany the objectionable feature prevailing elsewhere of an excessive demand for labor at certain seasons alternating with lack of employment at others. This metayer system has been held responsible for the reluctancy of the farmer to introduce modern agri- cultural improvements. It has been said that these agricultural famihes are backward and unwilling to intro- duce novelties. This is true to the extent that it is slow work to get these peasant farmers to adojit the latest agricultural improvements in scientific agriculture, such as the use of artificial fertiUzers. But it must be borne in mind that when the work of education has been accomphshed and such famihes have once been convinced they take hold, and improvements once introduced are placed on a firm basis. It must also be borne in mind that a great variety of crops is raised on the same land; and, while this may hinder specialization in any one branch, yet this system provides occupation for the farming family the whole year round and is the most economic form of agriculture. QUESTIONS. Q. How long do farming families remain on the farm under the crop-sharing system ? A. (Count Feassinetti.) The agreement with the farming family under the metayer system is under- stood to be for one year. If in November notice to quit has not been sent in, the agreement holds good from year to year. Some famihes have been cultivating the same land for a hundred years and more. Q. Who determines what crops shall be grown, the tenant or the owner ? A. The proprietor in consultation with his agent. The lease made with the farmers prescribes the rota- tion of crops. Owners of large estates, comprising not less than 40 farms, usually employ an agent whose duty it is to inspect the farms and see that the terms of the lease are respected. He represents the landowner at the division of the crops, and has charge of the purchase of Uve stock, etc. Q. Are peasants given any opportunity to buy these farms ? A. No; but if the crop sharing leaves the farmer a siu-plus he puts it by and wiU very often purchase another farm, which in his turn he leases to another farming family. Q. Do these farming famihes employ laborers ? A. The rule is that the family itself cultivates the land, but if there is a deficiency in labor on account of illness or death, etc., the family may engage hired labor, which it has to pay for. The owner sometimes advances the cost of this labor. Q. What percentage of the land in Tuscany is OAvned and cultivated in this way? A. All, except in the Province of Grosseto, where extensive agriculture prevails — grain and forage crops cultivated by hired labor. Q. Is any literature available on the travelmg schools or extension professorships of agriculture ? A. There is literature on the subject. Q. Do farmers pay income tax ? A. Yes; a small income tax; because under the law the metayer contract is considered as a lease and the taxes are paid by the landowners and charged against the farmers. The property tax with the provincial supertax amounts to from 34 to 50 per cent of the income from the land as assessed 70 years ago. Q. Is there no variation of the tax with the improvement of the land 1 A. The valuation of the land was made in 1832-1834, consequently much land then uncultivated is now planted in vineyards and olives, and yet it is taxed at the same rate as in 1832. This has led to a great inequality in taxation all over Italy. A law has been passed for the revision of taxes in accordance with the real value of the land. This has already been done for 18 provinces. ITALY. 45 Q. Does the peculiar nature of land tenure in Tuscany decrease or increase the need for rural banks ? A. Under the metayer system it is not the farming famUy which is in need of credit, but the landowners who own from 30 to 40 farms. The sums of money they require are much larger than those loaned by small rural banks. Q. After division of the crops at the end of the year is there any cooperation as to the marketoig of the tenant's share? A. No; there is no cooperation after division of the crops. The farming families sell their shares for them- selves. The owner collects his share, and sells for himself. AGRICULTURAL ASSOCUTION OF FLORENCE. statement by Prof. Fekrari. Florence. The special system of land tenure prevailing in Tuscany has led to the differentiation of the various insti- tutions existing for the promotion of agriculture which have here assumed somewhat different forms from those prevailing in other parts of Italy. Thus the agricultural association in Florence differs somewhat from those in other sections of the country. The agricultural committees, founded as far back as 1865, are the legal representatives of agriculture in Italy. They are in touch with the minister of agriculture; but, as far as actual practical work is concerned, they are not a very active force. In 1889 the agricultural committees of Florence founded their association, which is not on quite the same basis as a cooperative association, but was founded among the members of the assembly. Before the organization of the asspciation the committee had 250 members; it now numbers 1,500 mem- bers, paying 10 lire a year each, thus providing a fund of 15,000 lire for agricultural purposes. The last balance sheet of the association shows purchases of agricultural requirements to the value of 2,000,000 lire. There are four associations in the Province of Florence, and one in each of the other Provinces of Tuscany, and the amount of purchases made through them shows constant increases. The foundation of this agricultural association among the members of the committee has infused into it new life and rendered the committee entirely independent of government subsidies. It has become a very powerful educational body. The agricultural committee, besides organizing three associations for the purchase of agricultural require- ments, is also active in organizing the traveling schools of agriculture which are characteristic of Italian agri- culture. They have done much to improve farming methods in this country. COOPERATIVE INSURANCE. Prof. Ferrari. statement. Florence. Another work of the agricultural committee has been the organization of the mutual association for insur- ance against accidents to farm workers. Since 1904 there has been a law in Italy requiring employers of indus- trial labor to insure their working people against accidents which may occur to them in connection with their work; but no provision was made under this act for the risks and accidents to agricultural workers in the pursuit of their work, except that the act required the insurance of men engaged as foresters or on farm machinery. The mutual insurance association, therefore, took up the insurance of the agricultural population. The law on industrial insurance requires that employers should pay a rate reckoned at so much per thousand of wages paid, varying from 10 to 90 per thousand according to the nature of the occupation. This makes it necessary for employers of industrial labor to keep exact accounts of aU kinds of work done by their employees and of the wages paid them, so as to make their annual settlements with the insurance authorities. Such a system is impracticable in the case of the insurance of farm workers, as it would be impossible to keep an exact account of the time employed in each kind of work and of the amount paid; therefore, it had to be set aside. A system was adopted of calculating the amount of labor required for each kind of farm durmg the year. In this way it has been possible to calculate for each crop the amount of labor required, which, of course, differs greatly for the different kinds of crops. Therefore, when a landowner wishes to insure his agri- cultural laborers, he is asked by the society which kind of crops he raises, and the society has a table showing the amount of labor required for each crop. On that basis he is required to pay a premium of 5 per thousand per year for the amount of labor required for each of his crops. These calculations show that the landowner pays a 46 AGEICULTXJRAL COOPERATION IN EUEOPE. premium of from 50 centimes to 1 franc per hectare of land, and it has been foimd possible, on this basis, to reimburse the landowner 30 per cent of his outlay at the end of the year. He thus pays from 30 to 70 centimes a year per hectare of land. In this way, by a small expenditure, the mutual insurance association will insure any kind of labor on the farm, whether it be the kind of labor for which insurance is compulsoiy or not. The great liberty allowed under this system, which relieves the landowner from the necessity of making any further declaration as to the labor he employs, has made this kind of insurance very popular m Tuscany. After four years of life the society has insured 794 farms, comprising 265,000 hectares of land, with a population of about 120,000. The population may seem small in proportion to the area, but it must be remembered that it includes a considerable area of forest lands, which are the only lands to which the law of compulsory insurance would ^pp^y- . ..... The cultivation of vineyards, olive orchards, and mulberry trees, which are largely cultivated in this district, gives rise to many accidents, as shown by the statistics of the society. The insured person receives compensa- tion for death, total disability, and in some cases for partial disability. The society has already paid 120,000 lire in liquidation of claims and has a capital of 7,000,000 lire. QUESTIONS. Q. How are mutual insurance companies organized? How managed? Are they under Government supervision ? A, These mutual insurance societies come under the law of 1904. They are required to deposit with the Government a sum in guaranty of their ability to meet obligations. Q. Are they dividend-paying institutions ? A. No; but they pay taxes. All surplus between cost of administration and paying risks, etc., is retxirned to the members. For the past three years there has been 30 per cent difference between actual cost and charges on policies. A portion of the 30 per cent is returned as diminution of the premium paid on policies. In three years a reserve fund has been established of 81,000 lire. AGRICULTURAL COOPERATION IN LOMBARDY. statement by Prof. Aipe. Milan. Agricultural cooperation in this country is not very old. Before Itaty was united there was not any coop- eration at all, but later on cooperative associations were formed. The fii-st farmers' associations were for pro- duction, and the movement then extended to finance. One of the first instances of practical cooperation in this part of Italy was in the silk-worm industry. The industry was in great danger. The farmers came together and sent a man to Japan to study the industry there, and this was the first example of agricultural coopera- tion in this part of our country. The first help from the Government came in 1866, when a law was enacted covering agricultural cooperation. At that time there were only agricultural committees organized by indi- viduals for the purpose of purchasing material and suppHes needed for agriculture. Later on a more per- manent form of cooperation came — an agricultural cooperative syndicate was born. Between 1880 and 1890 the movement became more active, and took on the form of schools of agriculture, which were founded in most of the important cities. The professors went into the country, travehng from one place to another, to teach the farmers how to do their work and where to get the supplies and materials they required. Other forms of agricultural cooperation arose in other cities — in Lodi and in Gallarate — among agriculturists and in this way small cooperative societies were formed. Then, seeing that it was not possible to do any important work on account of their inadequate size, it was found necessary to further unite, and more important bodies were made up by federating several cooperative societies. In this way many larger societies were born. So several provinces, including our Province of Milan, have federated cooperative societies. In this part of our country there is no such institution for agricultural credit as the Bank of Naples. But this lack is practically offset by the so-called people's banks, which, although they were not designed for agricul- tural purposes, still helped agriculture and took upon themselves the task of financing the farmers. The banlis financing the farmers opened checking accounts tor their use. Just as the original small cooperative societies born of individual effort very soon found the necessity of organizing into greater bodies, so thp same necessity was found by these credit institutions, and, as a result, a greater association was born called the Italian Federa- tion of Agricultural Associations. This federation was founded in 1892, and it has since brought together over 600 different societies which are providing materials, suppUes, fertilizers, etc., that are necessary for the use of farmers. It is interesting to note that the business the Italian federation built up during the last year amounted ITALY. 47 to 19,000,000 lire. The forms of credit granted are various. It must be noted that loans are made on a special estimate of the people to be served; consequently, the losses the cooperative societies are meeting are very small. In this way the financing of our farmers has been made possible. The silk business is another form of cooperation which must be mentioned, as well as the irrigation works in the Province of Cremona, which is made up of 52 different communes. Another important feature of the irrigation project is the ViUorati Canal, which provides a great amount of water to its members and has made possible a great amount of work in agricultural lines. All this has been done as the result of mutuality; that is, of cooperation. PEOPLE'S BANKS AND RURAL CREDIT. Prof. SiTTA. STATEMENT. Milan. Not only do the people's banks give open accounts for general purposes to the agricultural associations to be used at their discretion, but they give hnes of credit for special purposes, such as the purchase of seeds, Uve stock, and general farm requirements. These open accounts, granted for special purposes, are settled when the agricultural associations have made their settlement with the farmers. Another form in which these cooperative people's banks come to the assistance of the farmers is the following: Man}- farmers have a great objection to signing a promissory note; consequently the people's banks, in order to facilitate matters, will accept from the agricultural associations the invoices for goods delivered to the farmers and signed by them. In very smaU districts they will accept invoices for goods even if unsigned by the man to whom the goods have been delivered, because in small sections the value of the goods delivered is known, and they have such intimate knowledge of the people who deal with the associations that they are able to give this form of credit. Besides these forms of assistance given through the agricultural associations, the people's banks give credit accounts to farmers; for, although the people's banks arose first in the cities for the special purpose of being of assistance to the industrial, lower, and middle classes, they have extended their work to the country. Another form in which these banks come to the assistance of agriculture is that of assisting the small rural banks (WoUemborg banks). These small banks could not carry on then- work for the farmers if they were not able to discount their notes with the people's banks, which are so organized that they are able to get into intimate touch with the rural banks and are thus able safely to discount their notes. The ministry of agriculture of Italy has published an important work showing the entire development of the people's banks and the credit they give. One of the volumes is a historic account giving the history and development of these banks; the other volume consists of statistics, with diagrams showing the whole prdgress and development of cooperative popular credit in Italy. Besides these, you can get all the information and facts you require on these systems from the bulletins published by the International Institute of A^culture, which show the whole growth and development of agriculture, keeping up to date the data on agricultural cooperation in Italy. The people's banks arose in 1865, and their first banks were at Milan and Cremona, founded as a result of the propaganda carried on by Luzzatti. From there they spread all over Italy, especially in the northern sections of Lombardy and Milan. In 1908, at which date the ministry of agriculture published its report, there were 750 of these banks in Italy, with a capital of 130,000,000 lire and deposits of 800,000,000 lire, thus making, with capital, reserve funds, and deposits, a total of 1,000,000,000 lire. According to the inquiry made by the ministry of agriculture about 450,000,000 lire were placed by these banks at the service of agriculture in 1908. These people's banks have developed differently, the financial status of some of them being extraordinarily powerful. The People's Bank of Milan is the foremost of all, being one of the strongest financial instituti.ons in Italy. These banks are operated on strictly democratic principles. Each member has one vote only, no matter how many shares he may hold. In the second place the shares are strictly personal, and no shareholder can own more than 5 000 fire worth of shares. The result of this is that the shares of the people's banks are entirely removed from the sphere of speculation. The administrators are selected by the shareholders and in nearly all cases give their services gratuitously. In Milan recently some proposal was introduced to pay the adminis- trators but they absolutely refused any payment for their services, as they considered themselves amply repaid by the moral reward. The profits of these people's banks are mostly added to the reserve fund, because the high credit they enjoy as the result of this poHcy is the absolute guaranty of the savings deposits they receive. In recent vesrs the savings of the population have remained in the bank. This poUcy of buildmg up large reserve 48 AGRICULTUBAL COOPEKATION IN EXJEOPE. funds has been entirely the result of the spontaneous wish of the administrators and independently of any government pressure. These people's banks have acted as the nucleus around which the cooperative movement of Italy has grown up. The People's Bank of Cremona has given birth to the agricultural associations of that province; it took the initiative in founding the traveling professorship of agriculture and has supported these movements with all its might and main. These banks have been the great center for the building up of every other form of agri- cultural cooperation promoted by other societies. QUESTIONS. Q. Please give an explanation as to how the people's banks accept invoices from the farmers. Does the bank give credit directly and then collect the money from the farmers ? A. The invoice is accepted as a note with one indorsement; that is to say, the invoice is signed by the association, with the signature of the farmer. The association is responsible to the bank and the farmer to the association. Q. Does the work of the bank take up all the time of the administrators ? A. The admmistrators meet two or three times a week from one to three hours, according to the need for examination of requests for loans. The director is a paid official, and the administrators are the people who are personally responsible to the shareholders for the management of the bank. Q. Do these people's banks give open accounts on mortgage guaranty ? A. The people's banks do not give open accounts on mortgage guaranty except very occasionally, as they have to keep their money liquid. The open accounts of people's banks are given on the credit of signatures. Q. Do rural banks deposit with the people's banks as well as obtain favors and credit from them ? A. No; the deposits of rural banks are very small. Their total deposits are only reckoned at 40,000,000 lire, and they are loaned out in their locaUties and are not available for depositing with the people's banks. Q. Is there government inspection and audit of the people's banks ? A. The people's banks are administered by a board, elected by shareholders, and by revisers who supervise the work of the board, audit the accounts, and become personally responsible to the shareholders. The Gov- ernment has nothing to do with these people's banks, except that it requires of them every month a published statement of their financial situation. Every year a balance sheet is published and submitted to the general assembly of the shareholders who thus exercise a control over the administrators and auditors of the people's banks. A congress of people's banks was held at which there was a current of opinion in favor of government inspection of the banks, but no definite action was taken. The important people's banks of Milan, Cremona, and Bologna objected strenuously to such government inspection, and so the measure was not adopted. Q. How comes it that the people's banks, which were founded to supply the needs of the towns, do business in the rural districts ? A. It is true that these people's banks arose first in the cities to meet the needs of the lower and middle classes and of the small shopkeeping and industrial classes. But in Italy there are very few large industrial centers, and, naturally, as soon as the people's banks went into the small towns they had to extend their business to the agricultural population, which forms the majority of the inhabitants of such small centers, as agriculture is the chief industry in Italy. Then came the incessant request for the opening of branch offices in the villages and populated centers outside the small cities, and these banks began to work for the small landowners and tenant farmers. The purpose of these banks is to conduct a savings-bank business and put such savings to the most productive use. Q. Do cooperative storehouses offer a better basis for securing rural credit than private granaries would, because they are better known and store larger quantities ? A. Certain cooperative associations in the northern section of the Province of Milan have organized coopera- tive granaries where wheat is stored collectively and used as security for obtaining credit. When the loans are liquidated, the grain is sold for the benefit of the collective owners, the granary retaining one half of 1 per cent to meet working expenses. There are also institutions which accept farmers' products and make advances on them. ITALY. 49 AGRICULTURAL CONDITIONS IN LOMBARDY. Prof. SoHBSi, Traveling Professor of Agriculture. STATEMENT. Milan. The Province of Milan occupies an area of 150,000 hectares under cultivation. The soil is partly gravel and partly sand, and, had it not been for the assiduous care of the farmer, the soil could not have attained the high degree of fertility now prevailing. This high development of agriculture is due to careful cultivation, and more especially to the magnificent irrigation system to which the wealth and fertility of this province is due. The water used for irrigation is largely obtained from lakes Como and Maggiore. The rivers Adda and Ticino contribute a large amount of water used for these irrigation purposes. The first canal was derived from the River Adda and was built in the year 1200, with a water force of about 40 cubic meters per second. The other main canal comes from the Ticino and has a capacity of 100 cubic meters per second. The first of these canals irrigates the eastern section of the Proviace of Lodi. The other great irrigation canal from the Ticino River was built as far back as 1200, during the glorious period of the life of the communes, when victories and successes were commemorated by carrying out great works of irrigation for the benefit of the province. The other two great irrigation, canals, the Vetaglio and the Naviglio, form an artificial lake, and Napoleon constructed another canal to carry the water out into the country. The total amount of water conveyed for irrigation purposes by these two canals is about 300 cubic meters of water per second. These irrigation waters are spread over the southern section of the province. The northern section has quite a different system of farming. In the northern part the farms are in small holdings of about 2 hectares each. The rotation is a four-year one — wheat, clover, wheat, Ir\dian corn. These farmers use great quantities of manures and chemical fertilizers, and the fields are worked by South Bend and Oliver plows. The great feature of the agriculture of this section is the cultivation of the sUkworm. Each of these farmers working a farm of about 2 hectares raises from 30 to 40 grams of silkworm eggs. The production of cocoons is about 50 kilograms of cocoons per ounce of eggs; the value of silk is about 3 lire per kilogram of cocoons; so the growers get about 150 lire of silk per ounce of eggs. The total amount raised in the northern section of the Prov- ince of Milan is reckoned at 4,000,000 grams of silk cocoons. Another specialty of the agriculture in the northern section of the Province of Milan is the raising of fatted calves. The farmers generally have two or three milch cows and the calves are fattened and sold in the mar- ket of Milan. The southern section of the province is irrigated and the agriculture is quite different. Instead of farms 2 hectares in size, the average farm is about 200 hectares. The rotation in this section is wheat and clover, the clover lasting from two to three years, on an average. Then the field is plowed and rice is raised. The rice is grown for two consecutive years, followed by Indian corn; then wheat again, which recommences the rotation. Forage crops are a great feature of this section, and you wiU understand their importance when you learn that there is one cow per hectare of land in this part. There are many herds of from 100 to 150 cows. The average production of milk is reckoned at from 30 to 35 hectoliters per cow per year. This milk is used for diverse purposes; in the first place for cheesemaking. The cheesemaking is generally conducted in dairies on the farm, but in some parts it is sent to be worked up in great industrial dairies. Butter is the principal product in most of the sections. The yield of rice, in spite of the diseases prevailing in recent years, amounts to 50 quintals per hectare. Indian corn also yields well, about the same as rice. Wheat yields between 22 and 25 quintals per hectare. The average yield of forage crops in rotation is from 90 to 100 quintals per hectare. The yield obtained in the flooded fields is over 150 quintals of hay per hectare. The traveling professors of agriculture carry on their educational work by lectures and field demonstra- tions. A course of lectures is given and a number of experiment fields are worked each year. Besides giving lectures, bulletins are printed, by means of which information is also disseminated. The traveling professors also make a specialty of improving the breed of live stock by encouraging fairs, shows, and the importation of breeding animals. They also give practical training to herdsmen in model farms with all appliances, so as to train experts in stock breeding. They teach the rational use of machinery and do their best to raise the educational level of the farm laborer, as scientific agriculture requires men of the highest grade of intelligence. It should be noted that the organizers of both the agricultural associations and the traveling professorships of agriculture come from the Agricultural High School of Milan. 14174°— S. Doc. 214, 63-1 4 50 AGBIOULTTTBAL COOPEBAttON IN EUAOPB. QUESTIONS. Q. At what age are fatted calves sold for the market ? A. From 70 to 80 days old; the calves weigh from 140 to 150 kilograms. There is a government tax of 2 lire on each calf, the tax being applied to improve the breed of live stock. Q. Is butter marketed cooperatively ? A. There has been a movement in that direction, but so far it has been unsuccessful. Butter for exporta- tion is marketed by large commercial enterprises. Q. Does the Government provide any inspection of the herds ? A. No; only the milk sold in the city is inspected. Milk used for butter is not inspected. Q. Must milk contain a certain proportion of fat in order to be sold ? A. It must contain 2^ per cent. Skim milk can be sold, but it must be stated that it is skim milk. Q. What is the approximate market value of a quintal of wheat ? A. From 25J to 29 lire. Q. What is the price of Indian corn ? A. From 22 to 29 lire per quintal. Q. What is the price of potatoes ? A. The regular price is about 8 lire per quintal. Q. What is the present price of hay ? A. There is a very great difference in the price of hay, according to its quality. The average price of hay from permanent meadowlands is about 10 lire per quintal. But hay from rotation fields would be lower. COLLECTIVE LEASES AND COOPERATIVE FARMING. Prof. Samoggia. STATEMENT. Milan. A particularly interesting and peculiarly Italian form of agricultural cooperation is that of farmers who do not own but who collectively lease or purchase land which they work on the cooperative plan. This system is known as cooperative or collective leasing (afl&ttanze collettive) . This system has arisen from different causes in different parts of Italy. In Lombardy it has arisen in order to replace the capitalist middlemen, who used to lease the estates from the great landowners and then sublet them to farmers in small holdings. The first of these cooperative associations arose in Lombardy 25 years ago for the purpose of enabling farm laborers to lease directly from great landowners and public corporations which own land. In Sicily also associations of farm-workers have been formed to lease lands from great landowners directly and thus get rid of the middle- man, locally known as the "gebellotto." The importance of this form of cooperation from a social standpoint is greater in the Province of Emilia, because in that district the population consisted mostly of landless farm laborers who went out at a daily wage to work on the farms. This class of wage farm laborers was subject to long periods of unemployment, and, consequently, districts were subject to strikes and serious labor troubles due to the discontent of the wage- earning population. The result was that these farm laborers formed cooperative societies to solve these diffi- culties with a view to leasing land on the crop-sharing plan and acquiring land by purchase. The results have shown that this form of cooperative farming has been a great and powerful influence and has served to cahn the labor troubles in this district. Not only have these associations acted as a pacifying social element but the yield obtained from the land has greatly increased. The cooperative associations have raised the standard of agriculture in addition to raising their own social status. There are two kinds of these cooperative farming associations. In one kind, which prevails in the Province of Milan and in Sicily, the land is leased collectively to the association, but is then parceled out in lots* assigned to each family, which farms its allotted portion of land. In the other kind, which predominates in Emilia, the land is leased and farmed collectively. From the social point of view, the cooperative farms, in which each family is assigned a special plot of land, have given the best results. The first congress of these cooperative farmers was held in 1906, the second in 1911 ; and this second congress showed not only progress in the number of members and associations but also an advance in the system of cooperative farming. In Sicily the tendency is constantly to enlarge the area of the cooperative farms, and not only to lease but to purchase the land thus farmed. In central Italy, where great difficulties have arisen from so-called "civic usages," and in the district of Padua, which was constantly subject to agricultural strikes, the tendency now ITALY. 51 is to adopt the cooperative farmiag system and obtaia the land either by lease or purchase. In the Province of Ferrara the tendencies are toward cooperative farming, leasing or purchasing land, and toward cooperative crop-sharing farming. In the latter case land is obtained from landowners and a copartnership agreement is entered into by which the crops and profits of the enterprise are shared. To summarize, it may be said that this kind of cooperative form of collective leasing has given good results, both from the social and technical agricultural standpoints ; but it has been noted that this movement should not be left without guidance. For instance, in Lombardy and Venetia there is a tendency to make excessive charges for such land leasing, and the technical side of such farming is also in need of guidance. Experience shows the need of introducing measures : First, to provide collective farming associations with credit; and, secondly, to provide technical guidance for the agricultural aspect of the work, so as to improve their farming methods. It has also been noted that these cooperative farms, when worked on the system of assigning tracts of land to individual families, must apply cooperative methods for purchasing their require- ments, marketing their products, and financing their undertakings if they are to prove a real success. These cooperative farming associations have appealed to the Government to induce it to pass legislative measures to enact the improvements required. Besides this, autonomous federations have been formed amongst these farmers to apply further cooperative methods to their particular form of agriculture and to work out the needs of the farmers themselves. The traveling professors also have specialized in certain districts with a view to meeting the particular needs of this form of farming. The governments of Hungary, Roumania, and Russia have sent commissions to Italy to study these coop- erative farming systems with a view to adapting them to meet the special needs of those countries. Especially in Roumania, the Government has passed special laws to enable their agricultural population to lease or acquire lands to be worked on this system of cooperative farming. In southern Italy, where it is necessary to under- take great land-reclamation works, the effort is now being made to form cooperative associations of workers for the purpose of first reclaiming the soil and afterwards farming it on the cooperative method. QUESTIONS. Q. In the case of collective leasings, when land is assigned to individual members, is there any cooperation in the marketing of the crops and products ? A. In the case of some of these collective leasings the farmers purchase and own their farm machinery collectively and have also iatroduced cooperation in the production and marketing of farm produce. FEDERATION OF RURAL COOPERATIVE SOCIETIES IN LOMBARDY. Statement by Mr. Bttssola. Milan. The Federation of Rural Cooperative Societies of Lombardy arose through the efforts and initiative of the travehng professors of agriculture and the good will of certain cooperative bodies of this community. The purpose of this federation is purely for supplying the agricultural requirements needed by members. It also facilitates the use of machinery for agricultural cooperative associations which would be too expensive for them to buy for themselves, promotes the exchange of products between the several cooperative associations, and assists in the administration of the cooperative institutions. The number of cooperative societies affiliated with this institution now number 80, but it is constantly increasing, which shows that the federation is well received and rapidly gaining strength. The capital consists of 250 shares of 25 hre each, but even with this small capital the federation has been able to do a very considerable business. Last year it made purchases of agricultural requirements to the amount of 500,000 hre, besides 90,000 hre worth of household requirements for members. The federation is most active in the northern section of the Province of Milan, where there are cooperative societies in practically every village, with a store for the sale of agricultural requirements and general merchan- dise. One of the features of these local cooperative societies are collective storehouses in which farmers can store their crops for collective marketing. Other features are cooperative bakeries conducted on very hygienic principles, cooperative breeding stations for improving breeds of five stock, and cooperative mills for milling grain. These local cooperative societies make their purchases through the federation, as they thus get better prices and more especially are guaranteed the quahty of the goods. The cooperative societies have to work with a hmited capital, especially as the law does not allow of a shareholder owning more than 5,000 lire in shares; therefore, they are bound to obtain credit from other institutions. This credit the cooperative societies obtain from rural banks and people's banks which grant them open accounts. 52 AGftlOtTLl'TJfiAL OOOPERATIOS' lit EVfiOPST. "AGRICULTURAL FAMILY" OF CORNAREDO. Statement by Marquia Ponti. Milan. The institution of the agricultural family (Famiglia Agricola) consists of the union of various cooperative societies aiming at the improvement and well-being of a certain number of farming families. The "Famiglia Agricola" belongs to those forms of patronized copartnerships which may be founded on the initiative of a single landowner (as in this case and a few others) or by a partnership of landowners. The advantage of co- partnership is founded on the following principles: (1) The interests of the proprietors and their dependents coincide in many respects. (2) Apart from the moral side of the question, a real advantage is obtained by the proprietors in promoting those iastitutions which improve the intellectual, sanitary, economic, and social conditions of their dependents and farmers. (3) Our farming system permits the landowners to help such institutions by giving them credit. (4) In the present intellectual condition of our peasants, copartnership institutions patronized by land- owners, notwithstanding the difference existing between them and free cooperative societies, represent one of the most practical forms of securing for the rural population the advantages of cooperation and thus little by little preparing them to act for themselves. In 1893 Senator Ponti organized on his estates at Cornaredo a mutual cattle insurance society, and in 1895 a bakehouse for hygienic and economical bread making. In 1901 the proprietor himself, in agreement with the heads of the farming famiUes on his estate, organized the "Famiglia Agricola" which absorbed the two institutions above mentioned, joined to it the mutual benefit society already existing, and founded later on new branches of cooperation with a view of promoting the intellectual and material well-being of its members. The executive members are the landowner (who is president by right), the agent (vice-president by right), and the heads of the farming families. The heads of those farming families residing in Cornaredo who do not work on the estate are allowed to join the society as associate members. The executive members in their meetings choose the board of directors and a second vice president. There are also honorary members. The "Famiglia Agricola" is divided into five sections: 1 . The cooperative bakehouse which furnishes hygienic and cheap corn bread. 2. The mutual cattle insurance society which compensates for loss due to death or sickness of cattle. 3. The mutual benefit society for assistance in illness, confinement, etc. (Laborers belonging to estates are insured against accidents at the expense of the landowner.) 4. The dairy society which buys cow's milk from its members at a fair price. 5. The cooperative store which buys household and farm requisites at wholesale prices and sells to mem- bers. These goods include: (a) Seeds, manures, machines, and agricultural tools; and (h) eatables, wine, fuel, household goods, etc. The store also sells the wheat of its members to the value of about 20,000 lire a year. It also hires thrash- ing machines, lets out on hire mowing machines, and manages a small circulating hbrary. On the estate there is also a slaughterhouse and a sausage factory. The executive members of the "Famigha Agricola" number 360 representing the same number of famiHes- The cooperative bakehouse numbers about 240 famiMes, representing some 1,600 persons. Nearly 4,700 hundredweight of bread made from Indian corn is baked annually. Each family pays 2 or 2^ lire a year for each of its members with the exception of children under 5 years of age and old people over 70. The mutual cattle insurance society has 382 members representing the same number of famiMes. The value of insured cattle amounts to 230,000 lire, of oxen 170,000 lire, and of horses 60,000 lire. The com- pensation paid in 1912 amounted to 5,110 lire covering 16 poUcies, 14 of which were for oxen valued at 4,270 lire and 2 for horses valued at 840 lire. The mutual benefit society has 250 members, 153 being men, and 97 women. The grants made in 1912 were for illness 843, for 520.65 lire; confinements 11, for 172.40 lire; and for extra subsidies 80 lire. The dairy society has 223 members. The milk sold in a year varies from 5,000 to 6,000 hectoliters per dairyman, who converts it into Emmenthal cheese and butter. Other institutions on the estates belonging to Marquis Ponti are the mutual cattle insurance society at Fagnano-Olona; the cooperative bakehouse at Robecco sul Naviglio, and the fishermen's cooperative society on Lake Varese. The cooperative store is open to both members and nonmembers; sales amount to about 100,000 lire a year. Buyers share in the profits. The constitution and by-laws of the store are as follows: ITALY. 53 CONSTITUTION AND BY-LAWS OF THE COOPERATIVE STORE. Article 1. Section 5, for tlie "collective purchase of agricultural requisites," organized by the "agricultural family" of Oornaredo and Uniti (Ponti estate) in accordance with article 2(e) of the constitution, has the following purposes: (1) The purchase of those requisites required by members for agricultural production, acting as an intermediary between the mem- bers themselves and the producer or seller. (2) To promote the use of seeds, fertilizers, machines and implements which tend to increase agricultural production, and to do this by means of advice, experiments, lectures, etc. The section absolutely excludes all speculation from its purposes, aiming instead to promote agricultural progress in general and the welfare of adhering members in particular. Art. 2. The section shall work under a board of vigilance, consisting of five members and presided over by the governing board of the "agricultural family." Art. 3. The members of the board of vigilance shall be elected by the directive council of the "agricultural family"; they shall be elected for one year and are eligible to reelection. Art. 4. The board of vigilance shall meet whenever the governing board thinks it desirable. Aet. 5. Meetings shall be valid whenever three members of the board are present besides a representative of the governing board. Art. 6. Motions shall be carried by an absolute majority of votes cast by those present. When the votes cast are equal, the president shall have the deciding vote. Art. 7. Purchases shall be made on the estimates of those members who intend to avail themselves of the services of the section. Estimates are gathered by the members of the governing board of the "agricultural family." Art. 8. The board of vigilance, after consulting the governing board, (o) decides whether or not purchases shall be made and on the division of the goods subscribed for, taking into due account the solvability of individual subscribers; (6) selects the merchant from whom the purchases are to be made; (c) determines on the purchase price; and {d) decides the price to be charged to members and also all special conditions touching withdrawal of goods, payment, etc. Art. 9. The governing board or one of its members is generally authorized to make purchases. Art. 10. The members of the board of vigilance are required (a) to assist the members of the governing board in making purchases or to replace them in this duty if need be; (5) to conduct and assist in the control, withdrawal, and carriage of goods; (c) to attend to the distribution, of goods to subscribers; {d) to enforce observance of these by-laws. These duties shall be assigned to the members by turn. Art. 11. The members of the board of vigilance shall give their services gratuitously and are only entitled to reimbursement of actual expenses incurred in the discharge of their several duties. Art. 12. Subscribers are required to withdraw from the cooperative store on fixed days at least the quantity of goods for which they have subscribed. Art. 13. 'The withdrawal of goods will be entered each time in a special book to be kept by the member, who is required to verify such entries at the time they are made, as no complaints will be taken into consideration afterwards. Art. 14. Payments shall be made by members at the headquarters of the "agricultural family" on fixed days. The sum paid in shall be credited to each member on his personal book and on the books of the association. Art. 15. When so ordered by a resolution taken by the governing board of the "agricultural family," the money due to a member tor his consignments of milk to the cooperative dairy may be withheld in payment of money due from the member for goods withdrawn from the cooperative warehouse. Art. 16. Any profits which may result at the end of the business year shall be distributed, after paying all expenses, among the mem- bers who have made use of the section proportionately to the value of the goods they have purchased. AGRICULTURAL fflGH SCHOOL AT MILAN. Report op a Subcommittee. Milan. The agricultural high school at Milan is a school of university grade, corresponding to the best agricultural college in America as planned with the usual departments of study. It has as heads of departments men of first rank and scientific standing, the president being himself a chemist of international reputation in his field of work — organic chemistry. Students are adinitted who have completed their secondary school courses, and must, therefore, be about 18 years of age. No student is admitted whose academic standing is below the grade mentioned. Students are not admitted from the lower-grade agricultural schools. The training is intended mainly (a) for owners of land, and (6) for teachers of agriculture. There is a splendid museum connected with each department. In addition to teaching, the college does scientific work of a commercial character. It makes scientific analyses of all artificial manures sold to the farmers of the district of which Milan is the center. Last year over 20,000 such analyses were made. On the results of these analyses the prices of the material are fixed; This institution renders a very important service by preparing young men to take up the work of traveling professorships of agriculture. 54 AGKICULTUEAL COOPERATION IN EUROPE. PEOPLE'S BANK OF PIACENZA. The President. statement. PlACENZA. You are in the headquarters of the People's Bank of Piacenza, which, from the beginning of the move- ment for the development of Italian agriculture, has assisted the growth of agricultural cooperation in all its different forms. You see gathered together under one roof the different forms of association, so that this may truly be described as the home of agricultural cooperation in this province. You see the headquarters of the traveluig professorships of agriculture; of the People's Bank, which supplies the credit required for these various activities and which has made possible the other institutions for agricultural cooperative production and dis- tribution; and of the Federation of Agricultural Associations. You can here study the working of the agricul- tural associations and of the agricultural committees which preceded them; of the cooperative fertilizing fac- tory and other cooperative institutions which you have visited. You thus see realized in this building the dream of Luigi Luzzatti — the lesson which he has been teaching for so many years — that there should be coop- eration between all these various associations centering around the people's banks, which act as their natural center in supplying the credit required by them to carry on their work. Here in this building we have the headquarters of the agricultural committee, the first body to inaugurate the cooperative life of Piacenza, 50 years ago to day. You have here the agricultural association which arose 25 years ago and has been such a powerful influence in the organization of agricultural production and dis- tribution. The Federation of Agricultural Associations arose in 1891, when some 10 of the associations thought that it would be to their advantage to cooperate. The work of this federation has so grown that, instead of 10 or 12 associations federated in 1891, it now comprises some 700 federated societies. Although this federation has its headquarters in Piacenza, which is in an out of the way part of Italy when we consider the geographical formation of the country, it has, nevertheless, been able to extend its influence throughout the peninsula, and through its branch offices in Ronie, Xaples, and Sicily has built up a network of these cooperative organiza- tions all over the country. I will not go into details about the work of those associations. I will only remind you of one fact, namely, that the federation which stands at the head of this great organization of associations does its work with a capital not exceeding 300,000 lire. Yet with this capital it has been able to do a business in 1912 of 19,000,000 lire. In this connection I wish once more to call your attention to the People's Bank of Piacenza. This is the cooperative institution which has rendered possible the development of all these other forms of cooperation, a development which would have been quite impossible if they had not had at their disposal the credit afforded by the People's Bank. QUESTIONS. Q. What amount of business is done and what is the loss ? A. The average busiaess done by the bank amounts to 60,000,000 lire a year, and the loss does not amount to 1 lire per million. This bank was founded in 1867 with an initial capital of 25,000 lire; the present capital of the bank is 487,000 lire, to which must be added the sum of about 300,000 lire of the reserve fund. This is the result of the wise policy pursued by the administrators of the bank who have always employed a large pro ■ portion of the bank's profits in building up a reserve fund adequate to fully safeguard the bank's transactions. Q. What rate of interest did these small farmers pay before these cooperative banks came into existence, and what rate do they pay to day ? A. That question can not be answered very definitely, as I have not got figures showing jn-evious interest rates; but approximately the rate of interest used to be between 8 and 12 per cent, and, moreover, it was very difficult indeed to get credit even at these high rates. At the present moment, when money is tight, loans are being made at the rate of 5^ per cent. The usual rate is 5 per cent, and not infrequently it falls below that. Q. How was the initial capital of the bank obtained ? A. The 25,000 lu'e of original capital was subscribed by the people of Piacenza, among others by the dii-ec ■ tors of the Worldngmen's Union. The people's banks are limited, not unlimited, liability associations. The responsibility of each member is limited to the value of his shares; there is no limit to the number of share- holders. We now have the sum of 487,000 lire capital, 300,000 lire m the reserAc fund, and members' deposits now amount to 8,000,000 Ike. By these means the People's Bank of Piacenza has been able to promote agri- culture and industry in the whole province, and more especially in the immediate neighborhood of Piacenza. ITALY, 55 SAVINGS BANK OF PIACENZA. The Pebsidbnt. statement. PlACENZA. The savings bank.began some years ago to assist agriculture by two kinds of operations: First, by granting long-time credit; and, second, by grantiig short-time credit. It grants mutual loans on personal security, guaranteed by signatures of individuals and associations, and also mutual loans made for a period of 25 years. These latter loans are made to associations for irrigation purposes, for the purchase of live stock, and for improving breeds of live stock. The rate of interest charged on these long-time loans is from 2 to 3J per cent. In some special cases the bank has even made mutual loans bearing no interest. Another form of assistance to agriculture is that of granting loans on notes indorsed by two signatures for a period of six months, renewable for another period of six months; but at the expiration of this second period the loan must be paid. These short-time loans are made for the purchase of seed and fertilizers. The borrower must obtain a certificate from the agricultural association guaranteeing that the loan will really be used for that purpose. The rate of interest charged on such loans is one-haK per cent less than the discount rate charged by the Bank of Italy. In accordance with an alteration introduced into the constitution of the sav- ings bank in 1898, notes are now accepted and discounted with only one signature, if it be that of a local bank. The savings bank has set aside a fund of 350,000 lire to be used in granting a line of credit to the local banks authorized to discount such bills. The line of credit granted to local banks for this purpose is subject to revi- sion every six months, and can be increased or withdrawn. When such loans are made for the purchase of seed or fertilizers, the rate of interest <;harged by the savings bank is only 2 per cent. When made for other agricultural purposes the rate is 3 per cent. The local banks which discount these notes are allowed to charge an extra 1 per cent on the 2 per cent loans and an extra one-half per cent on the 3 per cent loans, thus raising them, respectively, to 3 and 3i per cent. Lately, so as to insure these facilities being used by small farmers, the maximum amount of loan allowed to each farmer on these notes has been fixed at 2,000 lire. The rate of interest was then also uniformly fixed at 2f per cent to the local banks, on condition that the local banks that indorsed the notes and discounted them could charge a maximum rate of interest of only 3 J per cent. All the credit granted under these heads by the savings bank through the local banks is only given when a voucher can be produced from the agricultural association certifying that the loan will be used for agricul- tural purposes. The savings bank also gives open accounts — lines of credit — to agricultural associations at 3J per cent, but these accounts must be guaranteed by the signature of the association and by other signatures. The lines of credit allowed to cooperative bodies by the savings bank in this district and to the agricultural associations of Piacenza amounted at first to 750,000 lire. The savings bank started by charging 2| per cent interest on these discounts, which rate was subsequently raised to 3^ and then to 4 per cent, and now stands regularly at 1 per cent below the discount rate of the Bank of Italy. From 1898 to 1912 the Savings Bank of Piacenza has discounted for the Agricultural Association of Piacenza 11,368 notes to the amount of 5,116,496 lire. Besides the money advanced in the form of loans and lines of credit, the savings bank has given from 1886 to 1912, as an encouragement to agriculture, for purposes of instruction and technical improvement, the sum of 160,457 lire. It has also contributed 65,000 lire toward the expense of the traveling professorships of agriculture. QUESTIONS, Q. What was the original source of the capital obtained by the savings bank ? A. The bank was founded in 1861 with an initial capital of 300,000 lire donated by the Monte di Pieta (municipal institution for lending money on pledge) . It is a bank for receiving savings deposits, and, as it has no shareholders and, consequently, has no dividends to pay, all profits go to form a reserve fund, a certain portion of which is given to purposes of public utility. This bank now has an annual profit of over 6,000 lire. At least three-tenths of these profits are assigned annually to purposes of public utility, among which is the promotion of agriculture. Q. What is the rate of interest paid on savings accounts ? A. Three per cent; prior to 1913 the rate was 2| per cent. Q. Does this bank compete with other savings banks ? A. Yes; it is in keen competition with other savings banks, which have always offered 3 per cent interest on deposits. This competition forced this bank to raise its rate of interest on deposits to 3 per cent in 1913. Q. Who administers this institution ? 56 AGBICULTUKAL COOPERATION IK EUROPE. A. These savings banks are public-utility corporations governed by a board of directors appointed as follows: Four directors are appointed by the municipaUty, four by the province, one by the agricultural asso- ciation, and one by the chamber of commerce. These members elect their president. These banks are not under government inspection or control beyond submitting monthly financial statements and a yearly balance sheet to the ministry of agriculture. Q. How much higher is the rate of interest on commercial loans than that charged on loans made for agricultural purposes? A. At the present time, when money is very tight, loans for commercial purposes are made on mortgage security at the rate of 4| per cent and loans on notes at 6 per cent. The usual rate is 5 per cent. Q. What class of persons deposit in these savings banks ? A. The savings bank receives deposits from all classes of people. It has a special class of depositors with small savings accounts who receive interest at the privileged rate of 4 per cent, whereas the ordinary rate of interest on savings accounts is 3 per cent. COOPERATIVE OIL-CAKE FACTORY AT PIACENZA.' Evidence of the Manager. PlACENZA. Q. What is the capital of this factory ? A. 100,000 Hre. Q. How many members are there ? A. One thousand two hundred. Q. Do you sell only to members ? A. No; we sell to both members and nonmembers; but only the members share in the profits. Q. What interest do you pay on your capital ? A. Five per cent. Q. How long has the factory been in operation ? A. Four years. Q. Do you make regular repa3rments of the money borrowed from the cooperative banks ? A. Yes; there is a sinking fund which is paying off the debt. When the sinking fund shall amount to the value of the loan, the factory ^Yi\i become the property of its members. Q. Who manages this factory ? A. It is managed by a board of directors. Q. Are these directors elected by the members ? A. Yes; by those present at the annual general meeting. Q. Do you sell your oil cakes at a lower price than the ruHng market rate ? A. No; we sell at regular market prices, but the profits are divided among the membei's. Q. What kind of products do you manufacture ? A. Oil cakes and oil. Q. How do you dispose of the oil? A. To soap factories. Q. What force is required to operate the plant ? A. Eight men — four work by day and four by night. Q. What wages do they receive ? A. Four lire a day. Q. What percentage of the farmers in the community belong to the agricultural association. A. About 50 per cent. Q. Do you deal mostly with large or small farmers ? A. The number of smaU farmers who deal with us is greater than the number of large farmers, but the larger aggregate of purchases is made by the largis farmers. ' This is a cooperative association founded by the Agricultural Association of Piacenza for the purchase of agricultural req uu-ementa and is financed by cooperative credit institutions. From 12,000 to 15,000 quintals of these oil cakes, made from Indian corn waste, are sold per year to the members of the association as a cattle feed. The factory was opened on a capital obtained from shares subscribed by both large and small farmers and with an advance from the Cooperative People's Bank. ITALY. 57 Q. How do you distribute your profits ? A. One third to the members of the association, one third to the sinking fund to amortize the original debt, and the remaining, third is divided among purchasers proportionately to the value of their purchases. Q. What security did you give the people's bank for the original loan ? A. Part of the loan was obtained on bonds and part on open account, the directors pledging the credit of the society. The liability of the directors to the society is unhmited. The association is responsible up to the hmit of its capital. The members are not responsible beyond the capital of the association, and the bank does not loan money beyond what can be secured by the capital of the association. Q. What was the initial capital of the factory ? A. Five thousand lire. Q. What is the value of the shares ? A. Twenty-five lire each. No member may own more than 500 lire worth of .shares. SAVINGS BANK OF BOLOGNA. Evidence op the President and Officers. Bologna. Q. What is the name of this institution ? A. The Savings Bank of Bologna. Q. Who is the director ? A. Mr. Enrico Selvani. The director draws no salary. There are 100 foundation shares of 130 francs each which draw no interest. Q. Who contributed that money ? A. The 100 founders. Q. Did they contribute this money freely ? A. Yes, sir; the money was freely contributed by distinguished citizens. Q. How many years has the savings bank been in existence ? A. Seventy-six years. Q. The foimders then contributed the initial capital of the bank ? A. Yes, sir. Q. How much does this bank now hold in deposits ? A. Sixty-five mUlion lire. Q. What rate of interest is paid to depositors ? A. Different rates — from a minimum of 2^ and 3 per cent to a maximum of 6 per cent. Q. WiU you please describe the different classes of deposits'? A. The savings deposits are 58,000,000 lire. Besides these there are special deposits for benevolent institu- tions amounting to 556,000 lire, for mutual cooperative societies, etc. Q. Kindly state what becomes of the surplus. A. Part is devoted to the promotion of works of public utility and the remainder is added to the reserve fund. Q. What rate do you charge ia making loans to farmers ? A. It varies according to the time when they need it. Q. At what rate of interest ? A. Four and one-half to five and one-half per cent. On mortgage, 5 per cent. Q. Is there any Government supervision of the bank ? A. Yes; it is under the supervision of the minister of agricultm-c. Q. How frequently is it iaspected ? A. Every month we send in a statement of the financial situation and every ypar a balance sheet. Q. To what public uses is the money given ? A. To the antituberculosis campaign and to hospitals. Q. How much is thus given away ? A. Two hundred thousand lire were given last year to these purposes; also an amount of 2,000 lire was given to the seaside convalescent homes and holiday funds. Some 300,000 lire have been given for schools, and from time to time funds have been given to the new agricultural school of Bologna. 58 AGEICULTUBAL COOPEBATION IN EUEOPE. RURAL BANKS IN THE PROVINCE OF BOLOGNA. Report op a Subcommittee. _ Bologna. Most of the rural banks in the Province of Bologna are organized by the Catholic Church and all the members thereof are members in good standing of that church. Usually the priest of the parish or the com- munity is at the head of the organization, keeps the books, and has practically the guiding hand in the operations of the institutions. These and the following facts were brought out in an interview with the officers of a rural bank about 15 miles from Bologna. These rural banks are much more numerous in the hilly lands of the province where the farms are small and where the number of small proprietors is greater. On the level lands, where there are a large number of share tenants, there are fewer rural banks. The number, however, is said to be growing and some of them are found in almost every part of the province. ORGANIZATION AND OPERATION OF A TYPICAL RURAL BANK NEAR BOLOGNA. The bank was estabUshed in 1898, and the officers serve without pay. This is usually the case in these institutions, although sometimes the secretary or bookkeeper receives a small remuneration for his services. The membership at present is 220 members, each member having one share of the value of 1 lire. Sources of funds. — (1) Saving deposits of members; (2) deposits from nonmembers; (3) loans received from the small savings banks of Bologna. This institution loans money to the rural banks on the presentation of a list of members with the amount of property which they hold. Rate of interest. — On deposits, 3^ to 4 per cent; to borrowers, up to the first of May, 1913, 5 per cent; since May 1, 1913, 5^ per cent. Duration of loans. — Six months is the average, but these loans are usually renewed from time to time according to the needs of the borrower. Some loans have been out four years. In general it is purposed that the loan be repaid out of the proceeds of its investment. Security. — The borrower offers first his personal security, or integrity, and second, must have an indorser, an honest man of property or financial responsibility. That is to say, money is loaned on two-name paper. Furthermore the purpose of the loan must be stated. Money is loaned only for agricultural purposes, such as the purchase of machinery, stock, and fertilizers, the payment of rent, or for other productive purpose. At this bank no advice is given as to the use to which the loan shall be put. Area of operations. — This is about 25 square kilometers in the present instance. Business hours. — Bank opens daily, Sundays and feast days excepted, from 9 to 12 a. m., and some hours during the afternoon. On Sunday there is a meeting of the board of directors or managers. Size of loans. — The minimum loan is 5 lire. The maximum loan is 1,500 lire. In exceptional cases this may be increased to 2,000 lire. The average loan is about 500 lire. GJiaracter of memhers. — Members of this bank are small agriculturists, proprietors, metayers or share ten- ants, and some few day laborers. There are also in this bank a number of small tradesmen and other industrial persons. Out of 220 partners 150 are metayers or renters on shares, and 10 are day laborers. Supervision. — No State supervision is exercised and no inspection except by the federation of rural banks in Bologna. The bank must present to the tribunal a list of its depositors and borrowers and the loans which it has made each month. (The tribunal is a civil authority of the Province of Bologna.) Cost of estaUishment. — The cost of establishing a rural bank is about 60 francs, which includes the outlay for books, furniture, and perhaps the rent of a small room. Other functions. — This bank has practically no other functions. The partners do not sell in common any of their products, which are chiefly wheat and grapes, nor do they buy manures, fertilizers, or seeds collectively. Many of the rural banks do buy the wheat of the partners and sell it collectively to prevent extortion by the wheat speculator. (It is usual for farmers to market their wheat in Bologna, selling to a wheat buyer individ- ually. In some instances the metayers or share tenants sell to their landlords, but this is not compulsory.) Depositors. — The depositors may be members or others who wish to place money in the bank. They are mostly members. The others are small farmers, merchants, tradesmen, and industrial workers. Deposits of any amount may be made, but they are usually small. Limitations. — None but a partner may borrow from a bank. No member in one bank may be a member of any other institution of similar character. Surplus. — The surplus in this bank equals the difference between the 3^ per cent paid to depositors and the 5i per cent received from borrowers less any expenses of administration. The surplus is kept as a reserve or part of it may be loaned through a higher or central bank to some other rural bank. Upon the dissolution of the rural bank the reserve goes to a similar bank. ITALY. 59 TESTIMONY OF INDIVIDUAL MEMBERS. (1) A B, a metayer member, borrowed 800 lire in 1911, paid 5 per cent interest to May 1, 1913, 5^ per cent since May 1. Used nioney for the purchase of a yoke of oxen which he hopes to sell at a profit at the end of this year in order to pay back the loan. In addition to this he hopes to make some profit from the sale of products made through the use of the oxen. He gave as security for the loan the name of one of his neighbors. (The witness said that his personal guarantor might be secured in turn by him, A B, to a certain amount.) ^ (2) B C, a small proprietor, borrowed 1,000 lire four years ago for the purpose of improving and operat- ing a farm. He has paid 250 lire of this sum. He hopes to pay the remainder by cutting his holding into small lots, building houses thereon and selUng them. His indorser, or security, is his brother, whose name has been on his note for the entire period of the loan. The rate of interest, 5 per cent to May 1, 5i per cent since that time. (3) C D, metayer and member, borrowed 1,000 lire one year ago to purchase a yoke of oxen which he hopes to sell at a profit. Will repay the loan when oxen are sold; gave as his security another member. Rate of interest at first 5 per cent, since May 1, 1913, 5^ per cent. In answer to the question, "Do you attend the meetings of the members?" the witness answered, "Yes; once a year at the general assembly of the members." ^ SMALL CREDIT BANK OF THE DISTRICT OF THE ROMAGNA. Report op a Subcommittee. Bologna. In northern Italy there are a large number of so-called Cathohc banks, modeled chiefly after' the Luzzatti, or people's banks, but especially designed to do business with Catholic institutions — small Catholic "peoples, banks," " confessional" rural banks, Cathohc workingmen's clubs, etc. As a matter of fact, they do not now con- fine their activities to a church chentele, but do business with all sorts of institutions and individuals, though they are most flourishing in Cathohc centers, where they receive the hearty support and patronage of both rich and poor. It appears that a number of these banks give particular attention to smaU credit (piccolo credito), and a dozen or more take their name from these words. It has been stated on good authority that the Catholic small credit bank had its origin at Bergamo. It is true that the small-credit business has grown to large proportions in this part of Italy. One of the largest of these banks is the small credit bank of Bergamo with a share capital of about 300,000 lire and between seven and eight milhon hre of deposits, with loans, in smaU amounts, of six miUion lire. The Piccolo Credito Romagnola (small credit bank of the district of the Romagna), with its headquarters in Bologna, was organized in 1896; it is composed of 5 branches located at Bologna, Faenza, Ferrara, Ravenna, and Rimini, 7 sub-branches and 17 agencies located in the smaller centers. In reahty, the bank has 29 establishments in 4 provinces — ^Bologna, Ferrara, Forli, and Ravenna. Connected financially with the "small credit bank" are 72 rural and small village banks, most of which the central bank assisted in founding. The activities of the "savings bank" consist in making loans to individuals and smaller institutions, particularly the 72 rural banks within its sphere of operations, in receiving savings and current-account deposits, in discounting and rediscounting bills, and in carrying on a regular general banking business. The balance sheet showed on April 30, 1913, the following figures: Lire. Share capital - 1 , 336, 08(1 Reserves : - - 702, 1 74 Total bank's capital 2, 038, 25-J Deposits 42, 038, 922 Active operations -■ , :i7, 080, 652 Net profit, 1912 152, 387 ' Officers of the bank testified that no guarantor has ever been called upon to pay a loan. The member has always fulfilled his obligations. Moreover, the bank has never lost a cent since it was founded. ' The rules of the bank provide that any member who does not attend the general assembly which meets once a year must pay a fine. 60 AGEICTJLTUBAL COOPEEATION IN EUROPE. Federation. — The first ol the rural banks was establislie< I in 1896, one year before the central was founded. These banks are not supervised by the savings bank except as to their financial standing for credit purposes. They are, however, federated into a small union of catholic banks, and this federation inspects and supervises all its members. -Loans.— The bank lends almost 22,000,000 lire to rural banks on the basis of property lists furnished by each rural bank. These lists contain a description and give the value of all the property owned by the members of the rural banks. The central, in general, is willing to lend up to about one-tenth of the certified valuations set down in these lists. The security which the central has for the loans is, first, the signature of the officers of the local bank, pledging the property of all the members; and, second, the signatures of the rural borrower and his surety, pledging their individual properties. All loans are personal, and the amount loaned to any rural bank may be arbitrarily limited at any time. Tlie rural banks may or may not deposit their surplus with the central bank. Indeed, the federation of rural banks acts partially as a clearing house for them and distributes the surplus funds of one bank to others which have shortages, taking the market rate of interest as a standard. The savings bank lends to the locals at a rate of interest depending on the state of the money mar"ket. It is usually not more than 4 per cent, but in May, 1913, the rate was somewhat higher. It may be lower or higher than the official rate of the Bank of Italy. The 72 rural banks all secure money at the same rate from the savings bank, but they individually fix the rate at which they loan this money to their members; most of them loan at 5 per cent, some at 5^ per cent. Deposits. — Deposits are accepted at various rates. On small savings accounts (not more than 3,000 lire) the bank allows 4 per cent; on ordinary savings accounts (to bearer or order), 3 per cent; on time deposits or deposits on foUr months' notice, 3^ per cent; on checking (current) accounts, 2 and 2^ per cent. The savings bank does all in its power to encourage rural banks, but offers practically the same terms to people's banks and to other cooperative institutions, catholic and noncatholic. Following is a brief statement of the operations of the "Savings Bank of the Romagna, " prepared by officials of the bank especially for the commission. ADDITIONAL POINTS OONOERNING THE SAVINGS BANK OF THE EOMAGNA. The Small Credit Bank of the Eomagna, a cooperative society with unlimited liability, having headquarters in Bologna, traces its origin to the economic movement started by the catholics in Italy during the latter part of the last century. It has as its object the aiding of catholic institutions by the establishment of banks, rural and people's banks, agricultural cooperative societies, cooperative farms, and cooperative societies of consumers, seeking the moral and material improvement of the masses, and especially of the agricultural population. The necessity of combating the power of usury, insidious in the towns and openly rampant in the country, of helping the small and neglected man, and of buildiag up the great agricultural resources of Italy, took on a new energy from the activities of the people's banks. Thus inspired the Romagna bank in Bologna, on April 2.5, 1896, modestly undertook as its principal object to extend the benefits of credit and savings to its members, to rural banks, and other catholic institutions, to proprietors, merchants, farmers, workmen, etc. The form of the society chosen was that of cooperation with unlimited liabilitj'-, fixing the shares at 20 lire in order to make it possible for the most humble in life to find entrance into the society. The bank itself is catholic as regards the admission of its members, but not as regards its operations. Anyone, no matter what religious belief or political opinion he may profess, can make deposits, obtain loans and take part in any other of the bank's operations, so long as he can offer such guaranty of morality "and solvon(\v as is commonly required by all credit institutions. The preponderance of the accounts of the bank is agricultural, the bank having been especially organized i---.--., The Director. 1 Name in full. > Parent's name. •« Place of birth and residence. » Owner, leaseholder, tenant, share tenant, etc. "Mark out the word which does not fit the case. 78 AGBIOULTTTBAL 00OP.p(4.TI0N' IK ETJBOPE. Rural Dahk of Viqonovo. No. This is to certify that note No falling due to the amount of has been paid by Mr Vigonovo , 191 . . . Tht Cashier. The Honorable Board of Directors of the Rural Bank of Loans of Vigonovo. In consequence of a request made to me by for expenditures to be made for keeping my property in good condition, I am ready to declare, and I so do declare, that I acknowledge the credit to the amount of $ , which this bank has granted in behalf of my above-named tenant on shares on the day of and for the period of , and I therefore renounce in favor of the said bank the privileges accorded me by Article 1958 of the Civil Code, as follows: (o) All the chattels and movable property of my above-named tenant. (5) that the same may be held or acquired for money received as a loan from the bank and to the limit of amount and time above indicated. Vigonovo If renunciation of one of the two categories of things is excluded, lines are to be drawn through it with ink. I -4^ g . •B g .a ^ ■" M ° Is a a a > o ^ S SOS § 13 _ o g 3 "i fe >-H ^ p. No. 110. One hundred and ten. Space for the figures indicative of the amount when the corresponding notes do not exist. Vigonovo, ,191... $ Within (three months from date) I will pay for this (note), to (the order of the Rural Bank of Vigonovo) the sum of $ RcRAL Bank of Loans of Vigonovo. Coo perative joint-stock company.) Memorandum to the member. Mr. Must be debited. For loan received to-day, No. Must be credited. For. Tlie Treasurer. ITALY. 79 Rural Bank of Vigonovo. Account rendered No. , Year Date. Firm name. Cash account. Remarks. Owing. Paid. ^ AGRICULTURAL COOPERATIVE SOCIETY OF CREMONA. E\ridence of Dr. Lmoi Fornaciari, Director. Cremona. Q. Do you sell other things besides agricultural machinery and fertihzers? A. We sell seeds, cattle, machinery, and spraying materials. Q. Is this a federation of other smaU societies ? A. No. Q. Where is the federation to be found ? A. At Piacenza. Q. What is the title of that federation ? A. Italian Federation of Agricultural Societies. Q. What is the extent of your business and membership ? A. The annual sales amount to about three and a half mUlions lire; the members number 1,600. Q. Do you make use of mortgage credit? A. We do not; the bank does. Q. What are the relations between the bank and this society? A. The bank favors the societv immensely inasmuch as it sees that the society favors or helps the bank, and it gives to the society a rate of interest that it would not give to a private person. RELATIONS OF THE PEOPLE'S BANK WITH THE SOCIETY. Evidence of Mr. Bossi, Director of the Bank. There are relations existing between the bank and the society, and in reality the society would not be able to do the work that it is doing without our means and support. The people's bank serves the society in the same manner as the Bank of Sicily and the Bank of Naples serve the intermediary institutions which are in the south. The bank has opened a current credit account with the society amounting to 1,200,000 lire. Q. What is the customary rate of interest ? A. Four and one-half per cent. When the society does business with its members it takes their notes, which come to the bank indorsed by the society. These notes have a certain guaranty because the current account is opened independently. So, knowing how the society is administered, the bank opens a current account, and the society, by ceding to the bank, which is also the depository of the society, those notes indorsed by it, obtains by this deposit a guaranty which serves the society to-morrow. In this manner the society is able to do business more extensively, although it only has a limited capital. Evidence of Mr. Fornaciari. Q. Why is this favor granted to cultivators and farmers and not to other persons ? A. Because the principal industry is agriculture. The People's Bank of Cremona has more than 40,000,000 lire precisely 43,000,000 lire — of deposits devoted almost entirely to farmers. Q. Does the society have relations with the Government or receive subsidies from the Government ? A. It receives no subsidy from the Government. The Government favors certain initiatives taken by the society such as live-stock exhibitions and the importation of cattle from Switzerland, with some subsidies from time to time but it does not grant any annual subsidy. The Government makes us pay the taxes the same as any private person and does not grant us any favor. 80 AGBICULTtTEAL COOPERATION IN EUROPE. Q. Is there a tariff on agricultural machinery and on phosphates imported into the country ? A. Not for phosphates, but there is for agricultural machinery. In accordance with the types of machines, we pay a tariff tax varying from 15 to 20 per cent. Q. And for sulphuric acid ? A. We produce it ourselves. Q. But does it enter under a tariff ? A. It does not come in; it is all produced in Italy. Q. From what is it made ? A. From pyrites. Q. What is the minimum deposit which the people's bank accepts ? A. It accepts any deposit whatever. Q. Are there cooperative societies for distribution between the farmer and the city; or rather, is there a cooperative society which acts as intermediary between the farmer and the merchant in the city ? A. We, ourselves, are the cooperative society. Q. Is there an agency which occupies itself exclusively in bringing producer and consumer together ? A. We are that agency. Q. Is the trade in these products totally abandoned except that which goes abroad ? A. By no means. Q. Is there a municipal market at Cremona ? A. No. Q. How are the products of the soil marketed in the city ? A. There are products which are not for the consumers. These products are sheep, silk cocoons, wheat, corn, forage, cattle — these do not lend themselves readily to retail trade. Q. Are products brought into the city ? A. No. Our agricultural products are so abundant that it would not be expedient to sell them to the consumer. It is more convenient to use wagons and to send them where they are to be used directly. Cheeses, for example, are brought in bulk by wagon, and they are exported to America. Q. How is cheese sold ? A. We sell to wholesale dealers, and they sell to retailers and peddlers. COOPERATIVE DAKY AT SORESINA. By the Director. STATEMENT. SORESINA (near CrEMONA). Every member is distinguished by a number. The nulk received from each member is weighed. A sample of the mil k is drawn off before it is weighed and is measured into a small measuring tube, and every morning an analysis is made both as to the fat content and as to the purity of the milk. The cans of each member are washed, sterilized, and put out to dry, and then they are deposited in the local storeroom ready for removal on the following morning. By means of a tramway the milk goes directly into copper kettles where it is made into cheese. The kettles are aU heated by steam. We make a type of cheese all of which is exported to North America and is called Roman cheese. After the cheese has formed, the milk is drawn from the kettles by suc- tion into a reservoir whence it is pumped into a strainer. Then the cheese goes to the magazines for salting. There the cheese remaias four months passing through the stages of curing and seasoning. We always maintain in the curing rooms a temperature of 14°. We also have a refrigerating plant. The cheese is ready to eat in about a year. Formerly this cheese was made exclusively from sheeps' milk; now we use chiefly cow's milk, inoculating it with certain special ferments derived from sheep's mUk. To-day this kind of cheese can scarcely be distinguished from genuine cheese from sheep's milk. After the four months are up, we put the cheese on the upper floor in a storeroom where the temperature is maintained at 15°. Since there is no longer any call from America for cheese colored artificially, we do not use yellow coloring materials when we make samples, and the cheese is made without artificial materials. PRODUCTION OF CASEIN. One of the operations for the extraction of milk sugar is the separation of the casein by centrifugal action. We have the rooms for drying and grinding the casein which is then sold to the establishments for pharma- ceutical purposes. In appropriate vessels the first preparation of the whey is made. In these vessels by means of six filters the whey is clar^ed and then it passes into the processes of concentration and condensation ITALY. 81 MANUFACTDEE OF BUTTER. In this branch we have about 150 employees. Our butter has the natural color produced by the churning of the milk fat, which is chemically equivalent to butter. We have two kinds of members — producing members and member owners of milk. Our association controls 4,000 cows. There are 160 members. Some are land- owners and they have pledged themselves to supply us for 30 years; while others are producers of milk under a lease, and they are pledged to supply us during their leasehold. The shares sell for 50 hre each, but the capital was repaid in 1908 after eight years of business and we now actually have a reserve fund superior to the society's capital. We have a veterinarian attached to the dairy whose business it is to inspect the stables, test the condition of the cows, and set aside the cows which are found in an unhealthy condition. The visit of the veterinarian is obligatory in our concern, but it is not obligatory throughout Italy. The nulk is analyzed every morning and the record is kept in the establishment. QUESTIONS. Q. By what means do you preserve the samples for shipment to Milan ? A. With bichromate of potash. The milk is cooled in the stables with special apparatus, so as to bring it to a temperature of 25° centigrade. As soon as milked it is filtered and cooled. Q. How do you pay for the milk — -by weight or by fat content ? A. It is paid for by weight, but only if it contains a certain percentage of fat. To those members who have 0.20 per cent of fat on the average there is made a distribution in proportion to the less quantity of fat. Q. Is there a premium for superior quality ? A. There is not. Q. What is the minimum fat content ? A. Three per cent per hundredweight. We render a monthly account to the members. Q. Do you seU your butter at wholesale ? A. Yes; it is sold at wholesale as you have seen it in those baskets, which are then sent back to the dairy. Q. What is the price of butter ? A. It sells from 20 to 30 centimes per kilo, according to quality. One quahty sells for 3 lire and another for 3.20 or 3.30 lire in bulk. At retail it will sell for 3.50 lire. Q. What is the relation of butter to buttermilk ? A. A kilo to every quintal of buttermilk. Q. What is the amount of fat in the buttermilk 1 A. One and one-fifth per cent. Q. Are payments made at regular intervals ? A. Every month accounts are paid at the rate of 10 lire per quintal of milk. At the end of the year the profit is determined, a certain percentage is allowed to the individual, and the rest all goes to the cooperative dairy. Q. Are there any special feeding of the cows ? A. Certain feeding stuffs which change the constitution of the milk are prohibited. Q. What is the amount of production per cow a year? A. Thirty quintals, or 3,000 liters. Q. Do you have regulations concerning the bulls which must be owned ? A. There is an agricultural society which provides bulls. We do not have special regulations, but, as a matter of fact, the province has issued regulations concerning the breeding of bulls and their importation. Q. Of what breed are they ? A. The brown Swiss. Q. What infiuence has this cooperative dairy had on the quantity of milk produced on every holding ? A. It has materially increased the production of milk, because the management is good; so fairly remu- nerative premiums are distributed, from 1 to 2 lire or more, according to annual profits, the balance being devoted to the cooperative dairy. Q. Does the itinerant professor carry on a propaganda for the dairy ? A. He aids the dairy. Q. Are the cows kept in stables ? A. Before calving they are sent to the mountains; but for the dairy the cows all stay in stables. Q. What is the percentage of cows that are tuberculous ? A. That may be learned from the annual report. Q. What results have this cooperative dairy achieved ? 14174°— S. Doc. 214, 63-1- — 6 82 AGKICULTUEAL COOPEBATION IN EUROPE. A. Our organization, which is founded on the cooperative conception, has had very happy results, because the members have always been animated by the spirit of cooperation, which the itinerant professor has aided. In our laboratories the greatest care is taken regarding the sanitation of the laboratories themselves. We aim to produce choice products, especially on the hygienic side. Since we are exporters to your fertile coun- try, in which you have lands as fertile and productive as they are beautiful, we know that we must seek by every means to furnish you products that are wholesome. Q. Can you state the average returns of the farmers ? A. One is not able to give the average personal returns of the farmers, because they vary from a minimum of 1 lire to a maximum of from 100 to 200 lire.. The cooperative society is formed above all to protect the small producer of milk, because, while it is easy for the large producers to make good contracts for themselves, for the sale of their milk, the small owners are in a measure imposed upon in that the price which they are paid is frequently lower by 10 or 15 per cent than the market price. Therefore the small farmers got together and formed themselves into cooperative societies, and these cooperative societies we brought together in order to secure to them the advantages of a large industry. Q. In a radius of 3 or 4 miles, how many farmers are there who are not members ? A. Within a radius of 3 or 4 miles two-thirds of the farmers are members. Q. What dividend has been distributed to the members ? A. About 30 per cent, because the capital is small; the amount is nearly 250,000 lire. We have redeemed all the capital, machinery, etc., therefore we are in a position to pay the highest dividends, exactly 30 per cent, because the shares participate in the profits from the milk and because during the first years the shares did not receive dividends.' Q. Is there any difference in the distribution of the dividends among the members who hold 100 shares and those who hold only 10 shares? A. Every member is obliged to have a share for every cow, although the members who do not have suf- ficient means are exempted. The shares which originally sold for 50 lire now sell at 170 lire. The shares are per cow. The member who no longer is engaged in production is obliged to grant to the cooperative society the right of buying back the shares. Q. Precise information is desired on this point: It being granted that two members have an equal number of productive cows, there is a great difference between them through the quality of their herds. Are the profits divided in the same proportion between them both ? A. The shares exist solely in order to guaranty the profits to the society; but it is all based on the pro- duction of milk. The question concerning the productivity, or, rather, concerning the herds, does not enter into it. In the division of profits, we base it on the quantity of milk furnished and do not take into account the number of cows. In the province adjoining ours there are other kinds of cooperative dairies, but they have not attained such splendid results as we have for technical and administrative reasons. Not one of these do at the utmost one-fourth of the business that we do. Of the three branches of production, cheese- making is much the more profitable, it being due in a measure to the prime quality of the raw materials. The milk sugar is little utilized. The profit is little more than the expense of production, and so it is deemed best not to bother with it at all. In the small cooperative dairies, in which the buttermilk or whey is returned to the producer for the feeding of live stock on the farm, a much greater profit can be secured by the utilization of the buttermilk in this manner. On the other hand, the small cooperative societies do not yield so great a profit in the production of cheesei , Q. Are the profits of this line of business devoted to the progress of the cooperative dairy ? A. Certainly. The land leases were valued by us at 120 lire per hectare; to-day they are worth double that amount. Therefore the value of the land has doubled, and that, too, in a period of from 12 to 13 years. Q. What is the average selling price of cheese ? A. It varies according to the quality from 1.50 to 2.50 lire per kilo. In 14 years the price of milk at 10 lire per quintal has been regarded as having a use value of 17 lire. Moreover, the cooperative society, in order to hold its advantage in the Soresina country districts, has taken advantage also of the Cremona country dis- tricts because one tends to modify the other. Q. Have private producers attempted to form a kind of trust against the cooperative societies ? A. During all these years they have tried legally to lower the price of milk. Our enemies are practically only those who use nulk industrially, and they attempt to bring it about that we get as little milk as possible in order that they may pay less for it than they pay now. ' The whole of this is rather confused. The law does not allow cooperative societies in Italy to pay more than 5 per cent. This dairy has paid off all its share capital and now divides all its profits in proportion to amount of mUk supplied. It is misleading to call this a 30 per cent dividend on what he once paid for his share in the society. The voting is "one man, one vote," aa is laid down by the law. ITALY. 83 Q. Wliat means are used to keep the number of bacteria in the milk low ? A. Our farmers sprinkle Ume in the stables. If a member should bring spoiled milk to us we would fine him, and if this should not prove sufficient we would bring it up before the society. If abnormal milk is brought to the dairy when there is sickness among cows and the matter is explained to us, we receive the milk and pay for it as in every other case. If, on the other hand, it happens through carelessness, then the guilty parties not only pay the fines, but also the damages. There is also the question regarding the cleanHness of the milk; as soon as the milk comes from the cow it must be passed through a strainer and cooled. The cleanHness of the mUk is tested as soon as the can is opened. The process of refrigeration is conducted within receptacles at a temperature of 14°. The cooperative society itself has furnished to individual producers the filtering and the refrigerating apparatus, having early seen the necessity of holding down the fermentations in the milk during the summer seasons. Q. Does the cooperative society recommend certain feeding stuffs ? A. No; we exclude those feeding stuffs which are not able to further the production of milk. Q. Do you sell directly to the United States ? A. No; up to the present we have sold through the instrumentality of merchants, but now we intend to try to make direct sales. Q. At what age are calves sold ? A. They are about a month old when sold to the butcher. The choicer ones are kept for nulk production, though one can truthfully say that one-half or two-fifths of the cows which supply the dairy are imported from Switzerland. Q. What is the average price of imported cows ? A. The average price is high, being from 700 to 800 fire. For some little time there wiU be no further need to import more of them. Q. Do you have any kind of veterinary or medical inspection ? A. We have estabhshed a cooperative pharmacy for the veterinary service and for disinfecting purposes. The pharmacy also serves the families of members and throughout the surrounding country; it also serves as a practical headquarters for aU kinds of remedies. In pubhc sales we add a small percentage of profit, and the difference is appHed for the benefit of the poor people in that part of the country. Q. Do the cooperative societies interest themselves in social and moral projects for the improvement of social fife and rural conditions in general ? A. The improvement of rural life is more an affair of the church and of the priesthood. In Italy there do not exist organizations among the farmers which have their origin in the cooperative societies — those circles or associations for diversion and the development of social hfe, such as exist in the United States where the population is scattered. Here we do not feel the need of organizing ourselves for diversion and hohdays; to us they are superfluous. Q. Are the elementary schools adapted to the needs of the country — -that is, do they give elementary instruction in agriculture ? A. They are beginning to do so in Italy, making a distinction in the work carried on in the rural schools and the work followed or planned in city schools. Such a course has aheady been made concerning the study of nature along general lines. There is no technical instruction in agriculture. Practical work in the district schools does not exist. Whatever work is done of a practical nature is done in special schools. The youths can enter the special schools when they leave the elementary school. LITTLE CREDIT SOCIETY OF BERGAMO. Statement by the Director. Bergamo. We lend on five-months' notes at a uniform rate. The rate is from 6 to 6| per cent; then we have a rate from 5| to BJ per cent. To farmers the rate is 4^ per cent, but lately we have been compelled to equalize aU the rates of interest and commencing with the 1st of July the rate was made uniform in hope of getting rid of the different gradations. Here the farmer opens a current account at the bank. On this account he can only draw to purchase the materials for fertilizing purposes, machinery, manures, etc. The notes come from the Agricultural Union and are put in circulation by us. The loans are made in the form of merchandise; then we have also the other form of current account for money. The Agricultural Union at the end of the agricultural year receives the notes from the farmers who are not in a position to pay in full and who pay only in part. We have an open current account of 200,000 Ure at 4J per cent, but we make a loan or two a year on occasions of great necessity for fertihzing materials to out- siders; then we furnish the guaranty, and we discount these notes to the farmers. 84 . AGBICtJLTUBAL COOPEBATION IN EUEOPE. COOPERATIVE BANK AT BERGAMO. The Dibectoe. statement. This is a modest concern established by workmen, skilled mechanics, and professional men. It is an out- growth from the Milan Society which has existed at Bergamo for more than 50 years. It promotes credit in favor of small workers, small merchants, and in no way neglects the farmer — that is, the small farmer; it has a capital of about 199,000 Ure, which amounts to 233,000 lire by adding the reserve fund, and 726,000 lire in deposits. At the end of last year it did a business of 14,000,000 hre. We give credit also to small horticul- turists, but the figures are not given in detaU because they are entered in bulk. QUESTIONS. Q. What security do borrowers offer ? A. The members give notes indorsed by one or two signatures of known value. Q. What is the number of loans ? A. In 1911 we made 4,644 loans to members, amounting to 3,480,000 lire; in 1912, amounting to 3,000,000, the number of loans being 4,603. The interest on notes is paid in advance. The notes when they fall due can be renewed, provided that not less than one-tenth of the value is paid. Q. Can they be renewed before they fall due ? A. No ; certainly not. Q. What is the rate of interest that one pays ? A. From ^ to 1.1 per cent more than that which is paid at the bank of discount. Q. Are there any important losses ? A. No ; there are a few. Only in one year did we have any material losses, but we have been able to make them good. AGRICULTURAL SOCIETY OF BERGAMO. Statement by the President. Bekgamo. On December 31 this society had a membership of 1,087, as set forth in the report. The members deliver to the society their estimates for the merchandise which they will require for a year, also a note for this amount which we deposit at the people's bank. The people's bank holds these notes on deposit without putting them in circulation, and upon them as security loans the society a sum corresponding to the value of the merchan- dise which the members need. Besides this, the people's bank grants a loan of 150,000 lire without any guaranty other than the credit of the institution. HUMANITARUN SOCIETY OF BERGAMO. Mr. Valli, President. STATEMENT. We are engaged especially in aiding the cooperative farms. One of these industries is devoted to the business of tomato curing, exporting the canned tomatoes, also melons and potatoes; but especially the industry of tomato preserving has been found more profitable than either their production or their sale. The director is occupied with the general administration, with the purchase of fertilizers and' fertili2dng materials in general, but more especially with the sale of products. QUESTIONS. Q. Do you have more favorable conditions for the sale of products ? A. Certainly, because we are in daily touch with the merchants. To that end when sale conditions are good we decide to sell in the immediate neighborhood; when they are not good we export the products, especially cucumbers and potatoes. For their transportation we make use of small, swift-traveling conveyances. Q. What results do you have in making sales ? A. The wonderful result has been in realizing every day the high wholesale price of 2 or 3 lire more for potatoes on the market of Treviglio and surrounding districts. When the merchants buy and hold them for ITALY. 85 the purpose of monopolizing the products, we take all the products from the hands of the farmers. Another advantage is this, that the farmers are protected from the speculators, because all the small producers and the farmers are not able to go upon the market to sell their products and they would have to sell at a price much inferior and less remunerative. The cooperative farmers have accomplished this: That the producer gathers his products, divides it up into lots, brings it to the market, and sells it directly to the consumer, so that the middleman is shut off and the consumer has a fresher product. The producers secure an advantage by no means trivial. Q. Do you contract for a uniform cultivation? A. There are various farmers, but the method of cultivation is determined by the cooperative society in a manner that there may be a more or less uniform type of products. Q. What is the financial mode of procedure ? A. The financial method of procedure is that everything is planned in the central office by the director cooperating with the council of administration. The cultivation is not collective; every farmer is free on his own field. The farm is collective. The distribution is made in this manner: The cooperative society has a proprietary interest on the one hand — a collective proprietary interest ; on the other hand there is a proprietary interest of the farmer in that part of the farm which he takes. This cooperative land is then divided up into so many small farms and they are distributed to the farmers so that each one cultivates his own land. The distribution is made to families in proportion to the number of actual individuals able to work, and the products are consigned to the cooperative society. Sales are always made collectively, except of those things used by the family on the farm. Q. Is the land the property of the whole society or of the farmers ? A. It is owned by the society ; although all are proprietors, yet no one is a proprietor. Q. How many families are there ? A. About 140. Q. How many hectares ? A. There are 250 hectares cultivated intensively. AGRICULTURAL CONDITIONS IN CENTRAL AND WESTERN ITALY. Report or a StrBOOMMiTTBB. The investigations on which this report is based were made mostly in the open country among the farmers on the land. No attempt was made to describe the technical operation of cooperative societies or rural credit banks, but rather an expression of opinion was sohcited as' to what service was being rendered by them. FARMING IN TUSCANY. Among the estates visited were those of Marchese Corsino and of Count Leonello de NobiU, which are mostly devoted to olives and vineyards and situated just outside of Florence. The land is hilly, the fruit trees are spaced near together, and there are so many Vine-supporting trees that little use can be made of agri- cultural machinery. Wheat, "fava" (beans), and leguminous forage crops are grown between the trees, and cultivation is carried on in a scientific manner. The soil is very hard to work in dry weather, because it bakes and cracks open, forming, when cultivated, sohd, hard blocks, or cakes of earth. Most of the work is done by tenants, on the "mezzadri," or crop-sharing plan, the proprietor furnishing a house for each family of tenants and a certain amount of land surrounding it, and one-half of the live stock, tools, etc.; the tenant family furnishes the other half and all the labor, and the proceeds are divided equally. The farm, buildings are of stone masonry with tUed roofs, consisting of a house of two stories, with two or three rooms on each floor, a stable adjoining, accommodating a pair of oxen and several cows, sheep, hogs, etc., and a courtyard inclosed by a wall, in which the forage is stacked and the branches which have been trimmed from the fruit trees are stored for firewood. Plows and other farm implements are also stored in the courtyard, everything being kept very neat and orderly. The cattle are kept inside of the stable nearly all the time, are fed during the greater part of the year on green forage, and are said very rarely to suffer from tuberculosis or any other disease. Oxen are used for plowing with very primitive wooden plows, the "mezzadri" maintaining that steel plows damage the roots of the trees, but the greater part of the work has to be done with grubbiug hoes, or mattocks, by hand. It is noticeable that the wheat and forage crops grow almost as vigorously close up to the trunks of the trees as out in the open. The reason given is that so much fertilizer is used, the branches of the trees are cut back to such 86 AGRICULTUEAL COOPEEATION IN EUROPE. an extent, and the foliage is kept so short, that very little shade results, and only a small amount of nourish- ment is taken from the soil by the trees. Some of the women in each family work in the fields with the men, and the others remain indoors to do the housework and attend to the silkworms, etc. They seem to be contented, and to Hve a comparatively comfort- able existence. The proprietors believe that the system of "mezzadria" is very satisfactory, but that it would be stiU better it they could manage the operation of their estates personally, and they do direct a certain proportion of the operations on those parts where they have not been able to get suitable tenants located. The price of farm labor amounts to from 40 to 60 cents a day throughout the year, but at harvest time the proprietors some- times have to pay as much as 80 cents a day. Farm produce and foodstuflTs are high in price, and buying and selling are m.ostly done cooperatively through the agricultural syndicates. The children of the "mezzadri" are only given a very rudimentary training in the pubMc schools, but the traveling professors of agriculture give further instruction on the farms, and they beUeve that too much education in school unfits the farm people for their work in Hfe and makes them discontented. They find that by educating them in agricultural matters on their own land the best results are obtained. The sj'stem of "mezzadria," providing a separate dwelhng and farm buildings for each family upon the land operated by it, with half ownership in the equipment and production, gives a sense of ownership which tends to bind the people who work the land to it. There is little emigration for this reason, and consequently the cost of labor is lower than in most other parts of Italy. FARMING NEAR ROME. A day was spent at the estate of the Duke of Grazioli, 10 miles east of Rome, near Lunghezza Station, in company with Prof. Gaitano Brini, No. 1 Trajon Forum, Rome. This estate consists of 2,470 acres of slightly undulating land, valued at $200 an acre, which rents at $6.40 per acre a year. The soil is a sort of disintegrated sandstone which is everywhere near the surface, and outcrops at intervals. Pasturage, meadows, woods, and cultivated fields make up the greater part of the area. Cereals, mangolds, sugar beets, etc., are cultivated in sufficient quantity to feed cattle, hogs, and sheep, which constitutes the main industry of this section. Community houses of masonry with tiled roofs are provided for the families who work the land. During the winter the wages of men are 50 cents per day, and no women are employed in the fields, but during the three summer months the men receive 80 cents per day for performing all the heavier labor and the women 50 cents per day for doing such fight work as hoeing, raking hay, and gathering beets. From about October 15 to March 15 both the meadows and the pasture lands are rented out at $5 per acre to shepherds, who come down from the mountains with their flocks to pasture them. This property is rented and operated, on a large scale, by two brothers (I Fratelli Mauri), who furnish all the equipment and pay for all the labor. The proprietor furnishes the land and the community houses and receives the fixed rental of $6.40 an acre per year. The tenants borrow their capital from the local credit society, and have found operations under these conditions very profitable. They invited the traveling professor of agriculture to come out and make a demonstration on a certain measured area in each of their hay fields to show the effect of using chemical fertilizers. The hay was being gathered at the date of our visit, and Prof. Brini weighed samples from each of the plats which had been fertilized, and the adjoining area without fertili- zation. Hay standing in the field is valued at $7 a' ton; the cost of cutting, curing, and storing it averages $5 more, so that hay in the stack is worth $12 a ton. As much as 50 tons of mangolds and 15 tons of sugar beets are being produced per acre. Under the law for improving the lands of the "Campagna Romana" the proprietor has borrowed money at 2^ per cent for drainage, irrigation, and erecting community houses. The department of agriculture, through the "Cattedra Ambulante," demonstrates on experimental plats of the farms in the "Campagna Romana," even to the renter of these lands, the advantage of using chemical fertihzers, leguminous crops, and proper rotation and cultivation. The fertilizers consist of superphosphates, sulphate of ammonia, the cost of the former being $11.20 f. o. b. Naples, or $13.63 at the farm. Experiment No. 1. — A field of mixed hay was treated with 440 pounds of superphosphate per acre, both with and without sulphate of ammonia (when used 110 pounds). The result shows that an unfertilized field yielded 1.13 tons of dry hay. Where superphosphate alone was applied the yield was 1.51 tons, and where sulphate of ammonia was added also the yield was 1.66 tons per acre. Experiment No. 2. — This field was planted with alfalfa and fertihzed the same as field No. 1. Where no fertilizer was used, the production amounted to 1.13 tons of dry alfalfa; superphosphate alone, 1.60 tons. Where superphosphate and sulphate of ammonia were both used, 1.70 tons of alfalfa resulted per acre. ITALY, 87 The sulphate of ammonia costs $3.80 for 110 pounds, and superphosphate $2.46 for 440 pounds, $6.26 per acre treated with both. The superphosphate alone increased the production of mixed hay 33.6 per cent and alfalfa 41.6 per cent. The cost of harvesting is little changed, as the same ground has to be covered. The price of hay being $12 a ton, superphosphate alone increases the production of mixed hay by $4 and that of alfalfa by $5 per acre. The cost of the fertilizer appUed to the land and the extra cost of harvesting the crop only amounts to about one-half of the increased yield on alfalfa and more than one-third that on mixed hay, with the additional advantage of the fertilizer which holds over to the succeeding crop. Agricultural machinery is used to spread fertihzer and for harvesting grain, hay, etc. ' The mowing machines and wheel rakes are drawn by oxen or mules. Prof. Brini thinks that if the proprietors would only supervise their own estates personally they would get better results than they do by renting. As it is the tenants find that it pays them to use fertihzers and machinery, even if they do have to pay for it themselves. Prof. Oreste Bordiga, director of the School of Practical Agriculture at Portici and author of the report on Country Life Conditions of Southern Italy, Volume IV, Campania, 1909, [made the following observations: (a) The large landholders in Italy take little interest in the operation of their estates, leaving the direction to agents, who treat the tenants unfairly, thus discouraging them from doing as well as they otherwise would in agriculture. (b) The share system, which in southern Italy allows the proprietor all the fruits from permanent plants like fruit trees and grape vines, and the tenant only half of the produce from the cultivated crops, is very unfair. (c) The large estates should be divided up, and those who work the land should be given an opportunity of becoming absolute proprietors, and, until such opportunity is given, a more equitable system of share farming should be established. (d) The laborers receive at the rate of 40 cents a day when employed throughout the year, and as much as $1 a day is paid for extra labor at harvest time, in the country around Naples. (e) Laborers in the city of Naples receive $1 a day at the same time that 40 cents is being paid in the country. The cost of hving has risen just as rapidly as wages, so that the people can hve no better with the wages now paid than they could formerly. (/) Returning emigrants have purchased land for sentimental reasons rather than from consideration of its productive capacity, paying fabulous prices and then neglecting to cultivate the land themselves, but have followed the example of the large proprietors in exacting an unreasonable agreement from those who are willing to work. (g) The large landholders have been influenced by these purchases at high price to hold their lands at equally unreasonable figures, thus making it very difiicult for those who cultivate the soil to buy farms at reasonable prices and become proprietors. (h) These are the reasons why the agricultural laborers are continuing to emigrate, thinking it a step up- ward in the social scale to leave the land and become known by a number on a "time check" of some subway contractor in New York. (i) Those who are born and reared in the agricultural districts should be informed concerning conditions in the open country and be given an opportunity to acquire possession of farm lands in America before they have been spoiled by employment on construction work. When a few have succeeded others wiU foUow their example. (j) With the high prices of foodstuffs and improved niethods of agriculture, assisted by rural credit and business methods of production and marketing, the opportunities are great for the ambitious cultivator of the soil who becomes a proprietor of the land he works, whether it be in Italy or America. It was suggested that small land holdings provided with a dwelling and farm buildings, and sold on easy terms to emigrants desiring to hve In the country and having proceeded from the agricultural districts, would do much to start the movement. Wherever this has been tried it has worked well, and the sons of each agricultural family thus established become available to the surrounding farmers as an extra source of labor in time of harvest, etc. PONTECOEVO VALLE DEL LLKI CASERTA. The town of Pontecorvo is a center of rural organization, having an agricultural cooperative association, cooperative people's bank, cooperative society, and a cooperative insurance society. Cooperation is taught in the schools, the officers of all the societies are extremely progressive, and progress is rapidly extending throughout the surrounding country. The following leaders were interviewed: Deputy to Parliament, Count Anibale Lucernari; Mr. Mattia Sparangana, president of the People's Bank; Mr. Pasquale Belli, director of the "Consorzio " ; and Mr. Carlo Lungo, cashier of the credit department of the "Consorzio Agrario." 88 AGKICULTUKAL COOPERATION IN EUEOPE. Cattle, grain, tobacco, wine, olives, hay, fruit, and vegetables are the staple crops. The country is undu- lating, from level plains on the east to steep mountains on the west. A decided tendency to divide up the large land holdings and for small proprietors to live in separate houses on their own farms is noticeable. Those who live in the town have to pay an excessive rent and have to waste much time in going to and from the farms. Prices for :^arm produce are high; corn $1.30, wheat $1.35, and oats 60 cents per bushel. Wool sells at 30 cents per pound, oxen weighing 1,500 pounds each sell at $300 a pair, dressed beef at 16 cents per pound, olive oil at 30 to 34 cents per quart, and wine at 8 cents a quart. The agricultural association handles agricultural machinery, chemical fertilizers, seeds, and spraying mate- rials, and is carrying on an extensive campaign through the distribution of printed literature and demonstra- tions on individual farms by the traveling professor of agriculture, with additional instruction in the pubhc schools. Superphosphates, potash, and nitrates are the fertilizers most generally in use, and alfalfa, clover, beans, etc., are extensively cultivated to add nitrogen to the soil. Very careful cultivation and crop rotation have been introduced, and as a result production is high. The people seem to be prosperous, and constant and rapid progress is taking place, particularly in the use of agricultural machinery and modern methods of production. A considerable portion of the farm produce is consumed locally, tending to keep up prices, thus reducing the necessity for cooperative marketing, which has not as yet been undertaken. However, the leaders in the cooperative movement can already see that their attention must next be directed to the problem of marketing. FONDI PICO SAN GIOVANNI IN CARICO CASERTA. A trip was made across the mountains in company with Don Luciano Federici, a buyer of cattle and farm produce, of San Giovanni in Carico, Caserta, to the town of Fondi, near the coast. This district is moun- tainous but cultivated up to the timber line; the vineyards, olive trees, hardy fruits, wheat, oats, and alfalfa being raised in the higher altitudes and oranges, lemons, etc., at the foot of the mountains. Oranges sell at SI to $8 per thousand and lemons from |2 to $10 per thousand, according to the season of the year and the size of the fruit. The lemons and oranges are large and of good quality. Most of the lands are held by small proprietors who cultivate them directly, but there are some large holdings, and those who work the land at Fondi nearly all live in the city or in scattering houses in the suburbs. It happened by actident that several rural families from this district were taken to the rural districts of New York and New England upon arriving in America, and became established in the country at the very start of immigration. At the same time some of these farmers went to Ai'gentina, where they continued in agriculture, and as a result a very large proportion of all who have emigrated have gone directly to the country where their friends are already established and doing well. Many of these emigrants, failing to find employment during the cold winter months in the United States, return and spend the winter in Italy and come back again in the spring. The living conditions are good among these people, both in Italy and America, affording an example of what may result from having emigration directed away from large cities. Each town has its own market place, where there is much traffic carried on between the farmers them- selves in hogs and cattle, and much grain, hay, fruits, etc., are sold to the townspeople. Wine, olive oil, citrus fruits, wool, etc., are shipped to outside markets, and there is room for improvement through cooperative mar- keting associations, which are soon to be established. Few people are leaving this part of the country at present through necessity, emigration being more frequent from a desire for change and a chance to see a new country about which so much has been told by returning friends. These reports being about rural districts in America, those who emigrate naturally go where their friends are. With the acquisition of land by those who work it, and the further introduction of agricultural .machinery throughout the broad fertile plains of Caserta and Naples, it would seem that this part of Italy should before long approximate to the already prosperous condition reached by the northern provinces of Italy. Much manufacturing is already being done throughout the towns of this section, thus adding to the sta- bility of employment and giving a local market the produce of the surrounding farms. PIEDMONT — TURIN . Director General Italo Pennaroli, of the Turin Agricultural Cooperative Association, stated that most of the land in this section is held by farmers doing their own work, the size of the farms ranging from 2^ to 25 acres in the mountains and from 75 to 500 acres on the plains. There are, however, some extensive holdings, includiag those of the ancient order of "Maurizzio," originated at the time of the crusades, and of which the ITALY. 89 King is the president. This property is farmed by tenants, each cultivating areas similar to those held directly by the other farmers of the same locality. Many farmers keep no live stock at all except those necessary for cultivating the land, but board the flocks and herds for the shepherds during the wintertime. The farmers devote all their attention to raising hay and grain for the shepherds and cultivating vineyards and orchards. Some farmers have dairies from which milk is supplied to Turin, and even sent to Genoa, and they keep their cows in the stable nearly all the time. The shepherds remain in the mountains with their floclcs and herds throughout the summer season, only coming down to the farms for the winter. There has been a cooperative milk supply in Turin, resulting in an extremely low price to the consumers, but at the present time the supply is individual. There is an understanding among the dairymen immediately surrounding the city by which they agree to divide up the city into sections, each group of farmers delivering directly to a distributing station in one section of the city. Motor trucks make the rounds of each dairyman's district, collecting the milk and carrying it into the corresponding distributing station, where it is bottled and delivered to the consumers by women and boys at a price of 4 cents per quart. This is the lowest price for milk that has been observed anywhere in. Europe, and it is due largely to the excellent organization in the distribution system. It is partly due also to the adaptability of the territory surrounding Turin for dairying and also to the moderate size of the city and the simplicity of its layout, the cost of marketing being only 25 per cent of 4 cents, equal to 1 cent per quart. Thirty thousajid liters of milk are distributed in this way daily, and it is brought to the city in cans holding from 25 to 75 pounds, corresponding to cans holding 10 to 30 quarts, the smaller cans being delivered directly and the mUk from the larger ones bottled. There are 400,000 inhabitants in Turin. Farm labor is from 60 cents to $1 a day throughout the working season, and the farmers are unusually progressive and prosperous. The association buys cooperatively great quantities of fertilizer, seed, and agri- cultural machinery, but its credit department reports that there is little demand for short-time loans. This is due to the fact that the farms are already pretty thoroughly developed and the production almost up to the maximum, and that the dairying industry and the boarding of the shepherds' cattle do not require much capital, but result in an income which is paid regularly. The great level plains are largely devoted to forage crops and grain, having the surface furrowed for drainage and irrigation purposes, making the use of mowing machines rather difficult; and for that reason they are not very much in use. Other agricultural machinery, such as grain drills, thrashing machines, etc., is very popular. A new agricultural association is just being established for the purpose of cooperative marketing. The president, Count Rebandingo, invited the committee to attend a session of the society in which the proposed by-laws were being discussed. The members were extremely well informed and were planning the rules for their society very carefully. They appreciate that the marketing of their produce is the subject of most vital importance to them, for they have already developed their production and are not immediately in need of more capital, except such amounts as they may have to use for the collecting stations and carrying on of their marketing plan. An animated debate arose over the locations for the collecting stations, and it was decided to allow some extra compensation to the members who would have to travel the greatest distance to deliver their produce. ITALIAN LAKE REGION. The melting snow from the Alps keeps the plains of Piedmont and Lombardy well watered and large tracts are devoted to rice growing, the water being led down over the successive fields through sluices, there being a slight difference in level, just sufficient for this system of irrigation. Very few cattle were seen in the fields, but great quantities of hay and forage crops were being harvested and the farm buildings were very neat in appearance. The higher levels were devoted to grain growing and the steeper slopes to vineyards. The price of wheat was $1.54 to $1.62; oats, 57 to 70 cents per bushel; hay, $18 per ton; straw, $6 per ton; dressed beef, 15 cents for fore quarters and 14 cents for hind quarters; dressed veal, 17 cents; and dressed lamb, 16 cents per pound. Spring chickens, 64 cents a pair; hens, 94 cents a pair; eggs, 18 cents a dozen; butter, 25 to 30 cents a pound; and wine, 4^ to 9 cents a quart. Eefined sugar, 14 cents a pound; superphosphates, $12 to $15 per ton; bone meal, $17.50 to $18.50 per ton; nitrate of soda, $56.50 per ton; chlorate of potash, $76 per ton; and sulphate of potash, $50 per ton. Copper sulphate, for spraying, $120 per ton. All these prices May 30, 1913. The high productivity of this territory seems due to the progressive methods of fertilization, crop rotation^ and cultivation, together with the well-controlled distribution of moisture and the universal introduction of leguminous crops, as well as to the industry and business ability of the farmers. 90 AGEICULTUEAL COOPEEATION IN EUROPE. As the border of France was approached the country appeared very much broken up with rocks and steep slopes, but every bit of soil was being cultivated in the most careful manner and great care was being taken to maintain the forests wherever the land was too steep and difficult to cultivate. Every small terrace in the upper valleys was provided with irrigation from the streams wherever possible. AGRICULTURAL CREDIT AND COOPERATION IN ITALY.' I. AGRICULTURAL AND LAND CREDIT IN ITALY. (a) STATUTORY ORGANIZATION OF AGRICULTURAL CREDIT. With respect to the organization of agricultural credit, Italy may be divided into two parts: One comprising Piedmont, Lombardy, Venetia, Emilia, and Tuscany; the other including Liguria, the Marches, Umbria, Latium, south Italy, and the islands. In the first the organization of credit was the result of a spontaneous movement among agriculturists who united for the purpose into cooperative societies (popular banks, rural credit banks, etc.), and provided for their own needs; while in the second, owing to the weakness of private initiative, the State has been obliged to make provision. The result of State intervention is a series of agricultural credit laws which create special credit institutions, adapted in each case to the particular needs of the district, throughout central and southern Italy and in the islands. The most important of these laws are those of July 7, 1901, and March 29, 1906, the first authorizing the Savings Bank of the Bank of Naples to engage in rural credit business in the southern provinces of Italy and in Sardinia, and the second creating a special credit rural section of the Bank of Sicily. Laws of December 21, 1902, March 31, 1904, and June 25, 1906, dealt, respectively, with agricultural credit in Latium, in the Basilicate, and in Calabria, and there are numerous other special laws. The important underlying principle in this legislation is that of providing credit whenever possible through the channels of local organizations, preferably cooperative in form, which are therefore referred to as intermediate institutions. These are for the most part rural credit banks, popular banks, and district or county agricultural associations ; and since there were comparatively few of these in south Italy and the islands, provision was made in the same legislation for the encouragement of their formation by the offer of prizes to be competed for, and in various other ways. This has led to the establishment of many rural credit banks and a sensible increase, therefore, in the number of intermediate institutions. Cash credits are generally granted to these by the various central credit institutions (the Savings Bank of the Bank of Naples, the credit section of the Bank of Sicily, the Latium Agricultural Credit Institute, etc.) in proportion to their importance and the security they can offer. On December 31, 1912, 579 institutions had cash credits with the Bank of Naples to a total of over 18,000,000 francs, and from the Bank of SicUy, 275 institutions enjoyed credit to the extent of about 15,000,000 francs. The operations which the two banks referred to — the most important in Italy transacting agricultural credit business — are by law authorized to conduct may be reduced into two essential functions : (a) The rediscounting of bills drawn by the intermediate credit institutions against farmers who have received advances for various purposes in connection with the working of their land. (6) The discounting of biUs offered by these institutions themselves in the event of their needing loans to make collective purchases of agricultural material and supplies, or to advance money to their members in the case of the collective sale of their produce. They transact such business, however, only on condition that the loan in each case is to be devoted to some object directly connected with agriculture. To insure this, the persons to whom advances will be made are clearly enumerated. They must be proprietors who cultivate their own land, leasehold tenants or metayers, ' The following preface is carried in the printed copies of this report furnished the commissions: "The work done by the International Institute of Agriculture in the field of agricultural cooperation and credit has attracted atten- tion in the United States of America where, especially by means of the Institute publications published in English, some of which have been disseminated in thousands of copies in the Union, a knowledge of the cooperative credit systems in use in Europe has been diffused. It seemed desirable to the Americans to study these systems more closely in order to adapt them to American conditions. For this pur- pose, on the proposal of the Southern Commercial Congress, held at Nashville in April, 1912, a commission has been appointed, consisting of at least two official delegates for each State of the Union, to visit Europe to study the above systems. The commission decided to begin its tour with a visit to the International Institute of Agriculture in Rome. To facilitate its work in Italy, the central committee formed in Rome to receive the delegates decided to publish a brief report on the organization of agricultural credit and cooperation in Italy and requested the International Institute of Agriculture to prepare the same. I have the honor to present herewith the desired report, prepared by our esteemed employee. Dr. Giulio Costanzo." Giovanni Lorenzoni, General Secretary. ITALY. 91 or intermediate holders between landlord and cultivators. Further, the loan must be devoted to land within the area served by the central bank, and in maldng application the purpose to which it is to be devoted must be stated. Loans will only be made within, certain prescribed limits as to amount and length of credit, fixed, respec- tively, at 1,000 francs and one yearfor assisted loans as defined by the various acts (i. e., for cultivation, harvest- ing, and the purchase of seed, manure, and fungicides), at 2,000 francs and three years for loans devoted to buying live stock, and at 3,000 francs md three years in^ the case of loans for the acquisition of machinery. As we have seen, advances can not, as a rule, be made to individual agriculturists, but only to the inter- mediate institutions, among which preference will be given to those of purely agricultural character. Loans are made to the institutions by the two banks mentioned at a maximum rate of interest of 4 per cent, and by the institutions to their menabers at a rate which must not exceed 6 per cent. They are guaranteed by the capital of the societies where these are under hmited Uability, and by the property of the members themselves where the societies are founded on unliroited liability. The total loans which may be effected depend therefore upon the accumulated capital of any society and upon its legal form. The societies in turn enjoy certain privileges for their members, one in fact a legal privilege conferred by article 1958 of the Italian Civil Code, already referred' to, and another special privilege created by the law of January 23, 1887, with reference to loans devoted to stocking farms, purchasing agricultural implements and machinery, or apparatus for the handling and adaptation of agricultural produce, and to any other strictly agricultural use, This in general outline is the method of conducting rural credit business in the case of the Banks of Naples and of Sicily. In the Basihcate and in Sardinia, on the other hand, there exists a third form of rural credit, which consists of advances of money or goods. The central credit institutions (the Provincial Agricultural Credit Bank for the Basilicate, with headquarters at Potenza, and the Ademprivile Banks of Sardinia at Caghari and Sassari) instead of discounting the bills of the intermediate societies or issuing credit for their use, make direct advances to them in money or kind to a maximum amount of 10,000 francs, repayable over a certain number of years; and the societies then make loans on their own account to their members. • What has been said so far refers to current credit; that is, to advances made to agriculturists to enable them to stock their farms and buy machines and implements and meet actual working expenses of sowing, manurii^, raising crops and harvesting them. With i^egard to credit for real estate improvement; that is, the erection of cottages, the construction of modern farm buildings and roads, irrigation works, and changes in methods of cultivation, this is regulated only by the special laws existing in Sardinia and the Basilicate, and comprises loans madie to landowners, leasehold tenants, intermediate holders, and agricultural cooperative societies. Such loans are secured by mortgages extinguishable in installments over a period not exceeding 50 years, and may also, by agreement, be guaranteed by a lien on the increased value of the estate due to the improvement effected. The interest payable may not exceed 4 per cent, and advances to be used in the erection of cottages and improved farm buildings must be granted at the rate of 2^ per cent, the State undertaking to pay the dif- ference between this and the normal rate. The total amounts placed at the disposal of agriculturists in Italy by virtue of the special laws, either by the State or by savings banks and credit institutions, are approximately the following in the various districts: Francs. Central Provinces and Sardinia 29, 000, 000 Sicily 3 16, 000, 000 Southern Provinces and Sicily (provincial agricultural credit banks) 14, 000, 000 Sardinia (Adeipprivile Banks) 6, 350, 000 Basilicate 2,600,000 Calabria 2, 000, 000 Latium 1, 700, 000 Umbria and the Marches.. 1,100,000 Liguria 500,000 Total, 73, 250, 000 With reference to the transactions of the various special credit institutions during the last five years we add the data in the following summary tables compiled by the general direction of credit and thrift : 92 AGEIOULTUBAL COOPERATION IN BUEOPE. Agricultural credit institutions. SAVINGS BANK OF THE BANK OF NAPLES. Interme- diate in- stitutions in opera- tion. Rediscounts. Discounts. Direct loans. Total. Year. Number of trans- actions. Amount. Number of trans- actions. Amount. Number of trans- actions. Amount. Number of trans- actions. Amount. 1908 108 104 140 185 214 9,660 10, 226 12, 421 17,207 18, 296 Lire. 3, 413, 054. 37 4, 194, 965. 13 6, 061, 413. 05 7,469,503.28 7, 158, 973. 55 178 182 244 278 270 Lire. 1, 321, 261. 13 1, 139, 837. 91 1, 629, 312. 54 2, 029, 700. 84 2,104,868.89 114 37 125 149 70 Lire. 89, 124. 85 55, 400. 00 139, 675. 00 155, 009. 00 89, 991. 00 9,952 10,445 12, 790 17, 634 68, 636 Lire. 4, 823, 440. 35 1909 5, 390, 203. 04 1910 7, 830, 400. 59 1911 9, 654, 213. 12 1912 9, 353, 833. 44 AGRICULTURAL CREDIT SECTION OF THE BANK OF SICILY. 1908, 1909 1910, 1911 1912 78 120 155 193 211 9,673 16, 112 25, 490 30, 766 37, 188 1, 881, 808. 63 3, 634, 759. 89 6,089,063.58 7, 852, 904. 57 9, 990, 308. 72 31 69 145 198 287 127, 629. 69 372, 219. 43 999, 201. 78 1, 262, 692. 58 2, 035, 327. 09 809 169 103 83 69 182, 860. 00 54, 290. 00 31, 455. 00 22, 374. 99 13, 755. 00 10, 513 16, 350 25, 738 31, 047 38, 174 2, 192, 298. 32 4, 061, 269. 32 7, 119, 720. 36 9, 137, 972. 14 12, 039, 390. 81 THE LATIUM AGRICULTURAL CREDIT INSTITUTE. Year. Interme- diate institu- tions. Transactions -with, intermediate institutions. Transactions made directly with agricul- turists. Grand total. New. Renewals. Total. New. Renewals. Total. 1908 73 86 99 109 113 Lire. 3,904,475.69 4, 151, 871. 08 4, 393, 588. 34 7, 492, 884. 91 3, 733, 413. 68 Lire. 2, 116, 929. 07 2, 421, 641. 04 2, 676, 774. 65 4, 347, 826. 09 4, 927, 174. 20 Lire. 6,021,404.76 6, 573, 512. 12 7, 070, 362. 99 11, 840, 671. 00 8, 660, 587. 88 Lire. 384, 285. 24 398,502. 69 559, 608. 60 570, 802. 90 551, 389. 05 Lire. 313,125.00 404, 235. 00 585, 823. 00 712, 957. 50 660, 847. 00 Lire. 697, 410. 24 802, 737. 69 1, 145, 431. 60 1,283,760.40 1, 212, 236. 85 Lire. 6, 718, 815. 00 1909 7, 376, 249. 81 8,215,794.59 13, 124, 431. 40 9,872,824.73 1910 1911 1912 THE "VITTORIO EMANUBLE III' INSTITUTE OF AGRICULTURAL CREDIT FOR CALABRIA, AND THE PROVINCIAL AGRICULTURAL CREDIT BANK FOR THE BASILICATE. The "Vittorio Emanuele III" Institute of Agricultural Credit for Calabria. Provincial Agricultural Credit Bank for the Basilicate (po- sition at the end of the year). Year. Loans to agriculturists. Loans to associations aifd,rural banks. Total. Advances to monti ftru- mentaii credit banks and agricultural societies. Advances for agricultural Number of loans. Amount. Number of loans. Amount. Number of loans. Amount. improve- ments. loos' 329 810 969 1,013 847 Lire. 356, 173. 75 795, 062. 50 985, 776. 00 1, 012, 735. 25 803, 916. 22 5 4 6 6 5 Lire. 98, 015. 00 94, 000. 00 89, 000. 00 60, 000. 00 30, 000. 00 334 814 975 1,019 852 Lire. 454, 188. 75 889, 062. 50 1,074,776.00 1, 072, 735. 25 833, 916. 22 Lire. 124, 095. 19 212, 787. 64 307, 070. 26 226, 337. 29 (?) lAre. 32, 275. 43 211, 183. 26 379, 876. 20 662 302 17 1909 1910 1911 1912 (?) ITALY. Ademprivile banks of Sardinia. [Position at tlie end of the year.) 93 Short-term loans. Advances to monti fru- mentari credit banks and agricul- tural asso- ciations. Loans for agricultural improve- ments. Year. Short-term loans. Advances to monti fru- mentari credit banks and agricul- tural asso- ciations. Loans for agricultural improve- ments. Year. Discounts. Rediscounts. Disdounts. Rediscounts. Ademprivik Bank of Cagliari. 1909 Lire. Lire. Lire. Lire. Ademprivile Bank of Sassari. 1909 Lire. 116, 265. 00 229, 637. 40 347, 568. 00 Lire. Lire. 476,00L64 500, 163. 56 520, 557. 21 Lire. 23, 178. 66 150, 263. 95 466, 380. 70 1910 4, 735. 00 1, 385. 00 194, 481. 77 372, 431. 88 98, 278. 25 208, 492. 23 1910 26,660.66 188,435.00 1911 13, 373. 22 1911 The special credit institutions, that is to say, transacted loan operations to a total amount of 35,000,000 francs. This figure, it is obvious, does not include aU the agricultural credit transactions of the country, but only those made with capital furnished by the central banks. There remain the loans made by the intermediate institutions with their own funds (share capital, reserve, and deposits), and by the rural banks and the popular banks in districts where they do not act as intermediaries. It is necessary, therefore, to examine separately the working of the rural banks and the popular banks in their character of autonomous credit institutions. The ordinary savings banks, too, are of notable importance in the agricultural credit system. (&) COOPERATIVE ORGANIZATION OP AQKICULTTIRAL CEEDIT. (l) THE POPULAR BANKS. Cooperative credit, still one of the most important forms of cooperative activity in Italy, was for a long time practically the only form, though it originated, not in the country but in the towns, in the establishment of popular banks of the Schulze-Delitzsch type, adapted to Italian conditions, by Luigi Luzzatti. These preceded the rural banks, but, on the introduction of the latter, did not discontinue the help they had given to agricul- ture. On the contrary, they often assisted and continue to assist the rural banks themselves. While the latter, however, serve more particularly the small farmer class, the popular banks prefer to deal principally with the commercial, industrial, and agricultural middle class and have relatively a very wide area of operations. Their business consists in granting loans (at rates varying from 4 to 7 per cent), discounting commercial bills, furnishing cash credits on current account, and making advances and renewals. Discount transactions, together with the business done in accommodation bills, are of great importance reaching a total on December 31, 1908 (for 690 out of 736 banks then existing), of 600,000,000 francs, which is the latest oflB.cial figure. The total business of this nature transacted during that year alone (loan transactions and repayments added together) was about 1,600,000,000 francs. Out of that total nearly 500,000,000 francs represent loans to agriculturists, who, as regards the number and total amount of their operations, rank after the commercial class and before the industrial. Of particular importance to agriculture are the popular'banks of Bologna, Cremona, Lodi, Brescia, Padua, Piacenza, and the Province of Treviso. The banks obtain the necessary working capital from their own funds and from deposits, the first men- tioned amounting in 1908, for 690 banks, to 155,000,000 francs, or an average per bank of 226,000 francs. The total comprised paid-up-share capital (the value of the shares varying from 5 to 50 francs) to the amount of 98,000,000 francs, and reserves of 57,000,000. These together serve as security for the operations of the bank and as a basis for deposits, which in 1908 amounted to almost 1,000,000,000 francs. It is to be noted how the Italian popular banks, with the object of increasing their command of capital, have from their inception made use of terminable interest-bearing bonds. In this way they have been able to extend their operations and include loans to agriculturists for longer periods than are usual, and in this they anticipated similar institutions in other countries. Characteristic of them also are the loans guaranteed on honor, which take the form of small sums advanced, by preference, to workingmen who can offer no other guaranty than their labor and their reputation for honesty. Worthy of notice, too, is the work they perform for the economic and social improvement of the district in which they are situated. Their share often takes the form of irrigation works or the reclamation of land. 94 AGBICTJLTUBAL COOPERATION IN BUEOPE. and many cooperative productive societies and cooperative societies for contracting for public works find their chief support in the popular banks. The banks have increased rapidly, their nunaber rising from 50 in 1870 to 736 in 1908, with more than half a nullion members. They are most numerous in Lombardy (77), Veneto (75), Emilia (71), Marches (62), Campagna (104), and in Sicily (72). Then follow in importance: Tuscany (48), Puglia (46), Abruzzi and Mohse (45), Piedmont (32), Calabria (29), and Latium (29). There is no federal organization, but the oldest and most important of them belong to the "Association of Italian Popular Banks," founded by Luigi Luzzatti in 1876 with its headquarters in Eome, whose object is to promote the foundation of institutions of popular credit, watch over their legitimate interests, examine and discuss economic administrative and legislative questions in connection with credit, and collect and publish statistics. Since 1877 the association has held seven congresses on popular credit, collaborated in the compilation of the various oificial statistics of popular banks, and, since 1889, has published Credit and Cooperation, a technical journal in which questions relating to popular credit are treated at length. From the latest official statistics of popular banks (decennial period 1899-1908) compiled by the General Direction of Credit and Thrift, we add the following tables, which suffice to show the development of the banks and their importance as organs of credit: Table I. Year. 1876 1877 1878 1879 1880 1881 1882 Number of banks. 82 81 97 97 123 124 139 Number of members. Total. 77, 340 80, 160 88, 959 90, 440 102, 279 105, 177 114, 072 Average per bank. 943 989 917 932 831 848 821 Year. 1883 1886 1887 1893 1898 1908 Number of banks. 195 412 541 662 594 690 Number of members. Total. 139, 946 259, 204 318, 979 405, 341 381, 445 501, 022 Average per bank. 718 629 590 612 642 726 Table II. Year (on Dec. 31). Number of banks. 1898 594 492 509 528 549 571 591 615 633 658 690 1899 1900 1901 1902 1903 1904 1905 1906 1907 1908 Banks' ow funds, paid- up capital, and reserves (000,000 omitted). Average per bank of banks' own funds (000 omitted). Total fiduciary deposits. Bills in portfolio (000,000 omitted). Balance of credit redis- count business. Advances and renewals (000,000 omitted). Government and other securities (000,000 omitted). Mortgage loans and loans on simple note of hand. Lire. 103, 736 96, 362 99, 314 103, 428 108, 013 113, 013 117, 715 124, 647 133, 804 145, 660 2 155, 664 Lire. 175 195 195 196 197 198 199 203 211 211 226 Lire. 377, 590, 295 390, 758, 695 429, 594, 481 468, 471, 187 504, 398, 927 555, 619, 620 607, 686, 296 658, 817, 329 733, 103, 663 844, 990, 646 971,167,644 234, 035 249, 571 273, 702 298, 758 327, 439 348, 122 375, 428 410, 286 434, 533 511, 017 586, 099 Lire. ' 94, 009, 919 64, 360, 611 128, 447, 945 109, 397, 348 151, 297, 897 151, 845, 332 122, 457, 224 140, 782, 185 124, 793, 167 131, 194, 747 ' 172, 009, 276 Lire. 35,615 57, 173 60, 526 65, 677 68, 521 83, 047 100, 883 134, 414 136, 549 153, 850 101, 790 Lire. 140, 024 127, 555 128, 003 131, 310 146, 152 157, 247 165, 360 171, 135 179, 560 185, 361 219, 824 Lire. 14, 638, 688 13, 538, 914 13, 426, 477 14, 804, 219 16, 922, 474 18, 520, 298 18, 335, 119 20, 275, 547 21, 184, 681 22,720,148 26, 964, 995 1 This figure refers to credit rediscount transactions during the year ] 2 Average per member, 310.69 francs. « Figures for the total credit rediscoiint business during 1908. ITALY. Table III. 95 Year. Gross profits (000,000 omitted). Total ex- penses and losses (000,000 omitted). Net profits (000,000 omitted). Net profit per cent on paid- up capital. Net profit per cent on paid- up capital plus reserves. Dividend per cent on paid- up capital. 1880 Lire. 7,320 13, 416 14, 487 25, 090 30, 744 28, 023 62, 861 Lire. 3,070 9,096 9,765 17, 602 24, 230 21, 191 49,213 Lire. 4,250 4,320 4,722 7,488 6,514 6,833 13, 647 11.53 11.66 11.80 11.32 8.28 9.15 13.88 8.88 9.00 9.04 8.81 6.27 6.59 8.77 9.49 1881 .. 9.48 1882 ; 9.44 1886 8.26 1893.. 6.63 1898 6.68 1^08 8.34 Table IV. — Summary of the balance sheets of the popular banks on Dec. SI, 1908. Numer- ical order. 10 11 12 13 Particulars. CREDIT. Cash in hand Bills paid (Italian and foreign). Loans guaranteed on honor Advances on securities de- posited Advances on security of goods and valuables , Credit renewals Loans on mortgage (capital and interest) Ordinary loans on note of hand (capital and interest) Real estate Securities Current accounts Furniture and installation ex- penses Miscellaneous debtors Total Net losses Lire Lire. 42, 307, 068 586, 099, 593 417, 281 18, 356, 418 4, 614, 794 78, 818, 526 17, 141, 679 9, 823, 316 16, 212, 078 219, 824, 094 193, 613, 019 2, 471, 667 198, 024, 026 1, 387, 723, 559 50, 113 1, 387, 773, 672 Per cent. 2.16 29.91 .02 .93 .23 4.02 .83 .50 .88 1L21 9.88 .13 10.11 100 Numer- ical order. Particulars. DEBIT. Paid-up capital Reserve funds ; . . Current accounts and savings deposits Bills accepted and payments due Debit renewals Rediscount of bills Miscellaneous creditors Total Net profits. Lire Lire. 98, 310, 108 57, 354, 279 971, 167, 644 3, 158, 671 20, 251, 029 72, 260, 849 151, 591, 163 1, 374, 093, 743 13, 679, 929 1, 387, 773, 672 Per cent. 5.05 2.94 49.91 .16 1.04 3.71 7.79 100 On December 31, 1908, the fiduciary deposits in the Italian popular banks, as is shown in these tables, amounted to nearly 1,000,000,000 francs. At the present time, according to an inquiry recently completed by the General Direction of Credit and Thrift, they amount approximately to 1,150,000,000 lire, a fact which proves the confidence which all classes of the population have in these banks. (ll) THE RUEAL BANKS. The rural banks perform in the rural districts the work performed by the popular banks in urban centers and market towns. The first bank of the kind was founded by Leone Wollemborg in 1883, at Loreggia (Padua) . Others followed in rapid succession. Owing their inception in part to the propaganda conducted by Wollemborg and his followers, but for the most part to the CathoHc social movement. They are modeled on the Eaiffeisen banks and on the principle, therefore, of joint unhmited responsibiUty; but while those which owe their origin to Wollemborg and his followers are unsectarian, the banks founded by the Catholics have a decided sectarian character. Their object is " to improve the material and moral condition of members, providing them with necessary capital obtained from the deposits of other members or third parties and avaihng themselves of credit furnished by larger institutions." This is their principal function, but certain banks engage in other business for the benefit of members such as collective purchase or hiring, and mutual cattle insurance. The rural banks, on their foundation at least,, have no capital of their own, but as we have said, receive deposits from members, and to a greater extent from nonmembers, on which, as a rule, interest is paid at the rate 96 AGEICtrLTXJBAL COOPEEATION IN EUEOPE. of 3i or 4 per cent. These deposits which on June 30, 1912, reached 99,234,040 francs, provide the funds for the loans which range from 50 to 1,000 francs, and only in so far as they are insuflBlcient for their needs do the rural banks resort to credit obtained from other institutions (popular banks, ordinary savings banks, etc.). In the course of time, however, they build up a capital of their own, undividable even on the dissolution of the bank, formed in part by the small fees paid by members on entrance or on effecting the first loan, but principally by the balances in hand at the end of each year which are devoted almost entirely to forming a reserve fund. The loans are made as a rule on the security of bills, and are of two kinds: Short-term loans, which must not exceed two years, and long-term loans, which may be made for a period of 10 years. The first are generally renewed every three months ; the second are extinguished by regular repayments which combine extinction of the debt with payment of the interest due, which varies as a rule from 5^ to 7 per cent. The difference between the interest received by the banks on these loans and the interest paid by them to depositors and central banks, provides for the expenses of administration and constitutes a reserve fund which in the event of the dissolution of a bank is devoted to some work of pubUc utility. Similar in their administrative methods and their legal form to the banks already described are the "agri- cultural banks" estabhshed cooperatively in south Italy and the islands as the result of special legislation, and intended, as we have seen, to act as intermediaries between the central credit banks and the individual agri- culturists. On December 31, 1912, the rural banks and cooperative agricultural credit societies under collective title numbered 2,033 throughout Italy, two-thirds of them being sectarian in character and the remainder un- sectarian. They were distributed thus : North Italy, 1,168; central Italy, 238; south Italy, 191 ; the islands, 436. The following provinces have each at least 50 rural banks within their territory: Verona, 106; Rome, 101; Bologna, 87; Palermo, 81; Girgenti, 74; Bergamo, 73; Padua, 73; Caghari, 70; Cuneo, 70; Treviso, 69; Udine, 60; Alessandria, 60; Aquila, 55; Rovigo, 54; Brescia, 52; Catania, 52; Caltanissetta, .52; Parma, 50. On June 30, 1910, the general financial position of 868 rural banks, according to the balance sheets as published in the Official Bulletin of Societies Limited by Shares, was as follows: Balance sheet of 868 rural banks on June SO, 1910, showing banks' own funds. No. Particulars. Lire. No. Particulars. Lire. 1 CHEDIT. Cash in hand 1, 915, 321 45, 911, 397 1, 856, 740 363, 074 2, 477, 187 1,015,458 1, 777, 715 9, 071, 033 314, 568 764, 586 6, 437, 043 1 2 3 4 5 6 7 DEBIT. Paid-up capital (members' shares) 455,155 1,514,155 7, 111, 268 50, 087, 705 6 194 423 2 Bills paid 3 Mortgage loans (capital and interest) Debit current accounts (capital and interest) . . Miscellaneous deposits (capital and interest) . . . 4 Loans on simple note of hand 5 Real estate , 6 Government securities Miscellaneous creditors 6, 085, 546 7 Company shares and bonds Total • 8 9 Credit current accounts (capital and interest) . Furniture and installation expenses 10 11 Miscellaneous debtors . . Total 71, 904, 122 237, 237 696, 554 71, 448, 252 12 Debit balance from previous years to be ' liquidated or assigned Revenue and profits of current year's working (including credit balance of previous years to be liquidated or assigned) 13 Net losses on current year 's working 1, 389, 661 Grand total Grand total 72, 837, 913 72,837,913 The sectarian rural credit banks are found principally throughout Venetia, Bergamasco, Emiha, and Sicily, where they are grouped in diocesan, provincial, and district federations which, in addition to the ordiaary work of coordination, representation, and supervision, make provision for the calls on each bank by passing on funds from the banks which have a superabundance of capital to those where the working capital is insufficient. We may mention, out of the many: The Provincial Federation of the Rural Credit Banks of Bologna, which, on December 31, 1911, comprised 80 societies with 6,766 members; that of the banks of Brescia, which includes 40 banks; the federation of Romagna at Faenza, with 57 member banks; and the Latium Central Credit Institute in Rome, to which are affiliated more than 40 societies. These local federations are in turn afiiliated to the National Federation of CathoHc Rural Banks, formed at Bologna in 1909, which again forms part of the Economic Social Union of Itahan Catholics with its headquarters at Bergamo, the great center of coordination and administration for Catholic social and economic organizations in Italy. The unsectarian banks also are afifiiated to local federations, among which we may mention the Federation of Cooperative Credit Societies with head ofl&ces at Girgenti, which embraces 46 societies with 8,700 members. ITALY. 97 There is in addition a National Federation of Italian Eural Banks (whicli succeeded the national federation founded at Padua in 1887), to which some 300 societies are affiliated, and which has for its declared object the organization of unsectarian rural banks into " a single representative body, promoting their diffusion, encourag- ing their development, protecting and defending their interests by means adapted to the needs of the occasion." To carry out this program, the latter federation has lately taken the important step of founding a national bank of Italian rural banks, the preliminary work in connection with which is already well advanced, and which will doubtless give a fresh and vigorous impulse to cooperative rural credit in Italy. The official organ of the federation is La Cooperazione Rurale, the oldest established journal for cooperative propaganda, founded by Wollemborg in 1885. (c) THE ORGANIZATION OF LAND CREDIT. Land credit in Italy is at present conducted by the following institutions : The Italian Land Credit Institute (Rome) ; St. Paul Institute of Charity Organizations (Turin) ; Monte dei Paschi (Siena) ; the Sardinian Land Credit Bank (Cagliari) ; and the savings banks of Milan, Bologna, and Verona. By royal decree certain other bodies may also be authorized to deal in land credit: Landowners' mutual societies possessing real estate to the value of not less than 5,000,000 francs, institutions and societies with a paid-up capital of ten million, and those also with less than ten but not less than two million, in districts where no land-credit institution exists. The land-credit sections of the savings banks of Milan and Bologna, the St. Paul Institute, and the Monte dei Paschi, as well as the Italian Land Credit Institute, may conduct business in any part of the kingdom. The Verona Savings Bank is limited to the Venetian provinces and Mantua, and the Sardinian Land Credit Bank to the island of Sardinia. The operations which, under minute statutory regulations, these institutions may conduct are of various kinds. The most important is the granting of first mortgages on real property to a maximum of half its value extinguishable by yearly payments providing for amortization in a period of not less than 10, nor more than 50 years. The annual payments comprise the amortization installment, interest, income tax, commission, and management expenses, which must not exceed 45 centimes on each 100 francs of the loan, and lastly, the mort- gager's share of revenue and stamp duties which are paid on his behalf directly by the institutions. The debtor, however, may at any time within the term of the loan pay off the whole or any part of the mortgage. The land-credit institutions may also through surrender or transfer acquire ordinary or preference mort gages on the same conditions as they grant loans, making these also amortizable. They obtain the funds necessary for these operations by the issue of mortgage bonds bearing interest at varying rates — 3J, 3f , 4, 4^, and 5 per cent — designed thus to lessen money-market fluctuations. The loans also are made in the form of bonds at a rate of interest equal to that on the bonds issued for the accumulation of working capital. They are, of a nominal value of 500 francs and are payable to bearer or his order. They are redeemed at par through half yearly extractions, the amount so redeemed at each extraction being equal to the total amortization of mortgage effected in the preceding half year. The interests of bond holders are protected by the fact that ail the bonds issued are guaranteed by the total mortgages held. Proprietors who without having immediate need of capital for expenditure wish to have the support of credit, may obtain a cash credit from the banks in the place of the loans customarily made by the consignment of bonds; in this case advances as called are paid in cash at a variable rate of interest determined by the banks. To give an idea of the business done by land-credit institutions in Italy we present the two following tables, the first giving for all the banks together the totals of the chief credit and debit items in the six years 1906-11, and the second the total transactions of different kinds made by individual banks in 1911 : Number of institutions, and totals of chief credit and debit items for all banks together. Year. Number of insti- tutes on Dec. 31. Mortgage seciurity on Dec. 31. Total amount of mortgage bonds in circulation on Dec. 31. Total mortgage loans made in each year. Total amount of mortgage loans existing on Dec. 31. 1906 7 7 I 7 7 Francs. 792, 484, 204 821, 981, 025 904, 898, 770 924, 045, 706 1, 031. 733, 191 1,152,398,533 Francs. 322, 597, 500 • 341. 250, 500 37i; 038, 000 395, 726, 500 437, 228, 000 490, 198, 000 Francs. 44, 329, 500 45, 335, 000 61, 819, 000 59, 713, 800 74, 111, 500 78, 896, 000 Francs. 345, 413, 633 1907 1908 1909 1910 1911 359, 816, 990 389, 933, 630 413, 551, 475 457, 824, 751 508, 276, 418 14174°— S. Doc. 214, 63-1- 98 AGEICULTUEAL COOPEBATION IN EUEOPE. Totals of chief credit and debit items for each bank in 1911. Land credit inatitutions in operation. Savings Bank of Bologna Savings Bank of Milan Savings Bank of Verona Sardinian Land Credit Institute (Cagliari) Italian Land t'redit Institute (Rome) Monte dei Paschi (Siena) St. Paul Institute of Charitable Organizations (Turin) Total Mortgage security on Dec. 31. Francs. 60. 889, 478 334, 552, 000 19, 570, 600 3, 767, 300 368, 550, 000 158,853,476 206, 215, 679 1, 152. 398, 533 Total amount of mortgage bonds in circulation on Dec. 31. Francs. 38, 948, 000 167. 276. 000 16,003,000 J , 839, 500 129, 406, 000 • 63, 509. 000 73. 216. 500 490, 198,000 Total mortgage loans made in each vear. Francs. 7, 973, 500 25. 420, 000 :i. 174,000 :;io, 000 15, 563. 500 11,630,000 14, 825, 000 78. 896, 000 Total amount of mortgage loans existing on Dec. 31. Francs. 38,152,802 162, 688. 719 15, 696, 447 1, 799, 185 155, 2«S. 686 63, 068. 727 71,631.852 508, 276 418 II. COOPERATIVE PURCHASE SOCIETIES. Collective purchase and distribution, intended as it is to protect agriculturists against exaggerated prices and often against the inferior quality of goods, is an important branch of rural cooperation. In Italy it is conducted by societies of different types — technical and agricultural associations, farmers' clubs and unions, rural banks, and credit societies, to the number of 1,500. The most important group is formed by the agri- cultural associations, of which there are 750 whose work constantly increases with the growing use of machinery and chemical manures. These associations are under the form of cooperative unlimited liabilitj- societies whose operations cover a group of parishes. They are organized for the direct purchase, either on their own initiative or in conjunction with other societies or through their federation, of all the materials, supplies, and instruments of production necessary and adapted to the type of agriculture prevailing in their districts, exercising in the interests of acquiring meijibers a strict control over the quality of all goods. The members as a rule then purchase from the association at market prices, any profits accruing to the association out of the transactions being distributed afterwards among the members in the form of dividends or rebates in proportion to their purchases. The purchasing fund of the associations is formed by the capital, unlimited in amount and subscribed in shares of from 10 to 50 francs, and by the accumulated reserves. Any profits remaining after meeting management expenses are divided among the shareholders, who receive as a rule 5 per cent, and the residue is assigned in varying proportions to the reserves, to propaganda in aid of rural cooperation and instruction, and to the members in proportion to their purchases. Among the organizations for collective purchase of agricultural material in Italy the most important is the Federation of Agricultural Associations, with headquarters at Piacenza, which does business in every part of the country, and comprises more than 700 separate associations. Formed in 1 892, its growth has been remark- able, as the following table shows: ITALY. 99 Growth of the Federation of Agricultural Associations from its foundation to Dee. Si, 1910, Year. 1892. 1893. 1894. 1895. 1896. 1897. 1898. 1899. 1900. 1901. 1902. 1903. 1904. 1905. 1906. 1907. 1908. 1909. 1910. Mem- bers. 3 In eight years the society has cleared itseK of a, debt of 500,000 francs incurred for erection and plant. Net yearly profits reach an average of about 150,000 francs, which enables it to pay a dividend of 5 per cent. It has a share capital of about a rnHHon and a half francs. The factory at Lendinara (1905) produced 70,000 quintals in the first year and 140,000 in the second, and paid dividends at 14 per cent to purchasing members and 10 per cent to nonpurchasing members. The society has erected another plant at Adria, where it already had 350 members holding 4,000 shares, so that at the present time it has a capital of more than 300,000 francs and a reserve fund of several thousand. The works at Bagnolo Mella were the first erected in Italy (1897). The society forms part of the Bagnolo Cooperative Agricultural Association and produces annually an average of 80,000 quintals of phosphate. It owns capital to the amount of 350,000 francs, approximately composed of shares to the extent of 20,000 francs, a reserve fund of 70,000 francs, appreciated value of shares of 200,000 francs, and a sinking fund of 55,000 francs. Of the total capital only 20,000 francs is paid-up share capital; all the rest is accumulated profits of the business. At Mantua an estabhshment plaimed in 1895 was erected in 1902. At the present time it has an output of from 120,000 to 150,000 quintals and earns a net profit of 40,000 francs. It has about 900 members and capital of its own to the amount of 300,000 francs. The Piacenza estabhshment, which dates from 1907, produced 121,265 quintals of phosphate in 1911-12 and sold 114,848 quintals. The net profits were 33,000 francs and dividend was paid at 5 per cent. The work- ing capital owned by the society is at present 477,684 francs and the total of the year's transactions reaches 850,000 francs. The number of members on February 28, 1913, was 1,350, who held 9,502 shares of 50 francs each. At Cremona the works were estabhshed chiefly on the initiative of the local agricultural association. They have an aimual output of 130,000 quintals of phosphate and do business on the principle of guaranteed sales, certain of the members being under obhgation to take dehvery of a certain quantity of manure, determined by the number of shares held. The average net profit is about 30,000 francs; the working capital owned amounts to half a milUon. The most recent estabhshment is that of MontebeUuna, which was founded in 1908 and began operations in the following year. It has a capital of 500,000 francs, a membership of 1,300, and an annual output of 100,000 quintals. Amongjjfche other factories, that of Novara has a yearly production of 140,000 quintals ; that of Cerea, 105,000 quintals; that of MUan, 70,000 quintals; that of Lodi, in operation since 1911, a production of 130,000 quintals and a capital of half a million francs, subscribed by 120 members; and that of Sant' Elpidio, erected in 1911, a yearly out put of 80,000 quintals. These figures, which give a total annual production of nearly 2,000,000 quintals of phosphate, show the wonderful progress made in a short time in an entirely new branch of cooperative activity. Kecently (in 1907) there was formed a central association with headquarters connected with those of the Federation of Agricul- tural Associations of Piacenza, and already begins to feel the benefit of a closer organization. ' Roughly 1,000 quintals equal 98 tons. 102 AGBICULTITEAL COOPEEATION IN EUROPE. {d) MISCELLANEOUS COOPERATIVE SOCIETIES TOR PRODUCTION AND SALE. In addition to ttie societies abeady referred to there are in Italy some 15 cooperative oil factories in con- tinuous operation to the advantage of their members both in respect to the quaHty of the oil extracted and to the saving in cost of production. We may note the Benacense Mutual Refinery, at Toscalano, on Lake Garda, estabhshed in 1902 with a capital of 25,000 francs in 25-franc shares; the Matino Cooperative Oil Refinery, in the Province of Lecce, founded in 1906 with a capital of over 50,000 francs; and the Cooperative Refinery of Spoleto, in Umbria, estabhshed in 1907 with an initial capital of 47,000 francs in 100-franc shares. In North Italy again (Piedmont, Lombardy, FriuU) are to be found scores of cooperative mills and bakeries. In technical efficiency and financial success they show continuous progress and constitute one of the most valuable means of protecting agricultural laborers from pellagra. Worth noting also is a cooperative oil-cake factory at Piacenza, which produces annually 15,000 quintals of oil cake for cattle feed; a sugar refinery at Casahnaggiore (Cremona); and a cooperative nursery garden at Canneto suU'OgHo (Mantua), formed by 44 members, with 100 hectares of land. Characteristic also is the cooperative movement among tobacco growers, who are seeking means to sup- plant the existing commercial houses and acquire for themselves the exceedingly profitable trade. Cooperative sale societies, in the strict meaning of the term, are by no means numerous in Italy. We may mention a cooperative society for the sale of grain at Bagnolo Mella (Brescia) ; societies for the sale of grapes for table use in the Piacenza district; 15 societies for the sale of market-garden produce and fruit in Romagna, the Marches, Calabria, and Sicily; 9 societies for the drying of cocoons for the silk industry; 6 societies for the sale of wool, and an equal number for the sale of eggs. The Bee Keepers' Federation for the production and sale of honey and wax deserves final mention. Formed in 1904 at Ancona as a cooperative unhmited liabiHty society, it has estabhshed branches at Macerata and at Fano, has nearly 30,000 francs of subscribed capital, and effects sales to the amount of 2,000,000 francs yearly. IV. COLLECTIVE FARMS. Collective farms are a recent and characteristic form of Itahan agricultural cooperation. The^ are asso- ciations of working agriculturists, formed for the collective hiring of the land they wish to cultivate. In most cases they obtain the land on a collective lease, as implied in their name, but in some instances make a contract to cultivate the land on some produce-sharing system, receiving as a rule half or one-third of the crop. They are always legally constituted as cooperative societies, either hmited or unhmited in habihty. In the Province of Bergamo they are civil societies with unlimited habihty. We must distinguish between associations for separate cultivation and associations for collective cultivation. The first confine themselves to renting the land from the proprietors and distributing it in small lots among their members; the second cultivate the land in common under central technical and administrative direction. Separate cultivation is the more common form, but collective cultivation holds the first place for the intensity of the cultivation and the perfection of its technical methods. In the latter case each member works in turn — an interesting attempt to lessen unemployment — the work to be performed being divided among the members, who are nearly always more numerous than the enterprise requires. Farms worked collectively are nearly always based on sociahstic prmciples, while those worked separately are inspired by the cathohc social movement, except in the case of Sicily, where sociahstic and catholic farms are alike under separate cultivation. The members are agricultural laborers in the case of farms under single cultivation; and in farms culti- vated separately include day laborers, small owners, and farmers. Except in the north of Lombardy, the members seldom five on the land they cultivate but in villages or small towns more or less distant from the holding. The hiring contracts are made, in the different cases, for a term of from 1 to 20 or 25 years, and the lands are leased from the State, from pubhc corporations, or from private owners. The necessary capital is nearly always obtained through loans — in South Italy from the special agricultural credit institutes; and in North Italy, where these do not exist, from other sources — cooperative credit banks, ordinary banks, private capitahsts, buyers of agricultural produce, who advance money on the anticipated results, or the members themselves who postpone the withdrawal of money due as wages. In addition to the cultivation of the land the societies generally conduct other supplementary business for the benefit of members, as, for instance, coUective purchase and sale, the collective ownership and working of machines, cooperative dairies, cattle insurance, and agricultural credit, either as intermediate institutions for the administration of credit under special acts or as autonomous deposit and loan banks. In addition to their economic activity just described the societies aim at accomplishing certain educational and moral work on ITALY. 103 behalf of their members through the establishment of special schools, infant asylums, and short courses of lectures in agriculture or popular education. From an inquiry just concluded by the National League of Cooperative Societies it appears that there are 150 societies in existence, divided into three groups, for each of which we give certain summary data: Province. Number of societies. Membership. Area cultivated. Amount of rent payable yearly. Sicily E milia-Romagna Lombardy Total 52 52 48 16, 107 14, 028 5,225 Hectares. 46, 778. 28 5, 060. 59 5, 677. 68 Lire. 2, 027, 209 525, 785 622, 700 152 35, 360 57,516.55 3, 175, 694 They were designed in Sicily and in north Lombardy to eliminate the intermediate speculator (gabellotto or fittabile), whose action in increasing rents had already frequently led to an outcry from the farming class. In Emilia and Romagna they were formed as an attempted remedy for unemployment, not reduced in the case of these districts by emigration. The results of their work are somewhat complex and it is difficult to estimate them fairly. In agriculture itself they have contributed to real progress; in their educational work they have certainly stimulated the sense of responsibility among their members and given them a more exact knowledge of the cost of the factors of production in agriculture and the returns to each. V. MUTUAL INSURANCE SOCIETIES. Mutual insurance societies, supplying as they do a very real need of the rural population, are constantly increasing in number in Italy, especially in respect to fire insurance and the insurance of cattle. There are 1,000 of the first kind, for the most part in North Italy. In the Province of Milan alone there are 200 societies, and in Udine 100. They are irregularly scattered over the whole country and are most numerous as a rule in districts where the land is much stibdivided. From data collected from 500 societies, by the national committee of agricultural mutual societies, it appears that there are about 100,000 members in such societies insured to the amount of 100,000,000 francs. The average capital per society is about 100,000 francs. They conduct operations in a restricted area limited in general to a commune, and the majority work on the system of after assessments. There is a tendency, however, in recent years to adopt the principle of fixed premiums, with supplementary after assessments when necessary, in proportion to the value of the animals insured. Compensation is in most cases limited to 75 per cent of the damage or loss. The societies are often grouped in provincial or district federations, among which that of Milan is worthy of note as the first federation to effect reinsurance in Italy, and those of Aquila, Lucca, Novara, Pinerolo, and Udine. On July 1 , 191 ] , a national federation of cattle insurance societies with the special functions of revision and the effecting of reinsurance was founded at Rome. Less numerous but increasing rapidly are the fire insurance societies. There are 300 of these, 200 of which are in Piedmont alone. The total capital insured in them reaches a total of more than 400,000,000 francs, with an average per society of 500,000 francs. The largest society is "La Fossanese," at Fossano, in the Province of Cuneo. It has 1,000 members, with 11,000,000 francs of property insured. As in the case of cattle insurance societies, the fire insurance societies are also united in provincial or dis- trict federations (Asti, Turin, Alessandria, Casale Monferrato, etc.), and in a national federation with head offices in Rome, which effects remsurance for the affiliated societies. There are in Italy five societies for mutual insurance against agricultural accidents, at Vercelli, Milan, Turin, Florence, and Bologna, and others are being founded. The most important is that of Vercelli, founded in 1902, among the agricultural workers of the district. This society insures its members against death or against total or partial permanent disablement, and in some cases pays compensation for temporary disablement. Insurance is extended to all agricultural workers, casual as well as regular. Premiums are fixed at the rate of 5 francs for each 1,000 francs of insurance, calcu- lated in respect not to the number of laborers employed but to the area cultivated. On November 10, 1911, 104 AGEICULTTJBAL COOPEKATION IN EUROPE. the society had 654 members, with a total cultivated area insured of 90,000 hectares, giving employment to 78,000 laborers. The accident insurance societies have their own federation in connection with the national agricultural mutual committee, also in Rome, a committee which encourages and directs the rural mutual insurance move- ment and contributes to its success. Insurance against hail is undertaken in Italy by limited liability and mutual societies such as the Mutual Aid Society of Milan, the Society La Prudenza e TEguaglianza, also of Milan, the Agricultural Association of the Provinces, in Rome, and the Interprovincial Agricultural Union of Cremona. At VerceUi, also, there is the cooperative agricultural limited liability society La Vercellese, founded in 1892, which, beginning operations in the Province of Novara, in Lomellina, and in the vicinity of Vigevano, in 1904 extended its operations to the whole of Italy. The property insured in it amounted to 8,199,700 francs in 1910, the premiums paid to 835,115 francs, and the indemnities paid to 477,357 francs. VI. NATIONAL LEAGUE OF COOPERATIVE SOCIETIES. Formed in 1886 with headquarters in Milan, this league comprises some 3,000 cooperative societies for distribution, production, and labor, dispersed throughout every province of Italy. It promotes the formation of cooperative institutions by perfecting their statutes and encouraging the adoption of suitable technical and administrative regulations, protects the interests of the affiliated societies, and labors to secure for each type of association the legislation best adapted to its particular needs. The necessary funds are provided by the contributions of the societies, calculated in proportion to the number of their members, and ranging from 15 francs to 300. The league has received recognition in laws dealing with emigration, contracts to cooperative productive societies and associations of labor, and the office of labor. It is represented on various consultative bodies (superior council of labor, thrift council, emigration council, provincial and central commissions for the supervision of cooperative productive societies, and societies of labor). It conducts its propaganda through national or local congresses, public lectures, and its official journal, La Cooperazione Italiana, and by means of numerous legal, economic, and statistical publications. In the course of 26 years it has convoked 18 congresses, to which the country has responded faithfully. The league has just established at its own headquarters the national office of traveling thrift and coop- eration lectureships, founded in Italy in recent years. This office aims at the organization of a vast propa- ganda for the diffusion of the various forms of cooperation and thrift. FORM OF BY-LAWS COOPERATIVE RURAL BANKS WITH UNLIMITED LIABILITY. ORGANIZATION, OBJECT, AND DURATION. Art. 1. There shall be organized in , county of , a cooperative society of unlimited liability called Rural Bank of . Art. 2. The society, excluding all political activities, proposes the moral and economic improvement of its members by means of credit facilities and also by means of the collective purchase of agricultural requirements and supplies, taking as its model the type of society which has for its aim the development of agriculture and other related indrstries. It shall, moreover, within the limits set by the assem- bly, have the power to unite itself with other rural banks, or other institutions for the carrying on of transactions which exceed the limit as laid down in article 14, e., provided that the transactions always conform with the nature and aims of the societ}'. Art. 3. With the consent of the assembly, the society shall ha\c the power to take part in associations having for their object the surveillance and gi:ardianship of cooperative societies and their members, but only for the exercise of fTinctions of general interest belong- ing to institi , tions of economic thrift. Art. 4. The society shall be established for 50 years from the date of the adoption of this constit' tion with the privilege of extension. The death, loss of civil rights, disability, or failvre of any of the members shall not cai se the dissolution of the society. Art. 5. The following are requisites to membership in the society: (a) To be of legal age and to have full legal rights. (6) To offer a guaranty of honesty and to practice the Catholic religion. (c) To be inscribed in the register of population of the parish of , comm; nc of , or to ha\ e freq- cut residence or permanent business there. {d) To hold membership in no other unlimited liability society according to article 112 of the Commercial Code, Art. 6. Membership is forfeited: (a) By death. (6) By failure to keep the conditions of article 226 of the Commercial Code. (c) By exp; Ision decided i pon by the board of directors whenever the member fails in any of the instances contemplated by article 186 of the Commercial Code and whenever also, by decision of the said board, the member ceases to possess any of the requirements stated in article 5, does not comply with the reqi iiements of the constit tion, the reg lations, and the decisions of the society, and does not fulfill his obligations toward the society. ITALY. 105 Art. 7. The members in the ways established by this constitution and by its regulations may: (a) Deposit money at interest in the society's bank. (6) Obtain loans. (c) Participate in all other transactions of the society. (rf) Watch over and gi.ard the transactions of the society. (e) Take part and vote in the general assembly. (/) Be elected to office in the society. Art. 8. The members mi st: (a) Be liable for all their possessions, sharing liabihty eqi ally among them, and be jointly and severally responsible for all outstanding obligations of the society. (b) Obey the constit. tion and regilations of the society. (c) Attend the meetings of the general assembly and assist in the good management of the society. {d) Pay as a membership fee and for the sinking i\ nd the s.,m of lire at the time of signing his name on the register of mem- l)ership. ASSOCIATION CAPITAL. Art. 9. The capital of the society shall be formed: (o) By membership fees. - (ft) By the reserve fund. Art. 10. The net profits, after settUng all expenses, shall be placed in the reserve fund in entirety until the capital shall equal one- twentieth of the society's liabihties; thereafter in not less than the following proportions: (o) Fov.r-fifths of the profits \;ntil the capital reaches one- tenth of the Uabilities. (6) Thereafter one-half of the profits. The remaining part of the profits, unless the assembly shall decide otherwise, the board of directors shall expend on objects in conformity with the spirit of the society. Art. 11. In case of the dissolution of the society, the capital, by decision of the general assembly, shall be devoted to the benefit of kindred instit. tions. THE ADMINISTRATORS AND THEIR FUNCTIONS. Art. 12. The administrators of the society are: (a) The assembly of members. (6) The board of directors. (c) The council of supervision. (d) The employees. (a) assembly. Art. 13. The assembly of members, legally constituted, shall exercise the supreme power of the society, and its decisions within the accepted limits of the laws in force and this constitution shall be valid and binding even ipon absent members. It is within the power of the assembly to decide upon work to be performed by the society and to determine the prliuipal plans therefor, to approve and modify the ri.les of order, and to deliberate rpon what is reserved to it by this constitution. ' Art. 14. The meetings of the general assembly shall be ordinary and extraordinary. The ordinary assembly shall meet within three months of the closing of the fiscal year, which shall be the 31st of December of every year in this assembly. Besides the transaction of other stated business, it must carry out this order of business: (a) Discuss, approve, or modify the financial statement presented by the supervisors. (b) Nominate the president, vice-president, and the directors. (c) Nominate the supervisors. (d) Nominate the treasurer. (c) Determine the maximum accommodation, direct or indirect, which any one person may have from the society. (/) Determine the maximum liabilities for which the directors may involve the society for deposits, loans, current accoints, etc. (g) Decide upon the rate of interest on deposits and on loans to members; (h) Empower the board of directors to perform work relative to other lines of the society's activities, and to determine its principal conditions and limits. The assembly extraordinary shall meet whenever the board of directors consider such meeting necessary, or upon demand of at least one-fifth of the members. Art. 15. The assembly shall be called together by means of a notice (containing the order of business^ posted outside of the society's office at least seven days before the date fixed for the assembly itself. Art. 16. For the validity of the assemblies it is necessary that at least two-thirds of the members be present; but, after an hour from the time indicated in the notice calling the meeting, the assemblies shall be valid, whatever be the number of members present. Art. 17. The decisions are binding when passed by a majority vote of those present. Art. 18. Every member has only one vote, and has not the right of proxy. Art. 19. The assemblies shall be presided over by the president of the society, which shall appoint a secretary and two auditors, who together shall approve and sign the official report. In case of the absence of the president, or one whom he may name as his substitute, or else according to its own discretion, the assembly shall elect its own president for that meeting. (b.) board op directors. Art. 20. The board of directors shall manage the society, appoint the employees, with the exception of the treasurer, and super- vise the execution of the society's work according to the rules established by the laws, the constitution, and the assembly. The board shall decide upon matters not reserved to the assembly. Art. 21. The board of directors shall be composed of a president, a vice-president, and directors. The president shall hold office two years; the other members of the board shall be renewed, half each year. In the first year the retirement shall be determined by vote; in the succeeding years by seniority of appointment. Members who die or resign shall, in the 106 AGEICULTUHAL COOPERATION IN EUROPE. first year be considered as retired by lot; in succeeding years they shall be substituted for, together with the retiring members. In this second case it is intended to substitute for those who have died or have resigned, those among the newly elected who have received the least votes, and in case of a tie vote those who are the youngest. All the members of the board are reeligible. The president or vice-president who resigns shall cease to be a member of the board. In case of the death or resignation of the presi- dent and of the vice president the assembly shall meet to hold a new election. Art. 22. The members of the board are not required to give bond. Art. 23. The president shall represent and personify the society in its dealings with members and nonmembers. Deeds and contracts which obligate the society may only be signed by the president, together with one director. For certain kinds of deeds and business the board of directors shall have the power to delegate the right of signature alone to a director or even to an employee. The legal representative of the society shall be the president. The president, with the permission of the board, shall have the right to nominate special powers of attorney, even to nonmembers, and may under necessity delegate to them also the power of signing for the society. In all cases of absence or detention the president shall be substituted by the vice-president, and he failing, by the ranking director of those present. Art. 24. For the validity of the meetings of the board of directors the presence of a majority of its members is required. The proceedings are binding only in case of a majority vote of those present, and never less than three affirmative votes shall carry, whatever may be the number of members present. (C.) COUNCIL OF SUPERVISION. Art. 25. The council of supervision shall be composed of three active and two substitute supervisors. Besides the powers conferred by law, it shall be the province of the coimcil of supervision to ratify at least the decisions of the board concerning requests for accommodations which entail direct or indirect obligation on the part of the members of the board. Moreover, the council of supervision shall intervene as friendly mediators, and if occasion arises, as arbitrators without appeal in controversies between members or between members and the board of directors. (d. employees.) Art. 26. The society shall have a treasurer, a bookkeeper, a secretary, and if necessary, other employees who shall hold office one year and who may be reelected . Members of the board may be elected to these offices, excepting the president and the vice-president. One person may hold several offices. If, during the year, a treasurer shall be required, the board and the council, acting together, shall appoint him; such employee shall remain in office until the next assembly. The remuneration of employees shall be determined by the assembly. SOCIETY activities.. Art. 27. The principal activities of the society shall be deposits aiid loans. Art. 28. Deposits shall be accepted from members and nonmembers. Loans sliall be made to members only, after declaration of tlie purpose they are to serve, but they may be guaranteed by nonmembers. The provisions of the preceding paragraph ma> only apply in cases contemplated under article 2. Art. 29. The rule for loans is that they shall be made in the form of bills of exchange; the bills shall lie of no longer duration than six mouths and may be renewed with the approbation of the board. Art, 30. The society prohibits any speculative dealings; real or personal guarantee is required for loans. Small sums may be bor- rowed upon the simple signature of the member requesting them, but it shall be the province of the assembly to determine each year the amount of each loan and the sum total which may be employed in these transactions. Art. 31. Collective purchases shall be based upon the lists of members, so that the amount purchased shall practically correspond with the lists themselves. Art. 32. With the authority of the assembly, the board may enter into transactions for the society as provided for in article 2 of this constitution, but -in no case through the exercise of the said representative authority shall the society be made liable for more than its regular capital. MISCELLANEOUS. Art. 33. All modifications of this constitution, the possible future dissolution of the society, or its renewal, must be approved by three- fourths of the enrolled members. Art. 34. All that is not provided for in this constitution the society intends shall be settled according to the regulations laid down in existing laws. EGYPT. 107 EGYPT. PRODUCTION AND MARKETING OF EGYPTIAN COTTON. Report op a Subcommittee. Alexandria. The result of the investigation of the subcommittee is threefold, and in each respect the situation is well worth careful consideration. In the first place, Egypt's cost of production in ratio to the value of her commodity is much lower than America's. In the second place, Egypt's output varies but little from year to year and is capable of but slight expansion, and is therefore a more or less fixed factor of great economic potentiality. In the third place, an influential and predominating group of large planters are in cordial sympathy with our purpose to establish a more intelligent system of marketing. Egyptian cotton cultivation offers no instruction whatever for America in skill, science, or other element of economy or eflSciency, though irrigation there, as elsewhere, demonstrates the more stable and dependable output of the soil with a regular water supply as compared with production dependent upon uncertain and variable rainfall. The rich delta lands of the Nile, it is true, yield more than the average of American land, acre for acre, and the Egyptian cotton, of course, is superior in quality to the short staple which constitutes the greater part of our crop, though our long-staple or sea-island cotton is superior to the Egyptian. At the same time our progressive farmers who fertilize and cultivate intelligently produce about as much short staple per acre as the Egyptians produce, though our long staple is not so prohfic as the Egyptian. Nor can it be said that the Egyptian producers market their crop to better advantage or even to equal advantage, inasmuch as they sell their cotton in the seed and have no accurate idea of the commercial value of the seed or other by-products. On the other hand, they suffer no loss from "country damage," because there is little or no rain during the picking and ginning season, and the cotton is well out of the hands of the producers before the period of light winter rains, which usually fall in January and February. Nor is there excessive waste or toU or graft in sampling. But while Egypt offers no instruction in cultivation, she constitutes no menace of overproduction, since it may be fairly estimated that not more than 25 per cent of available acreage remains to be developed for cultivation by the reclamation of sea marshes, and this work can hardly be accomplished in less than 20 years. Allowing for such possible development and for possible improvement in methods of cultivation, it is safe to assume that Egyptian production will not increase within any calculable time faster than the normal demand for this particular quality of cotton. The British advisory government of Egypt is making extensive experi- ments in cotton growing in the Sudaii; but even if that region should equal Egypt's output in another generation, the total result in our judgment would hardly outrun increasing consumption. The methods of baling, sampling, and marketing the lint — all effected after it leaves the farmer's hands — may be studied with profit both by way of teaching us to save waste and by way of exhibiting the excessive charges of middlemen, who are the plague of agricultural Egypt as of agricultural America. COST OF PRODUCTION. Egypt's comparatively low cost of production notwithstanding her antiquated methods of cultivation, her heavy expense of conversion from seed cotton to spinnable lint, is a matter of serious concern to America, for Egypt is able under present conditions to produce her superior quality of cotton, worth now 18 to 20 cents a pound, at about 12| cents a pound, compared with American cost of 10 to 12 cents a pound for cotton now worth 11 to 12^ cents. We attach a detailed calculation, made to the American consul at Alexandria on May 16, by one of the foremost producers of the country and confirmed by us in all substantial elements. 109 110 AGRICULTURAL COOPERATION IN EUROPE. Estimated cost of producing 4 cantars or 400 pounds of cotton in Egypt. 3 plowings and ridgings $5. 00 Labor: Sowing seed and hoeing ridgee 75 Watering (by gravity) ^ ; 75 Cost of seed, 55J pounds 1-25 Hoeing, 3 times 3. 50 Picking 3. 40 Worm picking (varies) 1-00 Manure, 440 pounds superphosphate 3. 20 Pulling stalks and leveling ridges 50 Total 19.35 Add rent , 30. 00 Grand total 49. 35 It must be understood that the labor herein reckoned is paid at the rate of 15 to 20 cents a day for adults and 5 to 10 cents for children, and the calculation applies to all who are engaged in the work of actually tilling the soil, whether as owners, tenants, or hired workers. Paying the same labor at the cheapest rates paid to unskilled American farm laborers would more than double the expenditure, and the cost of producing Egyptian cotton would far exceed the current market price of the commodity. On the other hand, if modern methods of production were used the present cost could be reduced 25 to 50 per cent. As the case stands, the average tenant or small owner with three or four children cultivates about 8 acres of land of which he plants one-third to one-half in cotton, under more or less intelligent rotation, and the remainder in feed and forage crops. The average yield for Egypt during the last few years may be reckoned at 450 pounds to the acre; so we may say in round figures that the cotton output of the average peasant family — all of whom work at cultivating or at tending the animals or otherwise — is about 1,500 pounds, which at 5 cents a pound profit will make only $75 a year for accumulation or for creature comforts with which the native Egyptian family now has no acquaintance whatever. It does not appear probable that the Egyptian peasantry, who are the actual cultivators of the soil, will require higher wages or attain to materially better living in any near period, for they are without keen aspiration and they are multiplying at a greater ratio than the increase of production. It would be interesting from a sociological standpoint to consider the reasons for this industrial and social inertia, but to do so would extend this report beyond proper limits, and we can only submit the bald fact that "the man with the hoe" in Egypt is standing still, and therefore that there is no early prospect for such increase of pay or such betterment of living as will materially enhance the labor factor in the cost of production. This being accepted, American cotton gi-owers must face the fact that 1,500,000 to 2,000,000 bales (500 pounds) of Egyptian cotton a year are produced at a cost approximately no greater than American cost, and yet the Egyptian cotton, by reason of superior quahty, sells for about 6 cents a pound more. In other words, a decline of 3 cents a pound below the current market price would still leave a fair profit to Egyptian producers and would not cause any reduction in the Egyptian output, while such a decline would carry American cotton below the cost of production, and we laiow from sad experience how difficult it is under present methods and conditions of tenant farming in the United States to adjust supply to demand. Therefore it behooves American cotton growers to reduce the cost of production by more intensive cultivation, by the use and development of varieties of superior staple, and especially by eliminating the waste and graft in American methods of sampling, baling, and marketing. CON VERSION AND SALE. But while Egypt is somewhat a menace in respect to her low cost of production, we are gratified to be able to report a sympathetic attitude upon the part of representative and influential Egyptian planters and the British advisory administration of Egypt in respect to all the marketing problems which concern the producers of both countries alike, and especially with respect to securing accurate information concerning cotton con- sumption. This relation will be more clearly revealed by an examination of the Egyptian methods of conver- sion and sale. All Egyptian cotton is sold in the seed, and substantially all of it leaves the hands of the farmers by the close of the calendar year. The cotton is all bought directly or indirectly by the cotton merchants of Alexan- dria, who are organized into a compact association. ' Watering, if by Dutch wheel, $1.50, increasing total cost by 75 cents. EGYPT. Ill At least half of the crop is sold "on call" under contracts made early in the year. The proprietors of the larger estates thus sell the cotton for their tenants, and the fact that the corporations owning and operating these estates are earning only fair returns upon their investments demonstrates that the rates of rental, varying from twenty-five to a hundred dollars an acre, merely reflects the high value of Egyptian lands — three hundred to two thousand dollars an acre — due to the congested population and the passion of the peasantry for land- holding by either ownership or lease. We were permitted to examine the books of one of the most successful of these large estates, and the detailed accounts with tenants exhibited fair and generous dealing. The remainder of the cotton is sold by the small faimers after it is picked. It is bought in the villages by the agents of the Alexandria merchants, and the evidence we gathered shows that the cotton of the tenants sold by the proprietors of the large estates brings fairer returns than that sold by the small farmers to the vil- lage buyers. However, the village buying has been much improved of late by the efforts of the British admin- istration, which requires weighing upon tested scales and the posting of daily quotations from the Alexandria exchange. Contracts of purchase on the large estates are made early in the year — ^in many cases as the basis for credit — at an agreed price above the market value on the day of final sale, which the farmer may elect within stipulated dates, usually between September 1 and February 1. The price above the market or above "contracts ruling on the Alexandria exchange on the day of closing" is supposed to cover the value of the seed and the excess ratio of lint above the normal or standard ratio of 100 pounds (1 cantar) of lint to 315 pounds of seed cotton. To illustrate, we use the contract of one large proprietor who exhibited to us his selling transaction of last year. In February he contracted to deliver his cotton as picked — naming a maximum and a minimum out- put — $2.50 a cantar or 2^ cents a pound above the market. In the terms of the uniform contract made by the merchants of Alexandria, "the weight of the cantar must be 315 rotles (pounds) of seed cotton." The outturn of Hnt runs from 98 pounds for the poorest to 105 pounds for the best, and the premium above the market or above "contracts" on the exchange is figured to include the excess of outturn. It should be explained here that in Egypt the cotton of each large estate or of each particular district is the same in variety and is known by experience to maintam about the same quahty from year to year. This fact and the absence of rain during the growing and picking season combine to make a more or less uniform grade and to render unnecessary the sampling and pricing of each bale. The product of each plantation or each district, being of more or less the same variety, thus takes the rank of its general reputation and is valued accord- ing to such improvement or deterioration as it may show from year to year. Lord Kitchener's advisory admin- istration is effecting notable betterment by preventing the admbcture of cotton of inferior quality with cotton of superior quaUty, by furnishing at cost pure seed and by encouraging the differentiation and specialization of varieties best adapted to each particular section. These methods of process are worthj^ of emulation by American growers to the end that neighborhoods and sections may improve the quaUty of their output and establish for the product of a particular section a reputation which will command a premium at the mills. The contract price of 2^ cents above the market in the case we are reviewing is supposed to cover the value of the seed as well as the extra outturn of lint. In this instance the transaction was closed when the market price of "fully good fair," the Egyptian standard of grade, was 18 cents a pound, which the seller received, together with the agreed premium of 2^ cents a pound, or $20.50 for 315 pouijds of seed cotton. The outturn of lint in this case was 103 pounds to the cantar, or 3 pounds above the normal, and was worth 54 cents to the buyer. The cost of bagging, furnished by the buyer, is 35 cents a hundred pounds of lint, and the charge for ginning, including ties, is 37^ cents, or 72^ cents per hundred for gettpg the lint into the gin bale. Meanwhile the planter has paid 1 per cent tare on the gross weight of his seed cotton to cover bagging, dampness, and dirt. Adding to the $2.50 premium the 72^ cents for ginning and baling and deducting the 54 cents received on the 3 pounds of excess outturn, will leave $2.68^, which the planter received for 212 pounds of seed (the original 315 pounds of seed cotton less the 103 pounds of lint), or at the rate of $25.28 a ton. We do not know what Egyptian seed was worth last fall when this transaction was closed, but when we were in Alexandria on May 22 it sold at $34.50 a ton. As there has been no such advance in American seed during the same period, we may f aMy assume that this farmer did not get the value of his seed. It should be noted that American cotton seed is now worth about $20 a ton at the ports. Egyptian seed brings a higher price on account of the entire absence of lint and the greater consequent value of the meal and hulls for feed, and perhaps the oil as an adulterant of olive oil, but we raise the question whether the difference in real value is so much as the ratio of 20 to 34^, and we suggest that it might be worth while to investigate this discrepancy. The gins are located in the villages, not on the farms, and are owned in large part by the cotton merchants of Alexandria. The seed cotton is transported to them by rail, by camels, or by canal boats in sacks fur- nished by the buyers and used for the baling at the gin and again for the baling at the compresses, or "steam 112 AGKICULTUKAL COOPERATION IN EUKOPE. presses," as they are called. The gin presses, or "hydraulic presses," as they are called, pack the cotton into large, clumsy bales of 750 to 850 pounds, which are transported by rail to the compresses, which are like ■ wise owned in greater part by the same cotton merchants of Alexandria. Here the cotton is unwrapped, thrown loose upon the floor, agitated by hand to loosen lumps and expel dirt, sampled, repacked, and wrapped into the Egyptian bale of commerce, which weighs about 750 pounds. One sample is taken for about every 10 bales or for each lot of cotton of uniform variety. At both the gin and the compress effort is made to separate cottons of varying quality and to assemble cottons of the same quality so that the bales will be of uniform grade. The charge for compressing or steam pressing is $1.25 for each bale of 750 pounds. In both ginning and steam pressing there is much handling that might well be done by machinery, but labor is so cheap— 15 to 25 cents a day for unskilled and 40 to 60 for skilled — that it is a question on the one hand whether mechanical devices would be profitable and on the other hand what would beooino of the laborers now employed in a land where population is outgrowing development. COOPERATION PROMISED. The method of selling so large a part of the crop under contract, unwise as it appears in many respects, makes for the advantage of the ignorant peasantry, who otherwise would be the victims of commercial greed which seems to manifest itself everywhere in about the same way under similar opportunities and circum- stances. It happens, also, at this time to make for the advantage of the American producers, for the reason that these large proprietors are men of superior ability, and being comparatively few in number can be brought into effective cooperation more quickly- than large numbers of small proprietors and tenants in America. We found these proprietors eager to cooperate, and they expressed themselves as cordially sympathetic with the spirit moving the American commission for the amelioration of prevailing hard conditions among agricultural producers throughout the world. From our interviews with several of them and from their assurances of concert among their fellow proprietors of vast holdings, we are led to hope that there will soon be a potential movement ia Egypt for intimate cooperation in conversion and distribution. They manifested a keen interest in the undertaking initiated by the American cotton States governors two and a half years ago to obtain reports of cotton consumption in all the cotton-growing countries and pledged their immediate activities to this end. This particular proposal had the cordial approval of the Hon. Gerald C. Dudgeon, the English director general of Egyptian agriculture, who agreed to recommend it at once to Lord Kitchener, the head of the British advisory administration, and who expressed the confident opinion that his lordship would make formal request upon the British ministries of agriculture and commerce to institute a department for reporting cotton consumption. The cooperation of the American and British Governments in this behalf may be depended upon to accom- plish complete success, for we entertain the reasonable hope that with such reports of American and British consumption the International Institute of Agriculture at Rome will be easily able to persuade other cotton- consuming countries to make like reports. It was our good fortune to meet on the ship which took us to Alexandria Mansour N . Shakour Pasha, the manager of the Egyptian Enterprise & Development Co. and of the Garbeith Land Co., two large estates con- sisting of some 50,000 acres of land, reclaimed from sea marsh, from whom we 'obtained at first hand suggestions which led us directly to the sources of accurate information whereby we were enabled to accomplish in one week what otherwise would have required much longer time. Through him we met Mr. R. Lang Anderson manager of the Abourkir Co., an English enterprise which has reclaimed 30,000 acres of sea marsh and con- verted it into fruitful and valuable farms. We spent a day on the Abourkir property and later visited Shakour Pasha in Cairo, who brought us into contact with Mr. Albert Neurisson and other large producers representing directly and indirectly cotton production equivalent to 7^ to 10 per cent of the Egyptian crop, and we were assured of their immediate earnest action in behalf of cooperation among themselves and with American pro- ducers for mutual benefit. We have reason to hope also that Egypt will join in any effort the cotton States may initiate to establish an interstate and international bureau of cotton intelligence for the promotion of more efficient production and more economical marketing. In this connection we earnestly recommend that each of the principal cotton States of the Union create the office of cotton commissioner, and that such com- missioners together constitute themselves as a bureau of cotton information, with special reference to con- sumption and the extended use of cotton goods, and that other cotton growing countries be invited to have representation in such bureau to the end that intelligent information may be furnished the producers for their guidance in adjusting supply to demand, and that the demand for our great staple product may be stimu ■ lated. We are confident that such a bureau would operate as a practical insurance against either overpro- duction or underproduction and would maintain the price of cotton above the cost of production and yet prevent abnormally high prices, to the injury and hardship of consumers. EGYPT. 113 Besides these proprietors we interviewed many persons of important agricultural, commercial, and official relation, studied the work now under way in the fields, and by the courtesy of Messrs. Peel & Co. made careful observation of the steam presses or compresses in operation at Alexandria. We take occasion to acknowledge our special obligations to the Hon. Arthur Carrells, our consul at Alex- andria, and to the Hon. Peter Augustus Jay, our consul general at Cairo, with his vice consul, all of whom rendered valuable aid in our work. In conclusion we venture to express the confident opinion that the wisdom of your action in sending a subcommittee to Egypt is fully justified, and to predict that if this effort be followed by further activities the result will be a great blessing to the cotton producers of the world, and especially to the material prosperity of the United States, whose international trade balances are settled with cotton. Moreover, cotton is a world concern, because it is the chief fabric of raiment for all the millions of the earth's peoples; it is the chief food of the fed beef and pork of the market, the cheap butter of the masses and the salad oil of the epicure, and finally its" use as fertilizer is returning to the soil which produced it the plant food it has absorbed. Surely the producers of such world necessities and comforts are entitled to a fair reward for their labor and iavestment. To summarize: 1. Egypt with her 1,500,000 to 2,000,000 bales of cheaply produced but dearly sold cotton admonishes American growers to improve their methods of cultivation and marketing in order to reduce their cost of production. 2. The proprietors of large Egyptian estates representing 7 J to 10 per cent of the crop are in a position to cooperate and render powerful aid in maintaining fair prices for their commodities and these prices wUl tend to steady the prices of American cotton if our producers do not commit the folly of producing more than the world will take at profitable values, and if the cotton States will establish a system of State regulated warehouses which will enable the farmers to store their cotton and secure cheap money upon warehouse receipts whereby they may sell the crop gradually over a period of several months, instead of forcing it upon the market as they do now, withia two or three months. 3. These proprietors and the British Egyptian department of agriculture promise hearty cooperation in establishing a system of accurate reports of cotton consumption. Therefore we repeat that there is a vital relation between Egyptian and American cotton production which should be cultivated in amity and mutuality by every possible official and cooperative endeavor. 14174°— S. Doe. 214, 63-1 8 ROUMANIA. 115 ROUMANIA. COOPERATIVE MOVEMENT IN ROUMANIA. Special statement submitted to the Commissions by Mr. Pobin Enbsoo, Director General Central Bank of Roumanian Popular Banks. The cooperative movement in Koumania first appeared on a small scale in the cities about 1880, but in the absence of any serious organization it did not make much progress until 1895-96, when it began to appear in the villages. Owing to the social and economic conditions peculiar to Roumania, the cooperative movement took the form of cooperative credit (popular banks), which, in the absence of special legislation, conformed to the pro- visions of the commercial code. In spite of the difficulties connected with their formation and the absence of control, the popular banks developed to such an extent that in 1903 there were from six to seven hundred of them in existence, with about 60,000 members and a paid-up capital of 4,000,000 francs. In view of so important a manifestation, the State decided to take them under its protection, and by a law passed in March, 1903, greater facilities in regard to their formation were accorded, as well as exemption from taxes and stamp duties, expeditive measures in the execution of credits, etc., and an institution was created called "Central Bank for People's Banks and Cooperative Societies," which was endowed with a capital of 20,000,000 francs, granted the attributes of a central bank of cooperative credit, and authorized at the same time to control all the cooperative units and to put at their disposal the necessary information in regard to their operation, by correspondence, publication of pamphlets, congresses, and other methods. The result of this organization has been fruitful, for with the aid and guidance of the central bank the popular banks were thoroughly reorganized and have acquired a considerable development, in spite of the fact that Eoumania has only 7,500,000 inhabitants. A popular bank is formed in the following manner: Such peasants (at least 25) as may wish to form a popular bank subscribe a capital of from 20 francs (minimum) to 5,000 (maximum), which they are obliged to pay in within two years, although the whole amount may be paid at once. Each member is responsible for the anount of the capital he subscribes (limited liability). There are also societies in which the responsibility is joint and several and unlimited, but their number is still restricted (only 20 or 30), because of the individualist character of the Roumanians, but as the demand for such banks increases a larger number will be organized. A popular bank confines its operations to the village from which its members are recruited, and as these members may not at the same time be members or debtors of any other bank, they form a separate circle for each bank and exert an appreciable influence over the peasants. The administration is intrusted to a committee of six or nine persons, elected for a term of three years, of which a third is replaced every year. The principal function of the popular banks consists in making loans to both members and nonmembers. The advantage to the members is that they pay interest at 8 or 10 per cent, while nonmembers pay from 1 to 2 per cent more. Loans are made by the committee, which considers the object to which the borrower intends to apply the loan rather than his solvency. After granting a loan the committee assures itseK that it is actually utilized for productive purposes. Misuse of the loan on the part of the borrower subjects him to the penalty that he loses the profit from the land and is subject to immediate prosecution. Loans are chiefly granted upon personal security, but exceptionaUy on pledges. The statistics for 1911 show that out of 100,978,072 francs loaned 35,000,000 were secured by pledges and 65,000,000 by personal credit; 70,000,000 were loaned to members of the banks and 30,000,000 to nonmembers. Loans granted on account of pledges are secured exclusively by agricultural implements or cattle, which are registered in a special register kept by the communal authorities. In order to facilitate operations, by derogation of the common law, the property so pledged is permitted to remain in the possession of the borrower. The payment of loans granted on personal security is guaranteed by the entire estate of the borrower on which the bank has a claim similar to that of any other creditor. Ten years' experience has shown that the form of personal security is most advantageous, as it does not withdraw from economic circulation any part of the borrower's fortune, and not a single bank has been subjected to any loss through the application of this system of credit. 117 118 BOTJMANIA. In view of the fact that the principal occupation of the rural members of the popiilar banks is agriculture, the diu"ation of the loan is usually from 6 to 9 months, with right of prolongation to 18 months. Beyond this no further extension may be granted without the authorization of the general assembly of the bank. Ihe maximum amount which may be loaned to any one person is fixed by the general assembly as weU as the interest which is to be paid to depositors. The banks are obliged to prepare an annual balance sheet, which is submitted for approval to the general assembly. The reserve fund must be created out of the profits amounting to at least 10 per cent of the net earnings. Dividends to members can not exceed 10 per cent; the remakider must go into the reserve fxmd. The expenses of administration, including salaries, are fixed by the general assembly not to exceed 15 per cent of the profits. The administraton is usually gratuitous, except in the case of the accountant, who receives a salary, but gratuitous administration is not obligatory when the capital paid in exceeds 10,000 francs. Reserve funds are invested in State bonds. At the close of 1912, the reserves of aU the banks exceeded 15,000,000 francs. In addition to their loan operations, the popular banks conduct a distributive business, providing the peas- ants with seeds, agricultural implements, and other articles. This work is conducted, however, only in localities where no special cooperative societies have been formed to render such service. The popular banks are not permitted to purchase real estate or to engage in any other business enterprises on their own account. Ihey may finance special cooperative enterprises, however, in which the members have formed themselves into special cooperative societies. They also have the privilege of purchasing property to serve as their own offices, but expenditure on this account must be taken out of the profits within from 10 to 15 years. As the popular banks have developed they have encouraged economy among the peasants, and have fur- ther assisted them by increasing the productiveness of their labor. The peasants have also been taught the advantages of grouping themselves together in cooperative organizations. One of the most urgent needs of the Roumanian peasant is cultivable land, and since 1903-4 the peasants have begun to form associations for the purpose of leasing the lands of the large proprietors, eliminating in this way the profit formerly made by middlemen. Ihese associations (obstes) operate the leased land on the most economical lines. They divide the land into sections, determine the rotation of corps and apportion the land among their several members according to ability to labor. Each member in this way has his own share in every section, and regular rotation may take place without a change among the shares. Each man cultivates his own share, but aU who belong to a given association use the same seed. In each section the same plant is cultivated, each member cultivating his own share in that section, so that the advantages of farming on a large scale (uniform rotation of crops, selection of seed, etc.,) ai'e combined with those of farming on a small scale. Each member has his own plots set apart for him during the whole duration of the lease, with every inducement to encourage hini in his work. The period of such leases is usually from five to ten years. The members are jointly and severally responsible to an unlimited extent for aU the obligations of these associations. These associations have proved so useful to the peasants that after an existence of little more than five years they now number about 550, with 100,000 members, and cultivate about 400,000 hectares of land, paying an annual rentage of 14,000,000 francs. Ihey are increasing in number very rapidly, and it is hoped that before long all the land under cultivation will be worked by these societies, and the elimination of the mid- dlemen will be accomplished.^ ' All cooperative movements among the peasants of Eoumania have been encouraged by the central bank, which however is con- sidered as only a provisional aid in anticipation of the time when the movement will have reached its maturity and will no longer require Btate assistance. With this end in view the federation of the popular banks and cooperative associations has been encougaged. Already 20 such federations have been founded, composed of approximately 400 banks. In these federations each bank occupies the same position as that of one of the members in an individual bank. The federations serve as a central bank for a whole district (rerion) and it is anticipated that as they increase in number they will unite in a central organization of their own, which will then replace the existing Government central bank. HUNGARY. 119 HUNGARY RURAL CREDIT AND COOPERATION IN HUNGARY.' Budapest. INTRODUCTION. The last great wave of the migration of nations stranded the Magyar people upon the banks of the Lower Danube. Under the leadership of Prince Arpdd they settled upon the highway of migratory tribes where, until that time, no people had succeeded in founding a stable State government. The Kingdom of the Magyars thus formed dates from about the year 896 A. D. About a century afterwards the nation adopted the Christian religion and took its place in the European family of nations. Erected into a Kingdom, Hungary became the rampart of western Christendom and the eastern outpost of Latin civilization against the barbarians of the Orient — ^Huns, Mongols, Tartars, and Turks. Under the Arpad dynasty the Magyar Kingdom was a united national State. Feudalism, as that institu- tion was understood in the west — a social phenomenon making for disintegration — never got a foothold in this land, nor was Hungary at all familiar with that form of royal absolutism which dominated the continent for so long a time. In 1222 the Golden Bull of Andrew II, like its compeer, the Magna Charta of England of about the same period, established the freedom of his subjects. This is one of those fundamental ordinances dis- tinguished as a constitution which shares with that of England the glory of being the most ancient instrument of its class in Europe. After the extinction of the royal line of Arpdd the throne was filled by the method of free election. This application was in a measure limited, as the selection until 1526 always fell upon a candidate whose descent could be traced through the female line to Arpad, the original founder of national unity. Since 1526 the throne has been occupied by the Habsburg dynasty, which traces its descent from the same source. In 1687 the nation renounced its ancient right of free election and vested the succession in the male line of the house of Habsburg. The Pragmatic Sanction of 1723 extended this right of succession to the female line, but it also recognized and insured in full measure the constitutional freedom and independent sovereign state rights of Hungary. Not only the principle of the identity of her ruler with that of Austria but also the provision for common defense were embodied in this instrument. By the provisions of Law XII of 1867 certain factors are recognized as belonging to the proper interpretation of common defense, such as foreign and military affairs and the necessary financial appropriations. This law, traveling beyond the sphere of the Pragmatic Sanction, regulates certain other matters arising out of the coordination of interests of the two states and sub- jects them in Hungary to a procedure uniform with that current in the other half of the monarchy. Under this head it included the regulation of commerce, the tariff, currency, and the general monetary standard. There is, however, a wheel within the wheel. The position of Croatia-Slavonia, embodied within the frame of the Hungarian State, is an instance of one of those public-law conceptions altogether foreign to the polity of Anglo-Saxon peoples. Croatia-Slavonia is dowered with an autonomy complete in its local aspect and restricted only in that the land itself has no standing in international law. Matters of interior economy, education, and justice are regulated with no reference whatever to Hungary, but the land itself is part of the Hungarian State. Thus there is no separate Croatian sovereign. The position may be best illustrated by pointing out that when the boundary between local and national (i. e., Hungarian) affairs is reached the iden- tity of Croatia is merged into Hungary. The legislative and executive are factors common to both. • AGRICULTUEAL STATISTICS. The area of Hungary is 325,413 square kilometers, 282,872 of which belong to Hungary — in the local sense — and 42,541 to Croatia-Slavonia. The long belt of the Carpathians, the southern arm of the Danube, and the River Save form perfectly natural boundaries to a domain whose center, geographically as well as socially and politically, is Budapest. The coast line is miserably inadequate. As to climate, the best description would be that it is typically continental. ' This is a reprint of a statement prepared and printed in English especially for the Commissions by the Royal Hungarian Depart- ment of Agriculture. 121 122 AGKIOULTUEAL OOOPEBATION IN EUBOPE. According to the census of 1910 the population was then 20,886,487, Hungary claiming 18,264,533 and Croatia-Slavonia the balance. It would be a contradiction in terms to refer to the density of population, but the average per square kilometer is 64.2, varying, subject to geographical and economic conditions, between 28.8 and 120.3. Nineteen per cent of the total population is urban. To say that this tends to increase— that the towns grow rather by reason of accretion than by natural fecundity of the inhabitants and always at the expense of the rural population — is merely to say that the invariable rule of the incidence of population holds good in Hungary as elsewhere. The people are not unilingual, a result of historic causes. The wars waged for centuries with oriental barbarians, wars often of extermination, so depleted the original inhabitants that the authorities were at various periods constrained to invite settlement by foreign elements. These came in such numbers that the nation, engaged in the work of consolidation and defense, was unable to assimilate them. Absorption of a sort has, however, proceeded almost uninterruptedly since the foundation of the State; but the Magyar nation, though possessing its distinctive tongue, characteristics, and ethical peculiarities, is still a compound of various races, upon whom the soil has succeeded in impressing its own stamp. The tendency is certainly toward uniformity. According to language the people are divided as follows: Race. Hungary. Croatia-Slavonia. Hungarian State. Number. Per cent. Number. Per cent. Number. Per cent. 9, 944, 627 1, 903, 357 1, 946, 357 2, 948, 186 464, 270 194, 808 461, 516 401, 412 54.5 10.4 10.7 16.1 2.5 1.1 2.5 2.2 105, 948 134, 078 21, 613 846 8,317 1, 638, 354 644, 955 67, 843 4.1 5.1 .8 10, 050, 575 2, 037, 435 1, 967, 970 2, 949, 032 472, 587 1, 833, 162 1, 106, 471 469, 255 48.1 9.8 Slovak 9.4 EiOTim anian 14.1 Ruthen. . .3 62.5 24.6 2.6 2.3 Croatian 8.8 5.3 Miscellaneous 2.2 Total 18, 264, 533 100.0 2, 621, 954 100.0 20, 886, 487 100.0 About 2,000,000 of those whose mother tongue is not Magyar speak that language; thus the total number speaking Magyar approximates 12,000,000, a number which tends to increase. In 1880 the percentage was 46.6 only; in 1890, 48.5; in 1900, 51.4, while it is now 54.5. This is to be attributed partly to the rapid increase of Magyar influence in urban centers, partly to the fact that the most fertile districts are inhabited by Magyars. It is, of course, obvious that the more fertile the area the more attractive it must be. For centuries the Magyar nation has been characterized by exemplary patience as compared with other people. Beyond the establishment of the official language — not at all a hard-and-fast arrangement, in view of the manifold concessions in both legislative and administrative domains — there is no law insuring any form of privilege to the predominating race. In church, in school, in more intimate famih' and social walks there is complete freedom as regards choice of tongue. Hungary is essentially an agricultural country. Except for a few mountainous districts, the country con- sists mainly of the great wing of the central European tableland whose soil is so rich and fertile. The remainder, the lower hilly districts, is for the most part adapted to and occupied in agriculture and viticulture. The nature of the soil may best be judged by reference to the subjoined table: Division. Arable land... Horticulture.. Meadow land. Vineyards — Pasturage Forest land... Pen districts.. Unproductive Total... Hungary proper. Hectares. Per cent 12, 575, 328 375, 033 2, 720, 474 283, 725 3, 369, 728 7, 885, 243 62, 028 1, 470, 119 28, 241, 678 44.53 1.33 9.63 1.00 11.93 26.15 .22 5.21 100. 00 Croatia-Slavonia. Hectares. 1, 396, 615 55, 294 449, 546 32, 366 583, 702 1, 499, 799 2,372 235, 329 4, 254, 023 Per cent. 32.82 1.30 10.57 .76 13.72 35.25 .05 5.53 100. 00 Kingdom of Himgary. Hectares. 13, 971, 943 430, 327 3, 170, 020 316, 091 3, 953, 430 8, 885, 042 64, 400 1, 705, 448 32, 496, 701 Per cent. 42.99 1.32 9.76 .97 12.17 27.34 .20 5.25 100. 00 HTJNGABY. 123 The crops grown, acreage under cuiti ration, and the yields for 1911, a year sufficiently normal, are as follows : Harvested area- Production in centners. Crops. Autumn wheat Sjjring wheat Mixed wheat Autumn rye Spring rye Autumn barley Spring barley Oats Millet Buckwheat Autumn and spring rape Maize Chickling-vetch Legumes: Lentils Beans Flax Hemp Potatoes Tobacco Sugar beet Fodder beet Fodder maize Lucerne, clover Mixed chickling millet Other varieties Total Hectares. 3, 590, 320 117, 464 86, 507 1,077,270 28, 725 93, 572 1, 077, 699 1, 173, 551 37, 797 6,150 31, 082 2, 878, 832 46, 360 43, 774 15, 538 61, 951 697, 733 49, 774 142, 959 212, 646 98, 810 643, 748 538, 663 175, 785 12, 926, 710 Per cent. 27.77 .90 .67 8.33 .28 .72 8.34 9.08 .29 .05 .24 22.27 .36 .34 .12 .48 5.40 .39 1.11 1.65 .76 4.98 4.17 1.30 100. 00 Total. 50, 482, 260 1, 248, 657 1, 005, 327 12, 507, 396 275, 347 1, 166, 290 15, 432, 322 13, 819, 879 237, 225 38, 314 280, 590 41, 004, 895 430, 899 345, 633 ' 47, 958 2 92, 442 ' 213, 968 2 509, 564 50, 470, 990 633, 146 29, 875, 930 52, 768, 126 22, 034, 247 ' 111, 390 ' 23, 284, 652 18, 388, 207 Average per hectare. 14.06 10.63 IL 62 n.61 9.59 12.46 14.32 1L78 6.28 6.23 9.03 14.24 9.29 7.90 3.09 5.95 3.45 8.23 72.34 12.72 208. 98 248. 15 223. 00 2.11 36.19 3L44 'Seed. 2 Thread. 3 Fodder. Wine production in the last part of the nineteenth century was brought almost to a vanishing point through the ravages of the phylloxera. But now, due partly to planting more hardy American varieties and partly by growing upon immune sandy soU, the trouble may be said to have been overcome. The annual production varies between three and eight million hectoliters, and consists of a wine containing more than the average amoimt of alcohol and possessing more bouquet. In the spring of 1911 the number of animals in the country was as follows: Horned cattle, 7,319,121 ; horses, 2,351,481; asses, 20,103; mules, 1,850; swine, 7,580,446; sheep, 8,548,204; and goats, 426,981. Fifteen years ago 51.5 per cent of the total number of horned cattle were of Hungarian breed, suited to the yoke, hardy, but yielding little milk and taking long to develop. To-day the percentage has fallen to 27.8 per cent, whereas that of the Szemmentali type, including the red variegated type crossed with this breed, has risen from 20.9 to 58. 7 per cent. Farm holdings are to be considered on the basis of economic management rather than of the land register. In 1895 a thorough census was taken, and the results as to farm holdings were as follows: According to number of holdings. Total number of holdings under cultivation 2, 795,885 Per cent. Small holdings (to one-half hold) 52. 23 Small holdings (5 to 100 holds) ■ 46.89 Medium-size holdings (100 to 1,000 holds) .74 Large holdings (1,000 holds and above) .14 According to area. Per cent. Small holdings (to one-half hold) 6. 15 Small holdings (5 to 100 holds) 48. 44 Medium-size holdings (100 to 1,000 holds) 14. 22 Lajge holdings (1,000 holds and above) - 31. 19 124 AGEICTJLTUBAL COOPEBATION IN EX7B0PE. Forestry is the principal industry on the great estates, the wide areas being adapted to this form of cul- tivation; whereas in other lines of agriculture much more intensive cultivation is demanded. The classification on the basis of the various forms of agricultural activity is as follows: Arable land. Garden. Meadow. Vineyards. Pasturage. Forest. Swamp land. Unculti- vated. Very small holdings 62.44 67.07 57.21 32.07 6.78 2.22 .86 .36 13.79 17.41 10.57 6.91 6.85 1.69 .54 .17 3.62 5.33 11.81 13.07 2.80 4.56 16.01 42.34 0.10 .15 .36 .52 3.62 Small holdings Medium-size holdings Large holdings 1.57 2.64 4.56 The greater number of the estates are managed by their respective owners. If the trust, entailed and ecclesiastical estates be included, nearly 75 per cent of the total area is thus managed. Only 8.62 per cent ol the land is farmed by tenants. Where farming is carried on under the system of ownership and tenancy, the proportion is 16.35 per cent. There is no place in Hungarian rural economy for a special tenant class. Of the 1,459,893 very small holdings, 124,823 were tenancies, while of the next higher class, consisting of 1,311,218 holdings, 174,091 were worked as tenancies. Usually the small farmer cultivates one plot or more on tenancy terms. The number of tenancies among the medium-size farm-s was 3,074; tenancies on holdings of mixed character numbered 5,575. The bidk of the latter were small holdings to which, through the enterprising spirit of the owner, were added greater or smaller holdings on lease as his circumstances permitted. Of the 1,587 tenancies in the highest class, 727 were of this mixed character. These usually originated by a process of purchase out of the savings effected on tenant holdings, the original holding being retained. The surest road to financial success in Hungary is the leasing and cultivation of great estates. Tenants of the State renting trust, of entailed estates or of land in mortmain have frequently made large fortimes by turning their attention to the industrial branches of agriculture. Many great domains are in the hands of land t orporations, but another recent departure in economic culti- vation — the cooperative farm — has as yet given no promise of sviccess. The Association of Land Credit Banks, in cooperation with the National Central Credit Association, is in charge of the propaganda for popularizing cooperative farming. The idea is to cultivate a great estate on tenancy terms by a number of men engaged in farming on a small scale. From the point of view of small holders, the question of pasturage is of dominating importance. Whereas pasture land constitutes 12.17 per cent of the total area, the relatively smaller percentages of 3.62 per cent in the case of very small holdings, and of 5.33 per cent in that of small holdings, are set apart for pasture. In effect there is a lack of pasture land which is satisfied by the use of commons. These make up one-half of the total pasture area, to which is to be added the 2,700,000 hectares of common forest land which form fine pas- turage for cattle, pigs, and sheep. The agricultural department provides that small holders shall obtain the use of the common pasturage and that the latter shall be improved by proper, skiUful treatment. The preeminent position which agriculture holds in our national economy may best be judged by the statistics of foreign trade : Import;*. E.xpdrt^. Crowns. Per cent. Crowns. Per cent. 454, 804, 000 ■ 282, 926, 000 1, 344, 470, 000 21.84 13.59 64.57 954, 251, 000 184, 885, 000 691, 353, 000 52. 13 Half manufactured goods 37. 77 Total 2, 082, 200. 000 100. 00 1, 830, 489, 000 100. 00 The principal imports as to value and quantity are textiles, while the corresponding exports are corn live stock, and flour. It should be remarked that whereas formerly exports exceeded imports in value the reverse has been the case since 1906. In this respect the returns for 1911 were pecuharly unfavorable. Our principal means of communication are the railways. At the end of 1911 the mileage open for traffic was 20,988 kilometers. Of this mileage 8,123 kilometers belonged to the State railways, 9,498 to private hues under State management, being chiefly local lines, and 3,367 kilometers were in private hands. The total of HUNGARY, 125 invested capital in railways is 4,442,000,000 crowns. The rolling stock include 4,063 locomotives, 2,786 tenders, 8,724 passenger cars, 95,736 freight cars, and 275 mail cars. In 1911, 153,800,000 people traveled 4,772,000,000 kilometers; 78,700,000 tons of goods were carried 8,999,000,000 kilometers; the receipts were 526,290,000 crowns; the expenditures 331,630,000 crowns; and the credit balance 194,960,000 crowns. The length of the navigable inland waterways is 3,502 kilometers. Steamers engaged in passenger traffic and ordinary cargo delivery carried in 1911 2,440,000 passengers and 4,740,000 tons of goods. The marine traffic was relatively small. Hungarian harbors were visited by 22,879 steamers and 2,142 sailing vessels in 1911. The former carried 3,724,186 tons of freight and the latter 91,277 tons. The number of outward-bound ships and outgoing tonnage were, of course, approximately the same. Our greatestport. Fiume, for the year 1911 imported goods to the value of 186,200,000 crowns, exports falling little behind with 185,900,000 crowns. ^ Postal arrangements in Hungary are highly developed. There are 6,331 post offices in the country. The number of letters, etc., delivered in 1911 was 928,300,000. Parcels and registered letters numbered 29,300,000, valued at 10,907,000,000 crowns. In addition the value of money orders and goods forwarded C. O. D. repre- sented 1,797,000,000 crowns. GOVERNMENT PARTICIPATION IN AGRIOTTLTURAL ORGANIZATION. When, in 1848, the first responsible government was set up in this country, there was no separate port- foho for agriculture. Owing to the undeveloped state of our national economy, matters relating to agriculture were placed in charge of the minister of trade and commerce. It was not until 1889, 40 years later, that agri- cultural affairs were disconnected from their old surroundings and given a special department, which was endowed with wide administrative powers and authority. These extend to forestry, to the superintendence of meadow lands, to settlement, viticulture, instruction, experimental practice, and, lastly, to water regulation, a subject "placed within the jurisdiction of the department because of its important bearing upon soU improvement. In fishery, hunting, and adulteration of products, the powers of the department of agriculture are almost unlimited. But, perhaps, the most important sphere is that which concerns the amelioration of the condition of agricultural laborers, a socio-economic work of the first order and one which becomes every year more important. In certain respects the minister of agriculture exercises. quasi-juridical functions. He is the court of final resort in various matters pertaining to his office. This extends to the administration of the criminal law for offenses relating to the forestry department, land settlement, viticulture, instruction, and in short, to all matters which come within the scope of the department. He is, moreover, constituted the court of last resort in matters relating to the administration of the laws relating to agricultural laborers. Besides this the department manages a very considerable part of the State property. The treasury forests, an area of 1,640,000 hectares and having a value of more than 215,000,000 crowns, are under its control, as are also the treasury estates, baths, studs, vineyards, nurseries, and the territories designated for settlement. In general, upon the continent, the interference of the State in politico-economic domains is a more marked factor of pubUc life than it is in Anglo-Saxon countries. Indeed, the Hungarian' agricultural poUcy is State- conceived and State-endowed, and its sphere, if anything, tends to widen at the expense of private enterprise. The reason is that the farmer of continental Europe is far behind his brother of the west in inventive, initiatory, and directive genius ; and this want must be supplied by the State to an extent unknown and, indeed, perfectly superfluous in America. The department carries out a strong policy in regard to forestry, horticulture, agri- culture, viticulture, and the breeding of animals. In nearly all these branches the chief factor in the develop- ment and perfection of production is the State, whose activities in support of the farmer will appear during the course of this report. Within the productive sphere of action of the department are hunting and fishing, together with the development of silk production and bee farming. The department also promotes great waterworks in which direction its politico-economic activity is highly important through its staff of civil engineers, which is charged with certain public functions, while in other directions it stimulates private enterprise. The Hungarian farmers lack the spirit and practical outlook which are necessary for the proper disposal of their products. The department, therefore, has charged itself with the duty of disseminating news and in- formation, thereby bringing to the knowledge of the farmer as quickly as possible estimates of crops and actual harvest results, for which purpose it has instituted a separate statistical section. It takes care, moreover, that the farmer shall be kept supplied with information concerning foreign markets, etc., to which eiid it sends commissioners abroad. These commissioners from time to time furnish reports which are published. During the past two decades three tasks have confronted the authorities. These may be given a collective generalization as socio-political movements. First comes the estate policy, to which particular importance 126 AGBICULTUEAL COOPEEATIOlir IN EUBOPE. attaches since, by reason of the great number of large estates and small proportion of medium-size holdings, no fair balance is maintained. The disadvantage of this is increased by the fact that the freeing of the serfs resulted in the formation of a class of landless laborers. This fact bears very strongly on the problem, which is compH- cated to some extent by the parceling system of the last decades — not always managed in the public interest — and by the question of settlement. The agricultural, demographic and social importance of this matter invest it with a special character which demands careful consideration. Very often the communal possessions of earher days were divided for mercenary motives, and estates were sometimes allotted on the old farming system where they were not divided by the law of inheritance. Secondly, the problem of the care of agricultural servants and farm laborers constitutes, in the narrower in- terpretation, the agricultural social poUcy which strives for the well-being of these people — strives to give them a home and, having awakened in them higher intellectual desires, sets out to satisfy these desires. Thirdly, the care of all matters pertaining to cooperation. As wiU hereafter appear. Government aid in behalf of cooperation was in itself a shoot springing from the social roots of the movement. The reahzation of these tasks with their wide horizon is now strongly centralized in the department of agriculture which has 16 main divisions, the whole being directed by the minister of agriculture and three assistant secretaries. The department carries out the rdle of the State in its administrative and politico- economic domain in Hungary, and promotes that centralizing bent which is manifested administratively and politically in other domains besides agriculture. For the execution of its functions the department of agriculture depends upon outside authorities and agents. Such are forest authorities, farm superintendents, inspectors of animal hygiene, river and survey engineers, an estate directorate with headquarters in Arad, managers of stud farms, wine examining commis- sions, chemical laboratories and experimental institutes, agents and foundations appointed for technical instruc- tion. Since, however, self-governing bodies play an important part in pubhc life, having their origin in the old Hungarian constitution, the minister of agriculture, as other ministers, commands as his representatives the chief officials of local authorities, and these execute the departmental instructions within the sphere of action which the State has marked out for them. Moreover, in every such area the minister had until recently a special agent at his service known by the title of administrative reporter. These honorary and somewhat circumscribed offices were found unworkable. Thus the minister of agricul- ture found himself unrepresented by expert agents in local autonomous bodies. At first it was sought to over- come this disadvantage by increasing the number of existing superintendents over the animal breeding industry. Later, he widened the sphere of action of the superintendents transforming them into general agents, in order that he might be able to command directly the services of agents for carrying out his tasks. But the tremendous congestion of work and the quick progress of centralization made a plan necessary whereby the minister could use in his service middle-grade authorities to execute departmental orders in their respective districts and to take the initiative in the poUtico-economic activities which are to be determined according to local conditions. GOVERNMENT AID TO AGRICULTURE. The State endeavors to give assistance in various directions toward agricultural development. The Hun- garian farmer is distinguished by his conservative tendencies and he is to be persuaded to economic reforms only by means of instruction and enlightenment. The Government aids the farmer by providing hiTn with the means of acquiring on favorable terms certain plants and animals which it is desirable to increase by acclima- tization. The main aid furnished by the department consists in providing the farmer with seeds, saplings, and stock for breeding. The treasury estates are used for the purpose of granting to farmers the material specified. Naturally, the demand exceeds the supply, and the department turns to other sources to supply the deficiency, which is most marked in the case of animals for breeding purposes. These consist of selected breeds from foreign sources. For a long time the distribution of saplings and shoots, which are produced in the State tree nurseries and vineyards, has played an important part and has affected equally favorably the three departments of forestry, horticulture, and viticulture. This aid consists in furnisliing stock of excellent quality, in granting seed and sapHngs on favorable terms, in the pajnnent of freight charges, in requiring a fair interest on purchase price, and in insuring the animals for one year. In earher times, when the department advanced the purchase price, its beneficent activity was, of course circumscribed; but, later, it stood security for interest upon loans and was thus able to influence a larger area, while the difficulty of recovering capital advanced was thus done away with. The department also gave assistance in the matter of acquiring pasturage and in the building of workmen's dwellings. Where sufficient guaranty can be given for advances in the form of State aid, the latter usually takes the form of a loan from one or other of the funds at the disposal of the department. The form of guaranty required HUNGABY. 127 is the title-deed, a mortgage, or some sort of bond properly executed before an accredited oflficial. From these same funds loans are granted at low rates of interest — in some cases without interest — to such firms as are fJrin- cipally concerned in increasing our agricultural resources by working up produce and general evaluation. There are, of course, other forms of aid such as those which are comprised in a single grant and are never renewed. These were common in olden times, but are now rather the exception and, when granted, are often subject to conditions of eventual repayment. One kind of State aid applicable in restricted circles is the granting of implements and apparatus. Bee farming, poultry farming, hunting, etc., form cases in point. The serums for the vaccination of animals, their production under State control and their distribution at cheap rates are great factors in the promotion of animal hygiene. Other important aids are the furnishing of State experts, professors, viticultural experts, and survey- ors with their requisite services, and the granting of these under certain conditions to private individuals and to communal authorities. It is thus obvious that the assistance rendered by the department is not mechanical, but organic. TECHNICAL AQRICtJLTXJRAL INSTRUCTION. The proper development of technical instruction, of course, furnishes the most suitable aid. In this direc- tion the Government does its utmost, but its activity is strictly confined to instruction in the narrow interpre- tation of the word, while the general scheme of elementary education is administered by the department of education. Lower-grade agricultural technical instruction is given in the schools of agriculture. Of these, taking the statistics for 1911-12, 19 were State schools and 4 others were under State control. To these may be added other lower-grade technical institutions, as 8 schools for vinedressers, 4 for forest guards, 1 of horticulture and 1 for waterworks officials. Lower-grade technical instruction is in course of being remodeled in two new directions. Courses for small farmers are being arranged. These, of course, aim at widening the technical knowledge of this class. The re- quirements of officials will be satisfied by the arrangement of courses in existing schools, and these latter will be converted into boarding-schools. Hitherto the greatest mistake in the method of agricultural technical in- struction has been that it has never been able to attract the masses. Moreover, from its pecuUar direction, it has always been restricted in its sphere of action. In order to cover its deficiencies, certain agricultural peoples' schools are being organized and these will supplement elementary teaching by agricultural instruction. Fea- tures of this new departure are courses for small farmers and classes in housekeeping for young girls. Various courses have already been held by visiting teachers and experts. In addition to these, courses for bee farm- ing, home economics, and the collection of medicinal herbs are in progress. Higher-grade instruction in dairy farming and oenology is given at the Sarvar Dairy School and through the viticultural and cenological course in Budapest, while the higher form of agricultural instruction is fur- nished by five State academies. The High School of Mines and Forests in Selmeczbanya and the Veterinary High School of Budapest confine their activities to the giving of technical instruction in the subjects indicated, respectively, in their. titles. The latter institution has a European reputation and has well served the cause of agriculture at home. AUTONOMOUS SOCIAL ORGANIZATIONS. Although, as has been mentioned. State initiative is a weighty factor in Hungarian rural life, it would be imwise to deduce therefrorn that the farmers themselves, in social combination, do not contribute to the eco- nomic development of the country. Htingarian public life is, in general, based upon autonomous principles, for which reason agricultural unions form an important feature of rural life. Riiral society is organized into two national bodies — the National Hungarian Agricultural Union, one of our oldest social bodies, having been founded in 1825, and the Hungarian Farmers' Association, foimded in 1896. The former body, which in 1896 organized the county local authorities agricultural unions in a single body under its own leadership, originally owed its inception to the need for the development of technical prob- lems connected with progress in agricultural science. Much of its activity in this direction is evidenced by the appearance twice a week of an illustrated newspaper, the Koztelek. This is published for the benefit of mem- bers. In addition, there is the Magyar Foldmives for small farmers. Moreover, there is a constant output of books and pamphlets produced by experts, but suited to the popular taste. Similar ends are served by annual national and local exhibitions, cattle shows, machine competitions, and by experiments with artificial manures and in sowing seed. Parallel with this technical work, all legislative and administrative changes are attentively followed. Advice, opinion, and directive suggestion relating to these matters are always at the service of the Government, to the end that its activity may be exercised in full conformity with the needs of the situation. 128 AGKIOTJLTXIBAL COOPEEATION IN EUEOPE. The organization of credit forms a subject of permanent care. The National Agricultural Union founded, in lr863, the first Hungarian Mortgage Credit Bank under the title of the Land Credit Bank. This was achieved on pm-ely altruistic cooperative lines. Followiag this, the Small Farmers' National Land Credit Institute proceeded from the same source, as also did the National Central Credit Association, founded in 1896. The general activity of the union, particularly since it has combined in one organization the provincial agricultural unions, has exercised a marked efiEect upon the technical, political, and administrative development of agri- culture. The second great national agricultural organization is the Himgarian Farmers' Association, whose chief task consists m forming and directing agricultural cooperative societies which are based upon the principle of self-help. This object it attains by means of its monthly magazine and popular weekly, and also by means of farmers' clubs established in the provinces. In addition to this propaganda, the association calls the atten- tion of the farmer to agricultural, political, administrative, and commercial questions, and, in conjunction with the older imion, strives to generate a healthy public opinion. The conduct of the affairs of these two bodies is in the hands of our most influential landed gentry. Each is in harmonious cooperation with the other. Coexistent with these two national organizations are various special bodies concerned with the peculiar interests of horticulture, poultry breeding, bee farming, viticulture, oenology, and forestry. Guarding the special interests of the various counties there are 56 local bodies, with headquarters in their respective capitals. Their objects are the extension of technical knowledge, the holding of courses and lectures, the extension of good and popular technical works, the holding of exhibitions, the offering of rewards for animal breeding, the acquisition of good breeding animals, and the dissemination of sowing seeds. They, moreover, popularize the use of modern machines and implements and support the self-governing local authorities and local interests generally. Finally, the village farmers' clubs form the smallest units within the frame of the agricultural social organization. These promote the individual interests of their own communities and receive gratis, from the minister of agriculture the publications of the department, which form the people's library. SOCIETIES IN THE PUBLIC INTEREST. For the attainment of certain important ends, the Himgarian law recognizes a form of compulsory service in so far as it does not permit the obstruction of the common weal by minorities miable to discern their real interests. This is clearly manifested, in principle, in the matter of the regulation of inland waters, in which service societies for the prevention of floods occupy the leading r61e. These are usually formed by proprietors of island estates and by those whose lands abut upon areas liable to flood. The latter areas are either units artificially marked out or are inclosed within natural boundaries, such as moimtain heights, inaccessible to flood but lying in the vicinity of rivers or other waters. For the regulation of water basins and currents as well as for seciu"ing the safety of shores, the owners of such territories are authorized to form regulation societies and to construct works which will serve their pur- poses without causing damage to neighboring property. The formation of the society is determined upon by a majority of the owners interested according to the extent of their property in flood districts, the minority being bound by the decision. The formation itself is decided upon in general meeting, which includes the local authorities, and the rules are passed by the full body. The approval of the statutes is a matter for the minister of agriculture, to whom must be submitted the minutes. These societies are under strict govern- mental supervision. Their proceedings are followed with close attention by the inspectors deputed by the minister. If the activity of such a society is suspended, or the society fails to carry out the instructions of the minister within the provisions of the law, the minister is empowered to dispatch an official who, for a period not longer than two years, exercises those rights which would otherwise be vested in the society. His powers may eventually be revived for a period not exceeding seven years in aU. The affairs relating to the societies which use water power are much less centralized. The powers of the societies include the regulation of brooks, drainage, the reclamation of morasses, the pipe drainage of land in the neighborhood of springs, irrigation, and fishing. In these matters the minister of agriculture exercises only the highest form of control, while immediate supervision is delegated to local authorities. As regards irrigation societies, they have also a compulsory character; their creation depends upon the vote of two-thirds of the members. Assuming that the area to be treated formed pasture land the works extend to a distance of at least 100 hold. The compulsory principle which applies in the case of water companies is operative also in viticulture. Wherever a large wine-growing area is in the hands of several proprietors, a certain uniform procedure is demanded which can not be otherwise assured than by means of the association of owners. Therefore the law dealing with the supervision of meadows lays down that wherever an area extends continuously beyond 100 HUNGAEY. 129 hold and the owners number not fewer than 20 a third of this number may demand the formation of a society. In the case of smaller areas the mountain communities can be formed only with the consent of all interested parties. Here the compulsory principle is in abeyance. In the sphere of forestry the compulsory principle operates in the case of owners of communal estates. The law compels the members' of such communes and the old feudal owners to organize themselves for the direction of silviculture. These societies must submit their plans and arrangements for approval by the authorities. ' All these obligatory societies are self-governing.. Within the frame of the law they administer their own afifairs, and only in the most serious and important developments, where public interest is deeply concerned, does the State intervene, as, for instance, in the case of water-regulation companies. AGRICULTURAL CREDIT SYSTEM. The first attempts made in Hungary to organize a system of agricultural credit date back to the first half of the last century. In those stirring days the landed gentry (lesser nobility), which then constituted the bulk of the upper and middle classes of the country, began to be more and more in need of credit, partly as a result of important and profound economic and political changes and partly in consequence of an equally sudden revolu- tion in social conditions. The whole series of disastrous events that followed in rapid succession affected par- ticularly the gentry or middle class, which for decades were practically paralyzed. The emancipation of serfs (vassals) deprived the gentry landowners of cheap labor, and it became a very serious menace to their existence owing to the fact that the compensation offered them by the State in the form of debentures for the disencum- bering of their land — the realization of which was in those days an extremely difficult matter — came rather too late. It was this class which suffered most heavily from the havoc wrought during the war of independence in 1848-49 and from its grave economic consequences, as well as from various measures taken by the absolute Government — in particular, the confiscation and destruction of 60,000,000 florins' ($24,000,000) worth of Hun- garian bank notes, the suspension of the moratorium (period of grace) that had been granted to landowners, at the very time (1856) when an enormous slump in the price of corn had taken the world by surprise, and the very injudicious and inopportune restrictive policy of the absolute Govermnent toward the Hungarian savings banks, the effect of which was aggravated by the fact that the "regnicolar" and charity trust funds, which had been the most abundant sources of credit for landowners, had just ceased to advance mortgage loans. This combination of circumstances made the transition to a more modern system of farming in conformity with changed conditions practically a catastrophe for the landowning middle classj At the same time the cheapest rate of interest at which mortgage loans could be secured, even on unencumbered'estates, was from 18 to 20 per cent. Nor was the lot of the emancipated vassals a better one. In Hungary, indeed, the latter were not compelled to redeem their lands themselves from their feudal lords ; this was done by the State, which gave the landowners so-called debentures for the disencumbering of land, the sum required for the repayment of capital and the payment of interest beiag appropriated out of the national revenue from taxes. However, the moment the former vassals became uidependent farmers, cultivating their own lands, naturally their need for credit, too, became more and more imperative. Loans on relatively favorable terms could be obtained by farmers only from some of the public charity trust funds, more particularly from trustees of moneys belonging to orphans' courts of chancery, from Catholic chapters, and from savings banks, the number of which at that time was very small. Even the opening of the mortgage-loan department of the national bank in 1856 did very little to improve matters. Of the whole amount of loans (127,000,000 florins) advanced in 1858 on the security of mortgage (entry in the land register) only 38,000,000 florins had been advanced by banks, even if we include the mortgage loans of the national bank. Under the influence of political oppression and the economic upheaval, farmers were for a long time unable to effect any improvement of conditions unaided. It was only after 20 years of struggle that the absolute Government could be persuaded to grant permission for the establishment of a State- aided Hungarian land-mortgage institute. The establishment of the Hungarian Land-Mortgage Institute in 1863, which the country welcomed as a great national triumph, was attended with considerable restrictions. Later on, after the reestablishment of the constitution and when the State endowed the institute with various prerogatives and privileges, it became in fact of vital importance from the point of view of the organization of Hungarian agricultural credit, not only because ever since its existence it has rendered signal services toward satisfying the credit requirements of large landowners, but because the peculiar system resorted to at its establishment has become the starting point of those Hungarian public-credit institutes of an altruistic character participating in State favors and State support which, like so many boundary stones, mark out the various phases of the development of the system of agricul- tural credit in Hungary. These institutes include, besides the land-mortgage institute mentioned above, the 14174°— S. Doc. 214, eS-1 9 130 AGEICXTLTtTBAL COOPEBATION IH EVEOPB. National Small Holdings Land-Mortgage Institute, the Central Hungarian Credit Cooperative Society (founded on the basis of act 23 of 1898), and the National Association of Hungarian Land-Mortgage Institutes. With aU their failings, these institutes may be regarded as firm substructures and regulators of the whole organization of agricultural credit. The peculiar historical development of Hungary and the unfavorable effect of the same on the energy of Hungarian society have made it imperative that reforms universally felt to be necessary should be carried out and be supported materially by the State itself far more frequently than in western countries. The Turkish invasion and rule and the centuries of political and economic warfare for the recovery of the ancient independence of the nation waged unremittingly by Hungary against her more powerful neighbor, Austria — from the moment when, liberated from the Ottoman yoke, she reentered the field with her resources exhausted by devastation and the ravages of friend and foe for hundreds of years — made it impossible that Hungarian society should keep pace with the progress of European culture. Consequently, in 1867, when the restoration of its constitution once more insured the nation fuU liberty of action, it was compelled withia a few short decades to bring into being in every field all the institutions required by modern culture and economy. Whereas, in States that have developed under happier circumstances society has had time to mature institutions of public interest, as well as having the tranquillity and material resources required for their realization, Hungary has had to take such gigantic steps in every field to make up for the omissions of bygone centuries that in establishing certain institutions of general importance it has been quite oilt of the question to wait for society to take action. Indeed s.ociety itself has been compelled during a few decades to submit to a process of practically complete transformation; con- sequently, there has been no chance for a uniform development in that society of the moral consciousness and of the material capability essential to the establishment unaided of important modern institutions. These are the principal reasons why the State has had to cooperate practically everywhere with society by giving society the support of its influence and its material resources for the establishment of pioneer institutions. even in the field of agricultural credit. Yet the State does not interfere in an excessive way. Not one of the credit institutions of pubhc importance belongs to the State, which has confined itself to drawing up rules and regulations relating to them, supporting them financially, and stipulating for certain rights of supervision, which in actual practice mean really nothing more than a moral influence. LEGISLATION. 1. Laws relating to usury. — There are no legal restrictions with regard to mortgaging landed property or selUng real estate by auction in order to satisfy creditors. The homestead institution is also unknown in Hungary. The interests of creditors of owners of real estate are protected both by the general provisions of the civil law as well as by a special provision of the law which provides that where the real estate in question is sold at auction by order of a court of law the creditors' claims shall be satisfied by the court in the order corresponding to that in which their respective claims were entered in the land registry. For the protection of debtors — apart from the fact that certain most essential domestic implements and farm equipments belonging to them can not be seized for debt — the acts Nos. 8 of 1877 and 25 of 1883 aimed at the prevention of usury. These acts do not directly estabhsh a maximum limit of interest the exceeding of which is punishable by law. They merely declare that no notary pubhc ^ may set down in writing in a deed any claim to an interest exceeding 8 per cent, that such interest may not be registered in the land registry, and that no magistrate or justice may issue a warrant of execution (distraint) either for the insuring or for the exaction of such interest. However, even these prohibitions do not relate to loans on biUs of exchange or to the transactions of legally registered firms or merchants. The law makes the establishment of the offense of usury dependent not on the measure or rate of interest demanded but on the question whether the creditor has taken advantage of the embarrassment, recklessness, or inexperience of the debtor to secure disproportionate advantages. Where in- any village, township, or district the growth of usury results in universal poverty, the minister of justice may order official steps to be taken to suppress usury. 2. The laws relating to credit institutes.— In. Hungary there are very few private banks. Those in existence are to be found only in the larger towns and their sphere of activity does not often include the granting of agri- cultural loans. All the more important, from the point of view of agricultural credit, are the credit institutes. The latter are either limited companies or cooperative societies. The rules relating to the said forms of commer- cial companies are contained in the mercantile law. (Act 37 of 1875.) ' The office oE notary public in Hungary is quite different from what it ia in the United States. The qualifications necessary to obtain such an office are very difficult to acquire. The number of such offices is limited, and the notaries public are appointed by the Minister of Justice. Deeds issued by notaries public are of a public character and possess peculiar leg?d force. HUNGABY. 131 For the foundation of a limited company not less than seven shareholders are required. The share capital must be determined in advance. Only a definite number of shares are issued and aU of the same nominal value. The shareholders are Hable only for the amount represented by the nominal value of their shares. The articles of association of limited companies must be handed to the court for entry in the commercial register. At least 30 per cent of the share capital must under any circumstance be fully paid up. Shares may be either made out in the name of their owners or may be "bearer" shares. The shareholders exercise their rights at the' general meetings which must be held at least once a year. The affairs of every limited company are managed by a board of directors elected by the general meeting. The management of the society's affairs and, in particular, the correctness of the balance sheet are subject to the approval of the committee of control elected by the general meeting. A cooperative society is an association of an undefined number of members whose object is to further the credit, the earnings, or the economy of its members by a common management of business on the basis of reci- procity. The articles of association of a cooperative society must also be entered in the commercial register. The members contribute toward the stock capital by subscribing for shares in the concern. A member may give notice of withdrawal of his share capital; i. e., he may retire from membership in the concern after the lapse of a given time. A member may for certain definite reasons be excluded from the society. The articles of association may declare the Umiited or unlimited Uability of members. The regulations relating to cooperative societies are only very general in character. The measures relating to the general meetings, boards of directors, and committees of control of cooperative societies are very similar to those referring to hmited companies. The balance sheets of both limited companies and cooperative societies must be publicly advertised and, after being definitively passed by the general meetings, must be submitted to the court. The mercantile law is, therefore, extremely liberal in its provisions relating to limited companies and cooperative societies. Their foundation is not made dependent upon concessions. The management of affairs is under the control of the elected committee of control and of the general meeting, which control is practically of Httle value. The only other thing insisted on by the legislature is the publicity of the accounts. The only question the court has to investigate is whether the law and the articles of association have been strictly observed. TJ'here are no special laws or measures relating to the foundation and activity of banks. Any persons may found a Hmited company or cooperative society with a small amount of capital. A cooperative society may engage in any branch of banking and credit business, including the acceptance of savings deposits. However, there are special laws relating to pubhc credit institutes already referred to, and these laws will be explained later on. There are special laws, too, for the regulation of transactions in mortgage bonds and of the issue of debentures subject to certain concessions on the part of the State. 3. Mortgage honds. — As a result of the rapid development of Hungarian trade following the events of 1867, there arose a gradually increasing demand for mortgage loans repayable during a long period by means of equal annual installments and not liable to foreclosure on the part of creditors. In particular it was the farmers who required such loans, partly for the purpose of purchasing property and partly to obtain equipments or to convert paralyzing debts due on bills of exchange. But the rapid development of the towns also created a demand for mortgage loans which were required for the building of houses. In this country, which was so poor in circulating capital, there arose practically simultaneously in every branch of economy an enormous demand for capital. The legislature, therefore, determined to provide that the credit institutes should procure the money required- for the advancement of mortgage loans by the issue of securities the absolute safety of which should make them a desirable investment for capitalists at home and abroad who were in search of opportunities for laying out their capital at a fixed interest. The issue of mortgage bonds was regulated by act 36 of 1876, which was supplemented by certain provi- sions of act 30 of 1889. The issue of mortgage bonds is not subject to a concession of the State authorities or to any control on the part of the State. Any Hmited liabOity company, or any such cooperative society whose members are possessed of real estate, may issue mortgage bonds if it complies with the conditions laid down in the act referring to such bonds. According to the provisions of the law, the conditions relating to mortgage loans and the principles guiding the appraisement of the property to be mortgaged must be laid down in the institute's articles of association. For the securing of the mortgage bonds, a special reserve fund (to be managed separately) must be created, which fund must represent at least 5 per cent of the value of the mortgage bonds issued and must in any case amount to at least 400,000 crowns ($80,000). If the institute in question desires that its mortgage bonds should be tax free and should enjoy the privilege of being accepted as investments for trust funds in chancery, the special reserve fund must amount to not less than 3,000,000 crowns ($600,000). Such reserve fund serves exclusively as a security for the owners of the mortgage bonds as a body. No other persons can have any claim on the same — even in cases of bankruptcy — ^untU aU claims of the owners of the 132 • AGBIOULTUEAL COOPERATION IN BUEOPE. mortgage bonds have been satisfied. The law enumerates in detail the securities in which such a reserve fund may be invested. Mortgage bonds may only be issued on the basis of such loans as do not exceed 50 per cent of the appraised value of the real estate so mortgaged. The mortgage loans serve as security for the totality of mortgage bonds issued; they can not be subjected to execution, nor can any third person (except in the case' of realization resulting from bankruptcy) set up any claims whatever respecting them. The law stipulates that the institutes shall, every half year, submit to the court and publicly advertise a detailed statement of accounts. Besides, the law entitles the owners of mortgage bonds in certain cases to demand an order of the court for the examina- tion by experts of the management of the affairs of the respective institute. 4. Deientures issued on the basis of loans advanced for the parceling out of estates, the regulation of rivers, and for similar purposes. — ^The movements of more recent times relating to landed property have given rise to various kinds of demands for land credit for the satisfyiiig of which the system of mortgage bonds in itself has proved inadequate. During the last 25 years an extraordinary hvely movement has been at work to revolu- tionize the conditions of property tenure, which movement originated not only as a result of the enormous natural increase of the agricultural population, but also in the growth of capital possessed by the lower classes of the people. The more intensive system of farming, the rise in price of agricultural products, the greater facility for the reaUzation of residual products, as well as the increase of wages paid for agricultural labor, have done much to enhance the abUity of the peasantry to spend money in purchases of property. This change has been due in no small measure to the educating influence of organized cooperative societies which has tended to promote thrift. The enormous demand for small holdings resulting therefrom has been increased by the fact that about one-third of the territory of Hungary consists of inalienable property (entails, church benefices, and trust or charity commissioners' estates). On the other hand, the cost of production in the case of large estates increased so enormously that the owners in particular of landed estates of medium dimensions (especially those not possessed of sufficient capital to farm their estates in accordance with up-to-date principles or those encumbered with oppressive debts) have in many cases yielded without difficulty to the temptations offered by the high price of land to parcel out or to sell their property in part or entirely. To enable the peasantry to make purchases of this kind, loans amounting to not more than 50 per cent of the value of the land as assessed by strict appraisement, and advanced on the security of mortgage bonds, proved quite inadequate. It is well known that the productive value of estates passing into the hands of small holders increases to an extent that enables the new possessors to pay regularly the annual installments due on amortization loans even exceeding in amount 50 per cent of the actual value of the estates. In consideration of this fact as well as of the danger involved in the small holder purchasing such an estate, in order to procure the purchase price, being compelled to obtain a loan on a bill of exchange due at short notice in addition to that advanced him on a mortgage bond — the legislature came to the assistance of small holders and, by virtue of act 32 of 1897, authorized the banks under certain prescribed conditions to issue not mortgage bonds, but bank debentures on the basis of loans advanced for the purpose of such distribution of property, provided only that such loans do not exceed La amount two-thirds of the appraised value of the real estate thus distributed. The legislature endeavored to secure the safety of these debentures as an investment by making their issue dependent upon conditions to all intents and purposes quite as severe as those controlling the issue of mortgage bonds. On the other hand, though not available as investments for trust funds in chancery, these debentures are declared by law as suitable for all other purposes of investment, and they participate in the same exemption from taxation as mortgage bonds. The fact that the land mortgage institutes have not advanced loans for the purpose of parceling out estates to as great an extent as might have been expected is due principally to the law having subjected the distribution of property resulting in the issue of debentures to severe restrictions, which serve to check the liberty of action of the banks granting loans. Similar debentures may be issued, too, on the basis of loans acquired by virtue of the provisions of the laws relating to companies formed for the regulation of rivers and the improvement" of land. The security for such loans is provided by the right enjoyed by such societies of levying the instaUments (in accordance with a certain well-defined scale of contributions) on the members and of requiring that the sums thus levied be collected, in the same way as taxes, by government officials. Where such a company does not fulfiU its obliga- tions, the Government may delegate a special commissioner to provide for the collection of the installments due on the loan or loans. To one of the pubhc institutes — the Hungarian Land Mortgage Institute already mentioned — act 30 of 1899 granted the special privilege of issuing, under very strict conditions, mortgage bonds on the basis of loans bearing 4 per cent interest advanced to companies formed for the regulation of rivers and waterways and the improvement of land. As security for these special mortgage bonds, besides the territory mortgaged and the collection of the installments due in the manner of taxes, in this particular case we have the exceptional pro- HUNGAEY. 183 vision that the State engages to pay to the Hungarian Land Mortgage Institute all arrears of installments not paid by the debtors within the space of three years. The sums thus paid by the State may be levied in turn on the totality of members of such company. In practice, this particular mode of State guaranty has never yet been resorted to. PROCEEDINGS AND CONDITIONS RELATING TO MORTGAGE BONDS AND DEBENTURES. Loans on mortgage bonds, as well as on debentures, are usually granted for a period of 50 years and are repayable by haK-yearly amortization installments. These installments or annuities generally include, besides the interest and the redemption percentage, a certain permanent "thousandth" to cover working expenses. The institutes advancing loans usually reserve to themselves the right of giving notice to recall the same only where the debtor does not fulfill his obligations punctually, or where the value of the real estate involved has decreased to such an extent as to efadanger their claim to a repayment of the loan. On the other hand, the debtor may redeem the loan, either in part or altogether in a lump sum, at any time without being compelled to abide by'the original scheme of redemption by installments.' In such cases, however, he is usually bound to pay a certain compensation, the amount of which differs according to the practice of the several institutes, .though as a rule it does not exceed 2 or 3 per cent of the capital sum redeemed in this unusual manner. The mortgage bonds and the debentures secured by mortgage are not issued" on the basis of each several loan; but the security for the totality of mortgage bonds or debentures is afforded by the totaHty of the loans or the real estate mortgaged in return for such loans, respectively. The mortgage bonds and debentures are drawn according to a definite plan, generally within the space of not more than 50 years, and are redeemed at their nominal face value. But by this law the institute is bound to take care that if the amount of outstanding loans decreases, a sufficient number of mortgage bonds or debentures shall be withdrawn from circulation by an extraordinary drawing to provide for the total nominal value of the mortgage bonds or debentures not exceed- ing the total amount of claims on loans. According to the text of the respective obligations, the institutes pay their debtors the loans in mortgage bonds and debentures, respectively. In practice, however, this is a mere fiction; for, instead of reaUy handing over securities and leaving it to the debtors to realize the same where and how they best can, the institutes reserve to themselves the right of reahzing the securities. As the realization of the securities generally involves expense on the part of the respective institute — and generally a loss on the market price, too, in consequence of the fact that, when selling, it often receives less for its mortgage bonds than their nominal value — the said institute does not pay the borrower the fuU amount of the loan, but deducts a certain percentage to cover losses and expenses, or includes the installments due yearly on the losses and expenses advanced in the redemption installments or annuities. This latter procedure, however, is less common than the former. The sum deducted or added in Heu of losses and expenses generally varies with the condition of the money market. In the case of altruistic institutes, it is barely in excess of the actual loss incurred by sale, whereas the practice in vogue with limited joint-stock banks is that the debtor receives from 1^ to 3 per cent less than the market value of the mortgage bonds. It should be noted that some of the institutes issuing bonds advance loans on such bonds, or on debentures for parcehng out estates, not merely directly but also on the basis of cessions. Provincial institutes, whose chief sources of capital are deposits, are only too ready to grant mortgage loans. In order to make these negoti- able, and not infrequently to obtain profit as middlemen, they advance mortgage loans on precisely the same securities as the institutes of issue. Consequently, urged by necessity or by a belief that such a procedure would be a profitable one, they are often enabled to cede their claims to some great institute engaged in the issue of mortgage bonds. Over against the institute of issue, the cessionary institute undertakes the respon- sibility for such loans and generally collects the annuities for it. The legislature has granted cessions of this kind certain exemptions from the payment of dues and charges. Unfortunately, it is quite out of the question to show, numerically, the importance of the amortization loans, and, in particular, of those advanced on mortgage bonds, from the point of view of the agricultural credit of Hungary; for we have no statistical data referring to the mortgage loans advanced by the banks of foreign countries (in particular, of Austria), or of those granted by private capitahsts or the various fictitious persons (chapters, trust funds, courts of chancery). Only by way of general information we may mention the fact that Prof. FeUner put the total amount of mortgage loans on agricultural real estate in Hungary in 1907 at 4,111,000,000 crowns ($822,200,000). At the same period the sum total of the claims of home banks alone on mortgage loans amounted to 2,693,000,000 crowns ($538,600,000), of which sum, however, only 1,900,000,000 crowns represented loans on agricultural real estate. The value of mortgage bonds issued by Hungarian banks in circulation at the time amounted to 1,661,000,000 crowns. A considerable change must have taken place since 134 AGBICULTTJRA.L COOPERATION IN EUROPE. then; for; ir- 191 J, the claims of Hungarian banks on mortgage loans amounted to 3,777,000,000 crowns ($755,- 400,000), of which sum 2,455,000,000 crowns were loans on agricultural real estate, while the said institutes had 2,535,000,000 crowns' worth of mortgage bonds in circulation. These figures, however, do not include either the loans advanced on Hungarian real estate by the Austro-Hungarian Bank (which, it is true, do not vary to any considerable extent, and never exceed 180,000,000 crowns) or the mortgage loans advanced by the cooperative societies under the control of the Central Hungarian Credit Cooperative Society. As to how many of the debentures issued on the basis of act 32 of 1897 represented loans for the parceling out of property, we have no figures; for, by act 32 of 1897, debentures of this kind may be issued not merely on the basis of loans for the parceling out of property and the regulation of rivers, but on the basis of other loans, too, in particular of those advanced to townships. The organization of the system of material credit may, technically, be pronounced as unexceptionable. If the loans on bonds and debentures are not quite able to render superfluous mortgage loans due at short notice, we must attribute this to the fact that in Hungary conditions make the placing of securities with a fixed interest a matter of great difficulty. This is not principally due to any dearth of circulating capital in Hungary as compared with western States, for such capital is increasing rapidly enough. To illustrate this increase it wiU be sufficient if we refer- to one phenomenon, the fact that within the last 20 years the total amount rep- resented by savings deposited in Hungarian banks (not including the post office savings bank) has more than trebled. In 1890 it was 1,096,000,000 crowns; in 1910, 3,674,000,000 crowns. In Hungary persons wishing to invest their circulating capital have an extraordmary number of opportunities of doing so with equal safety and at a higher rate of interest than that offered by mortgage bonds and debentures. But a considerable pro- portion of this increase of circulating capital falls to the lower classes of the people, who do not as a rule buy securities, but invest their ready money with banks in the form of deposits. Now, savings .deposits are not of any particular importance from the point of view of placing of mortgage bonds. For instance, in 1911 the whole amount of sums deposited with banks on savings-bank books and accounts current was 5,000,000,000 crowns ($1,000,000,000; 38 per cent of the total liabUities); whereas the total assets of the said banks in securities of aU kinds amounted to only 1,020,000,000 crowns (7.8 per cent of the total assets). To judge by the above, therefore, Hungary is, in point of agricultural credit, to a very great extent dependent upon foreign capital, which has, in fact, up till quite recently invested considerably in Hungarian securities. However, in more recent times, as is well known, the markets of the West — in particular, those of Austria and Germany, which are of paramount importance for Hungary — have been simply ffooded with securities issued in the respective countries; and, besides, these markets have begun to show considerable antipathy in general toward securities paying a fixed rate of interest. These unfavorable circumstances have seriously affected the agriculture of Hungary. These difficulties are the real causes of much that is attributed by farmers to the defectiveness of the organization of agricultural credit. CREDIT INSTITUTES IN THE SERVICE OP AGRICULTURAL CREDIT. 1. Hungarian Land Mortgage Institute. — Of the altruistic credit institutes endowed \\ith State favors, the oldest is the Hungarian Land Mortgage Institute established to control the land mortgages of the larger estates. Toward the estabhshment of the institute in 1863, the treasury contributed 500,000 florins (1,000,000 crowns = $200,000), and, later on, the legislature endowed the institute with very valuable privileges and favors, namely, the law gave it special rights with reference to executions (distraints) carried out against its debtors, and declared the mortgage bonds of the institute to be exempt from the payment of taxes, stamp and other duties, and to be suitable for the investment of trust funds in chancery. A government commissioner is appointed to see that the articles of association are duly observed. The Hungarian Land Mortgage Institute was founded on strictly altruistic principles with the character of a cooperative society. The stock capital was contributed by 209 founders, who can not receive a dividend of more than 5 per cent on their founders' shares. After the payment of dividends, all the profits of the insti- tute are added to the reserve funds, which serve as security for the mortgage bonds issued by the institute. The institute began its activity with a total capital of 1,677,000 florins (3,354,000 crowns = $670,800), of which sum, however, the founders had to pay up only 10 per cent, the remaining 90 per cent of the subscribed capital having merely to be guaranteed by deed. The sums thus guaranteed were gradually remitted in proportion to the growth of the reserve funds, so that by 1875 the founders were finally exempted from any firrther obliga- tions as to the paying up of the capital. Besides the founders, the members of the institute include those landed proprietors whose estates have become mortgaged with the institute for an amount exceeding the mini- mum prescribed for this purpose. However, the latter can not take part personally in the general meetings, unless the amount of the mortgage loans advanced them reaches the sum of at least 100,000 crowns ($20 000), HTJNGABY. 135 while the other debtors, grouped by districts, have the right to delegate or rather elect representatives to take part in the general meetings. At these general meetings the members and the representatives of the smaller debtors are entitled to one vote each. The only trace of reciprocity as between the debtors is the duty incum- bent on them all of paying a very trifling sum into a mutual guaranty fund when they receive loans. Besides granting the ordinary loans advanced on the basis of mortgage bonds, the activity of the institute extends to the advancing of loans to companies for the regulation of rivers and waterways and the improvement of land. The privileges granted the institute in this respect, as well as the mortgage bonds issued on the basis of such loans, have been previously referred to. Since its foundation, the institute has granted, altogether, 27,387 mortgage loans, representing a total of 876,296,560 crowns ($175,259,312). The reserve funds of the institute have risen to 51,010,884 crowns ($10,202,177). At the close of 1912 the ordinary mortgage bonds in circulation represented a nominal face value of 397,000,000 crowns; those issued for the regulation of rivers and the improvement of land, 73,700,000 crowns. The value of the landed estates mortgaged as security for the same was 1,460,000,000 crowns. Special meetings are held at which the founders have an opportunity of exercising their influence in the election of a president and a committee of control, and in questions touching amendments of the articles of association (statutes). In other respects they can exercise their rights- as members, in the saGie way as the debtors, at the general meetings. The committee of control contains 36 members, and, besides controlling the management of affairs, exercises an influence on the course of activity taken by the institute. Of the members of the institute, district or local committees are formed to represent its interests in the granting and guaranteeing of loans. ' 2. National Small Holdings Land Mortgage Institute. — Whereas the owners of large estates and of estates of medium size had a permanent source of cheap credit in the Hungarian Land Mortgage Institute, until the eighties of last century small holders had practically no other source for obtaining mortgage loans, repayable by amortization, than the charity trust funds, the chapters, and the trust funds in chancery. It is true that the Austro-Hungarian Bank also advanced loans of greater or lesser amounts on mortgage bonds, but of the sum hereby advanced to landed proprietors in Hungary, which has never exceeded 180,000,000 crowns, not more than 10 per cent fell to small holdings. The larger banks and savings banks, too, did not particularly care for advancing mortgage loans of. small amounts, which, for institutes whose endeavor is to make as large a profit as possible, are anything but desirable either as business or on account of the working expenses involved. As a result of the crisis of 1873 and of the growth of a usury of the most shameless character, this want finally became so distressingly oppressive that public opinion demanded with ever-increasing vehemence that a credit institute similar to the Hungarian Land Mortgage Institute should be established for the benefit of small holders. This institute was brought into being by the legislature by virtue of act 39 of 1879. It was modeled on the Hungarian Land Mortgage Institute. The State contributed to its stock capital a sum equal in amount to that appropriated for the Hungarian Land Mortgage Institute (500,000 florins), and the institute received the same privileges and favors as had been granted to the Hungarian Land Mortgage Institute. Its organization, too, is similar to that of the Hungarian Land Mortgage Institute in so far as its members consist partly of founders and partly of the debtors themselves; and, further, in that the founders may not receive a dividend of more than 5 per cent. It difl'ers, however, from that of the Hungarian Land Mortgage Institute in that the founders have no special meetings, and that the committee of control exercises only the functions defined in general outhnes in the Mercantile Law. At present the founders' shares represent a value of 8,500,000 crowns. The drawing of these shares wiU not begin to take place until the reserve fund of the institute reaches a sum of 6,000,000 crowns in excess of the total value of the said shares. The original object of the founders was that the institute should satisfy the requirements of the small holders in personal credit, too. This was the first attempt to create a network of cooperatives destined chiefly to further the material interests of small holders. And 26 provincial savings banks and 40 mutual aid societies did actually join the institute. But the persons at the head of the concern soon recognized the impossibility of solving the problem of personal credit practically and safely by the aid of a loose organization of this kind, so that the institute gradually relin- quished its activity in this field, and since 1904 has acted exclusively as a mortgage institute. In the field of mortgage credit, the National Small Holdings Land Mortgage Institute has fulfilled expecta- tions quite as thoroughly as the Hungarian Land Mortgage Institute did. Since its establishment it has ad- vanced 66,264 loans on mortgage bonds, representing a sum total of about 288,000,000 crowns, so that the average amount of the loans advanced has been, roughly, 4,340 crowns ($868). At the close of 1912 the claims of the institute on mortgage loans amounted to 222,000,000 crowns, of which sum 210,000,000 crowns were loans on ordinary mortgage bonds, and 11,500,000 crowns were loans on debentures for the parceHng out of property. The institute advances loans of not less than 300 crowns, but does not guarantee loans exceeding 40,000 crowns unless the requirements of persons in need of smaller loans have been satisfied. The securities 136 AGBIOULTTrBAL COOPBBATION IN EUROPE. for the institute's mortgage bonds and debentures consist of landed property valued at 485,000,000 crowns and reserve funds amounting to 15,333,000 crowns. When the two credit institutes here spoken of were founded, as we have seen, the form chosen was neither that of a Hmited company nor indeed of a cooperative society — at least, not in the sense in which the latter is interpreted either by the respective provisions of the cooperative societies act or by the conceptions of the ' general pubMc. The pecuhar objects of the two institutes demanded a form which insured, on the one hand, the main- tenance of the original spirit of the institutes by the aid of a certain conservatism, and on the other a greater stabiHty of the amount of stock capital (though the founders' shares are drawn within a given period) than in the case of cooperative societies, the owners of the shares of which are enabled at any time to give notice of recall. We must note the fact that the founders' shares are transferable, though any such transfer is subject to the permission of the board of directors. From the point of view of conservative management (which is certainly •very desirable), this system is an extremely practical one; but there is no denying the fact that it has defects, too. The enthusiasm excited by the foundation of such institutes in course of time dies away, and then the further increase of the foundation capital becomes a matter of great difficulty. In this respect the Hungarian Land Mortgage Institute is remarkably fortunate; for five decades it has been in a position to amass consider- able reserves, and its sphere of activity has not widened, as a result of economic progress, to the same extent as that of the National Small Holdings Land Mortgage Institute. The latter, however, undoubtedly experiences grave difficulty in acquiring new foundation capital to meet the requirements of such development. Nor is there any denying the fact that, even if the two land mortgage institutes do possess the character of cooperative societies, that character has in essence become a mere form. The owners of founders' shares for the most part regard their foundations as merely so many patriotic gifts which are in good hands and, from their point of view, are not worth thinking any more about. And it is scarcely to be expected that even those landowners who are in undisturbed possession of amortization loans not recallable (foreclosable) for 50 years should display an}- greater interest. In the case of these institutes there can hardly be any question of a real cooperative feeling or of the development of a genuine cooperative cooperation among their members. Consequently, although the management of these institutes is really intrusted entirely to the bureaucratic organization itself, quite free from outside influences, it is undeniable that the ideal objects of the said institutes do not hereby suffer the least impairment. 3. Mortgage loans of joint-stock hanlcs and savings hanTcs. — ^There is no denying the fact that, by virtue of their moral weight and of the guiding influence they manifestly exercise in every respect, the two land-mort- gage institutions occupy the foremost place among the institutes engaged in advancing mortgage loans, though in the amount of such loans they are surpassed by the joint-stock banks and savings banks. In 1911 the claims of the land-mortgage institutes in mortgage loans amounted to 660,000,000 crowns, whereas those of the joint- stock bants and savings banks amounted to 2,972,000,000 crowns, of which sum 1,679,000,000 crowns were mortgage loans for agricultural purposes. In discussing the system of mortgage bonds and debentures, the fact was mentioned that the issue of such obligations may be undertaken by any credit institute which fulfills the conditions prescribed by the law. The big joint-stock credit institutes almost without exception show a great preference for the issue of mortgage bonds and debentures, though only in the case of a very small pre portion can their character be described as predominantly that of mortgage institutes. The rest are engaged besides in all branches of credit business. To mention only a few of the most important of these institutes, the Hungarian Mortgage Bank had in circula- tion at the close of 1911 mortgage bonds and debentures of the nominal face value of 632,000,000 crowns; the Pest National Savings Bank Society, of 357,000,000 crowns; and the Pest Hungarian Commercial Bank, of 550,- 000,000 crowns. However, we should point out that, of the debentures in circulation, a considerable part (not exactly determinable) were issued on the basis not of mortgage loans, but of loans advanced to townships, to companies engaged in the regulation of rivers, and of others given in conformity with the conditions laid down in act 32 of 1897. To confine ourselves to mortgage bonds particularly, the nominal value of such issued by the joint-stock banks in circulation in 1911 was 1,882,000,000 crowns. A considerable busLaess in mortgage loan^ is done by the country banks also, which are usually called savings banks, though in reality thej^ can not be regarded as such. In Hungary the acceptance of savings deposits is not subject to any kind of concession; nor is the management of the affairs of savings banks subject to any sort of legal restriction. The savings banks are joint-stock companies exactly similar to other banks, and it is left to their discretion to engage in any branch of banking just as the other banks, almost' without exception, also take savings deposits. This far-reaching liberalism of the Hungarian Mercantile Law has no doubt become the source of many evils, par- ticularly in regard to the not easily recallable and frequently risky investments of the savings deposits of country institutions. But this freedom of action has been an undoubted blessing to agriculture. It is true that, as HUNGAEY. 137 a result of the unlimited competition, the country banks are obhged to -pay for savings deposits far too high a rate of interest to allow of their lending the deposits to farmers at a low interest. But even this money is always cheaper than loans from private capitahsts and, from the point of view of mortgage loans on collateral security, has been practically indispensable, even since the development of institutes issuing mortgage bonds has assumed more important dimensions. The usual method employed by country banks advancing mortgage loans to farmers is to demand six months' bills, which are prolonged for certain periods that are either determined beforehand or are left inde- terminate, and to secure their claims by a mortgage entry in the land register. This kind of loan is certainly a danger to farmers owing to its being recallable ; but, in practice, the danger is not so great as one might imagine, although about three-fourths of the loans of this character are recallable by the respective banks at any time. The number of country banks being so large (e. g., in 1911, the number of joint-stock banks alone amounted to 1,869), it does certainly happen, particularly during financial crises, that some of these institutes call in even mortgage loans. But this is quite the exception. In general, mortgage loans — in particular those of small holders — are acknowledged to be the safest possible investments. Therefore, what happens most fre- quently is that, if any institute recalls loans of this kind, some other institute is found only too ready to take over the claims — ^in critical times often with the assistance of some big bank, or even, where the notice of recall given by any country bank which is itself in difficulties involves the interests of a considerable number of farmers, with the help of the Government itself. As a general principle this state of things is certainly open to objection; but it is a fact that, for several decades, the want of unrecallable mortgage loans has been comparatively less ia evidence as a result of the granting of loans of this kind by country banks. The Austro-Hungarian Bank, endowed by the legislatures of both States by virtue of laws of similar import, with the exclusive privilege of issuing bank notes, is also engaged (though this is a subsidiary branch of its business) in the granting of mortgage loans and the issue of mortgage bonds. For this branch of its business the legislature has endowed it with the same favors as are enjoyed by the two pubhc land-mortgage institutes. However, the mortgage loans of the Austro-Hungarian Bank are limited fo a total amount of 300,000,000 crowns, of which sum the bank does not appropriate more than 180,000,000 crowns for loans on agricultural real estate in Hungary. 4. Hungarian Central Cooperative Credit Society. — ^A successful attempt having been made some time back to create an organization more or less adequate to satisfy the needs of material credit, the conscious organi- zation of a system to satisfy the needs of personal credit did not begin till much later. Then the men at the head of afifairs recognized tha necessity of coming without delay to the aid of smaJl holders struggling in the clutches of usurers and even pubUc opinion, so to say, at last heard the "still small voice" of its social conscience. The movement toward the estabUshment of credit cooperative societies really began under the influence of the discussions that took place at the International Agricultural Congress held at Budapest in 1885. This move- ment originated with the higher classes of society and was furthered chiefly by the leading classes in the counties. Several country central cooperative societies sprang into existence, their objects being to estabhsh cooperative societies in the respective counties, to control them, and to furnish them with money. These cooperative societies were for the most part founded on the Raiffeisen principles. Apart from the cooperative societies established by the Sax6ns of Transylvania ia the southeastern part of that country, it was found necessary to do away as soon as possible with the unlimited responsibihty of members, under which more than one unfortunate experiment was made, but which met with strong iantipathy on the part of the people at large. In 1894 an attempt was made to establish a central cooperative credit society of this kind, the sphere of activity of which was to extend to all cooperative credit societies in the country. Yet, with aU its good intentions and despite the fact that the central cooperative society was backed by one of the most important credit institutes in the country, this attempt at organization also failed to achieve any real success. The institute was incapable of organiSiing the well-paid expert control required, or of providtag sufl&cient capital for the creation of a reaUy great organization. Many abuses, too, arose from the cooperative credit form of association, which was well on its way to achieve universal popularity, for it was a convenient form for the use of small banks and even private iadividuals, who often employed it for the estabhshment of advance societies without any capital, simply for the purpose of decoying the people into their nets and of exploitiag them. The pubUc demand for a reform of the system of cooperative credit societies grew more and more insistent. Schemes were at hand in abundance; interminable discussions were started on the subject, particularly as to whether the State should interfere or not, as well as to whether the principles of Eaiffeisen should be appHed strictly or not. The country banks, too, left no stone unturned in their endeavor to prevent a serious cooperative movement, which they believed threatened their very existence. This behef proved later on to be manifestly erroneous. The agrarians, too, had their fears of a movement initiated by the Government. For a time it seemed as if the whole question would be shelved; things seemed to be at a deadlock. At last, after a thorough study of the question, the 138 AGEIOULTUBAL COOPEBATION IN EtTBOPB. Government resolved to make an experiment and introduced a new bill which took shape as act 23 of 1898 — a measure of decisive importance in regard to the system of cooperative credit societies. This act left intact the provisions of the Mercantile Law relating to cooperative societies which, without doubt, only loosely regulated them. The new act declared that certain State favors would be insured to such cooperative credit societies that were established in conformity with the detailed and strict rules contained therein. Furthermore, with the aid of the State, it established a national central cooperative credit society for the use of such cooperative societies, and whose task was strictly to control, direct, and supply with necessary capital cooperative credit societies founded and acting in conformity with the law. At the time this new act met with a widely spread feeling of distrust. Even the drafters of the act themseilves regarded it rather in the light of an experiment, and by no means expected that the organization created by law would, despite all difficulties, within a short time practically embrace the whole country. Yet that is what did actually take place. The act did not abide strictly by the principles of Raiffeisen, but created a system which, under existing conditions, appeared to be the most opportune one. As a matter of fact, it proved a brilliant success. The most essential provisions of the act relating to the several cooperative credit societies are as follows: Agricultural or industrial cooperative credit societies falling under the provisions of the act may be founded only by administrative local government authorities, by public corporations such as agricultural associations, chambers of commerce and industry, and industrial corporations', or, finally, by the Hungarian Central Cooper- ative Credit Society. The sphere of activity of such societies is limited to a particular township or at most to certain clearly defined districts of restricted extent. Each member is bound to subscribe for 1 share only; but, at general meetings, not even those members who possess several shares are entitled to more than 1 vote. The nominal value of shares may not exceed 100 crowns. Not more than 6 per cent dividends may be paid on such shares. The remuneration paid to directors may not exceed 10 per cent of the net profits; the remainder of the profits must be added to the reserve fund. Cooperative societies may do business with their members only, but they may accept savings deposits from nonmembers. Members are liable for the debts of the cooperative society up to a sum representing five times the amount of the nominal value of the shares subscribed for by them; but this liability can only be enforced in case of the bankruptcy of the society. Losses, where not covered by the reserve fund, may be levied on the members. However, it must be remarked that ever since the establishment of this institution there has not been a single case of a cooperative society associated with the Hungarian Central Cooperative Credit Society having become bankrupt; consequently, in no single case has the provision relating to the liability of members had to be resorted to. Members can only withdraw from cooperative societies at six months' notice. In cases of execution or bankruptcy resulting from claims against their own members, cooperative societies affiliated with the parent institute have a prior right, as compared with all other creditors, to the whole movable property of the debtors, though only where the claims of such other creditors date from a period subsequent to the debtors' admittance into the cooperative societies. The rolls of members may be inspected by anyone, and cooperative societies are bound to inform everyone who makes a request to that effect of the total amount of the several members' liabilities. Besides the board of directors, the members of cooperative societies must elect a committee of control. This committee examines the books and accounts of the society in question at least once a quarter; it may take part in the sittings of the board of directors and, also, particularly as regards the auditing of the financial statement, has to perform all the duties intrusted bj' the mercantile law in general to the committees of control of limited-liability companies or cooperative societies. In the organization of the Hungarian Central Cooperative Credit Society we find traces of the same system as was applied in the foundation of the two public land-mortgage institutes. This is not a State institute, although the treasury contributed toward its foundation a sum of 1,000,000 crowns. But in the case of the two land-mortgage institutes, the Government has little chance of exercising any influence, notwithstanding the fact that the government commissioners attached to them are possessed of a certain right of inspection, because this inspection has no other sanction than the moral weight of any objections they may raise. In the case of the Hungarian Central Cooperative Credit Society, however, the Government has more extensive rights of interference insured it. The president of the institute is appointed by the king on the recommendation* of the minister of finance, the two vice presidents by the ministers of commerce and agriculture, respectively. Besides, the minister of finance appoints two members of the board of directors and one member of the com- mittee of control, and the election of a managing director by the board from among their own members is subject to the confirmation of the minister of finance. Moreover, for the purpose of controlling and superintending the management of the institute's affairs, the minister of finance appoints a government commissioner who may protest against any resolutions conflicting with the articles of association, in which case the said resolutions of the board of directors are suspended pending the decision of the minister of finance. HUN6ABY. 139 In essence, too, the Hungarian Central Cooperative Credit Society may be looked upon as a genuine coopera- tive society, far more so than the two land-mortgage institutes. Here, too, it is true, the system of founders' shares has been applied; but the ordinary members of the institute are the cooperative societies afiUiated with' it, which are bound to subscribe for a certain number of shares in the concern with a liability extending to a sum corresponding to five times the nominal value of those shares. Through their delegates these cooperative societies exercise an actual influence on the parent institute at general meetings as well as in the elections of the board of directors and the committee of control. Besides, the afiiliated cooperative societies can exercise a certain influence on the spirit and management of the central institute at the annual congress, where questions concerning the whole organization are debated, for the resolutions passed at the annual congress must be dis- cussed by the general meeting of the parent institute. Not more than 4 per cent dividends may be paid on founders' and ordinary shares by the central institute. The parent institute inspects and controls the cooperative societies affiliated with it. It is entitled to settle the general conditions relating to the business of such societies as well as those concerning savings deposits. The work of control is carried out as foUows: Not less than twice a year the institute's inspectors visit the cooperative societies, investigate their methods of business, offer advice and give instructions to the managers, and inform the central institute of every move- ment of the said societies. Where necessary, the central institute may apply for a bankruptcy order against any cooperative society or it may have such wound up. In practice, the central institute only enforces the winding up of such societies as are not' capable of maintaining themselves. In certain cases where, during the process of liquidation, it becomes 'evident that not even the fully paid-up shares are sufficient to cover the losses of the respective societies, the central institute — usually the sole creditor of the societies — remits that part of its claims which can not be met, so as to avoid the necessity of applying for an order in bankruptcy and an enforcement of the liability of the members. One of the duties of the central institute is to supply the affiliated cooperative societies with credit. The money required for this purpose is obtained by the central institute, in addition to its own capital, from the current account deposits invested with it, by rediscounting bills drawn on it by the aflSliated societies, and by issuing (by virtue of the right given it by the act) tax-free debentures (available as fidelity guaranty secu- rities) on the basis of bonds made out by the members of local cooperative societies and transferred, subject to the liability of the said local societies, to the Central Cooperative Credit Society in lieu of loans. The issue of the bonds is subject to conditions practically identical with those controUing the issue of the debentures mentioned above in connection with act 32 of 1897. But the act, not considering a 5 per cent guaranty fund adequate security for these debentures, insists on the creation of a guaranty fund of at least 10 per cent. The fact must be noted that the treasury contributed 3,000,000 crowns ($600,000) toward the creation of a special guaranty fund for the security of these debentures. Cooperative societies affifiated with the central institute are exempted by the act from the payment of trade taxes on business done, and are also entitled to considerable exemptions in respect of stamp and other dues. The Central Cooperative Credit Society itself is also exempted from the payment of trade taxes and enjoys, besides, exemption from stamp and other dues — which does not apply, however, to bills of exchange and drafts — as well as from the payment of postage dues. The institute may estabfish agencies; and it has, indeed, been bound to establish such in Croatia and Slavonia. The data referring to the development of the institute and to its present state of business will be. found in the supplement. The table there given shows that in 14 years the numbers of affiliated cooperative societies has risen to 2,412, and that the amount of credit granted them by the central institute alone amounts aheady to more than 100,000,000 crowns ($20,000,000). The activity of the affiUated cooperative societies already extends to nearly 8,000 parishes, i. e., to more than half the parishes in the country. This result is far in excess of the expectations entertained by the legislature when it estabUshed the central institute practically as a mere experi- ment. And this fact explains why the capital of the said institute is restricted within comparatively narrow limits. A control and management of a character as thorough as that demanded of the central institute by the act require an enomious staff and administrative organization. Consequently, the working expenses of the insti- tute are enormous. Formerly the local cooperative societies did not contribute at all to the expenses of control of the central institute. It is only a year since an attempt was made, on the basis of a very moderate scale, to insure such contribution. This has resulted in the receipt of 130,000 crowns, as against the total cost of control of 350,000 crowns. The contribution of each agricultural cooperative society may not exceed 200 crowns. No small diflSculty is experienced by the central institute in obtaimng the amount of capital required by so 140 AGEIOULTUBAL COOPERATION IN EUROPE. and, above all, the real estate mortgaged, the full liability of the local cooperative societies and of the Hungarian Central Cooperative Credit Society, as well as the special guaranty fund now amounting to 14 per cent, serve as securities for these debentures. Moreover, the State controls their issue through the government com- missioner. Yet the marketing of these debentures in any considerable quantity is not an easy matter, because, its business relations being practically confined to its affiliated cooperative societies, the central institute occupies a somewhat isolated position in the world of business — a fact that renders it extremely difficult for the institute to find purchasers for its debentures either at home or abroad. To the same isolated position is due the fact that, though its being under the thorough control of the State offers the greatest possible guaranty, the amount of its current- account deposits does not increase to the same extent as that of joint-stock credit institutes. Out of consideration for the opposition of the banks, the legislature did not permit the central institute to accept savings deposits, a branch of business practiced unrestrictedly by every bank. The enormous increase in the number of affiUated cooperative societies will sooner or later make it inevitable that the central institute should raise its capital stock considerably. However, there is no doubt that such an increase of the capital can not be carried out without effectual support on the part of the State; for, in Hungary, the number of securities providing a considerable income and easily negotiable is constantly on the increase, so that it is scarcely conceivable that any large number of private capitaUsts will care to purchase founders' shares of the institute which can not pay a dividend of more than 4 per cent. The fact that the central institute is obliged to obtain a part of the capital required to supply the credit needed by its affiliated cooperative societies by means of rediscounting naturally makes it impossible for the institute — espe( ially in view of its enormous working expenses — to advance loans to the said societies at as low and uniform a rate of interest as is desirable, though the rediscounting is mostly done through the Austro- Hungarian Bank. The local cooperative soc ieties are of two kinds — agricultural and industrial. The former preponderates, since of 2,412 societies in existence at present, only 226 are industrial. Of the latter, 142 are strictly speaking productive — machine works and cooperative societies for the realization of products (iron works, steel works, carpenters' and tailors' shops, carpet and glass factories, numerous basket weaving and other cottage industries, leather industry, etc.). The agricultural societies were at first anything but reconciled to the fact that the central institute interested itself in industrial cooperative societies too, for the results in this branch were by no means satisfactory at the beginning. However, the moment the central institute began to apply a new system, according to which the institute itself provided for expert and commercial management as well as for the realiza- tion of the products, the industrial cooperative societies rapidly developed. In 1912 goods to the value of 15,000,000 crowns were sold, and the workmen earned in wages and participation in profits no less than 9,000,000 crowns. The agricultural cooperative societies have become very important factors of agricultural credit for small holders. It will be sufficient to point to the fact that the affiliated cooperative societies have already nearly 700,000 members. The managers of these societies are in most cases country priests, teachers, notaries, in some instances even large landowners; in a word, the natural leaders of the people. Experience proves that those cooperative credit societies develop best whose members are mostly small holders. Less satisfactory are the cooperative credit so; ieties working in provincial towns, whose membership is a mixture of farmers, tradesmen, and persons belonging to the lower middle class. The managers of these cooperative societies, when considering the advancement of loans, usually lay great stress on the loans being for some productive purpose. Besides, they arc bound to inquire from time to time whether or not the circumstances of the debtors have changed so as to endanger the security of loans. In many places experiments have been made in the erection of small granaries, as well as the purchase of threshing machines, agricultural implements, products, and artificial manures for the use of members. The erection of granaries, however, although a considerable part of the cost of building is advanced by the ministry of agricul- ture, has not proved popular or general. Unfortunately, no success has yet been achieved by such a measure, particularly since the rise in the price of wheat has enabled brokers to pay small holders a more uniform price all over the country. In some places cooperative societies obtain a lease of large properties and sublet them in smaller lots to their members. This system, introduced but recently, promises to be very practical. Hitherto 1] cooperative societies have leased for the use of their members altogether 12,845 Hungarian acres. (1 Hun garian acre = about 1.4 English acres.) The articles of association of cooperative societies prescribe the maximum sum which any individual member may receive in the form of a loan. This maximum is usually 15 per cent of the total amount represented by the shares fully paid up. Those cooperative societies, however, which possess any considerable surplus of HUNGARY. 141 savings deposits may, with the consent of the central institute, advance loans in excess of this maximum. That part of the savings deposits which the cooperative societies themselves are unable to make use of for loans is deposited with the central institute. This is, however, rendered somewhat difficult by the fact that both local cooperative societies and the central institute have to pay taxes on the interest due on such savings deposits, and this tax on interest paid on capital now amounts to 10 per cent. Some of the cooperative societies invest their surplus savings deposits in the debentures issued by the central institute. The value of the debentures thus acquired by the affihated cooperative societies fluctuates between four and five million crowns. The loans granted by cooperative societies to their members on bonds are of various kinds. In some cases the societies accept as sufficient the signatures of sureties whom they regard as good. Loans of this kind may not be given for periods exceeding five years at a time, but in practice they are often prolonged. In other cases the societies require that the real estate of debtors shall be mortgaged as security for the loans advanced on personal notes. The loans thus secured by mortgage are either simply loans bearing interest or amortization loans which have to be redeemed within periods varying between 1 and 50 years. On bills of exchange the cooperative societies usually grant loans against the signatures of two accepted individuals ; the bills are due at six or, very often, at three months. The fact that the central institute procures a considerable part of the money required by the affihated cooperative societies by rediscounting the bills drawn on it by those societies is mainly responsible for the practice of drawing the bills at three months, since the articles of association of the Austro-Hungarian Bank prohibit it from accepting bills drawn at more than three months for the purpose bi rediscounting. Naturally this system, according to v/hich the central institute grants loans to its affiliated cooperative societies on the basis of bills of exchange or of the cession of loans on bonds, respec- tively, renders the administration somewhat difficult and costly. In 1912 the central institute discounted 266,796 bills drawn on it by affiliated cooperative societies, and granted the said societies loans on the basis of 20,998 bonds. Current-account loans are advanced by the central institute to affiliated agricultural societies only in exceptional cases or temporarily; this mode of granting loans is more usual in the case of industrial cooperative societies. As a rule the amount of credit obtainable from the central institute by the several agri- cultural cooperative societies may not exceed the amount represented by the shares subscribed for by the members, with the addition of twice the amount actually paid up. Of the credit thus determined, however, under ordinary circumstances a sum corresponding to the total amount of deposits invested with the respective cooperative society must remain open. The rate of interest on loans advanced by local cooperative societies varies in accordance with the circum- stances of each society. Those cooperative societies which have a comparatively large sum in deposits at their disposal and are not compelled to procure credit from the central institute, grant loans at a fairly stable rate of interest — often at a rate scarcely higher than that charged by the Austro-Hungarian Bank for the redis- counting of bills. However, the bulk of the cooperative societies are obliged to have recourse to the credit offered by the central institute. By the provisions of their articles of association, these cooperative societies may not exact a greater rate of interest than 2 per cent higher than that of the central institute, and may not (save in very exceptional cases and then only with the consent of the central institute) collect any commission or other dues over and above the interest. There is generally a margin of 2 per cent between the interest paid by local cooperative societies on deposits and that charged by them on loans. The rate of interest charged by the central institute is usually from one-half to 1 per cent higher than that of the Austro-Hungarian Bank. There have aheady been mentioned the reasons which made it necessary that, besides loans on mortgage bonds, other mortgage loans should be granted, particularly to small holders, for a sum representing at least two-thirds of the appraised value of the respective property. Mention has also been made of the fact that credit institutes engaged in mortgage business which comply with the legal requirements may issue debentures on the basis of such loans. The large Budapest banks do not, except in very exceptional cases, advance loans of this kind for the parceling out of property, principally because they have no opportunity of becoming thoroughly acquainted with local conditions and the solvency of the several small holders. But the difficulty of securing loans of sums corresponding to the higher proportion of the appraised value is felt even where such amortization loans are required by small holders for the purpose, not of acquiring land, but of converting the loans on bills at a high interest with whiqh the respective holdings are encumbered. In both cases the credit required by small holders is of such a nature that it can not be regarded exactly as material credit, but rather as something in its essence very much like personal credit. Loans exceeding 50 to 60 per cent of the appraised value of the respective holdings can be advanced with absolute safety only to such small holders whose personal qualities, agricultural equipment, and all particulars of their material circumstances are thoroughly familiar to the creditor. 142 AGBIOULTTJRAL COOPEBATION IN BTIEOPE. For the object of satisfying the needs of small holders for credit of this kind, it seems only natural that the mortgage institute should act hand in hand with the respective cooperative societies. About seven years ago the Hungarian Central Cooperative Credit Society did actually begin to grant collective loans of this character; at first only as an experiment. But in practice the system thus applied proves a complete success. In granting loans of this kind the method of procedure is as follows: The local cooperative society, with the consent of the central institute, votes the small holder in question a mortgage loan repayable by uniform annuities, which loan may not exceed in amount 75 per cent of the appraised value of the real estate purchased by him or of the property which he desires to disencumber of the heavy debts contracted on it. Part of the loan granted by such cooperative society — in no case more than 50 per cent of the appraised value of the property in question — may be ceded, through the intervention of the Hun- garian Central Cooperative Credit Society and on the security of the cooperative society granting such loan, to one or other of the credit institutes engaged in granting loans on mortgage bonds (generally speaking, to the National Small Holdings Land Mortgage Institute). The part of the loan thus ceded is entered in the land registry in the manner prescribed by the act relating to mortgage bonds, with priority of claim. The remainder is ceded in hke manner, though only with deferred claim, to the Hungarian Central Cooperative Credit Society. The small holder stands as debtor to his own cooperative society, to which the loan must be repaid by him in uniform and equal annual installments. The annual installments are collected by the local cooperative society which sends them in to the central institute; the latter divides the annuities thus paid into parts and transfers to the mortgage-bond institute the part which is its due. This system renders it possible that the comparatively large sum required by the small holder should be obtainable on comparatively easy terms as a loan on mortgage bonds or debentures. Loans of this kind may be repaid by the debtor at any time in a manner qxiite different ' from the original scheme — either in installments or in a lump sum. Experience proves that the small holders of Hungary rarely need loans of this kind for longer periods than from 10 to 20 years. Since September, 1905, the afSliated cooperative societies have, with the cooperation of the central institute, advanced more than 66,000,000 crowns in such collective loans on property of a total area of about 75,000 hectares (about 185,335 acres) . The work of preparing for, manipulating, and controlling all such loans is done by the Hungarian Central Cooperative Credit Society. During the 14 years of its activity the Hungarian Central Cooperative Credit Society has indisputably achieved signal success. In 1912 the amount advanced by the central institute and its aflBJiated societies (including the collective mortgage loans participated in by other institutes) to satisfy the requirements of the members of those affiliated societies was over 300,000,000 crowns. If these absolute figures in themselves do not seem particularly high, it must be remembered that hereby the needs of nearly 700,000 persons were satis- fied and that in the granting of credit the greatest caution is observed, so that we may say it is quite the excep- tion if any cooperative society suffers a loss on its loans. The most significant success achieved by the central institute is that, where its affihated cooperative societies are at work, usury has almost entirely ceased; and that, as an effect of the competition of those societies, the rate of interest charged by country joint-stock banks for loans has been reduced. The effect of the activity of the central institute may be observed further in a general improve- ment in the economic knowledge of the agricultural lower classes. The influence of this activity has also proved a blessing in the fact that the priests, teachers, and notaries of the several parishes (in other words, the natural leaders of the people) have acquired valuable economic knowledge as a result of the guidance and instruction afforded by the Hungarian Central Cooperative Credit Society. Of importance, too, is the fact that the managers of the local cooperative societies generally keep an eye on the methods of farming and even of the moral conduct of their debtors. The present financial crisis has proved in a most striking manner how important it is that the agricultural cooperative credit societies scattered all over the country should be intrusted to the guidance of the central institute. Whereas very many of the unorganized smaller banks and the cooperative credit societies not affiliated with the central institute have had their financial position shaken; of the 2,412 cooperative societies affiliated with the central institute, not a single one has had its activity checked by the financial crisis. The experiences of the past justify us in entertaining the very best hopes for the future. It wiU be the task of the Hungarian Central Cooperative Credit Society not merely to act as a source of credit for small holders, but in proportion as the institution becomes strengthened in every respect to occupy itself more and more with agricultural training and the enhancement of its intellectual requirements. Naturally, this action will not be realizable in every detail of the scheme proposed unless all the altruistic institutes, as well as the various cultural associations of the country, cooperate through the Hungarian Central Cooperative Credit Society to achieve the work. aUlSTGAHY. 143 5. National Federation of Hungarian Land Mortgage Institutes} — The system applied by the Hungarian Central Cooperative Credit Society in the field of agricultural credit has suggested the possibility of an attempt being made to solve another grave problem. Mention has already been made of the important movement in regard to land tenure which has been in progress in Hungary for the last 25 years, resulting in revolutionary changes in the conditions of that tenure which deserve particular attention from the point of view of the national economy of the country. From the point of view of land policy, it is of great importance to know the results of the extraordinarily brisk demand for land — the so-called "land hunger" — of small farmers. It is important to know in what parts of Hungary the small holdings resulting therefrom are to be found, in what proportions they are distributed, and what kind of people obtain possession of them. Another important point is that the small holders, whose land hunger often prevails upon them to purchase land on conditions which later involve the ruin of so many of them, should obtain energetic support from rehable institutions on the occasion of their purchases and also at the time when they negotiate for loans for that purpose. It is difficult for the Government itself to carry out a thorough land policy for various reasons. But the financial solution of the question would also cause the State very grave difficulty should it desire to take it directly into its hands. It was chiefly these reasons that prevailed upon the Government to create another altruistic credit institute by act 15 of 1911. The principal duty of this institute is to serve as an instrument of government in cases of parceling out and resettlement of land rendered necessary by the public-land poHcy and particularly in cases where large estates in mortmain are leased to smaU holders — an instrument subject to the guidance of those State authorities who are respon- sible for the conduct of land policy. The new institute, the official title of which is the National Federation of Hungarian Land Mortgage Insti- tutes, was founded by the State in conjunction with the two land-mortgage institutes referred to above and with the Hungarian Central Cooperative Credit Society. According to the act, the sphere of business of this institute includes the carrying out and furthering of the parceling out of landed property, of settlements, of the acquirement of common pastures, and of other measures of land poHcy as well as the satisfying of the need for credit connected with these transactions and with the erection of agricultural laborers' dwellings. The plans relating to these transactions of land policy are subject to the approval of the minister of agri- culture, while the conditions relating to credit transactions are determined by the said institute in conjunction with the ministers of finance and agriculture. The State contributed 8,000,000 crowns toward the founda- tion of the institute; and the three institutes taking part in the foundation contributed collectively 7,000,000 crowns. Besides, the State may place at the disposal of the institute out of its own resources 10,000,000 crowns' worth of various securities, for the purpose of creating a guaranty fund as security for the debentures to be issued by the institute. The administrative and working expenses of the institute are within certain limits ' Supplementary statement submitted by Baron Pap GSza, general director. — The importance of the National Federation of Hungarian Land Mortgage Institutes is social rather than financial. One of its principal tasks is to assist people with little or no means engaged in agriculture in this manner: In addition to cheap loans and State grants for amortization purposes, this institute supplies the whole pur- chase price for common pastures bought by parishes. The purchase of such pastures makes it possible for poor people to keep their cows, horses, and pigs cheaply during the six months of summer and autumn. These animals not only help to maintain their families, but a certain amount of money is also raised by the sale of young animals. Loans are granted to parish and county councils for the erection of workmen's dwellings. This renders it possible for poor workmen to live in their own houses, surrounded by a garden varying in size from 760 to 1,140 square meters, for very little more than the usual rent paid for one room and a tiny kitchen. Experience shows that these homes have a remarkably favorable effect on the minds of the poorest classes of the commilnity. The institute also leases estates from large landed proprietors and prelates. It then parcels out these lands and subleases them to small farmers without making any profit on the transaction, thus rendering it possible for poor farmers living on the Confines of large estates to acquire their own holdings. Out of large leaseholds of this kind the institute also creates leaseholds of medium size without making any profit thereon, and thus enables the class of large farmers to acquire wealth. The institute also purchases large real estate holdings, which it parcels out in conformity to the needs of the respective districts. In these transactions the institute practically only covers its expenses, but by selling these lots it creates new agricultural holdings, and thus makes it possible for the industrious agricultural classes to acquire wealth. In all these transactions the institute makes no charges for negotiation, legal expenses, or surveying; in fact, in all the lines of its activity it continues to aid its clients in business matters free of charge. It also takes care that they manage their farms in such a manner as to insure them the largest possible income. When required to do so it provides for the purchase of seeds, machinery, stallions, bulls, etc. — in short, for all the economic requisites which its clients need. The institute endeavors at all times to aid and assist poor men in the acquisition of wealth by offering them "first aid" and encouraging a gradual development. On the other hand, by putting large estates on the market in small holdings it puts them within the reach of small farmers, thus preventing any confusion which might arise from a sudden change in the present conditions of land tenure. In these ways the federation of land-mortgage institutes is helping to solve the problem of more production and enabling a greater number of people to live on the same amount of territory. In order to enable the activity of this institution to be genuinely altruistic the- State bears its administrative expenses. 144 AGEIOULTTJBAL OOOPEBAXTON IN BXTBOPE. borne by the State settlement fund. The expert work in connection with the transactions of the institute is undertaken free of charge by the officials of the ministry of agriculture. The national federation enjoys the same exemption from taxes and dues as the central cooperative credit society; and, besides, in the case of transactions of land policy carried out by it, the parties concerned also enjoy considerable exemption from the payment of dues. The National Federation of Hungarian Land Mortgage Institutes is just as far from being a State institute as are the other altruistic institutes. Although the bulk of its capital was the gift of the State, at general meet- ings the State can not have more votes than the other founders together. However, in consideration of the fact that the activity of the institute seriously affects the social and land policy of the State, the legislature has insured the Government a somewhat greater influence over it. The Government exercises this influence in the following manner: The president of the board of directors, one member, and one supernumerary member of the same are ap- pointed by the minister of finance; the vice president, one ordinary and one supernumerary member of thesaid board are appointed by the minister of agriculture, such being delegated for that purpose from among the officials of the respective ministries. These official delegates represent only a minority on the board, but they may suspend the resolutions of the board by protest, in which case the decision rests with the Government. The institute has been endowed with a special organization to conform with its peculiar objects. It is neither a joint- stock company nor a cooperative society. Its members may consist only of the State, the three altruistic insti- tutes concerned in its foundation, and such individuals as subscribe for founders' shares. At the present time, however, the institute does not possess a single member belonging to the latter category. The value of each founder's share is 100,000 crowns. The owners of such shares are not entitled to recall their capital at any time during the existence of the institute, and may not transfer their shares except with the consent of the board of directors and the minister of finance. Only in case either of the institutes concerned in the foimdation has to be wound up can any exception to this rule be made. No founders' shares are entitled to a dividend of more than 4 per cent. Within the sphere of activity of the institute the loans required by the parties concerned are advanced by the three altruistic institutes above referred to on the basis of the system applied by the Hungarian Central Cooperative Credit Society when negotiating collective loans, in conjunction with other institutes, for purposes of converting mortgages or acquiring land. In other words, the loans required by the purchasers of landed property sold in lots by the National Federation of Hungarian Land Mortgage Institutes are in the first place advanced by the local cooperative societies affiliated with the Hungarian Central Cooperative Credit Society. The local cooperative societies, in return for an entry in the land registry with priority of claim, cede the loans to some land mortgage institute in return for an entry with deferred (second) claim, to the national federation; and, finally, ia return for a deferred (third) claim, to the central cooperative credit society. The manipula- tion of these collective loans is carried out by the last-named institute. Loans of this kind may not exceed in amount 75 per cent of the purchase price of the estate. The money required for the part of such loans faUiiig to its share is obtained by the National Federation of Hungarian Land Mortgage Institutes by the issue of debentures as provided for ia act 32 of 1897. One important duty of the national federation is to introduce the system of small leaseholds on properties in entaU, particularly on the church and mortmain estates which occupy so large a proportion of the agricultural territory of Himgary. It controls and directs the farming methods of the lessees of these small leaseholds, just as it does those of the small holders to whom it grants holdings. The institute did not begin its activity untU 1911. During 1912 the institute purchased 21 estates, with an aggregate area of 7,406 hectares. Of the estates thus purchased, lots of a total area of 4,161 hectares were sold to 1,001 purchasers. The institute leased a manor estate belonging to the Roman Catholic Chapter of Nagyvarad of an area of 7,695 hectares and subleased 5,311 hectares in lots to 1,838 small farmers, inhabitants of 18 different parishes, and 2,384 hectares in 6 larger lots. It leased, besides, the estate of another chapter of an area of 1,795 hectares, out of which it created 3 large and 83 small leaseholds. And, finally, it took over the management of a manor farm belonging to the mortmain (entailed) estate of Prince Eszterhfi,zy of 13,233 hectares, on which 8,443 lessees are engaged ki farming in 150 different parishes. Moreover, in 1912 the insti- tute granted to 29 parishes loans amounting to 3,800,000 crowns for the acquirement of pastures, as well as loans of 712,000 crowns to four parishes and one municipality for the erection of agricultural laborers' dwellings. 6. Private organizations of the character of cooperative credit societies and non-organized cooperative societies. — Besides the cooperative societies affiliated with the central cooperative credit society (which is possessed of a national character), there exist a considerable number of cooperative societies which are partly grouped in separate organizations, and partly are completely independent and in organized connection with no other insti- tute. The smaller organizations of cooperative societies participate in State support only in so far as they are HUNGARY. 145 entitled under certain conditions prescribed by \^w to a partial exemption from taxation and the payment of dues. These cooperative organizations were founded at a time previous to the establishment of the Hungarian Central Cooperative Credit Society and chiefly in districts inhabited mostly by non-Magyars. Among these the foremost place is due to the cooperative organization created by the Saxons living in the south of Transyl- vania, which is based on Eaiffeisen principles and whose activity is really exemplary. The financial and moral support of the cooperative societies belonging to this organization is supplied by an old and well-reputed savings bank at Nagyszeben. The organization extends to 176 advance societies, 6 cellar cooperative societies, and 48 supply associations, with a total membership of 18,000 and a total capital of, roughly, 16,000,000 crowns. Another organization of this kind is the federation of Servian Agricultural Cooperative Societies at Zagrab, which includes 34 cooperative societies, with a membership of 1,174. The activity of these societies is chiefly concerned with the creation of leaseholds. The whole territory leased by them comprises 13,233 hectares. The cooperative organization maintained by the Croatian Agrarian Bank at Zagrab, which consists of 252 peasant cooperative societies and includes 38,000 members, is also conducted on Eaiffeisen principles. As regards the independent cooperative credit societies, part of them have been founded by money brokers, who have taken undue advantage of the facUities afforded by the cooperative form simply for the sake of indulg- ing in the practice of usury. However, the activity of these "usury" cooperative societies has recently been considerably paralyzed by the fact that neither the Austro-Hungarian Bank nor any of the big banks of good repute is wiUing to do business with'them. Among the independent cooperative societies, however, there are some which have been in existence for a long time, are strong financially, and quite rehable in other respects. Yet even these can not be regarded as genuine cooperative societies, but possess rather the character of savings banks. In the case of most cooperative societies of this kind, exception must be taken to the fact that they do not book the installments of capital repaid by their debtors as actual redemption of the loans, but, though naturally paying a lower rate of interest than that charged on their loans, collect them and book them as deposits until they amount to a sum corresponding to the original debts. Another fault of theirs to which exception must be taken is that for the most part they follow a system by which the members whose obli- gations are due in one and the same year are grouped into certain "annual associations" and made collectively responsible for one another. After the lapse of a certain number of years, determined in advance, these annual associations are wound up, the result of such a measure being very often a considerable loss. This system is exceptionable, also, from the cooperative point of view, because the shares paid up by the mem- bers of the respective annual associations are, at the winding up'of the same, reckoned as liabilities, as a result of which the capital of the cooperative credit society in question is subject to constant fluctuations. From the agricultural-credit point of view, the independent cooperative societies are continually losing ground. FARMERS' COOPERATIVE ASSOCIATIONS. The pivot of the activity of communal credit associations is naturally credit, but many, not confining themselves to this end, serve also other economic purposes. As an instance of this activity, the members occasionally come together with the object of buying various agricultural necessaries — seed, artificial manures, machines, and implements. By buying wholesale they get more favorable terms. A hst is compUed annu- ally by the assooiation and the goods are ordered. These are distributed upon arrival by the association, which collects the proportions due from each member. This work accomphshed, the temporary union is ipso facto dissolved. Here and there, however, the farmers create permanent separate unions for the attainment of specific objects in cases where the economic resources of individual members are not equal to the demands of the situation, or where individual action would be unprofitable. The first large and dear machine, for the acquisition and use of which a union was formed, was the thrasher. The farmer who uses the machine must supply the necessary labor. Of the seed thrashed by the machine the twentieth sack goes to the association. Out of its share the association pays the machinist and incidental outlays for coal, oil, and repairs. Of the earnings of the machine something must remain. This goes to a depreciation fund for the renewal of the machine when worn out. Later on the farmers associated for the use in common of -other agricultural machines — sowing machines, steam plows, etc. During the last decade the owners of medium-size estates have crowded into unions for the purpose of acquiring steam plows. From 5 to 10 neighboring farmers, each having from 5 to 50 hectares of arable land, come together to form such a union. Having out of their own resources subscribed 50 per cent of the purchase price, they received the balance on loan from the department of agriculture. The terms were for five years at 2 per cent interest. The association collected the fees pro rata from the members and out of these paid expenses and Uquidated the debt. Later, the department modified this material support. It 14174°— S. Doc. 214, 63-1 ^10 146 AGKICULTUEAL COOPEKATION INEUKOPB. granted no advance, but, for five years, subscribed 5 per cent of the arrears of payment. Small farmers can not use the steam plow, because their holdings are too small. Small farmers are, however, assisted toward the use of agricultural machines by unions formed for the occasion. Endeavors to form vUlage dairy cooperative associations were for a long time unsuccessful, as our people were not inclined to take up with strange movements, nor did they think it worth while to combine for the sale of their modest output. It was very difficult to convince small farmers that it would pay to establish an association which needed some thousands of crowns of initial capital. The minister, however, succeeded finally in persuading the inhabitants of Maria-Kemend to form an association. Hardly half of the farmers entered, but, as the business became established, every owner of a cow to the last man eventually joined. The out- put of milk beyond domestic requirements was dehvered to the association daily to the amount of thirteen or fourteen hundred liters. Butter and curds are made by machinery, and the mUk itself brings in a clear 12 heller per hter. In this manner the members cleared 35,000 crowns during the year for milk which, previ- ously produced in small measure, was either consumed in the house or wasted. This opened a new source of income, produced greater benefit year by year, and quickly became a potent factor in the enrichment of the village farmers. The fame of the Kemend association quickly spread into the surrounding district, and in the succeeding year other communities in the district followed suit. The experiment moved south and later spread over the whole country. The movement is facilitated by the fact that for ordinary evaluation the milk delivered by members does not differ much in quality. In the same district the breed of animal is identical and the quality of "fodder is the same; but, assuming a difference in the quality of the mUk, it is not difficult to estimate pro- portionate values, and therefore common evaluation does not injure the producers of the better grades of milk. The dairy associations were formed by the personal energy of the farmers who provided for their proper organization. It is only here and there that they call on the department for financial assistance and, when granted, this does not exceed a few hundred crowns. For the rest, government assistance was confined to the instruction and encouragement of the people and the promotion of butter export. Notwithstanding, the movement spread rapidly, as may be seen from the following table: Year. Xumber of unions. Number of members. Number of shares (cows). Liters of milk delivered. Butter. Income in crowns. 1897 34 70 146 246 376 452 517 584 597 622 651 558 541 597 587 2,767 10. 402 15, 357 26, 952 40, 673 46, 344, 50, 450 55, 981 56, 556 59; 104 62, 156 59, 931 58, 325 55, 131 55, 780 5,937 19, 701 26, 917 45, 934 69, 507 80, 871 86, 664 93, 839 95, 373 98, 479 98, 237 101, 969 96, 524 88, 863 100, 356 4, 790, 132 10,531,408 22, 147, 144 49. 436, 794 66, 718, 036 79, 686, 874 88, 612, 640 95, 364, 909 77, 089, 976 79, 927, 810 84, 406, 745 83,999,176 77, 290. 443 75, 962, 368 72, 398, 882 Kilograms. 191, 254 429, 838 878, 175- 1, 195, 634 . 1, 705, 001 2, 248, 965 2, 621, 477 2, 958, 739 2, 497, 555 2, 615, 940 2, 711, 028 2,439,-717 2, 489, 091 3, 010, 252 2,060,538. 539, 2S2 1898 1 153 456 1899 2, 327, 202 4 ''85 360 1900 1901 7 017, 959 1902 8, 325, 528 9 553 912 1903 1904 10, 199, 029 S 597 6C5 1905 1906 9, 452, 654 10, 186, 904 8, 484, 095 9 215 441 1907 ] 908 1909 1910 12,025,293 9, 410. ESQ 1911 The extension during the first six years was very rapid, but slowed down later. Some few associations dissolved, the chief cause being that, by reason of the great advance in dairy farming, many concerns were established to buy at fixed prices the milk production of the farms. If they offered better prices than the associations, the result may be prophesied. The village dairy association was organized to collect the whole output of milk of the district, to cool and deliver it in fresh condition, or to prepare cream from it. It was, however, not on a sufficiently great scale to manufacture butter in quantities equal to the need. For that object better installation is required, which can only be used to its full capacity where much greater quantities of cream are available. Arising out of the rapid development of dairy associations, there was formed in 1899 in Temesvar an organization for the delivery of cream. It comprised 59 associations. The first year's work resulted in the preparation of 4,000 quintals of butter, from the sale of which 750,000 crowns were paid out to the associations. The demand for butter in the markets of the world has been maintained at a consistently high level during the last 20 years. To this circumstance may in part be ascribed the fact that in 1900-1901 three such centrals were HUNGARY. 147 established — in Szabadka, Veszprem, and Dombovar. The total annual production of butter in these centrals reaches 6,500 quintals. These butter factories are separate concerns, limited companies, having only con- tractual relations with the associations. It might be better if these latter would establish their own butter factories out of their own resources. They might form an association by contributing the capital for such an undertaking upon a pro rata basis, or might form a company by subscribing the capital voluntarily. Our village people, however, are still rather unfriendly to such departures; but, as it is, the organization of associa- tions to such an extent as exist in Hungary is of very great economic utility. Many associations establish egg-collecting stations for the purpose of collecting in one or two days sufficient eggs to make it worth while to forward them to market in a fresh condition and to get a fair return. There may be about 500 of such stations at work. Having regard to that number the success attained is, perhaps, small, though the economic result is remarkable, as places lying far from the great distributive centers were accus- tomed to low prices, but those times are gone and now there is a general leveling up of prices over the country. Similar results may be observed in the evaluation of garden products — greens, vegetables, and fruits. No particular societies for the sale of these products have been formed, but local societies or greater or smaller firms have established collecting stations. However favorable the general picture is in regard to the cooperative sale of agricultural produce, thia question should not be left without a glance at the shady side of the newer development. With the organization of evaluation and the growth of export, the den and for milk, eggs; and other produce has so increased and the prices have gone up to such an extent that the small farmer, oppressed by debt and commercial burdens, can not resist the opportunity of selling not only the surplus, but also the whole of his produce, frequently denying himself and his family even proper nourishment. This is by no means a general phenomenon. The new source of bread winning, which is intimately connected with the practice of dairy cooperation, may be and in many places is used for the better nourishment of the people. Where only butter is sold, the milk, as separated by machine, is a cheap and valuable residue. The societies suffer from yet another disadvantage. The village farmer manages bookkeeping with much difficulty, and in this business of common property exact reckoning is indispensable. The small farmer must then seek outside assistance. Each society would require a separate center — one for dairy societies, one for egg collecting, and one for every other distinct branch. Recent years have witnessed a boom in the disposal of grain, cooperative principles having been applied as a remedy in view of the rise in prices due to the very bad harvest of 1897. Cooperation was suggested to the small farmer as a means of doing away with the chain of middlemen, saving cost of freight and trouble incident to the sale, and securing better prices. Crops were to be collected in convenient centers in their own villages, and there prepared for market. There was no result at first, as the small farmers could not raise the capital to build a cooperative granary. However, in 1900, the minister of agriculture saved the situation by granting State aid toward the estab- lishment of these warehouses under the following conditions: At least two-thirds of the members must be farmers whose annual crop for sale did not exceed 70 centners; half the expense of building to be provided by members, the other half by the State; 1 crown for every centner capacity of the granary to the maximum of 4,000 crowns. Progress was slow, as the farmers were hard put to it to find even half the sum. The other granary, the simple collecting establishment, was still further from them, costing as it did anywhere from ten to twelve thousand crowns. Therefore, in 1902, the minister raised the grant in aid to 8,000 crowns, and in exceptional cases even to ten or twelve thousand crowns. Afterwards, in 1905, the minister again raised the State con- tribution to five-sixths of the building capital. Of the association granaries, some only were erected on an independent footing, the majority being branches of a local credit society which, again, belonged to the central cooperative credit association. The building of cooperative granaries was effected as shown below: Year. Number. 1900 4 1901 5 1902 8 1903 3 1904., 7 1905.! 6 1906 4 1907 Year. Number. 1908 3 1909 1910 2 1911 2 1912 Total 44 148 AGKICXTLTUEAL COOPEKATION IN EUROPE. The capacity of these granaries ranges between 2,500 and 7,000 quintals, shows the actual state of the grain reserves in the years named: The accompanying table End of year. Quintals grain. 1900 5, 500 1901 12,117 1902 37,222 1903 67, 517 1904 52, 876 1905 102, 614 1906 150,066 End of year. Quintals grain. 1907 83,585 1908 77, 505 1909 47,911 1910 60,610 1911 62,898 1912 46,449 The societies are accustomed to advance sums upon the supply of wheat placed in the granaries, the wheat itself serving as security. !Many people expect from the granary system of cooperative societies a complete transformation of the organization of our wheat trade. They even look forward to the abolition of the agency branch of the trade. That is an exaggerated view. The cooperative society merely serves the purpose of doing away with the recurring miseries of the small producer by taking over the evaluation part of his business at the cost of a relatively small investment. It can also facilitate the distribution of the best available seed of uniform quality among small farmers. In places where business activity is greater common warehouses, built through local banks, are in use. These are larger than the cooperative granaries. Their holding capacity varies between 20,000 and 1,000,000 quintals. Their number is about 50. The larger warehouses serve com- mercial purposes. The sale of corn by the societies is confined to the small granaries. Crops grown upon areas distant from one another, crops grown in varying modes, of different sorts, and ripened under different climatic conditions show so many variations that it is impossible to secure uniformity in their classification. That being the case, there can be no question of uniformity in prices. The necessity of individual sale is apparent, and this strikes at the root of all cooperative activity. In general, the whole- sale societies are beset with difficulties. They have often been tried, but have never yet succeeded. Among the societies serving the interests of village farmers, the Hungarian Mutual Animal Insurance Society deserves mention. This was established in 1898 with a capital of 220,300 crowns, to which the State contributed 20,000 crowns. It insures horses and horned cattle and undertakes special risks (epidemics, cas- tration, racing). The minister of agriculture insures with it the buUs, staUions,' etc., which are distributed to the communities for breeding purposes. Recently the society has striven for the establishment of local coop- erative insurance societies which might join it for the purpose of underwriting risks. These endeavors are meeting with great success. At the end of 1912 there were 570 horses and 31,000 horned cattle, all private property, insured with the society for a total of 16,500,000 crowns. At the same time the number of affiliated communal insurance societies exceeded 600. The latter together had issued policies on 61,000 horned cattle to the value of 17,000,000 crowns. These societies pay to the central one-half per cent of the insured value. For this the central provides the communal authorities with lymph against anthrax, gangrene, swine fever, etc., and takes upon itself the liability for all damage exceeding 3 per cent of the insured value. The central, moreover, provides the local societies with all necessary printed matter — advice and directions in regard to management. In such manner it spreads the idea of cooperative insurance among small farmers and makes known to them through direct experience the value of inoculation. DISTRIBUTIVE COOPERATIVE SOCIETIES. A few decades ago there were formed in Hungary without system one or two cooperative societies. In 1898, however, there came into existence two national central cooperative associations (the Hangya and the National Central of Christian Cooperative Associations). The number of societies increased at a rapid rate from this epoch. We may say, therefore, that in Hungary, in the case of both distributive and credit societies, the formation of centrals preceded that of village associations, a practice at variance with the general custom in other countries. At the present time we have two kinds of distributive societies at work — organized, that is, owing allegiance to some central institution, and unorganized. 1 . Organized distributive societies exercise autonomous power in exactly the same measure as do the unor- ganized units. The difference is that they owe their foundation to the central which supplies them, controls their activity, attends to the wholesale purchase of goods, and provides them with working capital. These societies chiefly satisfy the requirements of the villages and provide household requisites, provisions, agricul- tural necessaries, seed, artificial manure, machines and tools, etc. The managing body consists for the most part of agriculturists to the number of from 5 to 10. The president is usually either the priest, the notary, the teacher, or a local landowner. Since the increase and development of the distributive societies stand in intimate relation to the activity of the greatest centrai association, the Hangya, we append a. sketch of that organization. HUNGAEY. 149 HANGTA, THE DISTRIBUTIVE SOCIETY OF THE HUNGARIAN EARMEES' ASSOCIATION. This wholesale society was founded in 1898 by the late Count Alex Karolyi, the illustrious economist and philanthropist, who organized the first cooperative credit societies in Hungary. The Hangya began very modestly with a share capital of 50,000 crowns only, which gradually increased to 2,130,000 crowns. Its members are the founders of the rural cooperative societies. This organization had much to contend against in the beginning. The agitation of country merchants and the ill will of authorities and administrative boards were directed agamst it. It took years for this feehng to subside, but now the government assists and favors cooperation by assisting with grants rural cooperative societies when once_ estabhshed or when buildings are to be erected. The number of distributive societies founded by the Hangya is 1,205. They are, in general, located in the smaller villages. The members are of the farmer class. The turnover of each society falls short of an annual average of 50,000 crowns. These cooperative societies have the appearance of grocery stores. For the greater part their supphes are di-awn from the wholesale society. Through this network of stores extending over the whole country the Hangya has accompHshed its task of regulating the price of provisions. The Hangya deals chiefly in colonial goods and raw produce, but there is a section for small and manu- factured articles. The members of distributive societies being chiefly farmers, farm machines and implements, forage, artificial manure, etc., are also kept in stock. The headquarters of the Hangya is Budapest. The society maintains, moreover, four provincial ware- houses and one agency, in addition to wine and spirit vaults, in Budafok. The central building contains appa- ratus for the roasting of coffee, mills for grinding salt, sugar, and paints, and a chest and cordage factory. There is, moreover, a banking and customs departnient, which latter inspects the bills of lading. In comparing the Hangya with other wholesale societies abroad the following facts should be noted: The Hangya is a wholesale society and at the same time the representative of the union of distributive societies. As such it must exercise thorough control in every respect over the affiliated societies. The auditors, about 60 in number, are occupied during the whole year in traveling from one society to another, examining books and taking inventories, or keeping a record of stocks on hand. The system of district auditing has entailed considerable expenditure, the cost of supervision running to about 35,000 crowns in 1912. The sacrifice is great but is justified by results; for not only is complete control maintained, but the central institution has been enabled to supply the societies to an extent to which no other organization can point. The percentage of supply has risen from 42 per cent to 60 per cent. One great disadvantage of cooperative societies is that they are not always able to command the services of trustworthy managers. In order to guard against abuses, arrangements have been made with an insurance company to insure against fraud, while in case of need trustworthy assistants are put at the disposal of the distributive societies by the central. There are 14 of these upon the books. In 1912 a sum of 35,000 crowns was returned in the form of bonuses to those distributive societies which had drawn most of their supplies from the wholesale house. This sum compares unfavorably with that returned by other wholesale societies, which means simply that the original prices are fixed upon a just scale leaving little or no margin. From the balance sheets of the societies it appears that the total of the paid-up share capital amounts to 3,800,000 crowns, the reserve standing at 4,700,000 crowns' — a result which shows that the Hangya hands the major part of its profits to the distributive societies. At intervals of three years there are general congresses of distributive societies. Last year 112 additional societies were affiUated with the union. The value of the trade done by the Hangya exceeded 25,000,000 crowns. About 150,000 crowns of the turnover represented trade done by the department for selhng mem- bers' products. The net profits were 185,000 crowns; share capital, 2,130,000 crowns; reserve, 300,000 crowns; depreciation fund, 372,500 crowns. The ofl&cial organ, "Gazdaszoevetseg Szoevevetkes," appears twice a week; the supplement, "Hangya," is added weekly, and deals especially with commercial matters and alterations in. prices. The Yearbook appears every October. A congress of the distributive societies is held at intervals of three years. The socio-political side of the work of the Hangya runs parallel with its trading activity. The arrange- ments for employees are upon a model scale. The institution arranges for the boarding of unmarried employees and workmen and gives its female employees opportunity to spend the summer vacation at good watering places upon moderate terms. The statutes provide that any employee incapacitated after 10 years' service may retire upon 40 per cent of his average earnings as pension. Each additional year of service increases the amount by 2 per cent. Thus after 40 years' service the maximum of 100 per cent is reached. Any employee may retire at the age of 60. The widow of a deceased ofiicial is entitled to 50 per cent of the amount of his pension plus 10 per cent fop eypry child under age. 150 AGEICULTUEAL COOPEEATION IN EUBOPE. Balance sheet of the Hangya, Dec. 31, 1912. To cash on hand $19, 306 To cash in bank 251, 929 To stock in trade 434, 958 To debtors 406, 393 To bills of exchange 204, 690 To bonds 9, 064 To deposits 53, 417 To real estate 380, 000 To effects, fittings, machinery 125, 211 Total 1, 884, 968 By share capital: Founders' shares $345, 000 Ordinary shares 80, 120 425, 120 By reserve fund 50, 036 By depreciation fund 74, 428 By creditors - 957, 720 By pension fund of employees Ill, 563 By securities -. 29, 417 By dividends not paid 2, 397 By mortgages 197, 101 By net profits 37, 186 Total 1, 884, 968 Balance sheet drawn up for all the distributive societies affiliated with the Hangya in 1911. To cash in hand $141, 964 To stock in trade 1, 962, 216 To debtors 577, 452 To effects, fittings, etc 206, 500 To real estate 692, 607 Total 3, 580, 739 By share capital , $767, 558 By reserve fund 942, 866 By creditors: Hangya 686, 155 Various 1, 107, 633 By net profits 76, 527 Total 3, 580, 739 Statistics about the cooferative societies affiliated with the Hangya, 1911. Number of cooperative societies. 1,093 Number of shareholders 167, 989 Number of shares 378, 433 Share capital crowns . . 829, 074 Sugar $711, 562 Flour 549, 363 Fancy goods 44. 596 Petroleum 167, 193 Spirit 569,193 In 1898. In 1899- In 1900. In 1901. In 1902. $9, 891 1 92 568 245 089 407 372 581 621 Paid-up capital $767, 558 Stock in trade 1, 962, 216 Net profits 94, 726 Sales ., 9, 563, 397 Turnover of the different goods in 1912. Iron goods $181, 960 Salt 203,067 Soap 92,294 Kice, bruised barley 114, 755 Bacon and fat 208, 380 Development of the business, 1898-1912. In 1903 $940,639 In 1904 1, 344, 347 In 1905 1,521,951 In 1906 •- 1 . 921, 199 In 1907 2, 516, 970 Purchases $7, 978, 965 Supplies drawn from the whole- sale 4, 761, 421 Various $2. 762, 153 Total 5,604,624 In 1908 $2,738,493 In 1909 3, 257, 845 In 1910 3,803,284 In 1911 4, 761, 422 In 1912 5. 604, 625 NATIONAL CENTRAL OF THE CHRISTIAN COOPERATIVE SOCIETIES. The National Central of the Christian Cooperative Societies possesses an organization similar to that of the Hangya and works upon the same Unes, There are within the union 274 societies. The turnover for 1912 was approximately 3,500,000 crowns, which represents 25 per cent of the total. 2. Unorganized distributive societies may be subdivided as follows: (1) Those which deal in household requisites and provisions. These are to be found chiefly in large towns or industrial works. The greatest of them is the Society of Hungarian PubUc Officials, formed in 1893. Number of members, 5,584; turnover in 1912, 5,700,000 crowns. Possesses a central warehouse in the capital and four branches. Then, there is the Society of Hungarian State Eailway Officials, founded in 1883, Number of members, 27,381; turnover in 1912, 4,875,000 crowns. This society has 25 warehouses and stores distributed throughout the country. The General Distributive (Workmen's) Society was established in 1904. Number of members, 20,462; turnover in 1912, 2.250,000 crowns. It has a central warehouse and two wine vaults in Budapest and 22 stores in Budapest and district. (2) Those which concern themselves exclusively with the sale of agricultural requisites. Of these the oldest and most important is the Hungarian Farmers' Association, which was formed in 1891. Number of members, 1,864; turnover in 1912, 19,250,000 crowns. The members are principally the great landowners, whose interest HUNGABY. 151 is chiefly in corn, fodder, seed, wine, animals for breeding, viticultural requisites, machines, etc. The association owns .a swine-fattening area and runs an insurance department. Other associations possess a similar organization. These are such as are situated in country centers — as, for instance, Szolnok, Arad, Komarom, etc. They have been founded and are managed by the county economic unions. Finally, we must mention an organization of a special order — the Credit Association Stores of the Highlands. The greater part of the inhabitants of the northeastern district of Hungary are Ruthenes of such low order of intelligence that they are incapable, of their own initiative, to withstand the usurers who come over from Galicia. The department of agriculture, therefore, nominated a special commission with the object of affording protection to these people, raising their intellectual level, and improving their economic condition. The commission, working in conjunction with the Hangya and the National Central Association, organized credit associations and stores in connection therewith. The latter, however, have no autonomous powers, but sire managed from a central in Satoraljaujhely. The committee of this central comprises representatives of the minister of agriculture, the commission, the National Central Credit Association, the Hangya, and the managers of the credit associations of the villages concerned. At the present time the number of communities supporting these stores is 100. The total turnover exceeds 3,000,000 crowns. It may be said that these, stores, working in conjunction with credit associations, have contributed to the material improvement of the Ruthenes during the past decade. The stores of the credit association receive their supplies from one of the warehouses of the Hangya situated in Satoralj au j hely . AGRICULTURAL LABOR QUESTION. Until the middle of the nineteenth century the seignorial estates were cultivated by serfs, together with the fields allowed for their own use. The promulgation of the famous laws of 1848 changed the status of the villein to that of free landholder. With regard to the medium-size and large estates, then without labor and equipment, the most important question in an agricultural sense was to supply this double deficiency. Serfs developed into proprietors, who, faiUng large families, found themselves in the same strait as large landowners. Field laborers in large number were required, as many common pastures had been subdivided and put under the plow. The man who had very httle or no land was the only one available for service. As regards the field laborer, it was not a matter of much importance to him whether he had land or not. Influenced by the discontent among workers, in effect by necessity, the proprietors of the great domains were constrained to offer a third, even a half, of the produce to the worker. For this compensation the workman mowed, transported the fodder, and cultivated certain vegetables. In this manner the landless worker easily satisfied his requirements, and since on the boundaries of the village there was common pasturage it was easy for him to keep a horse or cow and to fatten his pigs. He could earn enough from pig breeding to satisfy the requirements of his family during winter. The same workman would undertake the mowing and thrashing of the cereal crops. Bodies of men entered into a contract for this work nine months or so previous to harvest. The crops which were paid as wages in kind were distributed among the workers. Thus, it was obvious that the interests of employer and labor were identical, and the consequence of this was that superintendence of the men was unnecessary. The danger of the system was that in case of a bad crop the earnings of the men would fall short of that of day laborers; and in some one or other district of the country bad crops might be reckoned upon, in which event the workmen would refuse to fulfiU the contract. This eventually was provided against to some extent. In the event of a visitation of God, if the damage exceeded one-third of the total estimated crop the men might proceed to arbitration, but had no right to repudiate the contract. Some domains agreed to a minimum wage in case of severe damage. A new and abundant source of income was provided for the workmen in the sixties and following decades. These now found work in the water-regulating schemes and railways of the period. Then came the inevitable slump. Machines for agricultural purposes came into vogue; thus the land needed less labor. Corn land at once became vegetable areas. Greater domains were parceled out, and the new proprietors found cultivation well within their own capacity. Competition increased and wages went down. Socialism now reared its head. The popular press and the lectures of emigration agents assisted in the propaganda which spread over the whole of the Great Plain. In the winter of 1896-97 the Budapest Social Democratic Party took up the strike as a weapon of offense. The people took to the idea more eagerly because there was every promise of a bad harvest. The danger was averted, but its potentialities moved the legislature to greater activity in the matter of the protection of workers. Lahor laws. — The activity of the Government was first directed to preserving the chief resource of the country, the harvest product, and to removing the just grievances of the workers. The result was the labor law of 1898 which regulated the juridical relation between landowner and agricultural laborer. Contracts were 152 AGKICULTUEAL COOPERATION IN EUEOFE. to be entered into in presence of the local magistrate, wages fixed in money or kind, or both, at the option of the worker, and guaranties were exacted that the contract should be carried out and that no collusive strike should break out. Labor exchange. — This was established by the Government, which laid down the principle that every town and village should appoint an agent through whom employei-s and laborers might come into touch. This official was bound to study the interests of the workers and to communicate their requirements to other agents when ho himself was unable to satisfy their wants. He must also notify the minister of agriculture and the agent for the county of any great discrepancy in the incidence of supply and demand, and exchange periodical reports with other officials. One chief object of his activity is so to regulate the economic incidence of supply and demand in his district as to leave no permanent justification for emigration. Winter occupation. — To insure to the agricultural laborer winter occupation and the resultant wages is one of the chief objects of departmental activity. Such immense areas of wheat crops require attention at practi- cally the same moment that the supply of labor during harvesting is never equal to the demand, while in winter the majority ot the laborers are quite idle or, without the good offices of the State, would be idle. To prevent this in some measure, the minister of agriculture arranged courses in home industry in 1899. By this means instruction is given gratis in basket weaving, mat work, broom manufacture, and wood carving — easy and lucrative forms of handwork. About 500 courses are annually arranged for and attract about 20,000 workmen. These men, when proficient, are formed into cooperative societies, of which there are now 100 with a total membersliip of 6,000. Their total earnings during the three winter months exceed 1,000,000 crowns. The law relating to servarits. — Workmen or servants permanently employed upon farms had theii- interests secured by the law of 1907. This dealt with contract, notice, quality of wages in kind, rest, education of children, and medical attendance for the man or members of his family. The law did away with the truck system, until that date a fruitful source of discontent if not a positive evil. Housing. — The housing problem is one of the most pressing of all socio-economic tasks. The position of servants or laborers in permanent employ is somewhat different from that of temporary laborers. The former are given lodging by their employer. On great estates special buildings serve this purpose, but such of the smaller farmers who employ servants provide them with quarters in their own houses. On the lat^e estates it often happens that several persons are accommodated in one room, but this custom is now giving way before the ])ressure of public opinion, and spacious and healthy quarters are being built. The law of 1907 lays down the hygienic conditions to which tliese new buildings must conform. The position of temporary laborers is more difficult. These belong to the poorest classes and are relegated to hiretl lodgings. These lodgings, though not particularly convenient nor desirable, are yet very dear on account of the demand. The minister of agriculture, therefore, drew the attention of the county and parish authorities to the advisability of remedpng this state of affairs in the public interest, and published plans of model houses for their guidance. He also drew up a scheme of State aid to be applied in A^arious directions — money grants, expert advice, guaranty of interest, etc. The law of 1907 provided for the establishment of the national agricultural workmen's dwelling fund, to which the minister of agriculture assigned 300,000 crowns per annum, this sum being later increased to 500,000 crowns. In terms of this law 6,531 houses in various localities had been built up to the end of 1911. These were destined to become the property of workmen tenants at from 20 to 50 years' purchase. Insurance. — In cases of incapacitation, it was formerty the custom to pay and cause to be tended for a period of 30 days any servant who might happen to fall ill during the course of his work. Many humane farmers went beyond the law's requirements, but this was neither general nor obligatory. To remedy the evils incident to this state of affairs, the law of 1900 provided for the establishment of an insurance fund for agricultural laborers and servants. This was founded with State aid — at fixst 100,000 crowns, later 200,000 crowns annually — to provide aid in cases of accident or disablement. Its scope extends to the provision of a lump sum to the widow in case of the death from accident of a worker, but, if the latter have no wife, his relatives receive 100 crowns as burial aid. Payment is also made proportionately to various degrees of incapacitation, of natural decay, or after completion of the sixty-fifth year irrespective of capacity. Accident assurance is obligatory in the case of servants on yearly contracts and also in that of workers with machines. Premiums are paid by the employers. In the former case the premium amounts to 1 crown 20 filler; in the latter, according to degree of liability to accident, from 3 to 28 crowns. During the first 10 years the fund was called upon to distribute a total of 3,497,637 crowns, as follows: Accident, 2,376,465 croAvns; superannuation, 415,903 crowns; and death, 705,269 crowns. The number of members is 650,000. The reserve fund of the institution is nearly 10,000,000 crowns. For financial reasons the law did not impose obligatory insurance in general, but from time to time the State contribution was increased. To meet the requirements of cases not exactly falling within the operation HUN6ABY. 153 of the act, the rural communities have created funds to which the department of agriculture has contributed. These funds amount in the aggregate to some few million crowns, and are administered by local authorities in whi( h the workers are represented . One feature of the administration of these funds is that the aid granted in th^^orm of a loan is not recoverable from the heirs of a deceased beneficiary. Ik^scellaneous institutions. — Instructive lectures are delivered before rural audiences in winter: Wherever sufficient interest is manifested, the minister of agriculture provides a popular library. So far 3,000 of these have been issued. The department itself publishes a weekly popular journal and distributes instructive pam- phlets and books. Long-service awards in cash are given to agricultural servants and field laborers. These prizes, which range from 50 to 100 crowns, are accompanied by official certificates. A more interesting result of State aid is that, with the cooperation of agricultural unions, many old patri- archal customs have been revived, among them the harvest festival. Since 1890 the minister of agriculture has assisted local authorities to maintain a people's bureau where workmen may get expert advice gratis on legal questions, taxation, and military and other administrative affairs. The minister himself maintains an information bureau for similar purposes. He also assists the communities to found Rowton" Homes, institutions resembling settlements, where the people have every opportunity for harmless recreation. These are the headquarters of the library, the labor exchange, the local cooperative credit society, and other such institutions. Forty of these houses have so far been built. Table showing the growth of the financial resources, in crowns, and the results of the activity of the Hungarian Central Cooperative Credit Society Year. 1899 1900 190] 1902 1903 1904 1905 1906 1907 1908 1909 1910 1911 1912 Value of founders' shares. 3, 158, 000 3, 172, 000 4, 182, 000 4, 297, 000 4, 299, 000 4, 301, 000 4, 311, 000 4, 311, 000 4, 312, 000 4, 329, 000 4, 334, 000 4, 334, 000 4, 334, 000 4, 335, 000 Value of shares of ordinary members. 432, ooe 605, 600 754, 800 902, 600 1, 081, 000 1, 177, 400 1, 221, 200 1, 536, 000 1, 669, 600 1, 702, 600 1, 769, 800 2, 052, 000 2, 238, 600 2, 396, 600 Reserve funds belonging to the institute. 10, 180 33, 932 97, 750 188, 265 305, 290 451, 644 482, 980 538, 737 557, 960 731, 099 930, 710 1, 023, 260 1, 172, 040 1, 329, 655 Financial resources of the institute. Assets at its unre- stricted disposal. 3,600,180 3,811,532 5, 034, 550 5, 387, 865 5, 685, 290 5, 930, 044 6, 015, 180 6, 385, 737 6, 539, 560 6, 762, 699 7, 034, 510 7, 409, 260 7, 744, 640 8, 061, 255 Other funds at its disposal. 3, 136, 9,32 3, 270, 000 3, 405, 000 3, 643, 312 3, 767, 400 3,891,616 4,015,800 4, 139, 920 4, 139, 920 4, 264, 072 4, 388, 224 4, 512, 376 4, 636, 500 4. 760, 680 Sum invested with affiliated cooperative societies. Loans. On bills. 9, 847, 000 18, 230, 502 23, 129, 000 28, 442, 232 29, 366, 000 29, 582, 241 32, 502, 000 35, 982, 787 35, 171, 000 32, 531, 937 33, 474, 000 34, 994, 330 39, 341, 000 45, 660, 727 On bonds. 2, 063, 000 8, 052, 424 12, 300, 000 14, 076, 975 16, 988, 000 24, 263, 215 29, 436, 000 35, 605, 721 38, 257, 600 40, 911, 691 41, 469, 000 44, 163, 879 49, 444, 000 54, 204, 564 Current account. Total. 71, 343 115, 960 165, 145 229, 364 222, 879 212, 711 186, 208 193, 251 203, 727 190, 555 188,614 178, 597 171, 150 167, 953 11,981,343 26, 398, 886 35, 594, 145 42, 748, 571 46, 576, 879 54, 058, 167 62, 124, 208 71, 781, 759 73, 632, 327 73, 634, 183 75, 131, 614 79, 336, 806 88, 956, 150 100, 033, 244 Savings deposits invested with the central institute. 4, 105, 800 5, 634, 665 10,140,300 12, 915, 416 18, 775, 100 23, 425, 800 21, 700, 100 23, 014, 963 24, 528, 500 22, 922, 800 27, 602, 800 27, 280, 244 32, 384, 850 30, 129, 570 Year. 1899. 1900. 1901. 1902. 1903. 1904. 1905. 1906. 1907. 1908. 1909. 1910. 1911. 1912. Tax-free debentures bearing interest issued by the institute. 4, 700, 000 9, 329, 800 13, 000, 000 13, 000, 000 13, 000, 000 18, 770, 600 20, 242, 400 19, 537, 000 21, 397, 000 22, 335, 000 27, 653, 600 33, 952, 600 36, 555, 400 Working expenses (exclusive of taxes). Total. 110, 690 267, 169 345, 050 425, 705 507, 400 643, 506 684, 200 793, 256 865, 200 893, 883 994, 280 1, 059, 718 1, 082, 290 1, 094, 722 Proportion to money invested (percent). 0.93 1.01 .96 .99 1.09 1.18 1.09 N'pl income. Total. 50, 980 118, 684 224, 890 261, 879 292, 420 303, 745 260, 390 269, 804 293, 140 375, 090 412, 900 336, 715 383, 738 401, 470 Proportion assets at free dis- posal of institute (per cent). 1.41 3.11 4.46 4.85 5.14 5.12 ■4.32 4.22 4.48 5.54 5.87 4.54 4.95 4.97 Bills discounted during the respective years. Number of bills. '41,580 134, 304 174, 235 216, 797 240, 045 247, 591 281, 756 285, 034 277, 957 298, 296 274, 337 255, 086 249, 292 266, 796 Value of bills. 12, 778, 110 39, 166, 163 50, 963, 160 64, 187, 605 70, 397, 070 67, 066, 600 78, 714, 770 84, 908, 431 87, 144, 030 92, 965, 758 86, 869, 330 88, 927, 197 97, 935, 580 116, 540, 478 Bonds negotiated dur- ing the year. Number of bonds. 7,449 22, 294 20, 176 17, 388 19, 255 40, 129 33, 412 31,473 24, 081 25, 434 23, 228 23, 940 24, 541 20, 998 Value of bonds. 2, 066, 950 6, 783, 839 5, 960, 020 4, 830, 441 6, 290, 530 12, 094, 307 11, 186, 420 12, 880, 206 10, 696, 660 10, 194, 207 9, 903, 520 11, 453, 190 14, 332, 343 12, 916, 164 Value of bills redis- counted at close of year. 5, 480, 589 11, 633, 951 9, 265, 537 10, 180, 523 7, 867, 829 11, 596, 783 15, 213, 838 21, 438, 711 20, 838, 963 20, 045, 304 18,216,238 20, 336, 806 17, 160, 366 30, 410, 325 154 AGEICULTUBAL COOPEKATION IN EUEOPE. Table showing the development of the cooperative societies affiliated to the Hungarian Central Cooperative Credit Society during the past 14 years. Aggregate for 1899. . . Increase in 1900 Aggregate for 1900. . . Increase in 1901 Aggregate for 1901. . . Increase in 1902 Aggregate for 1902 . . . Increase in 1903 Aggregate for 1903. . . Increase in 1904 Aggregate for 1904. . . Increase in 1905 Aggregate for 1905. . . Increase in 1906 Aggregate for 1906 . . . Increase in 1907 Aggregate for 1907... Increase in 1908 Aggregate for 1908. . . Increase in 1909 Aggregate for 1909. . . Increase in 1910 Aggregate for 1910. . . Increase in 1911 Aggregate for 1911... Increase in 1912 Aggregate for 1912. . . Number of cooperative societies. 2, 712 252 964 323 287 224 511 142 653 89 742 72 814 142 956 85 041 55 096 110 206 64 270 66 336 76 412 Per cent. 33.9 24.7 is. 3 9.4 '5.'6 4.4 7.9 4.3 Number of pariahsB to which activity of cooperative societies extends. 5.2 2.9 2.9 "3.2 2,124 783 2,907 1,331 4,238 858 5,096 350 5,446 262 5,708 159 5,867 322 6,189 198 6,387 29 6,416 105 6,521 269 6,790 691 7,481 296 7,777 Per cent. Number of members. 37.2 45.9 20.4 7.1 4.8 '2.8 5.5 i 3.2 0.4 i. 6 4.1 ]6. i "3.9 141, 623 61, 982 193, 605 60, 097 253, 702 64, 152 317, 854 48, 867 366, 721 40, 309 407, 030 46, 899 453, 929 44, 450 498, 379 27, 593 525, 972 25, 542 551, 534 27, 565 579, 079 34, 784 613, 863 26, 296 640, 159 25, 174 665, 333 Per cent. 37.1 31.5 25.6 16.6 11.2 11.7 9.8 5.5 4.8 4.9 6.0 4.2 3.9 Number of shares. 278, 356 105, 220 383, 576 145, 488 529, 064 88, 858 617, 922 82, 351 700, 273 67, 679 767, 952 71, 766 839, 718 68, 296 908, 014 55, 065 963, 079 48, 561 1, Oil, 640 51, 263 1, 062, 903 66, 350 1, 129, 253 54, 063 1, 183, 316 60, 475 1, 243, 791 Per cent. 38.9 38.2 i?. i 'i3."4 9.6 ' "9."3 " '8.2 ""6."i " h'.h ' h'.i '6.'2 "i's " "s.'i Orovms. Aggregate for 1899 14, 789, 077 Increase in 1900 5, 187, 200 Aggregate for 1900 19, 976, 277 Increase in 1901 5, 826, 828 Aggregate for 1901 25, 803, ]05 Increase in 1902 4, 724, 658 Aggregate for 1902 ■. 30, 527, 763 Increase in 1903 3, 512, 971 Aggregate for 1903 34, 040, 734 Increase in 1904 3, 406, 165 Aggr^ate for 1904 37, 446, 899 Increase in 1905 3, 846, 572 Aggregate for 1905 41, 293, 471 Increase in 1906 3, 985, 063 Aggregate for 1906 45, 278, 534 Increase in 1907 2, 695, 650 Aggregate for 1907 47, 974, 184 Increase in 1908 2, 667, 718 Aggregate for 1908 50, 641, 902 Increase in 1909 1, 484, 998 Aggregate for 1909 52, 126, 900 Increase in 1910 5, 252, 566 Aggregate for 1910 57, 379, 456 Increase in 1911 3, 274, 899 iforl911 60,654,355 ' Increase in 1912 2, 556, 861 Aggregate for 1912 63, 211, 216 Value of shares. Per cent. 37.1 30.6 18.8 11.7 10.1 10.3 9.7 5.9 5.5 2.8 10.1 3.9 4.3 Shar^espaid pg^^g^j Crowns. 6, 521, 055 1, 616, 069 8, 137, 124 2, 727, 059 10, 864, 183 3, 186, 312 14, 050, 495 3, 095, 526 17, 146, 021 3, 357, 251 20, 503, 272 2, 936, 895 23, 440, 167 3, 016, 686 26, 456, 853 2, 566, 558 29, 023, 411 2, 816, 399 31,839,810 2, 611, 930 34,451,740 2, 013, 160 36, 464, 900 2, 230, 500 38, 695, 400 2, 741, 200 41, 436, 600 24.8 33.5 29.5 22.1 19.5 14.3 12.8 9.7 9.7 8.2 5.8 6.1 6.1 Savings deposits. Crowns. 5, 532, 589 2, 249, 783 7, 782, 372 2, 606, 009 10,388,381 4, 488, 951 14, 877, 332 6, 313, 623 21, 190, 955 9, 428, 405 30, 619, 360 6,187,039 36, 806, 399 10,369,971 47, 176, 370 8, 915, 480 56, 091, 850 7, 085, 600 63, 177, 450 11, 368, 920 74, 546, 370 15, 365, 680 89, 912, 050 16, 827, 300 106, 739, 350 12, 642, 550 119, 381, 900 Per cent. Eeserve fund. Per cent. 40.9 33. 6, 43. 5 42. 7 44.6 20.2 28. 1 18. 8 j 12. 6 17 9 20 6 18 7 11 8 Crowns. 590, 900 203, 692 794, 592 401, 008 1, 195, 600 445, 642 1, 641, 242 643, 496 2, 284, 738 602, 839 2, 887, 577 579, 715 3, 467, 292 773, 928 4, 241, 220 841, 270 5, 082, 490 893, 510 5, 976, 000 1,062,400 7, 038, 400 1, 079, 250 8, 117, 650 1, 695, 980 9, 813, 630 1,541,770 11, 355, 400 34.5 57.1 '46.4 '46.1 27.3 "20.6 22. 7 "ias "i7."5 17.7 is." 3 20.9 "is'e HUNGARY. 155 HUNGARIAN LAND CREDIT INSTITUTION. Count Hotos, Director. statement. Budapest. The Hungarian Land Credit Institution was founded in 1863 on the initiative of Count Dessewffy, father of the president of our directors. The mstitution was founded partly by the State, which provided 1,000,000 crowns and by 209 landowners, who contributed 3,300,000 crowns. Of this latter sum 10 per cent was paid down in cash and the balance (90 per cent) was paid gradually out of the profits of the institution. The members of the institution are the founders and the mortgage debtors. The organizers of the insti- tution are: 1. The assembly of the founders. 2. The general assembly. 3. The control commission. 4. The provincial committees. ASSEMBLY OF THE FOUNDERS., The members of the assembly of founders must be founders themselves, and every founder has 1 vote or, as proxy, not exceeding 10 votes. The founders have the right to select three persons from whom the general assembly chooses the president of the directors. They have the right to elect 18 members for the control commission, and they decide whether a proposition concerning changes in the by-laws of our institution shall be put before the general assembly. Twenty members, with at least 30 votes, must be present to make a quorum. The assembly chooses its own president each time. GENERAL ASSEMBLY. The general assembly takes place every year during the first quarter. Members entitled to vote are: 1. Those members holding a mortgage from the institution of 100,000 croAvns value have 1 vote each. 2. The members who have less than 100,000 crowns mortgage choose their representatives in such way that every 800,000 crowns' loan has 1 vote. 3. The founders. Every member of the general assembly has 1 vote, or as proxy not exceeding 10 votes. The objects of the general assembly are: 1. The supervision of all the accounts and the approving of the balance sheet. 2. The election and dismissal of the president, of the directors, and also of the members of the control commission elected by the founders. 3. The right of changing the'by-laws. CONTROL COMMISSION. The control commission consists of 36 members, 18 of whom are elected by the founders and 18 are elected by the general assembly. The duty of the control commission is to see that the directors manage the institution properly. Three members of the control commission must attend all directors' meetings when loans are discussed, and only such loans can be granted as the members of the control commission approve. The control commission has the right to inspect the books of the institution, check the assets at least once in every quarter, and publish a financial statement. This commission must see that the bonds in circulation never exceed the amount of moitgage loans granted. It examines the accounts and the balance sheet subject to the final approval of the general assembly and chooses the directors, not to exceed five. The control commission chooses its own president, who holds the office for life. PRESIDENT OF THE DIKECTOES. The president is elected by the general assembly for three years from the three men already nominated by the founders. He is chairman of the general assembly, and if he is absent from a meeting he passes over this duty to another director. 156 AGEICULTUKAL COOPERATION IJST EUROPE. BOARD OF DIRECTORS. The board of directors consists of the president and not more than five or less than three directors. It has charge of all the current matters and is divided into four sections: 1. The financial section. 2. The legal section. 3. The loan section. 4. The section on miscellaneous matters. The financial section has charge of managing the finances of the institution. The legal section has charge of the legal matters connected with the loans, such as registration, etc. The loan section values the properties on which loans are granted. PROVINCIAL COMMITTEES. Members of the provincial committees, which are established in every county of Hungary, must be members of our institution^that is to say, persons who hold loans — and it is their duty to help the management to value the property. GENERAL BUSINESS. As I mentioned before, mortgage bonds are now issued at 4^ per cent, running 63 years, with a yearly charge, including amortization, of 4.85; also mortgage bonds at 4 per cent, running 50 years, with a yearly chai'ge of 4.7. The price which the borrower netted m our last loan was 91.50; in the second case it was 84. In the first case the money cost the borrower 5.29, in the second case 5.6. The mortgage bonds are secured (1) by the mortgaged property itself; (2) by the capital of the institution; (3) by the mortgage-bond insurance fund (5 per cent of the bonds outstanding); (4) by the reserve fund; (5) by the mutual solidarity fund of the members of the institution. For this latter purpose everyone who receives a loan has 1 per cent deducted from the loan, which is deposited in the mutual solidarity fund. In case of losses this money must be called in first to replace them. After 63 years — that is to say, at the end of the loan — it is returned to the borrower. Apart from issuing mortgage bonds and giving loans, the institution also takes deposits m money, shares, etc., so that, apart from our borrowers, which number 13,000, there is a deposit clientele which numbers about 1,320. The institution does not engage in industrial busmess, in which, of course, there is always an element of risk. Durmg the 50 years of our existence we have not been forced to make more than three foreclosures. The bonds are listed in Budapest, Vienna, Berlin, Frankfurt, and in Amsterdam. QUESTIONS. Q. Does the Hungarian Land Credit Institution receive favors from the State ? A. Yes. Q. Do these favors enable you to make ;i lower rate to the borrower timn you could if they were withdrawn '( A. Xo. This State favor c:hietly consists in the fact that if tlie borrower ikies not pay his yearly annuity our institution lias the right to sell the property by auction by a summary process. Q. What would be the effect upon your institution if the State were to withdraw its favor entirely? A. We shouldn't get our money so easily, and it would have a certain influence on the liquidity of our assets, and as a last reason it would perhaps also influence the placing of our mortgage bonds. Q. Then if the favor of the State were withdrawn would it have the effect of reducing the volume of your business or increasing the interest ? A. No. Q. Would it increase the rate of interest? A. I think not. Of course, there is a certain connection between the favor of the State and the rate. People think tliat bonds with State favors, which are backed by the State, are safe and buy them willingly, and the continual demand for our bonds has certainly some influence on the rate of interest. Q. Now, then, you are of opinion that the favor of the Government has had nothing to do with the rate of interest, and but httle to do with the volume of your business. Now there is a National Small Holders' Land- Mortgage Institution. The statement is that that institution could not be organized or at least was not organ- ized until the State granted it the favor that it granted you ? A. It was not so organized. Q. Why could not that institution be organized without State favor? A. It could have been. HXJNGAEY. 15Y Q. Wliy was it not organized ? A. Because without State favor you could not raise money so easily ; people think bonds with State favor more safe. Q. Has your institution been able to take care of all loans that have been offered to you since it has been organized ? Do you adyance money to all persons who would borrow from you and who have the proper security ? A. Always. Q. Are you able to-day to do it 1 A. We are still able to do it, but as the money market is very bad and bonds can not be sold easily, the borrower has to wait longer than when the market is good. Sometimes it is six months before he secures the loan. Q., If the loan is for $40,000, does the borrower commence to pay interest from the time he gets it or later? A. The first payment is made after the first six months. It is a great help for the borrower to pay in this way. When you think that we have 5,000,000 loans running, you see it means a great loss of interest for our institution, but it helps our borrowers. Q. There is a period of six months between the time he applies for the loan and the time he gets the money; does he pay the interest for that time? A. No; he gets the money at the same time as he gets the loan, but there is sometimes a period of six months between the time he asks for the loan and the time he gets it. For this six months certainly he pays no interest. Q. How do you find a market for these bonds ? A. The stock exchange, our private-deposit clientele, and foreign countries, such as Holland, Switzerland, Germany, Austria. Not France, because the duty there on our bonds is too high — 2 per cent, with which we had to charge our borrowers. The insurance companies are great buyers. One of them has $8,000,000 of our bonds. We always take care to whom we sell our bonds. We attach great importance in selling our bonds to people or societies able to keep them. Q. Do you consider that a banking busiaess ? A. No. Q. Your managers serve in this institution from an altruistic standpoint — the salaries paid to your officers are not very large ? A. The managers are not as well paid as in America. They get about $5,000 a year. The salaries paid to the officers are (a) for the younger ones between $500 and $1,000; (b) for the older ones, from $1,000 to $3,000. Q. Is the difficulty of your selling the bonds increastag or decreasing ? A. It 'is increasing; but the reason is the bad money market and the war; people feel there is uncertainty. Q. If this land-mortgage bond system operated in other countries, would it have a tendency to draw away some of your purchasers that would otherwise come here to get your bonds ? They have this system in France and other European countries. Now does the fact that the volume of the bonds is increasing make it more difficult to sell them? A. As we have not sold such a great many in foreign countries and as they do not make oiu- main market it would not make it more difficult. Q. Now, do your bonds fall below 100 more than they did some years ago ? A. Yes. Q. Why? A. There is a great want of money, and for that reason there are more sellers than buyers. Some years ago our 4 percents were at 93 and now they are at 85. Q. Do the State bonds fall more in the market now than the land-mortgage bonds ? A. Yes; more by 10 per cent. Q. Have you amortization tables prepared on any other term than 63 years ? A. Yes; we have 63, 50, 45, 38^, 34^. Q. Are these institutions which are receiving favor from the Government driving out other loaning agen- cies which receive no favor from the Government ? A. Yes; we drive a great many loaning agencies out; but the main reason is that we are cheaper, not that we receive State favor. Q. Do you beUeve that your institution wiU be able to take care of all the business that is going to be offered to you in this Kingdom of Hungary ? Will you be able to sell the bonds as fast as they are asked for ? A. Yes; certainly. 158 AGRICULTTJKAL COOPERATION IN EUROPE. Q. In your opinion, what would be the effect if the American Government were to inaugurate a system of land-mortgage bonds, that would make them very desirable investments, so that our people would commence to sell land-mortgage bonds ? What effect would that have upon the world's market for land-mortgage boncls ? A. I do not think that it would have any great effect. Q. If you were to sell a milHon dollars' worth of mortgage bonds, how much American money would perhaps be invested in them ? What per cent is sold to American life insurance companies ? A. There is very httle American capital invested in our mortgage bonds. Q. Do you take these mortgages from any place here ? A. We take the mortgages from our whole country, except Slavonia. Q. AU the requirement is that a man's title be good ? A. Yes; the main thing is that the title be good. Q. Is that transfer made in the community or at the capital, or is it sin. ply registered in the community? A. Only in the community. Q. Are the titles accepted as good, or are they guaranteed by the State ? A. They are guaranteed by the State. Q. Does the Government fix the taxes and the value of the land ? A. Yes. Q. Do you- base the loan on the value fixed by the State ? A. That depends. The value fixed by the State is very low, so it is impossible to fix it always on that value. Q. Do you send your own appraisers to the land ? A. Yes. Q. Do you hold the deed and have it recorded with the Hungarian Government ? Do you investigate and in a way find whether that man's titlei is good or not ? A. Yes; we have to investigate. One section of our institution is exclusively occupied with this business. Q. When one mortgage is paid off, you have to substitute another of equal size. Do you ever have any difficulty in that ? A. No. Q. About the losses of your bank — has your bank ever been called upon to incur any losses 1 A. We had to foreclose only three times in the whole 50 years; but even in those cases we had no losses. Q. About what is the average expense to the man who borrows money — one of these mortgage loans ? Suppose he wanted one of $10,000, what would be about the average expense, what would he have to pay the bank ? A. Nothing. Q. You examine the land free ? A. Yes. Q. Then who pays tor the appraising of the land ? A- The bank. If there is a very big property to appraise — i. e., one taxed at more than 300 crowns — the borrower has to pay something; but it never exceeds 300 crowns. Q. What wonld your institution charge for making the loan ? A. Nothing. Q. Every person who comes to you and appfies for a $10,000 loan, you give him $9,900 and you keep $100 as a guaranty fund ? A. We only keep $10 in cash for the guaranty fund. One hundred dollars, of which $10 is in cash and $90 on paper, to be called in when losses occur, constitutes the guaranty fund. Thus the cash payments are $10 for the guaranty fund and $70.70 tor government taxes. Q. If two persons apply for a loan at the same time, who determines which man gets the loan ? A. The applications usually come by post and are numbered. They are taken up on the "first come, first served" principle. Q. Suppose you make a loan to a man, and after 5 years or 10 years he wants to pay it or sell out the property ? A. If he wants to sell the property and the new owner is willing to accept the mortgage, all right, the transfer can be made. If the new owner doesn't accept the mortgage, the seller is obliged to pay it back. He can do so without paying a penalty. HUNGARY. 159 NATIONAL SMALL HOLDINGS LAND MORTGAGE INSTITUTE. I. , Mr. KalmaiJ Imeedy. STATEMENT. Budapest. After the foundation of the Hungarian Land Mortgage Institute m 1863, which made loans on large and medium estates, the need of a similar institution for the benefit of small holders began to make itself felt. In 1879 the National Small Holdings Land Mortgage Institute was founded with a capital of 200,000 crowns con- tributed by the State. The institute issues no shares and is based on the cooperative principle. The foun- dation capital of 600,000 crowns (of which 200,000 crowns was granted by the State) was contributed by the founders, who may not receive a dividend of more than 5 per cent. This foundation capital now amounts to 3,000,000 crowns. The institute started doing business in 1880. It grants loans for amounts from 60 crowns upward, with no limitation placed on the maximum amount of loan which may be granted. At first the max- imum value of loans was limited to 2,000 crowns, but it was found that this was unprofitable, and so the maxi- mum was extended to 40,000 crowns and over; but a by-law provides that loans for such large amounts may only be made when the demand for loans of smaller sums has been satisfied. Loans are made up to 50 per cent of the appraised value of the lands mortgaged to the institute. In 1912 no less than 43,000 loans were outstanding for a value of 40,000,000 crowns. The losses of the institute have been practically nil. In 1912 of the total number of estates mortgaged numbering 45,000 only 11 were foreclosed, and 173 debtors were distrained against. Of the estates foreclosed only three remain on the hands of the bank. The net profits realized by the institute in 1912 amounted to 334,000 crowns. One half was placed in the reserve fund; the other half was shared between the board of administrators of the bank, the employees who received a percentage, and contributions to the pension fund for the functionaries and employees of the institute. The interest paid on the mortgage bonds issued by the institute has varied between 5, 4^, and 4 per cent, to which should be added a commission charge which at first amounted to 1 per cent, then to i per cent, and has now fallen to I per cent, payable to the bank. QUESTIONS. Q. What was the rate of interest paid by such small holders before the foundation of the bank ? A. From 8 to 12 per cent, and this in spite of the usury laws, which prohibit charging a higher rate of interest than 8 per cent. The extra amount charged used to be called "commission," etc. Besides this, it was extremely difficult to get any credit at aU for a small holder even at these high interest rates. They now pay through the institute 5.8 per cent with amortization. Q. What effect has this had on the welfare of the small holder ? A. The great demand for these loans shows the need felt for them. Q. Does this small holders' bank operate on the same principles as the Hungarian Land Mortgage Institute ? A. Yes; but its organization is not quite the same. It has a separate board of directors and board of supervision. Q. Has it a commission for valuing lands in each county as the land mortgage institute has ? A. No; it only has such commissions in the localities where loans are negotiated. Q. Are these commissioners paid ? A. They receive a commission in the form of a percentage on the loans they negotiate. Besides these the bank employs an agent in each district. The area of operations is confined to Hungary proper. Q. Has the Small Holders' Land Mortgage Institute any branch offices ? A. No; but it works through the branch offices of the Hungarian Central Credit Society. It grants loans through the agency of the central cooperative societies. It also acts conjointly with the Central Credit Society in granting loans on the collective security of an association of small holders up to 75 per cent of the valuation of these collective holdings. Of this amount 50 per cent is loaned by the National Small Holdings Land Mortgage Institute and 25 per cent by the Central Credit Society. II. Mr. Coloman de Szill, Vice President. QUESTIONS. Q. Does this institute inquire into the purpose of the loans ? A. No. We only consult the land registers as to the title and value and take care that all previous debts on the land are either struck off the register or paid off by the loan we give, so that we have the fu-st mortgage. 160 AGEICULTUEAL COOPEBATION IN EUKOPE. Q. What rates are charged for money and the percentage that is paid for interest, administration, and amortization ? A. The rates varied; also the periods. When the bank began work the rate was 5^ per cent and the period 33^ years. Later the rate was 5 per cent and the period 15 years, or 33^ years. Still later the rate was 4^ per cent, the period 17, 25, 40, or 50 years, and afterwards 4 per cent with periods 20, 30, 40, 50, 65 years. The administration expenses at the beginning were 1 per cent, but soon fell to ^ per cent and later successively to 0.35, 0.30, 0.25, 0.21, 0.19, and 0.16. The amortization varies according to the rate of interest and the period. At present, price of money being high, the rate of interest is 5 per cent, the administration expenses (commis- sion) have risen to 0.35 per cent after being for a time 0.25 per cent, and the periods are now 50 and 65 years. Q. How much is added for amortization? A. Nearly one-half per cent in the case of a 50-year loan. Q. Does the institution loan money which does not include amortization ? A. Yes; we grant a few loans without amortization to farmers and landholders, only for 10 years. Q. What is the rate of interest upon these loans without amortization ? A. Five, six, and six and one-half per cent. It varies. Q. Have you made any loans recently of this character ? A. None. Q. What was the rate charged on the last loan of this kind ? A. Six and a half per cent. Q. The interest is 5 per cent. What is the amortization on a loan for 65 j'oars? How much would be for interest, for amortization, and for administration or commission ? A. The holders of the bonds get 5 per cent, and the debtor pays for 65 years 5.56 per cent, including amor- tization, interest, and administration; 5.21 per cent is interest and amortization; 0.35 per cent is for administra- tion and commission. Q. Does this 0.35 per cent run through the entire 65 years? A. Yes. We have raised the commission to 0.35 per cent, which makes the rate now 5.56 per cent for 65 years instead of 5.46 per cent as formerly; that is, the interest is 5 per cent, amortization 0.21 per cent, com- mission and administration 0.35 per cent, making a total of 5.56 per cent for 65 years. For 50 j^ears the in- terest is 5 per cent, amortization 0.47 per cent, commission, etc., 0.35 per cent, making a total of 5.82 per cent. Q. What do these bonds sell for in the market? A. It varies. To-day 5 per cent bonds sell at 96^. Q. Now, of that how much do the farmers get ? A. To-day 95. Q. And 1 J is kept by the bank for commission ? A. This difference (say, 1^) is kept by the bank, but with this the bank must pay different commissions, i. e., for selling the bonds and for rebuying the bonds, when necessary to maintain the price on the markets, the costs of notification on the Exchanges, advertisements prescribed partly by Parliamentary Acts concerning our Institute, partly to inform the interested public, e. g., newspaper articles, advertisements, prospectuses, etc. So the Institute has not much profit from this difference, and that small profit is necessary, because it must, in case of a drop in the market price, cover the losses of the Institute. Q. The rate which you have given us is actually based on par value. If you base it on 95, which the farmer gets, the rate would of course be higher ? A. The interest is charged always on the par value, so that if the debtor receives not the whole 100 but only 95 on the nominal value of the loan, the rate of interest on the amount received will actually be higher, because he pays the interest on 100 and not on 95. For instance, to-day the debtor gets not 100, but only 95, and yet he has to pay the 5 per cent interest on the whole 100, so that calculated on the 95 actually received, the interest is not 5 per cent but 5.26 per cent. In case of loans at par value, by which the bank advances the difference between the nominal value and the market price of bonds, so that the debtor receives in cash not 95 but 100 for 100, the rates (including amorti- zation, etc.) are for 50 and 65 years, not 5.26 per cent and 5.82 per cent, respectively, but higher — i. e., 5.74 per cent and 6 per cent. This surplus of 0.18 per cent can cover only f per cent difference in the market price, so that should the 95 per cent payment become constant we must raise this 0.18 per cent to 0.24 per cent. Q. What have the losses of the bank amounted to ? A. Nothing, or so little that it does not deserve mention. Q. Will you describe the process by which you effect a foreclosure ? A. We have no law that enables us to foreclose and take possession of the mortgaged land in case the debtor fails to pay the amortization installments. Therefore in case of failing payment we must have recourse HUNGAEY. 161 to the law and enforce payment by legal proceedings. We have privileges which enable us to ask for imme- diate auction without the usual and somewhat long preliminary proceedings. Though we could take that course if the debtor failed in even one payment, we usually do not do it till three semiannual payments are overdue. The auction is public and the land is sold to the highest bidder. The Institute is allowed to buy the land only when there is nobody who would bid such a price as would cover the total of our loan, overdue installments, expenses, etc. From the selling price got at the auction are paid first the expenses of the execution proceed- ings, then the privileged sums (unpaid taxes and duties to three years back, etc.), and after then in succession the mortgagees are paid, first ourselves, because we give loans only when our loan gets the first place in the land register. After judicial paying of all the expenses, privileged sums, and mortgages, the remainder of the selling price goes to the debtor whose land was sold. Should the buyer want, he can undertake the further amortization of the loan, in which case we get in cash from the seUing price only the overdue amortization installments, the interest thereon, and expenses, whereas the remainder of the loan taken over by the buyer is deducted from the selling price. Q. Does your institution possess the right to receive deposits ? A. According to our statutes we have the right to receive deposits to the amount of five times our Reserve Fund, and we have some deposits, but we do not carry on a regular business in deposits. Q. What security has the depositor that his money wiU be returned to him ? A. The good will and the properties of the Institute. The latter only secondaidly, for the total property of the Institute serves first as security for the mortgage bonds in case the mortgaged estates and the Special Reserve Funds instituted for that purpose by different Parliamentary Acts should not be enough. Q. There are two classes here, the depositor and the holders of your bonds. What security has the depositor from your bank ? Is there any surplus fund here for the security of depositors ? A. No. Q. What special security exists for the depositors ? In case you go to liquidate, how do you work it out ? A. The bondholder is secured first, then the depositor comes in next. Q. Where are your bonds principally sold ? A. Most of them are sold in Hungary, some in Austria, and some in Holland. Q. What classes of institutions buy them — savings banks, life insurance companies, or private individuals? A. Savings banks, life insurance companies, private men, foundations, etc. Q. Is the bank able to accept aU the business that is offered to it ? In other words can you secure enough capital in the world's market to issue as many bonds as there is a demand for ? A. As a rule, yes. Q. How long does it take between the time that the borrower applies here and the time that you can supply him with the money ? A. From three to ten weeks after the application, according to the time which the punctual fulfillment of our conditions and the registering of the loan in the local land registers requires. Q. After the security has been accepted by the bank how long a time is the average before the borrower secures the money ? A. In a few days, at most one to two weeks after the loan is registered in the local land registers, the neces- sary deeds in order, the conditions fulfilled, and thereby the loan properly secured. Q. In this time do you actually issue the bonds and sell them on the market in order to get the money with which to pay the loan ? A. Our stores of cash money usually permit us, after the security according to the above is accepted, to pay the loan to the borrower and to sell the bonds themselves afterwards when we need fresh money to replenish our stores. Q. If after paying the farmer the money and before you sell the bond the price of the bond has fallen in the market, how wUl the bank recover the difference between the price paid to the farmer and the price for which the bonds are sold ? A. The Institute bears the loss and these losses are balanced in case the price goes up, and these losses are partly covered by any profits made by the sale of bonds. Q. Where does the bank secure the funds to make the loans in advance of selling the bonds ? A. From the reserve fund — ^from the profits. Q. I understand there are some joint-stock companies in Hungary that wUl make these same loans. What are the relative rates of your institution and theirs? Is the rate of joint-stock companies or banks higher o lower ? A. They may be a little lower or a little higher, but there is not as a rule much difference. -i/dT/t" s rtnn 914 as—i -xt 162 AGRICULTUEAL COOPERATION IN EUBOPE. Q. Does the favor which the Government gives your institution enable you to grant lower rates of interest * A. The only effect of the privilege is that we can sell the bonds more easily. Q. Then, in your judgment, the Government aid increases the business that the bank does ? A. Yes; but it does not affect the rates at all. Q. In the judgment of the officers of your bank should there be any limit set to the volume of mortgage bonds that should be offered to the market, or should it be left to the general law of supply and demand ? / A. It should not be limited. Q. It has been stated that the Hungarian Land Credit Institute is selling bonds at 93 on the market, whereas the lowest price your bonds have touched is 96 J. What particular element is it about your bonds that enables you to sell them at 96^ when another institution engaged in the same business sells their bonds for only 93 ? A. It is because the rate of interest is higher on our bonds. Q. You sell amortization bonds for 50 and 65 years. Which bond is more favored in the market and which brings the highest price ? A. There is no difference between them. m. STATISTICS FOR 1912. SPECIAL STATEMENT SUBMITTED TO THE COMMISSIONS. The institute has since its establishment up to the end of the year 1912 granted the sum of 287,826,200 (Hungarian) crowns to 66,264 parties. Of our loans, 16,112 are from 300-1,000 crowns, their total sum 12,063,800 crowns (average, 748.75 crowns) 19,091 are from 1,000-2,000 crowns, then- total sum 30,146,200 crowns (average, 1,579.08 crowns); 31,061 are above 2,000 crowns, their total sum 245,616,200 crowns (average, 7,907.54 crowns) ; total, 66,264 loans, 287,826,200 crowns (average, 4,343.63 crowns). The particular distribution of our loans is as follows : Small loans from 300- 2,000 crowns. Loans from 2,000-12,000 crowns. Loans over 12,000 crowns. Total number of loans. In the year— Number. Per cent of the total number of loans. Number. Per cent of the total number of loans. Number. Per cent of the total number of loans. 1880 827 1,233 972 384 450 923 927 703 606 461 623 362 304 493 746 831 657 713 762 793 670 515 620 1,601 1,958 2,486 2,507 2,558 1,612 2,074 1,664 2,430 1,238 77.12 73.31 77.45 68.45- 64.28 71.50 71.47 72.47 72.14 65.30 65.44 58.01 46.77 46.07 53.75 61.55 55.21 51.89 59.49 58.40 53.18 49.57 51.88 53.15 48.67 55.48 52.44 51.75 42.65 47.94 39.63 46.45 40.86 97 449 283 147 219 361 350 238 223 214 305 234 299 521 554 469 483 608 461 521 551 447 517 1,261 1,809 1,724 1,986 2,112 1,899 1,897 2,203 2,394 1,468 22.88 26 69 22.55 26.20 31.29 27.96 26.99 24.54 26.55 30.31 32.04 37.50 46.00 48.70 39.91 34.74 40.59 44.25 35.99 38.37 43.72 43.02 43.27 41.87 44.97 38.47 41.54 . 42. 62 50.24 43.85 52.46 45.76 48.45 424 1881 1,682 1,255 1882 1883 30 31 7 20 29 11 31 24 28 47 56 88 50 50 53 58 44 39 77 58 150 256 271 288 270 269 355 332 408 324 5.35 4.43 .54 L54 2.99 1.31 4.39 2.52 ' 4.49 7.23 5.23 6.34 3.71 4.20 3.86 4.52 3.23 3.10 7.41 4.85 4.98 6.36 6.05 6.02 5.50 7.11 8.21 7.91 7.79 13.69 561 1884 700 1885 1,291 1,297 970 1886 1887 1888 840 1889 706 1890 952 1891 624 1892 650 1893 1,070 1 388 1894 1895 1^350 1,190 1,374 1,281 1,358 1 260 1896 1897 1898 1899 1900 1901 l'039 1902 1^195 3,012 4,023 4 481 1903 1904 1905 1906 4 781 1907 A. Q4'i 1908 3,780 4,326 4,199 5,232 3,030 1909 1910 1911 1912 35, 203 53.13 27,304 41.20 3,757 5.67 66,264 HTJNGAET. 163 The above proves that most of our loans are small ones, i. e., not exceeding 12,000 crowns, and only 5.67 per cent are above this sum. At the end of the year 1912 there were in existence 45,372 of our loans. Their total sum was originally 222,287,900 crowns, diminished at the end of 1912 by redemption (amortization) to 199,862,310 crowns. These loans are secured on real estate of the value of 485,839,429 crowns. The other 20,892 loans have been totally repaid. The institute issued to the value of the granted loans mortgage bonds and obligations, of which there were at the end of 1912 in circulation — Crowns. Mortgage bonda at 5 per cent to the amount of 48, 978, 000 Mortgage bonds at 4i per cent to the amount of 127, 600, 800 Mortgage bonda at 4 per cent to the amount of 11, 536, 700 188, 115, 500 Obligations at 4} per cent to the amount of 10, 982, 400 Total < 199,097,900 The institute has no shares. The stock capital consists of foundational contributions. Its original sum was 3,339,000 crowns, 1,000,000 being contributed by the Government. Crowns. To-day it amounts to 8,435,000 To it belong — 1. Reserve funds 4, 573, 178 2. The special reserve funds according to the act 15, 1911 2, 312, 235 Total of funds 15, 320, 613 According to the act 36, 1876, 9,500,000 crowns of this capital serve as special reserve fund for the security of the mortgage bonds, and according to the act 32, 1897, 3,000,000 crowns serve as security for the obligations COOPERATIVE PRODUCTION IN HUNGARY. Mr. Ambrus Seidl. STATEMENT. Budapest. Cooperation in production is still in its infancy in Hungary. There are no cooperative societies for farming and no cooperative tenant farms as in Italy, but a movement in favor of their formation is now beginning. There are, however, cooperative associations of farmers for renting estates, which are then parceled out to the members, and each farms his own section individually. Cooperative dairies have been established under the protection of the ministry of agriculture, but they are not federated. This is their chief defect. They are thus isolated, and left to their own resources their existence is difficult. There is no organization, such as exists in Denmark, for collective marketing of butter and dairy products. There are some so-called central dairies, but they are not really cooperative, being merely limited liability concerns. There is now a movement on foot for federation and centralization in the dairy industry. There are, in Hungary, many industrial cooperative associations for production. The best developed of these are connected with the furniture industry. The work is not performed cooperatively, each member of the association working in his own shop, but the furniture is sold collectively. There are also cooperative societies of tailors for taking Government contracts, and others for supplying the army with saddles and boots. Basket-weaving cooperative societies have been organized with a view to supplying work to the peasantry during the winter months. The baskets are collected and sold cooperatively. QUESTIONS. Q. Have you cow-testing associations? A. Yes; but they are State institutions. Q. Have you cooperative fertilizer factories? A. No. Q. Have you cooperative associations for stock breeding ? A. Yes; and we also have cooperative associations for insuring live stock. Q. Have you cooperative institutions for agricultural training ? A. No; all educational work is done by the Government, which keeps up model farms for training the faxmers. 164 HUNGABY. AGRICULTURAL BANKING. Evidence of Baron Koranyi, Director General of the Central Cooperative Credit Bank. Budapest. Q. If the postal savings banks of Hungary have ample deposits, would it be practicable or desirable, in place of having it invested in bonds or other securities, to lend this money to rural credit associations ? A. It would be very desirable that the deposits in the postal savings bank should be used for that purpose, because they come from small people and should go to help small people. Although demands have been made to carry out such a course, they have not been successful because the deposits have been appropriated for security of State bonds. The postal banks are not incHned to lend the money as suggested, but invest it in State bonds. Q. You beHeve the system would be good ? It is only on account of lack of funds ? A. Not on account of lack of funds. Q. The demand for money on the part of the Government is greater than the supply, due to the fact that it is difficult to market the bonds outside of Hungary; therefore the Government makes use of the postal savings bank funds for its service. The logical way would be to lend the money to the rural people, would it not ? A. An attempt was made to get money from the postal savings bank in 1907. An appeal was made to the minister of finance to instruct the postal savings bank to have a certain part of the deposits set aside for the use of the banks. This proved unsuccessful, however, because the minister of finance prevailed upon the postal savings bank to -use its money entirely for State security. The State policy is to use the deposits. Yet 68 per cent of the inhabitants who live on agriculture are always in need of money. Q. What has been your experience regarding small loans as better security than large loans ? A. Experience shows that small loans are safer. Q. Have country banks opposed your institution making these small loans 1 A. They do not show any antagonism, except that they try to make the loans as hard as possible. Q. Are there any persons or groups of persons in this country fighting the institution ? A. There are no actual groups of persons acting against the institution; but, as the activities of the insti- tution serve to clear up land titles, there are certain groups of banking institutions that take advantage of this fact to make loans. Q. Has the work of your institution served to bring the money down to a lower rate of interest to the poor man? A. The poor man can now obtain loans at a cheap rate of interest, which is due entirely .to the activities of the cooperative institutions. They not only grant loans at a low rate, but they force others to do so. Q. Have aU the banks in Hungary been forced to place loans on real estate on nearly the same basis as your institution and those similar to it ? A. They are forced to grant money practically on the same conditions, but a little dearer. Only the pro- vincial savings banks give a bigger loan, compensated for by the higher rate of interest. Q. The two branches of institutions for the loaning of money are in active competition with each other ? A. Yes; land-mortgage institutes act against the banking institutes. Q. Do these mortgage bonds that are issued pass freely from hand to hand ? A. Yes. Q. Do they furnish good, safe investments for the people of small means in your country ? A. This class of people do not invest their money in this paper as yet. It was hoped that people with small means would invest in these bonds; but, unfortunately, this is not the case. They have not got accustomed to the idea, but the greater part of the mortgage bonds are in the country. Q. Do the ideas in the publication "Rural Credit and Cooperation in Hungary'" relating to the National Small Holdings Land Mortgage Institute represent your view of the situation in Hungary as you see it ? A. They do. The Central Cooperative Credit Bank has 2,414 affiliated associations and has acquired con- siderable experience in regard to small loans all over the country. This institution and the provincial savings banks are distinctly antagonistic by reason of the fact that in former times, before the institution of cooperative societies, the banks were able to lend money to people in want of it at an enormous rate of interest. The activity of the cooperative credit bank has forced them to reduce their rate of interest. Consequently, they show antago- nism to the institute. In the financial crisis of to-day, when the Austro-Hungarian banks lend money at 6 per cent, we only charge 1 per cent more for loans to people of small means. Q. In times of financial stringencies have your cooperative societies been able to stand the stress as well as or better than independent banks in the country ? ' See page 135. HUNGARY. 165 A. When there was a financial crisis, the central organization of the country savings banks was obliged to announce at the general meeting that 52 institutions had to be wound up; but not a single cooperative society was wound up for the want of money. CONDITION OF SMALL TENANTS IN HUNGARY. Mr. Odon Miklos. statement. Budapest. We have never been able to make an organization of small holders equal to the farmers of America. The American small holders are protected. In 1848 Hungarian life underwent a great change because the feudal tenants of the great proprietors were then freed and received the lands under certain conditions. This trans- formed agricultural life in Hungary. Between 1848 and 1867 the situation greatly improved. Since that time loans have been made to protect rural life. We were not able to organize the life of the agriculturist from the beginning. It was only after careful study that we found that something had to be done to protect the small people. QUESTIONS. Q. It would appear that the allurements in America are drawing peasants from Hungary. What is the Government doing toward forming farmers' clubs and fair associations in the country districts ? A. We have from the beginning acted very liberally with respect to emigration. There is no law pro- hibiting emigration. Many who are required to seive as soldiers have emigrated. I have many families on my farm, and when the men are called to arms I have to provide for their families. We have formed many farmers' clubs where lectures are given. Each association gives lectures once or twice a year, in order to inform the people about the different forms of progress in agriculture. These lectures are free. We have many horse shows in which different breeds of horses and cattle from the several sections are exhibited. These associations are protected by the Government. The Hungarian agriculturists must be guided considerably by the Govern- ment, because the men are slow to take up new ideas. The farmers are usually so bound to the soil that they have no time to give to these associations. Ihere are many things that only the Government can do in the way of providing professors who are attached to the administration for the purpose of giving instruction. We have one organization which is unique. Each village or commune is obliged to enter this society; and on payment of only 5 crowns a year they get from the association a number of trees annually. Q. It appears that the country people do not do much to help themselves. What is being done through the rural schools to teach boys and girls agriculture ? A. We have schools which boys and girls from 6 to 12 years of age are required to attend, where the Govern- ment professors give instruction. Q. What are the amusements of the rural people of Hungary ? A. They have not very much in the way of amusements, and they do not want them; they are very saving, and are desirous of enlarging their holdings. Q. Does the Government provide amusements in the rural communities ? A. No. Q. Are the emigrants who return from America improved by their experience ? A. No; it is more important to keep the countrymen at home. Q. What is being done to encourage land purchasing by peasants ? A. Peasants are conservative; they would like to enlarge their farms in the same village, which can not be done. Although the Government has sold a lot of land, it has been taken up by the big farmers, as the small farmers of a village do not love to take up land in unknown parts of Hungary, but would rather remain in the same restricted district. The middle class of people felt the necessity of doing something, and as soon as the price of land went up, our bankers, having found out that the peasant was in want of land, commenced to buy up ground and parcel it out. The small owner who is doing his own work is valuable to the country. The middle class of owners are forced to parcel out their land. 166 AGRICULTUKAL COOPEBATION IN EUfiOPB. HUNGARIAN FARMING. Evidence op Officials of the Department of Agriculture Budapest. Q. Do the farmers belong to some form of agricultural organization which would assist them in their work — the better cultivation of the soil, for example ? A. We have not had any experience in that as yet. In case of leased property, they form themselves into groups and lease collectively. Q. As I understand these organizations, they are purely for the leasing of land ? A. Yes. In the case of land purchase they form themselves into groups and draw lots for the different pieces. Q. Do you propose any method of giving the farmers any special information as to preparing the soil or sowing the seed? A. We have; but the information is only given out upon request. The formation of groups for the. ob- taining of loans acts as a guaranty that the man will administer the ground in the proper way. It prescribes how he is to put on manure and how he is to cultivate. Q. If I understand you rightly then, each one of these groups is under the supervision of a superintendent who is an agricultural expert? A. Yes; one who goes around. Q. Who provides this specialist, the Government or the institute ? A. The institute. Q. Do the farmers use chemical fertilizers ? A. Yes, we are helping them to buy it; but the whole scheme is in its infancy. Q. Do you expect farmers to specialize or to engage in mixed farming ? A. In mixed farming. Q. Whence will they get their supply of seed ? A. This institute is always williag to help in procuring new and good seed which are furnished by the seed farmers of the Hungarian Government. Q. On what conditions does the Government or the institute provide these seeds for the farmers ? A. The Government only charges a nominal price. Q. Does the Government require the purchaser to pay in cash ? A. No ; sometimes they are given credit. Q. Where do the farmers get their dairy stock from ? A. The landowners have private stockyards. The different counties also have dairy stock farms, and the Government helps by giving 25 per cent. If there is any material wanted in great quantity we have a State fund, or we can have cheap capital on which 5 per cent will be paid for from four to six years. Q. Do the farmers do most of their own work or do they employ help ? A. In the best parts of the State they employ day labor. Q. In cases where they employ labor how do they pay them and how much ? A. In cases where laborers are employed for 15 days or a month they are paid by the day. But as a general rule they are employed by the year and they are paid quarterly. Q. Do farmers experience difficulty in obtaining farm help ? A. Not as a general rule. HIGHER AGRICULTURAL EDUCATION IN HUNGARY. Robert Dubravszky, Councillor. STATEMENT. Budapest. Higher education in Hungary is in the hands of agricultural colleges. The students of these academies or colleges must have passed the eighth-class, or middle school, and what is called matriculation — an examination in addition to the eighth-class examination. The main characteristic of these agricultural colleges is that, in addition to the theoretical training, the students receive practical training in agriculture. The course consists of three years' study: The first year natural sciences — chemistry, physics, botany, sociology, _and mineralogy — are taught. The second and third years special agricultural subjects are taught, with practical demonstration HTJNGAEY. 167 on the college grounds. Agricultural subjects are also theoretically taught. The course is divided into 10 groups: First year's natural-science subjects: Second and third years' special agricultural subjects-Continued. Group l-Practical training. Group 9-Legal knowledge. rThis includes legal statutes, Group 2-Physics and chemistry. referring to the administration of the Group 3— Botany, sociology, and mineralogy. country; and, secondly, all those parts of Second and third years' special agricultural subjects: the law which are absolutely necessary and Group 4-Production, plant growing and breeding. essential for the use of the farmer.) Group 5— Animal breeding. (This course extends to all Group 10.— Horticulture in all its branche species of animals found in Hungary.) Group 6 — Training in proper farm management. Group 7 — Mechanics. Group 8 — Veterinary science and surgery (such as is ab- solutely essential for use on the farm. Stu- dents should know everything about dis- eases of animals and first aid. The most important part of this group is anatomy; this is particularly essential in the breed- ing of animals.) The prime object of these colleges is to train farmers practically and theoretically in all branches of the art. They are trained so as to understand the management of their own farms. It is from these colleges that the teachers are found for the higher and lower branches of education. There are 45 professors in the five colleges and 33 assistants with various titles. The various chairs in the colleges are provided with laboratories and implements necessary for the practical demonstration of their diflFerent subjects. Each of the colleges has its own farm of medium size. The five colleges have about 360 acres of ground. Every college has its experimental station, and, naturally, also an animal-breeding establishment of a more intensified character. METHODS IN CONNECTION WITH EXTENSION WORK. In parishes where there are several persons requiring education of this kind they form groups, both men and boys, and lectures in agriculture are given by professors, who outhne a definite scheme of work. The course is divided into some 50 lectures given at the rate of two or three a week and lasts from three to four months in the winter. They teach by object lessons, using magic lantern pictures to show the various instru- ments and objects required in this branch of training. The lectures extend to all branches of agriculture. Special lectures are held from time to time on special subjects for the benefit of farmers who possess a high order of intelligence. The lectures are paid for by the State, of course. The education department in connection with the board of agriculture arranges for the lectures to be given in the elementary schools. Distinction must be made between the first six years in the elementary school and the three years' finishing course. Arrangements have been made between the board of education and the board of agriculture that in places where there is a farm adequately equipped for the purpose, during these three years education shall be entirely and exclusively agricultural for students from 12 to 15 years of age. In these finishing schools where agricultural education is given there are special teachers. The farms must possess at least 26 acres and there must be an adequate supply of five stock. In these schools, where a farm of required size is not at hand, the pupils are trained in the agricultural schools but not to the same extent as in other schools. HOW TEACHERS IN ELEMENTARY SCHOOLS ARE TRAINED. All teachers' training colleges (where the course is four years) are supplied by the board of agriculture with a professor oi agriculture, who teaches the subjects in all four years; but this is only a rudimentary part of the teachers' training. To supply teachers for finishing schools there is a special agricultural teachers' train- ing college. The qualifications for admission to the special training colleges are that apphcants shall have passed four years in a training college. They here receive training in agriculture, natural sciences, and chem- istry, because in the rural teachers' training colleges they have all received basic training in these subjects. These teachers are for schools where agriculture is exclusively taught. Where agriculture is the secondary subject the head teachers receive a four weeks' course in agricultural colleges. In the special training college there are on the average 30 teachers, so that 15 graduate each year. Girls who are going through the finishing schools are specially trained in household management. The same distinction exists here between finishing schools connected with household mana^ment and those finishing schools in which household management is a secondary subject. There is a women teachers' special training college for the training of women teachers 168 AGEIOULTUEAL COOPEEATION IN EUROPE. in the special subjects of agriculture and household management. Here cooking, household management, dressmaking, ironing, washing, nursing, general utility, and agricultural subjects in general are taught, especially the care of animals and rearing of calves, poultry breeding, gardening, and dairy work. These women teachers give a very practical course — so-called extension work. They are divided into groups and sent into the centers of the extension work, where they have to go overall work done there under the supervision of the head mistress. As in the case of boys' schools, the girls have special finishing schools where they have the requisite equipment for teaching the various subjects. In those parishes where there is not the necessary equipment the subjects are taught as secondary subjects, and4here is a mistress who teaches in these schools for the four years' course the same as in the case of teachers in the boys' schools. EMPLOYMENT OF SPECIALLY TRAINED TEACHERS BY THE BOARD OF AGRICULTURE. These teachers are employed to give, in certain parishes designated for that purpose, the same three or four months' courses and lectures as given by the professors in academic colleges. The course is divided into 50 lectures, the subjects being determined beforehand. So, besides training the young pupils of the finishing schools, these teachers are engaged in teaching adults also. The lectures are given in the evening when the farmers have no work and can attend. Women teachers who have been through the highest courses at special training colleges are appointed by the board of agriculture as its special employees to give courses in household management, just the same as men teachers are employed to give special lectures in agriculture. Each of these women teachers has a particular radius in which she works, where she delivers courses and lectures running two months, so that all the subjects which are taught in the special training college are taught also by the members of the extension college. Peasant girls are taught the same subjects as are taught to the teachers in the training college. Besides, the board of education appoints certain of the women teachers, who have passed special training courses, as directresses of the colleges where household education is given. These head teachers of finishing schools also give courses and lectures in the same subjects to adults. QUESTIONS. Q. "Where do most of the students come from? Are they boys brought up on farms or are they from the city ? A. It is difficult to determine the percentage. Unfortunately, the sons of farmers who could attend the colleges do not do so. Most of the students are obtaining the knowledge for the purpose of earning their living; the majority of the students are sons of small farmers, as they look on education as a means of earning a livelihood. Q. About how many students are there in the five colleges ? A. Between 320 and 350, or about 65 to each college. There is a difference between the number in the colleges; some have 100 and some less. The present organization has been in existence for only six years. Q. What proportion of the students who graduate actually become farmers on their own account ? A. About 15 or 20 per cent. Q. About what percentage become managers of estates ? A. All the remainder except those who take up teaching. Q. Is the training the same for the teachers as for the farmers ? A. Yes; the same. Q. What is the proportion of the practical work as compared with the classroom work? A. The first year's work is almost exclusively outside, in groups. Q. Is a graduate of one of these agricultural colleges considered to have as good an education as a grad- uate of a rural college or university ? A. Just the same; the quality of the work is as high a grade. Q. Can graduates of the agricultural schools enter the college without special preparation ? A. No. Q. Is there any provision in the colleges for agricultural economics or the social study of agriculture? A. This is shown in group 9. The students make excursions every year and visit various cooperative institutes, where they are shown the workings of the institutes. Q. Is there any education for women of higher grade which looks to the farm home ? A. Women with the sanie qualifications as men may enter the colleges in special cases. Q. What do agricultural colleges do in the way of extension work ? A. In connection with the training of teachers, when they wish to specialize in certain branches they are sent abroad for one or two years and are then engaged as professors. Q. Is there any tuition fee to the individual student ? HUNGABT. 169 A. There is a tuition fee, but poor students are exempt. Q. What is the fee? A. Eight crowns a year. Q. Do students get paid for any work they do ? A. No; neither in the lower nor higher grades. A few of the landowners' sons go to the academy and finish their studies ; many go abroad. Q. How liberally does the Government support these agricultural colleges ? A. Everything is paid for by the State. Q. What is the amount of the appropriation ? A. One million two hundred thousand crowns a year for the five schools. The farms return about 600,000 crowns. There are two branches of technical training in the lower grade where pupils are educated in agri- culture as a career; and another branch is training farmers in the essential features of agriculture itself. The secondary training is only for overseers or foremen for the management of small farms. Q. Is training for research men the same as for college men ? A. Yes. There are men trained for this work in the colleges themselves; but, as men to be employed in these situations require special training, they are taken from other sources. There are 13 agricultural schools for the training of foremen; the only requirements are that the men shall have passed the elementary schools, they have to be at least 22 years of age, and preference is given to men who have done three years' military service. By establishing this minimum of 22 years, they insure a man having necessary practical training and practical experience as a foreman. There is as little theoretical training as possible; it is really all prac- tical training, and every man who enters this course must do every kind of work. During the two years' courses of those schools men are supplied with the necessary machinery, with a farm and anipial-breeding establish- ment, so that conditions may compare favorably with those of a farm devoted to active agriculture. The average size of the farms under cultivation is 400 acres. There are seven agricultural schools where the course of training lasts only six months each year — from October to March. In these schools there is a little more theoretical training, although an effort is made to make the training as practical as possible, especially in the management of machinery. The object of the schools is to teach the sons of farmers the leading principles of modern agriculture. During the six months an effort is made to extend the teaching to all branches of agriculture, naturally relying on the intelligence of the pupils. The pupils of these seven schools are not restricted to 22 years of age; they enter as young as 17 years. Only sons of small farmers are accepted as pupils. The expenses of all these schools are borne by the State. There is a dairy technical school and two schools for training dairy-farm laborers. There are two courses in the technical school. The first course is attended by those who have completed the courses of training at the agricultural colleges. The second course is for pupils who have completed the courses at the agricultural schools, and is intended rather for the train- ing of laborers. In the schools for the training of dairy laborers, boys are taken as pupils from the age of 15, and no qualifications are required beyond that of an elementary school certificate. Q. Teachers are recruited from men having completed courses in the agricultural schools ? A. When they have finished their courses of study in the agricultural colleges they are appointed as assist- ants in the agricultural schools prior to appointment as teachers. Q. Do many of the teachers of the higher agricultural colleges get training in German or other foreign universities ? A. Yes; three or four of them are sent every year, at the State's expense, to Germany and other countries where there are professors on these special subjects. Q. Are the students required to return to agricultural occupation 1 A. Yes; they are already definitely appointed officials. They are not sent abroad until it has been definitely determined that they intend to return and become professors. Q. In the schools where agriculture is taught — where girls are given the same training as the boys — what proportion of the girls are from 12 to 14 years of age? A. The proportion is about the same as the relative proportion of the sexes in the community. RAIFFEISEN BANK AT MONOR. Kepokt of a Subcommittee. MoNOE (near Budapest). This bank, situated at Honor, a town of about 13,000 inhabitants, about 25 miles from Budapest, was founded in 1882 by M. Aurel Forster, landowner, member of parliament, and public-spirited citizen. The bank was founded with 600 members, and was the first Raiffeisen bank in Hungary. At that time 40 villages 170 . AGEICULTUEAL COOPERATION IN EUROPE. were feeders of the bank, and the 600 members held 1,300 shares. Now there are banks m nearly all the adjacent villages, and this bank has fewer members. CHARACTER OR CLASS. This is a modification of the Eaiffeisen type, having a liability limited to five times the amount paid per share. It is of the "neutral" type, unconnected with any church. MEMBERSHIP. There are now. May 23, 1913, 400 members, mostly farmers, but also of other classes — tailors, bakers, etc. The farmers are nearly all landowners, holding from 5 to 25 hectares. One hundred of the members are women, mostly widows, who do their own farming. MANAGEMENT AND MEETINGS. The administration consists of the board of directors, comprising a president, manager, and four directors, and a council of supervision of four members. The president of the board of directors receives no salary and has been in office 26 years. He is Mr. Forster, who works a farm of about 200 hectares not far from Monor. The manager has been in office 23 years. He is paid 400 crowns a year. The bookkeeper has held office 20 years and receives 1 ,400 crowns. Superior to the board of directors is the general assembly, which meets once a year. The annual meeting is held in March, at which time ofiicers are elected for three-year terms, but they usually serve six or eight years. Changes of officers and directors occur in alternate years. The officers of the bank meet twice a week, at which time four make a quorum and a director must always be present. A different director serves in this way each week and is allowed a fee of 2 crowns per meeting. EXPENSES OF MANAGEMENT IN 1912. Crowns. Directors' salaries (10 per cent of the net profits) 170 Lawyer 100 Manager 400 Cashier 200 Bookkeeper 1, 400 Government supervision 100 Servant 1 20 Losses, stationery, printing, and sundries 1, 210 Total 3, 700 SOURCES OF INCOME. The initial capital of 1,300 crowns was subscribed by the original 600 members. There were almost no deposits for the first five or six years. After that time it became possible to secure funds from the Hungarian Central Cooperative Credit Society, founded by a special law. (a) Each share costs 50 crowns, the liability of a member holding one share being, therefore, 250 crowns. Ownership of shares is unlimited, but members have only one vote. (&) Membership fees, none. (c) Deposits are received from members and nonmembers, but of the latter there are very few depositors. (d) Money borrowed from the Central Bank at Budapest when needed. Interest usually 2 per cent less than market rate, but at this time 1 per cent less. By law allowed to charge not more than 8 per cent. (e) Profits for 1906, 2,561 crowns. LOANS. (a) Loans are made on notes of hand, on mortgages, or on notes of exchange for any purpose whether produc- tive or not. On notes two names besides that of the borrower are required. On mortgage loans 50 per cent of the value is accorded for buildings, 75 per cent on land. Members who have borrowed elsewhere, upon joining the bank may have their loans converted if they are paying too high interest. Generally speaking, loans must be made for productive purposes, but in this bank the rule is very elastic. Members have been granted loans for the purchase of house furniture, for the payment of a daughter's do^vry, for house building, as well as for all strictly constructive purposes in agriculture and commercial business. Loans are granted by the directors. (6) Duration: Cn notes of exchange, two to three years. Interest, at present 5 per cent, payable every three months. Mortgage loans with amortization are payable from 10 to 50 years, with interest at 5 to 6 per cent. HUNGARY. lYl (c) Maximum amount: On notes the maximum loan is 15 per cent of the value of all shares. In 1912 eight persoud borrowed 58,000 crowns on mortgage. Three hundred loans were made on notes of hand and 270,000 crowns were loaned. (d) Interest: On notes 5 per cent is usually charged, but this year the interest irf very high, being 6, 7, and sometimes even 8 per cent. On mortgage usually 5 per cent is charged, but this year it is over 6 per cent. Interedt paid on deposits, 4J per cent. Interest paid on deposits in central bank, 5^ per cent. NET PROFITS OR SXJRPLUS. Are divided: (1) 10 per cent to the reserve; (2) dividends, which must not be more than 5 per cent per share; (3) 10 per cent to the directors; (4) 5 per cent to the council of supervision; (5) the balance to the reserve fund. LOSSES AND FORECLOSURES. The losses in this bank have been 10,000 crowns in 31 years. No losses have occurred within the last 10 years. About 2 per cent of the members have failed to pay promptly. There are one or two foreclosures a year, usually of small shopkeepers. There has never been a foreclosure on a farmer. SUPERVISION. The central bank makes an examination twice a year, the expense being shared between the two. banks. In 1912 it amounted to 100 crowns. RELATION TO OTHER COOPERATIVE OR NONCOOPERATIVE ASSOCIATIONS. This bank has successfully inaugurated a warehouse for the purchase and sale of commodities (which, however, is an independent cooperative society with its own members, directors, etc.). The peasants bring their grain or other produce to the warehouse in lots of 10 to 20 kilos, which are sold for them in Budapest, the owner receiving 70 per cent of the value of his produce on delivery, and the other 30 per cent after sales are consummated. The bank also buys and distributes manure, machines, etc. It owns harvesting machines which it rents to farmers, nonmembers paying double therefor. INFLUENCE IN THE COMMUNITY. The Credit Cooperative Society protects the people from usurers, and the Cooperative Buying and Selling Society against the middleman. COOPERATIVE DISTRIBUTIVE SOCIETIES. Dr. Julius Hayden, Secretary of the "Hangya." STATEMENT. Budapest. Permit me to give you a short description of the "Hangya." This organization is the representative of the union of rural distributive societies and, at the same time, a wholesale society. Its task is to establish cooperative stores in the villages and to furnish them with all kinds of articles, especially provisions. Though the matter has been sufficiently treated by Mr. Bernat ia a previous meeting, and the pamphlet distributed by the ministry of agriculture gives an idea about the organization and the aim of the Hangya, still I deem it necessary to point out some peculiarities of this institution. I wish to explain to you the internal organization — the relation between the central and the village stores — and the duties and rights of each. The Hangya was founded in 1898 by the Federation of Hungarian Farmers, whose president was the late Count Alexander Karolyi, one of the foremost Hungarian political economists. The object was to make an end of the usury practiced in this country. For this purpose, soon after its foundation, the Hangya began the organization of rural distributive societies in the villages, the number of which at the present date has increased to more than 1 ,200. A considerable difference between the cooperative movement as regards distributive societies in Hungary and those abroad consists in the fact that here the central institution was organized first, and from this central were founded the distributive societies; while in other countries the active distributive societies preceded the foundation of the wholesale, which was established later by the distributive societies themselves. 172 AGEICULTTJEAL COOPERATION IN EUEOPE. In the country stores of the Hangya all kinds of provisions and household and agricultural articles can be obtained. In some places the store is combined with a public house or country inn. These country stores have complete autonomy; they are conducted by a management composed mostly of priests, teachers, notaries, and landowners. The members are chiefly farmers. These rural cooperative societies possess a capital stock of their own and depend only in certain respects on the wholesale, to wit : (1) "Wherever share capital is raised by means of small weekly payments, business may not be begun until a certain minimum amount shall have been accumulated, sufficient to procure the first stock of goods. This minimum amount is fixed at present at 3,500 crowns. (2) The societies are not permitted to give credit; all sales must be for cash. This rule is not very closely observed; but, as shown by the balance sheet, only two and a half millions of goods were last year sold on credit as compared with a turnover of fifty millions. The percentage is quite satisfactory. (3) Societies are required to bind themselves by their rules to buy from the Hangya such goods as that institution is able to deliver at or below current prices. (4) The Hangya is recognized as the auditing and inspecting authority. (5) Members of the managing committee render honorary service. (6) Societies are restricted in the assignment of profits to from 4 to 5 per cent- interest on share capital, the balance going to the reserve fund until all debts are canceled. Any surplus remaining after this is divided among the members in proportion to the value of their respective purchases. (7) Societies are required to apply a percentage of their reserves to educational and propagandist purposes. In this manner many agricultural societies, popular libraries, egg-collecting depots, dairies, cooperative granaries etc., have been formed. Besides the founders, the members of the Hangya are exclusively these distributive societies founded by the mother institution. The Hangya started 15 years ago with a capital stock of only 50,000 crowns. Its office staff consisted solely of the general director and an office servant ; but to-day it has a capital of more than 2,000,000 crowns and about 530 employees and workmen. In order to facilitate transactions and to make it possible to send whole carloads of goods to the provincial centers, the Hangya has erected warehouses at different railway junctions, and possesses in neighboring Budafok wine cellars and rum and liquor distilleries. Among the warehouses the first and largest is that of Budapest. The management and the superintending committee have their headquarters in Budapest. The provincial ware- houses are also directed from the headquarters. The central institution is managed by the director general who renders a weekly report to the board of directors. He is assisted by 10 heads of departments. The departments are as follows: The cash, bookkeeping and auditing section, which controls the distributive societies and super- intends the insurances and statistics; the commercial office, whicl\ takes charge of the orders and invoices; the central stores on the ground floor, which attends to the orders given by the commercial office. There is a department for small goods and one for manufactured goods, a bureau for the wine and spirit business, cor- respondence, telegraph, and letter files, and the legal business bureau. The editorial office of our official journal is also situated in this building. Permit me to call your attention especially to our auditing organization. About 60 auditors spend the whole year traveling from one distributive center to another, examining the books, taking inventory, and making out the annual balance. These auditors are charged with inspecting the rural cooperative societies, where they do their utmost to serve the rural community. The cost of supervision in 1 91 2 amounted to 300,000 crowns. This is a very high sum in comparison to the amount of general expenditure. But here again I would point out the great difference existing between our institution and other wholesale societies abroad. Our people are not on so high an intellectual level as they are, for instance, in Great Britain or in Germany, where supervision is scarcely necessary. Here people must be managed and controlled. Without thorough supervision, a great number of cooperative stores would have gone to the wall. We also render bankers' services to our distributive societies. We open current accounts to everyone and take or pay interest. For the amount of goods sold on credit we take or give bills of exchange, which we discount at the city banks. The Austro-Hungarian Bank granted us a credit of 1,000,000 crowns for thi< purpose; the remainder is covered abroad. Before closing my report I would point out that the result obtained by the Hangya during its 15 years of existence is satisfactory. It has fulfilled its task of regulating the prices of provisions. Wherever distributive societies have been established, it has effectually withstood the usurers, and it has accustomed its members to economy and to buying on cash, which is a very good result, considering that in Hungary in winter the people have little or no earnings. The distributive societies spread commercial knowledge and arouse a spirit of enterprise among the people, which circumstance contributes also to improve their standard of life. In Totmegyer you may visit a people's HUNGAEY. 173 house erected with the assistance of the ministry of agriculture, wherein the distributive society, the cooperative credit society, the farmers' association and the cooperative society for home industries work together in raising the intellectual level and improving the material condition of the people. There may be seen a small but model distributive society founded and conducted by the Hangya. QUESTIONS. Q. What proportion of the retail business of the society comes directly from the wholesale business ? A. About 60 per cent. Q. What does it cost to handle and sell the goods at retail ? A. About 15 to 20 per cent. Q. What is the cost of selUng the goods at wholesale ? A. From 5 to 6 per cent. Q. What are the salaries of the shop and storekeepers in the distributive societies ? A. About 1,200 francs per annum and lodging, which does not include meals, and 1 per cent on sales. Q. Wliat are the salaries of active directors and managers ? A. Mostly free service. Q. How do salaries compare to those paid in noncooperative societies ? A. Higher. Q. Do cooperative societies cut prices ? A. No; but lower prices by competition. Q. Are there any retail societies in Budapest ? A. Yes; one for household purposes. Q. How large a volume of business do city stores turn over in Budapest ? A. About 10,000,000 crowns. Q. What proportion of the business in Hungary is done by cooperative societies ? A. This can not be determined; but it is very small. Q. What dividend was paid last year. A. Five per cent is the maximum. Q. What rebate was paid last year by wholesale societies on amounts purchased ? What rebate on retail purchases ? A. Five and a half, including 5 per cent on stock, leaving one-half of 1 per cent on sales or 50 cents rebate on $100. The surplus is not always distributed, but it is generally placed in the reserve fund. Q. What is the percentage of loss of the Hangya on its entire wholesale business ? A. Not more than 10,000 crowns in 10 years. Q. What is the loss on retail business ? A. About 91,000 crowns in 10 years. Q. Have there been many failures in retail business ? A. Only a few; always on account of poor management and not on account of failure in principle. Prob- ably 2 to 3 per cent have failed. Q. What use is made of reserve funds ? A. Most of it is kept for permanent reserve; the balance is used for charitable and educational work. Q. How are retail organizations formed ? A. Mostly by the wholesale official organizer sent out for the purpose. Communities often ask for some one to come and assist in the organization. The minimum for an organization is 3,500 crowns. Q. How are losses made up ? A. They are shown in audit as loss. The Government sometimes assists, but very seldom. Q. Must members of the society buy entirely from the cooperative store ? A. No; they often go to independent stores for credit as the cooperative stores give no credit as a rule. Q. Can nonmembers buy at cooperative stores ? A. Yes ; but they receive no rebate. Q. Where do these societies get their money ? A. Wherever they please. The wholesale societies give retailers some credit. Q. What' length of credit is given to retailers ? A. A period not to exceed 90 days. Q. How are loans secured ? A. By biU of exchange; the society, through its directors, giving obligation. 174 AGRICXJLTUBAL COOPEEATION IN EUEOPE. COOPERATIVE VILLAGE OF TOTMEGYER. Stat bnt Scbmittbd to the Commissions. TOTMEGYEE. The community of TotmAgyer is sit ted in the county of Nyitra, just in the middle of the chief railway Une, Budap "Vienna. N er of inhabitants is 3,610, including the neighboring farmers. The surrounding lands beloni;; for the greater part to Count K&roljd, the remainder to small landowners. There is a cathedral in baroque style, two pubhc elementary schools, two kindergartens, and a hospital. Agricultural products are sugar beets, maize, and especially barley. There is no cattle breeding for want of pasture land. The cooperative movement began in 1896 with the foundation of the farmers' association. The distribu- tive society was founded in 1900, the credit cooperative society in 1902. These three societies were located separately until — thanks to the generosity of Countess Alois K&rolyi — in 1909 the "People's House" was erected, with the assistance of the minister of agriculture, at an expenditure of 52,000 crowns. Since that time, besides the above-mentioned three institutions, the Artisans' Club and the Gentry Club are also located in the People's House. This united effort has been crowned with success, considering that each society has since shown a con- siderable development. The credit cooperative society generally gives loans at the rate of 6 per cent; when, however, money is short — as the case now stands — 7 per cent is charged. The turnover of the credit cooperative society in 1912 was 126,000 crowns; number of members, 368; that of shares, 452 (par value, 50 crowns each). Saving deposits amounted to 92,000 crowns, the reserve fund to 5,255 crowns. Business done by the distributive society in 1912 amounted to 52,000 crowns; number of members was 77; share capital, 4,500 crowns; and the reserve fund reached 1,000 crowns. In connection with the distributive society there is a pork butcher's shop and a bakery. During the winter season evening lectures are given by the farmers ' association, and the large hall is used for performances and entertainments. The popular library contains 600 volumes. There are also two bowhng alleys and a tennis ground at the disposal of the members. It is pointed out that the zealous activity of the priest, the Rt. Rev. Charles Simk6, and of the estate physician. Dr. Louis Jaksics, who are the leading spirits both of the cooperative societies and the People's House, has contributed much to the success of these organizations. The president of the Cooperative Bank of Totmegyer, Mr. Geza Bangha, is a rental agent for several gentle- men in the neighborhood. He has been president for 10 years. He told us that the membership of the bank fluctuates very much, owing to the great poverty of the people, and that at the present moment it is rather low. A member may sell his 50-crown share at any time that he is compelled to have ready money, and the peasants frequently do this when they have no means of borrowing, because of lack of security, etc. It has been, he said, a hard puU to teach the peasants, who comprise most of the membership, to trust in the good intentions of the society, but this distrust is wearing away and he hopes for better times for the people. The people are also improving in the matter of thrift, and the bank is securing new depositors. The bookkeeper receives 1,100 crowns. For this sum he takes charge of the bank, distribution and buying society, hbrary of the Casino, etc. The two societies, i. e., bank and Casino, have otherwise separate ofl&cers, each having a president, five or six directors, and three inspectors, with equal authority. No loans are made without security, except in exceptional cases of very well-known and perfectly honest men. Among the members are seven women, widows. The membership comprises both peasants and villagers. The offices, except that of bookkeeper, are honorary. AUSTRIA. 175 AUSTRIA. CERTAIN ASPECTS OF COOPERATIVE AGRICULTURE IN AUSTRIA.* REAL PROPERTY IN AUSTRIA, Vienna. The complete area of the divisions comprising 17 separate crownlands represented in the Parliament of Austria is 30,000,793 hectares. Table I below shows the division of this area in the various provinces as well as the different kinds of cultivation practiced and the improvements which have been effected. Investigations on the subject of the size of the individual holdings into which the land is divided have not as yet been completed in all the crownlands; nevertheless, the information available furnishes sufficient data for presentation and is set forth in Table II below. Since the estabhshment of the so-called ground releases in the middle of the last century, the subsequent discontinuance of the serfdom of the farming element, and the hmitation of land ownership, land has been free from limitations of general ownership. Exceptions exist only as regards certain lands owned by the State, which can not be disposed of except by act of ParHament; lands owned by communities, the disposal of which is subject to the consent of the various diets; lands owned by reUgious societies and church corporations; and entailed estates. The latter are estates regarded as inaHenable property of one family descending in the order of succession as determined by the originator of such entail. The creation of such an entail, originally one of the prerogatives of the nobility, now requires a special act of Parliament. Table III shows the size and number of existing entailed estates. Table I. Total in hectares. Of the total area in per cent. Provinces. Arable land. Grass land. Gardens. Vine- yards. Pastures. Alpine land. Woods. Lakes, swamps, ponds. Barren land. Lower Austria 1,982,341 1, 198, 376 715,256 2, 242, 622 1, 032, 734 995,521 9,495 291, 834 495, 539 2, 668, 235 260, 200 5, 194, 810 2, 222, 216 514, 678 7, 849, 252 1, 044, 192 1, 283, 494 43.4 35.1 9.2 18.9 13.7 14.8 5.7 15.6 11.3 5.2 3.0 50.5 54.8 49.4 48.4 27.6 10.7 11.6 18.5 8.3 11.9 10.2 17.3 12.8 21.5 7.2 6.0 13.4 10.0 7.0 5.8 11.2 12.6 .8 1.6 2.0 .3 1.1 .4 .8 2.6 .3 3.3 .2 .4 1.3 1.2 1.3 1.4 .8 2.9 1.9 ""i'i' '""i'i' 12.9 2.4 9.4 .5 .5' ""'6.'4' 3.2 1.9 4.9 5.7 5.2 15.7 34.6 21.2 32.0 4.2 10.4 5.0 5.7 6.2 9.1 10.0 46.3 0.4 .6 29.0 6.2 17.1 1.4 34.3 34.0 32.4 47.9 44.1 44.4 23.2 22.9 33.2 38.9 25.9 29.0 27.5 34.2 25.8 43.2 29.7 0.1 .5 .9 .1 .2 .2 3.6 7.4 S^zburar 15.0 6.9 Carinthia 9.2 4.5 Trieste and territory 9.2 4.5 11.7 .2 .3 3.4 The Tyrol 25.7 33.8 19.1 Vnrflrl npre' 12.1 "BohfHiia .8 .2 3.4 3.1 3.1 .4 2.4 .3 .1 1.0 3.5 Bukowina 3.3 2.2 30, 000, 793 25.4 10.2 1.2 2.1 12.9 7.2 33.6 .3 7.1 ' This is a reprint of statement prepared and printed in English especially tor the Commissions by the Austrian Ministry of Agriculture. 14174 "— S. Doc. 214, 63-1 12 177 178 AGEICTJLTUEAL COOPEEATION IN EUROPE. Table II. Provinces. Lower Austria, Upper Austria Salzburg Styria The Tyrol Vorarlberg. . . . Bohemia Moravia Silesia Total number of real properties. 265, 084 109, 507 23, 006 182, 933 237, 172 37, 129 869, 886 542, 282 72, 876 Of these are properties of- , 0-Jhec Real prop- tare. i-5 hectares. 5-50 hectares. 50-100 hectares. Total Real prop- Total Real prop- Tccal Real prop- Total erties. area. erties. area. erties. area. erties. area. P. ct. P. ct. P. ct. P. ct. P. ct. P. ct. P. ct. P. ct. 39.44 0.92 34.36 8.37 25.08 53.48 0.92 10.70 26.56 .34 34.94 6.51 37.27 62.40 1.10 7.75 29.07 .10 23.43 1.67 40.11 23.16 5.76 18.09 18.53 .33 43.87 7.56 34.88 44.34 2.34 16.46 47.82 .61 36.00 5.93 14.18 18.51 1.32 11.05 40.77 1.10 43.03 11.86 14.67 24.50 1.07 15.57 42.91 .99 38.02 11.51 18.48 46.33 .45 6.34 49.60 2.21 36.23 14.40 13.81 45.84 .27 5.60 35.00 .70 43.73 12.80 20.66 41.21 .45 5.34 200 or more hectares. Real prop-: erties. Total area. P. ct. P. ct. 0.20 26.53 .13 23.00 1.63 56.98 .38 31.28 .68 63.90 .46 46.97 .14 34.83 .09 31.95 .16 39.94 Table III. 1 Number of — | Provinces. Number of — Provinces. Enbviled estates. Total area Farms of entailed belong- estates. ing thereto. Entailed estates. Farms belong- ing thereto. Total area of entailed estates. Lower Austria 71 174 125.995.801 58 18 220 59 579, 219. 410 177, 539. 479 Upper Austria 20 43 ' fin. 3.33. , =107 Moravia Styria 30 80 23^767.153 Silesia 5 ! 20 9 82 17, 670. 560 Carinthia 1 15 , 53 70,491.528 30, 026. 678 4,909.046 Carniola 10 17 ' 48,920.511 Dalmatia 36 36 Istria, and Trieste) The Tyrol 19 1 92 J 1,271.928 4 i 87.027 292 880 1, 140, 192. 628 Of the total area of these entailed estates 19.3 per cent are arable lands, 4.6 per cent are meadow lands, 66.2 per cent are forest lands, 4.1 per cent are pasture lands, and 3.1 per cent are barren lands. Recent legislation pays special attention . to measures aiming at the maintenance and preservation of medium-size agricultural holdings. To attain this object mention must be made of the regulation of succession in ownership according to the inheritance laws, to wit: The owner of an agricultural estate, may by his will dispose of his property at his pleasure in compliance with the civil code. In the event, however, of his dying intestate the property goes to the next of kin (as a rule to the eldest son). The other inheritors have no claim to the real property nor to any portion of the same and must accept as their share a money equivalent. The legacy depends on the value of the holding. The value, however, must be fixed by appraisement of the court, so that the next of kin may be able to main- tain himself after the deduction of the shares of the coheirs. The next of kin is, furthermore, entitled by law to obtain from the courts such alleviations as may be deemed advisable in lessening his obligations, in the payment of interest, and in final settlements. It may appear that these provisions discriminate against the other heirs in favor of the next of kin, but the disadvantages sufi'ered by the other heirs are amply compensated for by the great importance of maintaining property undivided. Laws to this effect exist in Bohemia, Carinthia, and the Tyrol and are at present under consideration and preparation in other crown lands. The Tyrolean law aims at the undivided maintenance of a farm. It contains a proviso by which an official commission, consisting of officials and farmers, must first consent to any detachment of a part of the land from such farm holdings. Other legal means to this end consist in the establishment of so-called leaseholdings, which is intended to prevent farm holdings from being split up in consequence of excessive mortgage obligations, or such as may be in danger of absorption by owners of large estates. Such laws exist in Galicia. They provide, in substance, ATJSTEIA. 179 that the Gahcian Provincial Leaseholding Commission shall grant loans, bearing interest to be paid annually, to farm owners whose holdings represent a legally stipulated medium-size farm. This enables them to pay the purchase price, satisfy mortgages, settle with coinheritors, erect buildings and make other improvements, and defray running expenses. The principal is to be paid within from 52 to 56 years. From data at hand to the end of 1911 such leaseholdings have affected 578 farms, having a total area of 6,700 hectares and valued at eleven and one-fourth million crowns, the mortgages amounting to five and one-sixth miUion crowns. In the Province of Bukowina the establishment of such leaseholds is about to begin. Recently a special law was enacted in the Province of Bukowina for the purpose of preventing the disin- tegration of registered tracts. It forbids the cutting up of individual tracts of arable land of less than 0.15 hectare and of Alpine and forest land of less than 1.5 hectares. While the measures thus cited tend to pre- vent the reduction of the size of agricultural holdings from their present extent, special laws, on the other hand, provide for the profitable development of individual holdings. This has been the policy of agrarian operations since 1883. In consolidating detached tracts of estates legislation aims at the advancement and increase of land and forest cultivation by improving and cheapening methods of exploitation, on the one hand, and by systematizing legal and economic conditions, on the other — a step which is of particular advantage to the numerous Alpine communities as to their pastures and forests. In 10 different provinces special officials are entrusted with the execution of these agricultural measures, known as agrarian offices. The segregation of such properties is effected by fixing their value as regards size and fertility and by their redistribution to individual owners. It must be specially noted, however, that with the execution of such agrarian operations is connected the improvement of the whole region, so that the landowners participate in all the advantages of rational soil culture and economy. In the reapportionment of the titles of property the individual owner must of necessity receive as compensation lands which must be of equal size and value, though slight differences are permitted. By the consolidation of farm property, the construction of roads and drainage, the grouping of fields easy to cultivate, and especially by bringing such groups of fields within easy reach of the farm buildings, a remedy has been found for the scarcity of farm hands. The steadily increasing cost of farm labor will also be less acutely felt by the farmer, since the redistribution of his holding permits of its more economical administration. The legal and economic regulation of the numerous agrarian communities is of great importance, since the right to share in these mutual holdings constitutes an appreciation in the value of the individual home- steads. Regulation of the right of usufruct in such communities in connection with farm improvements in Alpine districts effects an intensive and practical exploitation of tracts of land hitherto not utilized to the best advantage. ORGANIZATION OF AGRICULTURAL LAND CREDIT. No single financial institution deals exclusively with the needs and requirements of mortgage credit. The older savings banks, the banks of more recent growth, and the mortgage institutions especially created for this purpose all participate in extending such credit. In general, the profits derived from realty credits are not high, for which reason banks dependent upon profit engage in this line of business to only a limited extent. At present the principal part of the business of making loans on real property is in the hands of savings banks, mortgage institutions playing a secondary r61e. In former times bequests, church and orphan funds, and grain contribution funds covered the credit demands for agricultural purposes. So long as payment in kind prevailed these sources proved sufficient, but with the economic and social convulsions of the seventeenth century there arose a greater demand for money in agricultural pursuits, and at the right time the savings banks furnished a new field for credit. These banks, guaranteed by the city administration, began to gain a foothold in Austria at the beginning of the nineteenth century. The principal interest in the organization of savings banks was evidently the encouragement of thrift among the people, but of necessity the question of profitable investments by preventing losses must have been of paramount importance. Hence, the investments in mortgages must have appeared as the simplest and the most practical. The growing demand for substantial credit was in keeping with these times. In 1819 the first savings bank of Austria was established in Vienna, followed in quick succession by others in leading cities. There were 16 of such savings banks in 1849, 113 in 1865, and 669 in 1910. Most of them were organized in the cities and towns. Thus houses and real estate were first benefited by such institutions, although agriculture ultimately shared in the facilities extended by the banks. At the end of 1910 these 669 savings banks had 3,763,345,000 crowns iavested in mortgages, of which amount at least 55 per cent appertained to agricultural property. 180 AGRICULTURAL COOPERATION IN EUROPE. The economic affairs of Austria experienced a profound disturbance in 1848 and following years, causing a severe setback to the requirements of agricultural credit and to the development of realty credit organiza- tions. The banks adopted the system of the Credit Foncier of France, while the realty credit organizations adopted the system of the Prussian provincial governments, which resulted in the establishment of provincial realty credit institutions in Austria. Taken as a whole, the banks did not have a great influence upon agricul- tural credit, except perhaps in the case of the mortgage department of the I. & R. National Bank (now known as the Austro-Hungarian Bank), which was organized in 1856, but which was otherwise seriously handicapped in this particular department by reason of a proviso prohibitiag the lending of less than 5,000 florins (10,000 crowns) to any borrower. This proviso practically excluded the great number of small owners from taking advantage of this department's credit. After 10 years of activity the National Mortgage Bank had outstanding loans on mortgages to the amount of 126,203,316 crowns, of which amount 54,569,592 crowns were due in Hungary. In 1911 the Austro-Hungarian Bank had outstanding claims on mortgages to the amount of 55,690,000 crowns in the Austrian part of the em- pire alone, the increase in 45 years amounting to only 1,200,000 crowns. The banks operating for profit received slow and scant returns on their investments in average agricul- tural holdings, so that these sources of credit remained exclusively open to the large agricultural estates up to the present day for the reason that these estates became more and more industrialized and, consequently, better able to pay the high rates of interest demanded by the banks. For agricultural purposes in general the cooperative territorial mortgage institutions planned on the Prussian model proved to be the most suitable. The oldest of these institutions are the Galician Realty Credit Society, founded at Lemberg in 1865, followed by the Mortgage Bank of the Kingdom of Bohemia, at Prague, in 1869; the Austro-Silesian Realty Credit Institute of SUesia, at Troppau, in 1869; besides 14 others in the dif- ferent provinces except Styria. These institutions have very little working capital which is raised by the issue of mortgage deeds. These are secured in the first instance by the mortgage itseK, next by the assets of the institution, and, finally, by the guaranty of the provincial government. In 1910 these institutions, which for convenience will be referred to as provincial banks, had issued de- bentures to the amount of 1,557,819,000 crowns, about 80 per cent of which consists of agricultural investments. If we add to this amount the sum of 329,349,000 crowns in debentures which represent the investment of the combined orphan funds, it becomes clear that the savings banks and all other credit sources share equally in satisfying the needs of agricultural credit. The provincial banks will probably gain a still larger proportion of this business, since they are less affected in their development by unfavorable conditions in the money market. Agriculture prefers the credit of the provincial banks to all other sources of credit because they offer the lowest and most stable rates of interest, because loans are amortizable in small annuities, and because the loans are irredeemable. Under normal conditions the mortgage loans of private parties and of the savings banks should be converted into loans by the provincial banks, because the former are not in a position to waive re- demption and may not be able to adhere to an unfluctuating rate of interest during the whole period of the loan. It is furthermore impossible for private parties to make amortizable loans for small amounts. To day the provincial banks are practically in the lead so far as agricultural debenture credit is concerned. They would undoubtedly lead to a monopoly were it not for the legal sanction of three fundamental conditions — irredeemability, fixed rates of interest, and compulsory amortization, which are not available for every Irind of agricultural loan. An excessive rate of interest is irreconcilable with amortization in agricultural transactions, which reason discourages the conversion of older mortgages as well as the granting of new loans. The chief obstacle is the lack of opportunity to dispose of such debentures, notwithstanding the fact that the exceptional security of these debentures provides an absolutely safe investment. The conditions upon which credit on debentures is granted by the provincial banks are most rigorous. The value of property assessments is fixed by sworn experts and reexamined by the trustees of the bank. Loans are finally granted on fertile lands in amounts not in excess of three fourths of the actual value and on rentable buildings not in excess of one -half of the actual value, besides demanding proper fire insurance and security upon amounts of settlement in the event of damages by fire. It has been demonstrated by experience that the provincial banks have never suffered losses in compulsory realizations of their claims. The mortgages, the assets of the bank, and the province with its taxes serve, as has been stated, as guaranties for the deben- tures. It is desirable that the substantial investment in debentures of the provincial banks of Austria should be better known in foreign countries. At the end of 1910 there were current ia debentures of the provincial banks (m 1,000 crowns), at 3J per cent, 36,533; 4 per cent, 1,372,157; 4§ per cent, 97,084; 5 per cent, 25,816; 5^. per cent, 16,153. ATJSTBI^ 181 To these must be added debentures to the value of 4,470,000 crowns withdrawn from circulation for redemption, though not yet redeemed, the total value being 1,536,076,000 crowns. At the same time the balances of these banks showed the following figures (in 1,000 crowns): Liabilities: Fund for current expenses 3g 500 Own reserves 43889 Profits ' ][[[[[[[[[[[[[] ]['..[[[.[[[[[.[[[[['. 3' 266 Interest-bearing deposits 64, 129 Ciurent accounts 15X,' 362 Debentures issued 2, 576| 663 Assets: Cash on hand Ig 417 Note discounts 82^ 119 Loans on pledges 181 Stocks on hand 105, 496 Mortgage loans 1, 577, 496 Communal railway and improvement loans 1, 035, 652 Debtors 109, 837 Immovables 9, 610 The total receipts of the provincial banks on December 31, 1910, amounted to 109,903,000 crowns, the expenditures to 106,777,000 crowns, showing a profit of 3,126,000 crowns. The communal and other loans mentioned in the assets are loans granted by the provincial banks to communities and other pubhc corporations privileged to levy assessments for public works, etc. For such loans communal debentures are issued, the management of which is strictly separated from the realty credit transactions and their debentures. At present there exist 17 realty credit institutions, as follows: Organized. ' Name and location of institution. 1841. Galician Bealty Credit Society in Lemberg. 1865. Mortgage Bank of the Kingdom of Bohemia in Prague. 1869. Austro-Silesian Realty Credit Institution of Silesia in Troppau. 1876. Mortgage Bank of the Markgravedom of Moravia in Brunn. ' 1881. Realty Credit Institution of , the Markgravedom of Istria in Parengo. 1883. Provincial Bank of the Kingdom of Galicia and Lodomeria, including the Granddukedom of Cracow in Lemberg. 3889. Provincial Mortgage Institution of Lower Austria in Vienna. 18S0. Provincial Bank of the Kingdom of Bohemia in Prague. 1890. Provincial Mortgage Institution of Upper Austria in Linz. 1896. Provincial Mortgage Institution of Carinthia in Klagenfurt. 1898. Realty Credit Institution of the Kingdom of Dalmatia in Zara. 1899. Mortgage Bank of Vorarlberg in Bregenz. 1901. Provincial Mortgage Institution of the Tyrol in Innsbruck. 1903. Provincial Realty Credit Institution of the Counties of Gorz and Gradisca in Gorz. 1905. Provincial Bank of the Bukowina in Czernowitz. 1909. Provincial Mortgage Institution in Salzburg. 1910. Provincial Bank of Camiola in Laibach. These institutions are characteristic of Austria and merit the attention of countries where the greatest possible freedom of the individual and the vigorous development of the State as a whole are to be found working harmoniously together. COOPERATIVE ORGANIZATION. CKEDIT. Prior to 25 years ago Austrian agriculture lacked an organized and efficient personal-credit system. To-day, however, there exists an organization for this purpose with many ramifications. The immense capital now available for personal credit is derived from the very soil to whose rejuvenation and stimulation it is now devoted ; it is the surplus of prior years of abundance. In 1888 the first Raiffeisen societies were created in Lower Austria and these were soon followed by others in different provinces.' After overcoming the first difficulties, especially the deep-rooted distrust of the rural population toward any innovation, these Raiffeisen societies began to grow Uke mushrooms in all the provinces and soon developed an unusually fruitful activity. Raiffeisen societies are cooperative organizations with unUmited liabihty which limit their activities to the community in which they are located and, if necessary, to several contiguous communities. The administration of these societies is purely honorary. Most of them have from 100 to 150 members, but there are also some which number only 20 and others again which are com- posed of over 1,000 members. The average investment of each member amounts to about 15 crowns ($3). The members of these societies are by no means recruited from among farmers exclusively, since many factory workers, shopkeepers, merchants and others belong to them, and the commercial membership have frequently induced these societies to grant current-account credits. School-teachers and priests have shown themselves ' Crownland (Kronland), as for example the Kingdom of Bohemia, the Principality of the Tyrol and Vorarlberg, the Markgrave- dom of Moravia, etc., are crownlands in the sense of provinces. 182 AGRICULTtTRAL COOPERATION IN EUKOPE. willing to assume the honorary functions of managing and keeping the books of such societies and have zealously carried on a propaganda for the underlying principle. Here and there these societies also lend money on special security. Although contrary to the principles upon which the Raiffeisen societies are founded, local conditions compelled some of them to lend money on mortgages, their legitimate purpose being to secure to farmers safe investments for their savings and to afford them short-time loans. These Raiffeisen societies have also to a great extent awakened among the rural population a sense of thrift. The farmer and his laborers, who in former days concealed their savings in stockings beneath their beds, in hay or behind the stoves, deposit it to-day with these Raiffeisen societies. They have learned that it multiplies, that it grows, and every spare crown now finds its way there. When in the autumn the farmer has sold his products, he repays the loan received and leaves the balance as a saving investment. Day laborers, factory hands, and even children are numbered among the depositors. In the German portion of Bohemia, in 1910, out of 130,000 saving-deposit accounts 50,215, or more than a third, came from servants, workingmen, and children. The total deposited by children amounted to three and one-seventh milhon crowns, the deposits of servants and workingmen reached fourteen and one-sixth milUons. Auxihary saving cards and home saving boxes greatly encouraged saving. It can safely be asserted that, without the stimulus of the easy and convenient terms offered by the Raiffeisen societies a large number of these persons would have made no deposits owing to the lack of time, the distance to be traveled to the nearest savings bank, and the small sums involved. In Galicia these Raiffeisen societies have become the depositories for the savings sent home from America or brought back by returnuig emigrants. Even the harvest workers, who each year go to Germany, Denmark, France, and into the interior of Austria, invest their savings in them, thus providing ample loans for their towns- people, which in Galicia are not used to defray running expenses, but rather for improvements. The Galician Provincial General Office ascertained and published the fact that not less than 57-^ per cent of the credits granted were used for the acquisition of land, the erection of dwellings and farm buildings, the settlement of claims in joint legacies, and the improvement of the soil. While deposits may be made by anybody and the savings feature proves of benefit to the entire community, loans can be made to members only. These credits are granted for specific purposes, provided that a reliable guarantor is fm-nished or other satisfactory security is given and that loans be granted for short periods only. Although, as a matter of principle, credits ought not to be granted upon bond or mortgage debentures, yet this practice has become somewhat general of late. Credits on bonded securities have in fact become very popular in the Tyrol, SUesia, Carinthia, Carniola, Salzbiirg, and Vorarlberg. Loans on mortgage security are also granted in the last-named province, in Bohemia, and in Moravia. WhUe the sum total of loans on bonds in all the Raiffeisen societies of Austria in 1903 did not exceed 1,000 crowns and the mortgage loans to only 1,499,000 crowns, in 1910 the loans on bonds amounted to 1,447,000 crowns and those upon mortgages to 95,999,000 crowns, against which the sum total of credits only grew from 223,000,000 to 584,000,000 crowns. This is explained by the fact that the mortgage loan institutions Qand- credit institutions) can no longer supply the credit wanted and are but little used, since, in consequence of the low rate of interest on mortgage loans, there is little demand for them. There are at present in Austria more than 8,000 Raiffeisen societies. The business report of these societies for 1910 shows that 7,197 of them have 944,526 members, 234,190 of whom are in Galicia and 200,032 in Bohemia. The financial features of these 7,197 societies were as follows: Crowns. Investments 11, 129, 000 Reserve funds 16, 047, 000 Savings and book accounts 762, 201, 000 Outstanding credits 584, 957, 000 Mortgage credits 95, 999, 000 Amount of business transacted, about 1, 727, 000, 000 ' The relations of deposits to loans are shown by the following table : In millions of crowns. Saving deposits. Credits. Lower Austria 78 44 10 13 36 25 15 9 Dalmatia AUSTRIA. 183 The reserve funds are of various amounts. There are societies with insignificant reserves and others with reserves varying from 20,000 to 30,000 crowns. In 1908 the average reserve fund of one of the societies amounted to 2,084 crowns, or 16 crowns per member. The business results of the societies, in spite of the scarcity of money with which they have to contend, are almost everywhere satisfactory. While the net profits in 1907 and 1908 amounted to 1,977,266 and 2,566,964 crowns, respectively, the losses amounted in the same period to 69,643 and 243,483 crowns, respectively. The great increase in the latter figures is due to losses of a single society in Carniola. For the year 1908 the average profits amounted to 393 crowns per society or 2 crowns and 98 hellers per member. The cost of inanagement is small; in 1907 and 1908 it averaged 494 and 486 crowns, respectively, per society, or 3 crowns 49 hellers and 3 crowns 41 hellers per member. Another feature of agricultural personal credit is represented by the agricultural credit associations, organ- ized upon the system of Schulze-Delitzsch, a German social reformer of the preceding century. These organi- zations can not, however, be properly regarded as purely agricultural, since their membership consists chiefly of small tradesmen and persons following other occupations. Some 500 of these societies may be regarded as almost exclusively agricultural, namely, those found in Carniola and m the Slavic districts of Stjrria. Both categories of cooperative societies are based upon the law of April 9, 1873. This law is soon to be revised, the draft of a bill for this purpose being now before Parliament. As elsewhere, the Austrian cooperative societies formed central organizations within the various provinces. As a natural consequence of the racial conditions found in some of these provinces where more than one language is spoken, two or more central organizations exist. For instance, two are in Bohemia and three each in Silesia and the Bukowina. It is gratifying to note that the different nationalities cooperate with each other most harmoniously rendering one another mutual assistance, and that, while national differences have nowhere been accentuated, they have rather produced a salutary effect. This applies especially to Bohemia. The central associations include, besides the credit organizations, productive and distributive organiza- tions. In some of the provinces, however, the credit organizations are united in special central associations. In the Tyrol, for instance, the credit societies are represented in the central association at Innsbruck, while the other cooperative agricultural societies of the southern Tyrol have their central headquarters at Bozen. In Lower Austria there is a cooperative central society and a central organization comprising the productive and distributive societies. There are, likewise, two central organizations in the Bohemian portion of Moravia, one of which represents the Raiffeisen societies, while the other, in addition to credit societies based upon the Schulze-Delitzsch system, consists of strictly agricultural societies. The largest central organization as regards membership is that of the agricultural cooperative societies of Bohemia, which numbers 2,000. The objects of these central associations are: (1) To advise the societies in legal and commercial matters and in the representation of cooperative interests in general. (2) To supervise the cooperative societies. This phase, being based upon the law of 1903, represents an extensive field for central activities. These revisions not only take place every second year, as required by law, but frequently oftener, giving the central bodies the opportunity to advise the cooperative societies as to their business transactions. (3) The main object of the central association, however, is to fulfUl the credit requirements of the sub- sidiary societies. The central bodies, by paying interest therefor, assume the floating cash balances of their members and also accept loans from nonmembers for such purposes. The granting of credit is carried on, as a rule, upon the basis that each local society is entitled to a given credit for each of its members according to local conditions. The various central bodies foUow a different procedure in this matter. While the central body of Lower Austria grants to most of its societies a standard amount of 250 crowns per member, the standard limit of the central body of the German agricultural societies of Bohemia amounts to 400 crowns, while the German central association of Moravia grants 600 crowns. The central associations are, however, also required to grant credits to the affiliated producing, distributing, and purchasing societies. The ratios are as follows: Investment- credits of from 50 to 70 per cent on real and investment values are granted on the basis of the last trial balance sheets; guarantors' credit of from 50 to 70 per cent on the collateral security of the members toward the organization; and credits in varying amounts are granted on outstanding claims, on merchandise oii hand, and on implements in use. Many central organi- zations also grant credits under certain conditions to communities or to other corporations privileged to levy taxes. Central associations are required to invest their surplus partly in stocks, but only in such as are recognized trust securities, and partly also in banks by opening regular accounts. Subsequent to the falling off of margin rates on such stock as experienced of late, particularly in the line of government loan and mortgage debentures, these central organizations have suffered severe losses on margins. On this account the Upper Austrian 184 AGEICTTLrUBAL COOPERATION rPT EUROPE. Cooperative Central Association suffered a loss in 1911 of 400,000 crowns in margin. Although such losses are regarded as book losses, they appear in the balance sheets notwithstanding, and the central associations justly fear that such occurrences are apt to shake the confidence of the affiliated societies. Efforts are therefore being made to find a system by which margin losses may not appear on the balance sheets as such. So far, however, no means have been found to attain this end on the one hand while complying with the accuracy of the balance on the other. The central associations continually endeavor to develop cooperative enterprises by the creation of new ■ loan and other cooperative societies and, if need be, prevent new and injudicious combinations, besides seeing that the managers and bookkeepers of the affiliated societies properly discharge their duties. To attain the latter purpose, courses have been arranged for the training and education of cooperative officials. But the central organizations go still further. In districts where the population is stUl inexperienced these cooperative associations render most valuable educational services. They arrange for traveling lecturers and issue almanacs and leaflets for the dissemination of knowledge. Mention should be made in this connection of the Servian cooperative association in Ragusa, of the Ruthenian association in Lemberg, and of the Roumanian association in Bukowina. The following table is illustrative of the business activities of a number of these associations during the year 1911: In thousands of crowns. Central Association of Upper Austria Central Association of Lower Austria German Central Association of Bohemia Bohemian Central Association of Bohemia Cooperative Association of Laibach German Cooperative Association of Czemowitz Servian General Association of Ragusa 15, 107 43, 518 ■29, 770 28, 108 13. 398 1,413 12S 2,063 12, 388 10, 239 24. 15] 12, 604 2. 43S 182 56, 276 188, 706 120. 114 318, 000 102, 125 16, 062 3,984 These figures show, on the one hand, the large volume of business done by the central associations of Austria and, on the other hand, the marked difference between the deposits and loans in the individual provinces. While the deposits of the organizations in Bohemia and in the interior of Austria are greatly in excess of the loans, in the I^aibach organization the loans and deposits about equal each other. On the other hand, the demand for credit in the organizations of Czemowitz and Ragusa, as also in the east and south of Austria, is so great that the loans far exceed the deposits, thus compelling the organizations to procure money elsewhere at a high rate of interest. Though it may not be pleasing to know that many central associations, like those in Linz and Vienna, are compelled to deposit many millions of crowns, drawn from the savings of the agricultural population, with banks whereby an entirely different class is benefited, the money scarcity of the southern and east central associations should cause serious reflection. Access to the great money market is evidently not free to the cooperative central associations. Although the Austro-Hungarian Bank has of late shown a disposition to conform to the wishes of the agricultural associations, yet these bodies can not make use of the credit of this note bank in the same manner as merchants and tradespeople. The provincial associations which lack funds are, therefore, in need of a bank from which they can obtain money at low rates of interest. But even the better-situated central associations can not dispense with a money-clearing center, an institution intended to regulate the business of the cooperative organizations and to supervise their activities, especially their solvency, while on the other hand paving a way for a general money market. An institution of this kind, in accomplishing its legitimate ends, would not only have to stimulate its activities by auxiliary enterprises, but would also have to act the part of an institute of emission, to issue deben- ture stock against assumed obligations, whereby, by virtue of realizations in the investment market, the necessary means could be obtained to enable them to furnish credits. For years the Austrian agricultural cooperative associations aimed at the cooperation of the Government in the establishment of a credit institution similar to that of the central cooperative associations of Prussia, which should be the very apex of cooperative central organizations. This desire now appears to be nearer realization, since the draft of a bUl to that effect has recently been submitted to Parliament by the Government, aiming at a "general credit institution for the trade And agricultural cooperative associations of Austria." Should the provisions of this bUl, however, not fully comply with the intentions of the cooperative associations, the demand for a central clearing center would nevei^ tbeless, be gratifying. AUSTRIA. 185 THE PtTECHASE OF MERCHANDISE. The identical disadvantages to which farmers were subjected originally in obtaining necessary loans were also present ia the purchasing of their merchandise. But here again the cooperative societies intervened with a helping hand. Just as the credit societies represent a strong and solvent debtor who can obtain loans on easy terms, the purchasiag cooperative society represents a strong and competent buyer to which lower prices are gladly offered since its custom is highly appreciated; and inasmuch as cooperative purchases, as a rule, can be made without investment, the Eaiffeisen societies can therefore easily assume the purchase of articles for agricultural use. These purchases usually apply to articles in bulk, chiefly fertilizers and feeds, such chemicals as blue copperas for spraying purposes; also seeds, agricultural machines, coal, and frequently also cattle for breeding purposes. Outside of the RaifJeisen societies purchases are also made by (1) purchase and sales associations, which also attend to the sale of products; (2) grain-storage associations; and (3) consumers' associations, which also carry household articles. Wholesale purchase is well developed in some parts of Austria; in others it remains as yet an experiment. A great part of cooperative wholesale purchase fell to the lot of the central associations, which attend to the purchasing of necessities- for their afSliated societies. They have not only assumed the ordermg of goods fo'r their constituents, but have also organized the purchasing system. It is due to them, for instance, that the purchase of fertilizers is growing from year to year. COOPERATIVE PRODUCTION. The cooperative production societies have proven of the greatest advantage in the development of agri- culture, not only by concentrating available reserves, but also by creating such reserves and consequently aiding in the development of agriculture. To some extent they have assumed functions formerly performed by small farmers, but have improved upon them by making use of modern technical and chemical innovations. To some extent they have also taught the farmers how best to utilize and enhance th^ value of their products by methods formerly unknown to the average farmer. The foremost position taken in the direction of cooperation was assumed by the dairy associations. Their advantages consist in the attainment of better quality of products, greater exploitation of the material, better prices for products, mitigation of the farmers' housework, better control of production, and an increase in the profits of milk production. Such societies as can easUy dispose of their milk sell it themselves; others more distant from the great centers of consumption produce butter and cheese. Another important form of cooperation consists in the cellaring (wine storage) societies. It is a well- known fact that the process of fermentation is the most trying for the small wine-growing farmer. Lack of proper cellar facilities, tanks, barrels, proper personal efficiency, and marketing possibilities are additional disadvantages for the small man. This applies particularly to the Tyrol, where German cellaring societies are united in one organization, which proves of great advantage to this class of farmers. ■ Then there are in Dahnatia cooperative societies for the disposal of olives by the growers of olive trees which are so numerously cultivated in that region. In former days only the most primitive methods were used in handling olives. But in 1908 the ministry of agriculture assumed the organization of these societies, creating a special establishment for handling the product of farmers' societies, at the same time organizing the sale of the oil in Austria and in foreign countries. These societies are to-day provided with the most modern machinery and secure to the farmers good profits. The members of these societies therefore display a laudable sense of cooperation by providing their own men for their cooperative plants. Furthermore there are cooperative societies of flax growers in Bohemia and Moravia, which partly roast their own flax and prepare the same in difiFerent ways for the market. There are also cooperative distflling plants utilizing the potatoes raised by their members, at the same time supplying them with swill for their hogs. In Bohemia many farmers operate cooperative plants for the drying of chicory; in the south of the Tyrol and in Gorz for the cooperative drying of sUk cocoons. Some cooperative associations pickle sauerkraut; others produce oil of rosemary, and again others dry potatoes cooperatively. Many societies carry on cooperative cattle raising and attain thereby great results in the development of crossbreeds. Pasture societies are also multiplying visibly. COOPERATIVE SALE OF PRODUCTS. To this category belong those producers' societies which do not assume the sale of products fit for imme- diate marketing, but which, by means of more or less complicated manipulations, turn such into marketable merchandise prior to seUing them. These are regarded as purely distributing societies, since they attend to 186 AGKICULTUEAL COOPEKATION IN EUKOPE. the collecting, sorting, mixing, cleaning, and sale of agricultural products. Such especially are the grain-storage societies, the societies for the disposal of eggs, the truck-farm distributive societies, and the societies for the disposal of live stock. The advantages derived from the activities of the grain-distributing societies are: (1) Improved methods in the grading of qualities by means of drying, mixing, and assorting grain to render it readily salable; (2) regu- lation of prices according to the requirements of the different markets; (3) acquisition of easy credits for farmers on stored grain as collateral; and (4) economy in handling expenses and transportation rates in the sale of grain. The storage societies are particularly well developed in Bohemia and Lower Austria. The 21 storage plants of Lower Austria sold for their members in the fiscal year 1910-11, 330,000 quintals of products and purchased for them 366,000 quintals of agricultural supplies. The storage societies are also of great importance in the delivery of farm products to the army commissariat. The development of the cooperative disposal of live stock is a recent growth, although in a short time a great number of cooperative societies for the disposal of live stock have been founded, as well as several large organizations which have provided distribution centers for the disposal of the products of smaller societies. Mention is also to be made of societies for the disposal of eggs in Lemberg, which export millions of eggs annually. There is also an egg-distributing society in Scharding. The sale of hay, grain, and straw by individual societies is likewise often centralized in the associations. The association of agricultural cooperative societies in Lower Austria boasts of business transacted in 1910 to the amount of sixteen and one-half million crowns. Of great magnitude also was the business done by the Czech association of Prague. The Czech association of Brunn, Moravia, known as "Ustredni svaz," transacted business to the amount of ten million crowns. This association sold for its affiliated societies butter, pot cheese, and cheese to the value of two million ci:owns, mostly in foreign countries, especially in Leipsic and Berlin. This association secured for its members a substantial market for barley in Roumania. One associa- tion in Laibach sells Carniola beans in France, potatoes in Pola and Fiume, apples in India, and lumber in the Orient. Great deliveries of h&y, straw, barley, and cereals were effected by these associations to the army ' commissariat. LEGISLATION. FORESTRY. The maintenance of forests is not only a matter of general economy, but also one of great importance for climatic and hydrographic conditions; therefore, a control over the administration of private woodlands in the interest of the public is justified. This is the purpose of the fores law for the empire of December 3, 1852. Its principal contention is that no woodland may be exempted from forestry regulation. This appUes with special force to so-called protective forests, destined to bind the soil so that it may not become hable to slides in consequence of natural forces, and to such as act as windbreaks for adjoining properties. In provinces where woodland is insufficient, as for instance in certain Alpine districts, special laws have been enacted vaih a view of afforestation on a larger scale at public expense. FIELD AND FOREST PROTECTION. Crops and all objects of cultivation in the fields, such as trees, plants, fruit, live stock, implements, manure, etc., are regarded as especially protected field property. "Field violation" means every willful act of damage to such property not subject to the general penal code, but which is frequently enacted as a prohibition in pro- vincial laws for the protection of field property. Timber in forests is also protected by more stringent laws similar to field violations; such are designated and punishable as forest violations. For the control of field and forest properties a field or forest protective official has been created, acting under oath in public or private service, who, however, must be recognizable by a badge. This field service is regulated in detail by the laws of the provinces and by the aforesaid imperial law of 1852, partly also by special laws of the provinces. PLANT PROTECTION. Since the destruction of various kinds of parasites can only be accomphshed by united measures, a number of provincial laws, requiring the owners of real property to destroy May bugs, larvse, etc., were enacted. In special cases assistance in such work is rendered from public resources. To this category also belongs the imperial law of April 3, 1875, deahng with the destruction of phylloxera. Against this great enemy of the grape- vine, the international convention of November 3, 1881, was directed for the purpose of regulating international traffic in plants in such manner as to prevent the spread of phylloxera as much as possible. For the destruction of field mice, which appear in great numbers at times, certain measures are prescribed by law. The expenses involved are borne by the Government, but the owners of real property must contribute in proportion. AUSTEIA. 187 BIRD PROTECTION. The international convention of March 19, 1902, recognized the importance of certain birds for agriculture and rendered them special protection. Similar provisions are carried out in many provinces by special laws- Two kinds of lists have been prepared dealing with useful and injurious birds, prohibiting the catching and destruction of the former while permitting both in the case of the latter. For all other birds a close season haS been provided by law. PROTECTION OF AGRICULTURAL PRODUCTS. In disposing of his product the farmer acts the part of a trader and as such is entitled to laws for his pro- tection. Provisions to this effect are contained in the general imperial laws of January 16, 1895, relating to transactions in the necessities of life. AU persons are guilty of violations who, for the purpose of fraud in trading in foodstuffs, imitate and adulterate or who fraudulently offer for sale or sell foodstuffs under forged markings. The wine law of April 12, 1907, is also based upon this law, especially aiming to prevent the adultera- tion of wine. The law of March 17, 1907, rests upon the same principle of good faith in commercial transactions which prohibits fraud in hops. The value of this product depends to a great extent upon the spot where the hops were grown. Hops grown in Saaz, for instance, are world famous. This causes frequent frauds as to the origin of this product, and punishment must consequently be meted out to those who are guilty of fraud. This applies to aU designs on the bags, prices current, business letters, biUs of lading, and certificates of origin. VETERINARY POLICE. Live stock represents a valuable asset in the capital invested in agriculture, so much more so since its regeneration is a question of long periods; hence the necessity for special legal protection of hve stock. Such protection is primarily vested in the veterinary police created upon the basis of the general live-stock epidemic laws of August 6, 1909, the cattle pest law of February 29, 1880, and the law of August 17, 1892, aiming at the prevention and extermination of pneumonia. In these laws measures are prescribed to be applied within the State in the eradication of such epidemics and to prevent the entry of the same from foreign countries. As to measures relating to local epidemics, these laws provide for an obhgatory passport for Hve stock permanently leaving its place of habitation; the compulsory notification of certain diseases of five stock upon the appear- ance of the same; and the isolation and eventually the Idlling of diseased animals by the authorities, compen- sation for the loss of such animals being allowed to the owners by a special epidemic commission. In the importation of Hve stock from a number of countries, regulations have been adopted by veterinary conventions which not only apply to live stock, but also to meat, meat products, and crude animal products. Importations from countries with which no conventions exist depend upon decisions of the ministry of agri- culture in each individual case. Between Austria and Hungary the traffic is absolutely free, although in the agreement of 1907 between these countries some special provisions relate to the mutual traffic in five stock. DISPOSAL OP LIVE STOCK. The first advance in the disposal of live stock was the adoption of measures for its sale; the next step was the creation of conditions under which the farmers or their organizations could arrange for the ready disposal of their live stock by improving the quality or by reducing risks. For the purpose of systematizing such operations a center for the disposal of live stock was created by ministerial decree of March 20, 1910. The functions of the aforesaid centers are chiefly as follows: (1) As a technical advisory auxiliary to the ministry of agriculture in all matters pertaining to the disposal of live stock and meat products; (2) an advisory and educating body of farmers in aU matters of live-stock disposal, especially as to the organization of the sale, export, and insurance of live stock, and in matters aflfecting markets, tariffs, transport, the extension of business connections, and the assistance of organizations for the disposal of hve stock in differences with local authorities, etc.; (3) to further the development of live-stock markets for breed- ing and draft animals as well as for slaughter; (4) the encouragement of live-stock insiu-ance, the acquisition of food supplies, and the examination of feeds and fertilizers; and (5) the plants of the organizations and enter- prises devoted to the disposal of live stock are subject to the inspection of the central body. By the law of December 30, 1909, the sum of 1,000,000 crowns a year, from 1910 until 1918, was provided by the Government to be expended in furthering the disposal of live stock. The principal object of organiza- tion is to give the farmer support and encouragement in the disposal of his live stock and meat products. The action is perfected by organizations for the delivery and sale of live stock. 188 AGEICULTURAL COOPERATION IN ETJKOPB. DELIVERY ORGANIZATIONS. The trustee system, so called, is a scheme whereby certain trustees are selected for a given district, whose functions consist in advising the farmers as to the actual market prices of live stock, in collecting the live stock of their district and shipping it in carloads to the market to be sold. The proceeds are divided among the orig- inal owners of the stock. The selection of the trustees is, as a rule, made by an agricultural corporation. In substance, the live-stock disposal societies, while performing the same functions as these trustees, are able, in addition, to furnish credit and lend money. In many instances these live-stock disposal societies slaughter their own stock and dispose of the meat direct to consumers. While the delivery of stock for slaughter is usually made on commission sales, the disposal of breeding and draft stock is effected indirectly by the society in bringing together seller and piu-chaser, who make their own bargains. In furtherance of the marketing of stock for breeding and draft purposes, lists are published from time to time giving the addresses of sellers and purchasers of live stock. There have been issued 48,000 copies of the list published by the central office for the disposal of live stock. SELLING ORGANIZATIONS. The simplest form of organization for the sale of live stock consists in the appointment of an agent whose duty it is to sell the stock assigned to him as commissioner. The more advanced form consists in the estab- lishment of centers for the disposal of hve stock. These, as a rule, are branches of agricultural corporations which provide the necessary commercial experts for the commission sale of such stock. Having no capital, these corporations can not extend credit. In larger producing centers, as in the principal live-stock markets, independent commercial organizations ' exist, such as corporations with limited liability, which attend to the buying and selling of live stock. Such a corporation in Vienna is the General Society for the Disposal of Live Stock. The functions of such organiza- tions are in general: (1) The maintenance of a permanent news service as to prices of live stock; (2) the purchase and sale of live stock; (3) the granting of credits for purposes of pxirchasing, fattening, and selling; (4) the crea- tion of plants for furthering the disposal of live stock, the production and preservation of feed and utilization of offal; (5) the maintenance of slaughterhouses and the manufacture of meat products; (6) provision of insur- ance against losses in slaughter and transportation damages; (7) the acquisition and management of real prop- erty for the stabling and fattening of live stock; and (8) the management of funds of live-stock centers. The societies for the disposal of live stock maintain business connections with banks in order that they may command the necessary capital. Live-stock supply societies are connected with them and receive from them advice in commercial matters. The obligatory animal and meat market foundations referred to in one of these treatises represent a necessary auxiliary to the aforesaid organizations. At present there exist the following societies for the disposal of live stock: Five societies for the disposal of live stock, with three others in the course of organization; 7 live-stock disposal centers, principally selling slaughter stock on commission; 39 centers for breeding and draft stock transactions; 7 organizations engaged in slaughtering; and 100 societies for the disposal of live stock, the greater portion of which exists in Galicia. Trustee organizations for the disposal of live stock, as described, exist all over the Empire. The value of the sales of products can not be exactly established, since the sale of breeding and draft stock is not regularly reported to the organizations. The value of the sales in 1912 can, however, be safely estimated at approximately twelve to fifteen million crowns. PROVINCIAL MORTGAGE INSTITUTION OF LOWER AUSTRIA. This institution was created by the Diet of the Archdukedom of Austria below the Enns to promote irre- deemable annuity loans at a fixed rate of interest, without aiming at profits, for the purpose of (1) enhancing the value of the real property of the province and (2) of fostering the credit of the communities. Both branches of the business must be managed separately. The activities of the institution are limited to the Province of Lower Austria, to its 19,816 square kilometers and its 3,500,911 inhabitants, inclusive of the capital city of Vienna, with 2,031,498 inhabitants. This institution is managed by a board of trustees elected by the provincial representation exercising its functions under the supervision and control of the provincial executive and the Diet. The business of the institution is conducted by 113 officials and 22 minor functionaries. MORTGAGE CREDIT. Mortgage loans are granted by this institution upon debentures in amounts of not less than 200 crowns, as follows: (1) On such real property within the Province of Lower Austria as is entered upon the real estate AUSTEIA. 189 register, and (2) on buildings entered upon the local real estate register of the communities withia the Province of Ijower Austria, with the exception of industrial establishments, theaters, mines, quarries, and other property legally exempt from execution. Loans may be granted on buildings to one-half and upon real property to two-thirds of their ascertained value. In vineyard lands, where the value is conditional on the state of cultivation, loans are limited to one- third of their value. The estimate of value is, as a rule, made by a commission at the expense of the borrower. An estimate of value of agricultural property is dispensed with when the net income of the same, as attested by the tax assessor, is 25 times as great as the desired loan; in such cases a portion of the fire insurance on the farm buildings is reckoned as security. COMMUNAL CREDIT. Since 1898 the provincial mortgage institution has granted credits to the State for State purposes, to the Province of Austria below the Enns, to the municipalities, to public corporations privileged to levy- taxes, also to others if any of the aforesaid assume guaranties without mortgage securities. It also grants so-called communal loans by means of debentures marked "Lower Austrian, provincial or communal bonds." Communal credit is granted by this institution for various purposes, such as advances for providing homes (the erection of cheap and healthy dwellings for the people), the construction of public office buildings and school structures, poorhouses, insane asylums, hospitals, barracks, illuminating plants, and baths, and for the laying of water pipes, the construction of drains, ground improvements, roads, bridges, railway con- struction, etc. The provincial mortgage institution obtains thei means of fulfilling its mission through debentures and communal bonds issued in proportion to the amounts of the respective loans; the assets of the separately managed branches of this institution as well as their outstanding claims act as security for these papers, which are classified as trust securities; furthermore, the Province of Lower Austria assumes responsibihty for all business engagements entered into by this institution. Until the end of 1912 debentures to the amount of 467,733,400 crowns, bearing 4 per cent interest, were issued, besides 107,125,600 crowns bearing 3^ per cent interest. Of communal bonds 16,470,000 crowns were issued at 3^ per cent interest. GRANTING Or ADDITIONAL LOANS. Besides the loans on debentures and communal bonds this institution also grants loans for the whole or partial equalization of the difference between the excess quotation and the face value of debenture and com- munal bonds exceeding the limit of the trust security, but only to the maximum amount of one-tenth of the face value of the aforesaid securities. The rate of interest on these additional loans is fixed by the board of trus- tees. The amortization of the loans on debentures must take place within 10 years. The object of these addi- tional loans is to enable the borrower to repay the full amount without depriving him of the advantages of a loan bearing a lower rate of interest. EXCLUSION OF PROFITS. The provincial mortgage institution aims to grant loans without profit. It endeavors to secure for the communities money at low rates of interest without waste of time or costs. The nature of the loan is therefore subordinated to this purpose. ' REDEMPTION. On the part of the institution loans are irredeemable. Only in the event of exceptional circumstances — as, for instance, in cases of arrears in the payment of two successive integral payments, insolvency, depreciation of the mortgage, or failure to comply with fire insurance requirements — the institution may demand a dis- charge of the loan. On the other hand, the borrower is at liberty to redeem his loan in bonds of the institution in whole or in part at any time, in compliance with the loan agreement. This gives the borrower the oppor- tunity of severing his connection with the institution should he prefer to borrow elsewhere on better terms. FIXED RATES OF INTEREST. Loans, as has been stated, are granted upon debenture and communal bonds. By reason of the statutory provisions, requiring that the rate of interest on debenture and communal loans of this institution must be equal to the rate of interest serving as a basis for the loan, a fixed and stable rate of interest was fixed, the maximum of which is determined by the Diet. The present rates of interest are 4 and 4^ per cent. COMPULSORY AMORTIZATION. Besides paying the interest, the borrower is required to make a yearly payment on his loan, representing, with interest included, an annuity or integral payment. This annuity must represent not less than one-half per 190 AGEICULTUEAL COOPERATION IN EUROPE. cent of the loan. The period of amortization must not exceed 59 years. This principle of compulsory amortiza- tion, in its connection with the converting activity of the institution, promotes in a most effective manner the gradual disencumberment of real property. Since the inception of the provincial mortgage institution, encum- brances were written off in accordance with this plan to the amount of 38,422,329 crowns on mortgage loans and 9,983,091 crowns on communal loans. CONVERSION POLICY OF THE INSTITUTION. Since the inception of this institution, the conversion by purchase of redeemable higher rate of interest- bearing private loans into amortizable loans of this institution formed one of its leading features. These con- versions by reduction in the rate of interest operate in favor of real property and in favor of the principle of irredeemabihty by stabilizing the rate of interest and by stimulating compulsory amortization. Of the sum total of the additional mortgage loans, which amounted to 481,331,800 crowns up to the end of 1912, 232,621,588 crowns were used for conversion purposes. MANAGEMENT AND RESERVE FUND. To pay the cost of running expenses and for the creation of a reserve fund, the provincial mortgage institu- tion levies a contribution amounting at this time to one-fourth per cent on the loans. This levy is liable to reduc- tion or to be discontinued by the Diet. Mortgage loans not in excess of the original grant of 6,000 crowns are not required to contribute to these funds. To borrowers of large amounts many advantages have been con- ceded. The institution is required, both as regards mortgages and communal loans, to create a reserve of 5 per cent on the value of every debenture or communal bond issued to cover losses which may occur in its trans- actions. Unexpended balances are applied to the amelioration of credit conditions in harmony with the pubhc-spirited principles of the institution. MEASURES IN THE INTEREST OF DEBTORS. The provincial mortgage institution endeavors to alleviate the negotiation of loans and to assist the bor- rower as much as possible. In the accomplishment of these aims it attempts by special office days and through its confidential men and appraising officials to remain in constant touch with the population with a view to keeping down the costs in the contraction of loans. In cases of appraisements of real property in distant places, the institution pays the travehng expenses of its officials, attends to the registration of small holdings, and charges only the necessary stamp tax required by the borrower. The institution grants payment-time exten- sions in cases of damages by the elements, attends to collections of arrears free of charge, executes documents, grants reductions in the managing expenses, attends to the disposal of its securities at the smallest possible margin, and, by special efforts, seeks to maintain the popularity of the securities of the institution. ADMINISTRATION OF THE IMPERIAL AND ROYAL AGRICULTURAL SOCIETY OF VIENNA. The central administration of the agricultural society in Vienna was organized in 1909 and has at the present time 200 members. This department attends to the bookkeeping of its peasant chents by estimating the cash, the value of products, and the cost of labor. When a peasant joins the association, a description of the farm as well as an inventory is taken on the spot by a representative of the society sent from Vienna for the purpose. The necessary data for bookkeeping are obtained by this department by means of weekly reports as to cash transactions, conditions of the crops, and the use made of human and animal labor. These data are reexamined upon receipt and entered upon the ledger. Separate ledgers are kept for each crop grown and for each branch of the animal industry, etc., dealing with all the relative transactions as to money and payment in kind, the amount of labor involved, time required for hauHng, and board furnished to the laborers. This sort of bookkeeping enables estimates to be made on the principle of double entry. In 1912 owners of larger farms and of large agricultural estates also joined this central organization, sub- mitting their holdings to its administration and inspection. The same system of bookkeeping applies to such clients as to the peasant farmer. Owing to the enlarged volume of business, the bookkeeping center was changed into a division for the administration of estates and bookkeeping. Charges for such services are levied only on the middle-class farmers and owners of large estates, whereas bookkeeping and other service for the peasant farmer are rendered free of charge. This method of bookkeeping demonstrates the gross earnings of each property, as well as the net earnings of the separate divisions of the property, and, finally, the cost of produc- 'tion of the products of the respective farms. The department is able to make suggestions to each cHent upon the basis of conclusions drawn from the final statement. AUSTBIA. 191 Departments similar to these in Lower Austria exist also in most of the provinces. All oi them gather their information on the basis of uniform instructions and at the end of each year dehver their finished material to the central of the agricultural society in Vienna, grouped according to the order of the provinces, the size of the farm, the economic situation, amounts of gross and net proceeds, the most important sources of revenue, the type of the estate, the intensity of cultivation, the adaptabihty to industrial development, transportation facilities, etc. In this manner the data become valuable material for science and the economical policy of Austria. VIENNA DAIRY. The Vienna Dairy represents a society with limited liability, which was organized in August, 1880, and began business in 1881. It is the third of its kind in the list of dairy organizations on a cooperative basis in Austria. The construction of the plant of this dairy was begun in 1898 and completed in 1901. It is the largest cooperative dairy in existence. The building incloses an extensive court 108 meters long by 31 meters in width, enabhng 102 wagons, such as dehver milk to the depots or caU for milk at the railway station, to stand side by side in one line. The dairy owns 159 depots for the sale of milk, of which 146 are open the whole year. These depots are located not only throughout the city of Vienna, but also in adjoining towns. The branch depots have 210 pushcarts at their disposal. The individual buildings of the dairy plant are arranged in the following manner: On the right-hand side of the great entrance is the two-story office building containing offices and hving apartments for the director and a number of other officials. This is joined by the one-story dairy, to which is attached a roofed loading platform. The broad corrugated-tin roof of the platform can be cooled in hot weather by artificial sprinkling. In the rear stands the machine house, to which are adjoined the three-story buildings. In the left wing of the buildings are the stables with accommodations for 212 horses. Above these are sleeping, smoking, and dressing rooms for the unmarried employees, also a canteen where the ofiicials and employees can find good and cheap meals at prices controlled by the management. The permanently employed personnel, inclusive of officials and sales girls of the depots, number at present 650 to 660; and, counting those employed in the morning hours only (engaged in the delivery of milk), about 1,200 persons in all. The amount of business done by the Vienna Dairy has steadily and uninterruptedly increased since its inception in 1881. While in the first business year the society had only 33 members, in 1911-12 it had 631. The yearly delivery of milk and cream increased as follows: In the business year of — titers. 1881-82 1, 743, 307 1891-92 5, 743, 307 1901-2 13, 263, 848 1911-12 29, 052, 056 The members of the society are paid for their milk according to its fat content. The average amount of fat, since beginning payment upon the basis of this system in 1887, rose from an average of 3.25 per cent the first year to 3.85 per cent in 1910-11. In the laboratory of the Vienna Dairy 46,182 samples of milk were ex- amined in 1911-12, whereby the percentage of fat, specific gravity, and impurities were ascertained. Many bacteriological examinations were also made. The net value of a Uter of milk amounted in 1911-12 to the average of 23.2994 hellers f. o. b. at Vienna. Upon its arrival at the dairy milk is pasteurized after being strained and cooled, and only the cream and " Obers " (whipped cream) are sold or worked into butter, cheese, or pot cheese. A specialty of the Vienna Dairy is baby milk prepared by special methods. Fresh nulk is sold in sealed glass bottles, of which 80,000 to 90,000 are filled every night, making this the greatest milk-bottling plant in the world. To dispose of surplus milk, of which there is considerable in the hot summer days, the Vienna Dairy associated itself with the firm of Eisler & Co. as a corporation with limited lia- bility and attached to its plant a bottled-milk and condensed-milk department. The condensed milk, of which there is a steadily increasing production, finds a ready sale in foreign countries. OBLIGATORY LIVE-STOCK AND MEAT FOUNDATIONS. A survey of commercial conditions in the live-stock market of Austria reveals the fact that, as far back as 60 years ago, the credit conditions in this particular line were of paramount influence upon market transactions. It could be seen that, in consequence of the concentration of the entire live-stock trade on the central live-stock market of St. Marks (Vienna) in the hands of a few cattle dealers established there, this trade was virtually monopolized by a few, to the disadvantage of producers and consumers alike. It was found that this group of dealers had a credit monopoly for a basis, since only members of this group enjoyed credit m live-stock transactions. 192 AGEICULTUEAL COOPERATION IN EUROPE. To break this monopoly the Government, about 60 years ago, induced the city of Vienna to establish a credit scheme, since known as the municipal meat foundation, which was to make the extension of credit to purchasing butchers obligatory. This credit fund caused the disappearance of the aforesaid privileged group and out of it gradually grew the live-stock commission business. Inasmuch as the city administration did not in those days possess the experience in commercial matters which has since been gained, this municipal meat foundation developed certain defects which caused its dissolu- tion in 1870. But the influence and the experience acquired in the meantime by the live-stock co mm i s sioners, who had thus far secured the necessary credits, were sufficient to induce the city officials to again attempt in 1884 the organization of a new live-stock and meat foundation upon the basis of the credit granted to them. This new enterprise was, however, not inaugurated by the city, but by the General Bank for Deposits. Since 1884 this institution has been a feature of the Vienna central live-stock market, and quite recently its charter has been extended to the year 1923. The most important provisions of this foundation are these: The live-stock and meat foundation is required to furnish the cash necessary for the business transactions of this market. The foundation is controlled by the Government and the market authorities. Its activities con- sist in: (1) The sale of all live stock sent to the market. In this capacity the foundation exercises the legal functions of a commissioner. (2) For live stock not directly sold to the live-stock and meat foundation, the purchasing price must be paid to the seller by this foundation. The transactions in this market culminate in the issue of a closing certificate which must be presented to the foundation and, upon the basis of these certifi- cates, the purchaser pays and the seller collects the amounts due. The foundation charges a commission of 0.03 per cent on the gross sales of cattle and of 0.05 per cent on small live stock. Payment to the seller must be made in the course of the market day. (3) All purchase moneys for long-horned live stock, live swine, and sheep are paid to the foundation. Since it is evident that the responsibility for the market transactions rests upon this foundation, the obligatory character of these transactions is explained. (4) Arrangements for per- sonal credits to butchers and curers of pork doing business in the market place to enable them to purchase stock for slaughter. The amount of these credits is determined by the foundation in compliance with the degree of solvency of the buyer, which must be. approved of by a special credit committee. For credits received, a promis- sory note is to be given. The foundation may also grant credits on collateral security consisting of live stock on hand. (5) Granting of advance loans on live stock under consignment. The most important functions are those enumerated under paragraphs 2, 3, and 4. These secure to manu- facturers of meat products credit at a low rate of interest, which as a rule amounts to three-fourths or 1 per cent in excess of the rates of interest on notes payable charged b}" the Austro-Hungarian Bank. This enables every owner of live stock to sell his animals for ready cash at the market prices of the live-stock market regard- less of whether the purchaser buys for cash or on credit. The formal legal activities of the Obligatory Live- stock and Meat-Market Found r.tion consist in the market regulations of the markets in question emanating either from the imperial royal (provincial) government, or, in cases of markets of greater importance, from the ministries of agriculture and commerce. The successful experiments so far made in the line of obligatory live-stock and meat foundations caused other markets to create such foundations — for instance, in Pilsen and Innsbruck. In other cities the establish- ment of similar foundations is under consideration. Obligatory cattle-market foundations exist at present in slaughter stock markets only and are similarly planned in other cities. To what extent this can be applied to markets for breeding and draft animals is a problem yet to be solved. IMPERIAL AND ROYAL fflGH SCHOOL FOR AGRICULTURE. The Imperial and Royal High School for Agriculture in Vienna was founded under the sanction of the law of April 3, 1872, and was opened on October 15 of the same year. At that time the program of studies contained only a few of the branches of agriculture and their subsidiary sciences, the fundamental instruction in physical sciences being given at the technical high school. For obvious reasons such conditions were unsatisfactory, and by degrees the necessary chairs for the teaching of fundamental sciences were established. At the beginning of the term of 1875-76, when the high school for forestry at Mariabrunn was discontinued, a college of forestry was opened and, in 1883, a college of technical studies in tillage was added. The charter of this school endeavors to give the best possible scientific education in agriculture, forestry, and tillage, and also to fit students for the management of large estates. The school gives its scholars an opportunity to study political economy and law as well as agricultural subjects. It does not, however, confine its activity to teachiag, but pays special attention to research and experimental work. In conformity with its charter the school devel- oped in two directions — scientific education and agricultural research completing one another. As is the custom in all Austrian universities, the institution accords academic freedom to professors and pupils alike and is only restricted by certain regulations pertaining to examinations. ATTSTEIA. 193 Until 1905-6 each of the three courses of agriculture, forestry, and tillage extended over a period of three years; later a year was added, making the full course four years. It was thought that this change would reduce the nunaber of students, but this expectation was not realized, the school having steadily grown until now the pupUs number 1,160. In the first and second years lectures are delivered on fundamental subjects, such as chemistry, geology, botany, mathematics, physics, national economy, etc. Students of agriculture must devote special attention to chemistry and biology;. students of forestry and tillage to mathematics and physics. Students of the two latter branches also spend more time on practical research and drawing. From the beginning of the second year the courses are devoted strictly to professional education. Lec- tures are delivered on the so-called sciences of production, horticulture, cultivation of crops, cattle feeding, zoology, forestry, utilization of forests, etc. The last year of the course is devoted to the study of questions relating to the management and administration of estates. Pupils are also given a working knowledge of machinery, veterinary surgery, and law. There is a noteworthy difference in the teaching of agriculture and forestry, the former requiring more biological training, the latter laying more stress on technical and engineering subjects. This distinction is in accord with the nature of the work which graduates in .the two courses mentioned wUl be called upon to perform. One of the requirements for admission to the school is that applicants must present a certificate showing that they have attended an intermediate school (gymnasium or similar school) and have passed the so-called examination of maturity. A pupil who has passed through the course of a secondary school of agriculture or forestry is not allowed as a regular student at the high school. The question of requiring one year's practical experience in agriculture or forestry is a much debated point. Since the foundiag of the school this has not been required. The studies are intimately connected with the regulations for the examinations. In Austria the Govern- ment and the large estates have need of a large number of officials and teachers of agriculture and forestry. Both the Government and the private employer require certificates. Soon after 1875, when the school was founded, it was decided that the examination for a diploma should consist of two parts — one referring to theoretical and auxiliary sciences, the other to professional subjects! Examinations were then held at the end of the third year. In 1878-79 this regulation was changed and two examinations were held. The first examination, embracing six fundamental sciences, was held at the end of the third year; the second, covering the professional requirements of agriculture and forestry, was held after the completion of the entire course. There was also a supplementary examination in technology, machinery, and law. In 1889 the examinations were divided into three parts : The first for auxiliary sciences, the secondf or matters of production, and the third for administration, technology, and law. This now applies to the three courses of agriculture, forestry, and tillage. When the term was extended to four years, the school was able to confer the degree of doctor, every regular student after completing the course and passing the examinations being entitled to the degree of doctor of agriculture. Each candidate must present a thesis on some scientific subject connected with his special branch of study and pass a rigorous examination upon this same special branch, as well as pass an examination on some fundamental science. If the doctor's thesis is based upon research, the candidate is allowed the use of the laboratories for this purpose. Scientific research is regarded as of quite as great importance as the actual teaching. At the opening of the high school a few laboratories and greenhouses were available; since then their number has gradually increased. Three circumstances have encouraged the development of scientific research at the high school: (1) In 1884 the Government ceded 8.35 hectares of land at Wolfersberg near Vienna as a nursery and experimental garden for forestry. (2) In 1902 the Government gave an estate at Orth, consisting of 50 hectares of ground, as a training farm for experimental work. The dairy department of this estate possesses 20 cows of a French breed, while the sheep department has 60 to 80 head of sheep belonging to the Karakul breed. The training farm, moreover, disposes of all necessary farming implements as well as tools and machinery. Of these 50 hectares, 1 hectare has become a nursery for fruit trees and for horticultural plants. The experimental farm pays no rent. During the past 10 years many interesting investigations have been made and the results published. The farm provides opportunity to illustrate the various kiads of field work and the effects of fertilizers upon different crops. (3) An experimental station fgr the testing of farm implements and machinery is situated at Gross Enzersdorf . This station is fitted with a machine shop operated by electric power. A large number of agricultural machines as well as steam and motor plows have been tested at this station and the results published from time to time. 14174°— S. Doc. 214, 63-1 13 194 AGRICULTURAL COOPERATION IN EUROPE. RURAL CREDIT AND COOPERATION. Evidence of Baron Fuheer von Maimendorf. Vienna. Q. IJt has been pointed out that there was much scepticism as to the development of such cooperative societies in Austria; how is it possible, in view of this fact, that they could succeed in oi^anizing on the basis of unlimited liability ? A. It was just this unlimited liability which offered the cooperative organization security in dealing with people not in a position to offer individually adequate security for the credit they required. Under unlimited liability every member had the greatest interest in watching the financial standing of those asking for credit. As the president himself of the association which gives the credit has to answer with his full private fortune for the liability of every applicant, he is very careful in granting loans. Q. What is the extent of the liability in case of mortgage credit ? A. The liability varies according to the means of the member. Whether the organization grants a loan on special security or not is of no consequence. Q. Is it possible for part of the membership to get mortgage credit while another part gets personal credit ? A. Yes; in all such organizations which give mortgage credit this credit can only be claimed by some members, whereas others will get personal credit only. The latter is the rule of the Raiffeisen societies; mort- gage credit is the exception. Q. Why do the Raiffeisen societies refuse to give mortgage credit as a rule ? A. Because of the insufficiency of mortgage credit and lack of money in the mortgage banks. Q. Do other societies, besides the Raiffeisen, grant mortgage credit ? A. Yes; the Schulze-Delitzscli societies give such credit. Many give paper credit; whereas, on the other hand, a great number of societies refuse to give mortgage credit. Q. What are the sources of money at the disposal of the Schulze-Delitzsch central organization ? A. This organization does not possess a central bank in the exact sense of the word in Austria, as the Raif- feisen organizations do. It has created a kind of credit institution with the aid of industrial banks, whereas the funds of the Raiffeisen societies are sufficient to cover the demands of all their members. Each member is entitled to credit only up to an individually fixed limit, which amount is provided for in the cash funds. No member can ask a loan to his own liking, and that is Just the reason why, as a principle, mortgage credit is not given. But, as a uniform level of business education is not reached yet by aU the members and as, on the other hand, the existence of mortgage banks must be taken into consideration, the Raiffeisen societies are sometimes pompelled to give mortgage credit against their wishes and must in such cases provide for the proper security. Personal credit is only given for a short time and fixed for every member within certain limits. Q. Are loans granted for the erection of dwelling houses ? A. Yes ; in localities where workmen are interested in cheap dwellings. In such cases credit can be given as an exception, and it will be given as mortgage credit for a certain length of time; for instance, 10 years. But, as already mentioned, this will be an exceptional case. Q. How are cooperative organizations for production organized and how are they kept up ? A. As a rule, the inducement to form a cooperative organization for production is the need of the popula- tion itself. There are always several persons who take the first steps, in which undertaking they are often assisted by central associations wliich give all possible advice in regard to technical management as well as in regard to bookkeeping and other questions of commercial interest. Q. How are small provincial dairies organized ? A. For many 3'ears an active propaganda has been made to induce producers in the country to found organizations. As soon as people are instructed sufficiently as to the advantages that can be gained by such institutions, there are always persons found who have a special interest in such foundations. They enjoy the trust of the population and it is their business to take steps that will lead to the foundation of an organization. Q. Do such persons get any help, moral or financial, from the Government ? A. The initiative comes from the population itself. Sometimes they join associations already existing. The Government or the ministry of agriculture either gives subventions or the necessary credit, and as far as the sale of the products is concerned, they can either be sold directly by the producers to consumers, living in small cities in the vicinity, or the entire production can be sold to a central organizatioij which attends to marketing the products to ultimate consumers. Q. In the case of the purchase of land, do farmers get any assistance in that respect from the personal- credit societies of the Raiffeisen type ? A. It is the business of the organizations to provide personal credit, but it is not their business to promote land purchases. It follows, then, that it can not be the business of the organization to give credit for the pur- AUSTKIA. • 195 pose of buying land. In cases where this is done it is done against the principles of the organization and generally in territories where there is, no mortgage credit bank. Mortgage credit as such is as a rule given by special banks, but not by the organizations for personal credit. This credit is supplied by a small Raiffeisen fund which can only supply small loans for a short time, as the whole fund consists of savings of small farmers. They must be given the possibility to dispose of their savings very quickly, and this is the reason why the personal credit given by the Eaiffeisen bank can only be for a short time, to cover cost of production, pur- chase of seeds, machinery, or hve stock. Furthermore, the personal credit granted is of a very Hmited char- acter and can not be used for the purchase of land. The chief thing for the personal-credit organizations to do is to instruct farmers how to make the best use of personal credit, avoiding mortgage credit as much as possible. Q. Are mortgage credits also refused to farmers of experience ? A. Yes. For this purpose there are proper banking institutions in every province. Q. Do the personal-credit organizations grant loans to rent a piece of land ? A. No; not as a general rule. Q. Do they grant loans for the purchase of Uve stock ? A. Yes; because this refers to production, and it is the business of the personal-credit organizations to render all possible assistance to farmers to keep their farms going. Q. How far does the activity of organizations influence the improvement of seed and cattle ? A. By making large purchases and doing business with firms of the very best reputation. Moreover, the seeds supplied are sent to official laboratories for analysis to deternaine their grade. As aheady mentioned, a certain protection is guaranteed beforehand by the method of purchasing. Also artificial manure is carefully examined in proper laboratories. Q. Do you have laws to protect unorganized farmers ? A. We have laws against dishonest competition in manufacturing artificial manures. Special agricultural laws are not in force yet, but have been given some consideration. Moreover, the produce exchanges are subject to law. Q. Do you have laws by which merchants are compelled to destroy bad seeds ? A. Such laws are in force, but not in every province of the monarchy. Q. Is it possible for a young man, fit and wilHng for hard work and of good character and reputation, to get a loan from the organization so as to put him in a position to work a farm ? A. As a member of a Raiffeisen society he can do so. Q. What is the fee required to become an active member ? A. A very insignificant amount, only 5 to 10 crowns. In the case of the Raiffeisen associations, the chief thing is not the fee but the honesty of the applicant, for whom the organization answers with an unhmited liability. Q. Supposing that the applicant is such a man, how much can he borrow approximately to rent a farm ? A. In order to answer this question, the fact must be pointed out that a person can only become a member if he owns land. The personal credit that will be granted in such case will be individually fixed, but it will not exceed a certain limit. I^oans without any security are not granted in Austria. Q. Is it within the scope of the credit organizations, or is it the business of special societies, to promote improvement in the breeding of cattle ? A. This question concerns dairy organizations. We do not yet have dairy organizations which work to improve the breeds of cattle. What we have are societies for inspection, and it is their task to look to the improvement of the breeds of cattle. Q. Do dairy organizations possess their own butter and cheese factories ? A. The dairies have them, but the inspection societies do not. They are entirely independent corpora- tions which have to select the animals destined for breeding purposes. These societies are not closely connected with the credit organizations. Q. Are there special laws for the Raiffeisen organizations ? A. There is a law which governs all kinds of cooperative organizations for credit, production, etc. This law authorizes the organization of cooperative associations for production and distribution with limited or unhmited liability, in which the capital of the association is available for the members. The area of operation is not necessarily hmited, and the purpose of the association is to promote some branch of industry. Federated organizations in general have unhmited habUity; unfederated societies, as a rule, have hmited habiUty. Q. What are the fundamental principles to be observed when a cooperative dairy is founded in order to insure success ? A. There must be a sufficiently large quantity of fresh milk. This must be the guaranty at the very beginning: (1) Because it can only be expected to cover expenses if large sales are made. (2) The machinery 196 AGEICULTUEAL COOPERATION IN EUEOPE. must be of the best modern style, and such machines are very expensive. (3) There must be a thoroughly ex- perienced manager, who can only be secured at a high salary. (4) The products must be uniform in order to win and hold the market. (5) The manufacture of butter especially requires a large quantity of milk. As far as the manufacture of cheese is concerned, the quantity of milk is in proportion to the kind of cheese to be manufactured. The Swiss cheese requires a daily quantity of about 1,000 Kters; for other cheeses a smaller quantity will be sufficient. The chief thing is a fresh supply daily that does not stop. (6) To supply a city with milk, a minimum quantity of 300 liters per day must be insured. The above-mentioned six points concern the quantity of milk. A second fundamental condition is the honesty and reliability of the members delivering the milk. In this regard the organizations protect themselves by obUging their members to deliver the entire quantity obtained from their cows, except the quantity required for their own use. In case members stop delivery without giving reasonable excuses, they are bound to pay indemnity. This arrangement was made in order to compensate the dairy organizations for eventual losses incurred by tardiness or entire stopping of the delivery by any member. A further condition is a well-organized management with regard to administrative and financial trans- actions. Not only are expenses to be considered, but also amortization and repayment of loans. Legally an organization is further bound to arrange for a reserve fund by which possible losses are to be covered. Another matter of importance is the deUvery of pure-quality milk. The quality is determined by the percentage of fat contained in the milk. On the basis of this determination payment is made. A control in this regard is either made by the organization itself or by an official institution. The rules to which organiza- tions adhere are either laid down in the statutes or there exist special regulations for the delivery. Austria's dairy production is just sufficient to cover the requirements of the population. Not only organizations partici- pate in the deUvery of milk, but also small farmers if their farms are in the vicinity of a central organization. According to the report for 1910, there were in Austria 2,833 organized societies for milk farming with an annual sale of nearly 400,000,000 liters, of which quantity the city of Vienna alone, with about 2,000,000 inhabit- ants, consumes daily 800,000 liters. One-third of this quantity is delivered by organizations, the rest is supplied by unorganized farmers. Naturally, great cities are chiefly furnished by farms in their immediate vicinity. As far as the initial capital is concerned, the amount of this capital is not the same with every organization; it is in proportion to the size of the organization and it mostly consists of shares paid by the members who are chiefly small farmers. This capital is not sufficient to cover construction, etc., because such high amounts can not be signed by small farmers at one time. The cost of construction, therefore, will be covered gradually by amortization. The next result is that members can not expect to get fuU profits during 10 or 20 years. A part of this profit is always destined to cover the amortization fund and has to be deducted. The cost of the buildings, therefore, is also paid by the members. It is necessary to secure members willing to make sacrifices in order to pay the cost of construction themselves. Q. How many kinds of grain are planted in Austria ? A. Every kind existing. Q. Do you export ? A. At present Austria exports only barley. Q. Through how many hands do your products pass before they are received by consumers ? A. There are several answers to this question: (1) The corn may either be sold by the farmer to a small merchant, who sells it to another merchant, the latter selling it again to a more important buyer. (2) The corn may be sold to the storehouse of an organization which orders one of its associations to sell it direct to the consumer. In this case an agent will not be necessary at all. (3) The farmer may sell his corn direct to the consumer, either to millers or to other farmers who use it for feeding purposes. We are seriously considering the foundation of societies which will buy the crops of farmers, as it should be one of the chief purposes of cooperative organization to be in direct touch with the farmer. Q. Do your State railways give rebates ? A. Our farmers consider the rates very high. Kebates are not given to anybody but the army. On great quantities shipped by important dealers — say, for instance, on lots of 5,000 or 10,000 car loads — a freight reduction will be granted. Q. Can you tell us what the rates per unit for a certain distance are ? A. This question can not be answered offhand as our railway tariff is a differential one. The longer the distance traveled the lower the rate per kilometer. Q. How long has the system of cooperative organization been in existence in Austria ? A. About 25 years. Q. Has the system proved advantageous ? AUSTBIA. 197 A. There have been many iniportant results. To begin with, usury has been abohshed and the rate of interest, which formerly varied between 8 and 10 per cent, is now only 4 and 5 per cent. Two years ago, for instance, when we had a money crisis, it was possible for a small farmer to get money at cheaper rates from the Raiffeisen banks than those given to large agriculturists who had to apply to the commercial banks. Q. Is the value of your land high now ? A. Certainly; the value of land has lately advanced considerably and the farmer sells his products to far better advantage now than in former years. Formerly it was possible for the dealer to buy corn from the farmer at a very cheap price ; there did not exidt firm prices at all. Now the situation is quite reversed, as all farmers are advised of the market price. As far as dairies are concerned, not only the production has consid- erably improved, but prices have practically doubled within 25 years. All this is largely due to the activity of the organizations. Q. Can you secure prices in Austria independent of the world's market? A. The price in Austria is the world's market price plus duty. Exchange speculations must also be taken into, consideration. Owing to the latter it has been possible, for instance, for the price in Budapest to be higher than in Prague. Q. Is it economically possible for the duty on wheat in Austria to be of such a nature that Hungary is beneficially affected thereby while Austria will be at a disadvantage, thus stirring up the dissatisfaction of the industrial population ? A. Since the duty has been in force there has not, as a matter of fact, been an opportunity yet for the duty to prove as efficacious as was expected. Owing to the world's crop and to the constantly rising consumption, the world's market price is such that the price curve is so extremely high that it was impossible for the pro- tective duty to prove its efficacy. The protective duty we have will only be of advantage when such an enor- mous quantity of products will be thrown on the world's market that a great decrease in price will be the consequence, so that a similar price in Austria could not be thought of. In such a case the protective duty would prove its efficacy. Q. Is it the purpose of the protective duty to guarantee an income to the State ? A. No; it is simply a matter of politics and has nothing to do with State revenues. Q. Is it the business of the representatives of cooperative organizations to collect information regarding the prices on the markets in large cities ? A. Associations for this purpose exist in every large city. Q. Do you have regulations concerning the size and kind of packing? A. The regulations of the exchange are decisive if there are no special arrangements agreed upon in the contracts. Q. Are statistics published concerning supply and demand ? A. Such statistics are still very primitive. Successes of any concrete importance in this line have not yet been obtained. Furthermore, there is no possibility of making valuable conclusions, as such information or advice must infallibly lead to inside contradictions, for it would be the most natural thing, after such infor- mation had been publishetl, to have the farmers rush their products to market, thus influencing the market price most unfavorably. Q. Do the cooperative organizations own cold-storage houses ? A. Yes; dairies are provided with such rooms; but the prices are constant, so that only a small quantity of products needs to be stored away. In these dairies either ordinary ice is used or ice machines and refriger- ators. Cooperative cold-storage rooms do not exist except in dairies. There are stock companies which own such cold-storage rooms, but they use them very often for speculative purposes, i. e., to artificially increase prices. PROVINCIAL MORTGAGE INSTITUTE OF LOWER AUSTRIA. Fbiedrich Bedl, Director. statement. Vienna. The operations of this institute are limited to the country of Lower Austria, which has an area of about 20,000 square kilometers (about the size of New Jersey). The object of the institute is to make loans on real estate, without hypothecation, and with fixed rates of interest. The institute is not for gain, it is not a profit-earning company like any other share company. The principal features of the institute are as follows: First, absolutely no motive for gain; second, the borrower is not required to give notice of intention to repay; third, the rate of interest each borrower has to 198 AGKICULTUEAL COOPEKATION IN EUEOPE. pay is invariable and can not be altered; fourth, compulsory repayment, the borrower being compelled to pay interest as well as loan in installments. On these principles the institute is prepared to loan money on real estate within the crown land of Lower Austria. The loans are granted on agricultural property and farms, and on real estate and buildings in cities. Small holders are given the preference, the object being to put people who require funds in the possession of money at the lowest cost. In the cities the institute aims to provide housing; that is to say, sanitary and cheap dwelling houses. Over and above the loans and mortgages, the institute also grants credits to communities and public bodies and loans money to the Government for appropriation to the country. It also loans money to villages and small cities that have authority to levy taxes; these loans are made with hypothecary security. Mortgages are made on the basis of estimates; in certain circumstances estimates may be foregone. Mortgages are granted without estimates when the property has been registered in the land register. A careful record is kept of every piece of property and every plot of ground, with exact areas given and name of owner and whether or not it is encumbered. Maps are kept, and the assessments are based on the maps which are filed. The taxes are assessed by a commission every six or seven years, and the commission consists of agricultural holders, peasants, and government officials — a joint commission. When a proprietor complains of taxes being too heavy the property is reassessed. The institute is able to make mortgages without appraisal; it simply gets an abstract of the land register and copies of the maps and it knows exactly what the property is worth, how much its earning power is, and it sees whether it is encumbered or not. The Government guarantees the title. The amount of the mortgage the institute grants may be one-half the estimated value of the houses and two-thirds the value of agricultural property; in case of granting mortgages it estimates the amount of the mortgage wiU be two-thirds of 25 times the net earning capacity of the holding. This arrange- ment only applies to agricultural property; in the event of a mortgage being granted without appraisal (the house and agricultural property not being seen) one-third of the fire insurance will be added to the amount of the mortgage. HOW THE INSTITUTE ACQUIRES FUNDS TO CARRY OUT ITS PURPOSES. The loans are not made in cash, but in bonds of the institute. For example: A house is worth 100,000 crowns; a mortgage or advance on this house may be made up to 50,000 crowns. The money is not given in cash, but in bonds of the institute. The bonds are not given to the man in quest of the loan, but the institute sells the bonds on the stock exchange and the borrower gets the proceeds of the sale. The danger of loss on the exchange is borne by the borrower. The amount of commission on the sale of the bonds depends upon the state of the money market. If money is plentiful, the commission is a small one. The commission ranges from one-eighth to IJ per cent. The chief object of the manager of the institute is to get a good market for the bonds of the institute — he must try to make the bonds a good seller. For this purpose the in- stitute has made the following arrangements : The bonds are redeemed by drawings, which take place semi- annually. The redeemed bonds which are presented to the institute are exchanged for current ones against the payment of the diflFerence in price, deducting the value of the coupons which have been already cashed. If a redeemed bond is presented to the institute for payment and the owner wishes cash, the institute \viU give him 3 per cent interest from the date of drawing up to the date of presentment. A government tax of one-half per cent is levied on the coupons of the bonds; this tax is borne by the institute. Bonds are kept in the cus- tody of the institute free of cost (of course, this only refers to bonds purchased) . The institute also makes supple- mentary advances to make out the difference there is between proceeds of the savings funds and the nominal value of the bonds. The largest amount of any supplementary bond is one-tenth of the whole loan. For instance, the institute grants a loan of 1 00,000 crowns, the maximum supplementary advance must be amortized within 10 years, and the amortization of the loan which the borrower received in bonds may be deferred during this time. The institute has the right to give warning to demand repayment of a loan only in case of the land diminishing in value or the borrower going bankrupt; all these cases have been explicitly laid down in the statutes of the institute. The borrower may repay his loan at any time he chooses and with the same bonds he received when the loan was granted to him. This enables the borrower to sever his connection with the insti- tute in the event of finding cheaper money elsewhere. The rate of interest to be paid on the loan must always be the same as that of the bonds which the borrower received. Therefore the borrower will always pay the fixed rate of interest, which can not be altered. Besides the interest, the borrower is to repay a part of the principal each year, the minimum being one-half per cent. In the event of a loan being contracted at 4 per cent interest the borrower would have to repay 4i per cent yearly, so that the whole loan would be amor- tized in 54J years. Every loan must be amortized within 59 years. The institute is only authorized to issue bonds to the amount of the loans which have been granted. One of the chief aims is to convert loans of a AUSTRIA. 199 high rate of interest into loans of a low rate of interest. The institute also has the function of converting loans which are not repayable into loans which may be amortized, amortization to be done at some fixed rate of interest. The institute has been established since 1889 and has issued since its foundation 500,000,000 crowns in mortgages; about half of this amount has been for converting purposes. To cover expenses and build up a reserve fund the institute collects annually one-fourth per cent of the mortgage from the borrower. No con- tribution is collected in respect to mortgages up to 6,000 crowns. Of the mortgages granted at 4 per cent and over 6,000 crowns a contribution for expenses and reserve fund is only collected during the first 10 years. Of loans to public bodies the contribution for expenses is collected during the whole term. The whole net profit of the institute is appropriated to the reserve fund. The reserve, in turn, serves to cover losses incurred in manag- ing the institute. For mortgages, the reserve fund amounts to 6,000,000 crowns ; for loans to public bodies, about 2,000,000 crowns — together, 8,000,000 crowns. The reserve fund ought to amount to 5 per cent of the whole amount of bonds issued and loaijs granted to communities. The institute is desirous of helping its debtors in every way. Clerks are sent out to hold lectures in small villages in Lower Austria, so that the institute always remains in close touch with the population. These clerks arrange matters with the peasants. The institute bears all expenses incurred in managing small mortgages for agricultural small holders. If the debtors can not make their' payments in time, the institute collects the arrears by legal process. QUESTIONS. Q. How was the foundation capital secured ? A. In the year 1889 representative bodies of Lower Austria decided to found this institute, and received an appropriation of 100,000 crowns to begin with. After five years the institute was in a position to repay the advance, has since been self-supporting, and has built up the aforementioned reserve fund. Q. In case the bank was Hquidated and ceased to do business, where would the profits of the institute go ? Who would get them ? A. In case of liquidation the whole amount accumulated would be the property of Lower Austria. In order to Uquidate this institute it would be necessary to have a decree of the diet, but this decree would have to be approved by the emperor. The reserve fund in the first place is intended to safeguard the rights of the holders of bonds. Q. How is the control of the bank determined ? A. The institute is controlled by the committee, by a body of the diet, and by the diet itself. The committee consists of the chairman, elected by the diet for life (being styled "Oberkurator") of 10 members, and of the director, who must be a lawyer. The committee takes care of the immediate administration of the institute and represents the institute. The executive body of the diet can exercise control by means of one of its members, who checks the cash; it also has the power of deciding the granting of the more important mortgages. A mortgage on hypothecary security and to the amount of 500,000 crowns, can only be granted by the consent of the executive body. The executive body also has controlling power of making out and exchanging the bonds. Every mortgage bond contains a clause to the effect that the bond has been secured by a loan. The diet has the supervision in the first instance, and the report of the ofl&cers of the institute has to be laid before it annually. The director is the managing head of the institute. He is appointed by the committee. The other ofiicials of the institute are nominated by the executive board. Q. Has the institute the power to accept deposits ? A. Yes; this, however, is a branch of business it does not wish to cultivate. Q. What security do deposits have ? A. Deposits have absolutely no security. Q. What rate of interest do you pay on deposits ? A. That depends upon the rate of interest of the Austro-Hungarian Bank. From 4 to 5 per cent. Q. What is the present rate ? A. From 5 to 5i per cent. Q. Does this institute loan money on farm real estate without the amortization feature?' A. No; it does not, as compulsory amortization is one of the features of the institute. Q. What steps are necessary for the institute to get possession of a piece of land upon which mortgages have been executed if the borrower fails to meet his obligations ? A. Application is filed with the district court where the property is located. Q. After the application is filed and the court grants judgment, how long is it before you can take active possession of the property ? A. Upon receipt of application the court demands payment of the borrower within 40 days, and if paytaent is not made within that time request is made for the sale of the property. After three months have elapsed 200 AGMCULTUKAL COOPERATION IN EX7K0PE. from the filing of the petition the property will be sold at auction. This is a very rare occurrence. Kecord is kept of the execution of judgments for the purpose of ascertaining whether the land is going down or whether the cause is a personal one. Q. Is it necessary to have right of immediate occupation to make bonds acceptable to purchasers ? A. Guaranty for the bonds is threefold: (1) Value of the property mortgaged; (2) property of the insti- tute; and (3) guaranty by the country. Q. Does this institute purchase its own bonds in the market before they become due? A. No. The institute does not as a rule purchase bonds in the market before they faU due. The bonds are in circulation as long as the loan lasts, 59 years as a maximum. Q. Suppose the bonds are offered on the market by holders and the price falls, does not the institute buy them in order to prevent a fall in the market ? A. That is the first condition of the institute. When bonds go down the institute is compelled to pay interest on the bonds as long as they are in circulation. Q. Where does the money for such purchase come from ? A. The institute keeps accounts with all the more important banks in Vienna and has any amoxint of capital at its disposal. One of the main objects of the institution is to sell its own securities and prepare a ready market for them. The director of this institute is not merely an official, but has also to locate a very excel- lent market for the sale of the bonds. Q. Do the published statements of the bank show amount of bonds repurchased ? A. That is shown in the report. Q. To what extent does the Government favor this bank ? A. The diet guarantees the loans. Q. Is this a government-inspected institution ? A. The Government received the right of controlling the institution by the law of 1874 and this right is exercised by the diet. Every bond must bear a clause to the effect that it has been issued according to the regulations of the institute and under its proper powers. Q. What payment does the bank make to Lower Austria for the guaranteeing of these bonds ? A. Nothing at all. Q. Is it your opinion that the 5 per cent mortgage bonds can be maintained in the future ? A. The institute aims at keeping the interest at low rate; when the market is falling and when monej is getting dearer and interest going up, its aim is to keep the rate down. The question as to whether the 5 per cent bond wfil be possible in the future depends on the money market and rate of interest as fixed by the diet. Q. Is there any connection between the land-mortgage banks and the bank of issue ? A. No connection except that they keep an account with it. Q. Is it your opinion that the land-mortgage business in this country would be as successful if you did not have a bank of issue ? A. That is a question which is difficult to answer, because in times of stress the bank of issue is the only source of capital in this country, as it would be in the event of war. Q. Are the rural banks, the Eaiffeisen and Scbulze-Delitzsch systems, and the land-mortgage business pyramided in some form or other so that in times of stress you could go on up instead of down ? A. I am of the opinion that the danger is not so great, because in times of stress the institute would simply restrict its loans and draw on its bonds by using the amortization fund. Q. We find everywhere we inquire that there is a period of rising prices in Europe. Is it your opinion that the granting of increased credit to the farmers by reason of the land-mortgage and Raiffeisen systems is one of the causes of the rise in prices in the countries we have visited ? A. It has nothing to do with the rise in price of land. The causes for the rise in the price of land are increasing population and increase of taxation. It is also connected with the tariff. Q. What is the real rate of interest as charged to borrowers for 51 years, including amortization? A. That is according to the state of the market. If a bond is 90 it would be more than if a bond was 95. Q. Does a man pay anything for the privilege of repaying his bond ? Will you loan money cheaper for 51 years than for 5 years ? A. There is no penalty, and absolutely no hmit to the loan. Q. Has this bank any connection with the Raiffeisen systems '( A. Not at present. Formerly it was connected with the Raiffeisen system in order to get capital but it has since ceased all coimection. AUSTBIA. 201 LAND REGISTRY. Report of a Subccmmittee. Vienna. The members of the subcommittee who paid a visit to this institution were received by a government official attached to the staflF. The entries in the various registers were explained. A special staff of qualified officers is employed for taxing property, and the taxes levied are in accordance with the income derived from the property. A question was asked by one of the gentlemen as to how much it would cost to transfer, say, a piece o, property worth 100,000 crowns. It was said that such a transfer would cost 5 per cent of the purchase price, plus 3 crowns for stamp duty. It was asked how the tax was fixed for nonincome-bearing property. The reply was that in this case no tax was levied. The question was also asked as to what tax would be levied on a house occupied by the owner. It was said that the income-bearing capacity of a similar house would be taken as a guide for levying the taxes. GOVERNMENT MEASURES FOR PROTECTION OF AGRICULTURE. Mr. VON SCHULLERN VON SCHRATTBNHOFEN. statement. Vienna. To outline the Austrian agrarian poHcy in the time allotted to me is exceedingly difficult, as an adequate survey can only be made by taking into consideration both the imperial and the provincial laws. But as my task is merely to give you a basis for discussion, I will only call your attention to the more important facts in the case. First, the Austrian agrarian pohcy, as the agrarian poUcy of most other States in Europe, is still in its infancy. The importance of legislation and administrative measures to promote agriculture was only recently brought home to governments, as attention had previously been concentrated on the development of manufac- tures and industry. The great agrarian crisis, due especially to American competition in the cereal markets, directed the attention of competent authorities to the duty they owed to the foundation industry of agriculture. Naturally an agrarian poMcy of such recent growth can not be complete or systematic, it having arisen Uttle by Uttle from the recognition of new and concrete needs. The measures taken deal with the organization and management of agriculture and with the sale of farm products. With regard to agrarian organization, I will first mention the legislation which aims at restricting the excessive subdivision of the farm lands — the results of dividing up property in Uke shares between all direct heirs as required under the Code Napoleon which prevails in Austria. The imperial law of 1889 and the laws of Bohemia, Tyrol, and Carinthia are intended to estabUsh special measures governing the inheritance of farm lands, so that rural properties of a certain size may remain undivided in case of the death of their owner, unless expressly willed otherwise, and the transition of the property to the heir be so secured as to enable him to hold it permanently. Such also are the laws enacted in Gahcia and Ruthenia concerning the so-called rented pro- perties, the purchase money for which has to be amortized. These laws aim at the conservation and formation of small holdings under certain conditions. A real homestead law, or a law against speculation in real estate does not yet exist in Austria. Entails are not abolished in Austria, as in some other European countries, but they must be sanctioned by government decree. It is, therefore, very difficult to constitute them, and for many years past none has been formed. As a general rule it can be said that rural property has been consolidated, especially in recent years, although the buying out of small peasant holdings by the great landowners has become a serious evil in many parts of Austria, leading to the depopulation of some sections and the detriment of agricultural development. The old German system of land tenure — under which aU the farmers in a community were entitled to a strip of each kind of land (arable, pasture, wood, etc.) belonging to a parish instead of each having a consoli- dated farm consisting of contiguous lands — and the subdivision of the farm lands between the several heirs have brought about a situation that could not endure when brought in competition with modern methods of production. This led to the need of special laws for reassigning farm lands and for the consohdation of farms. As regards agricultural credit, reference may be made to the efforts for the enactment of new mortgage laws which would make amortization compulsory and repeal the creditor's right to call in the loan. As regards the agrarian policy, reference may be made first of all to the efforts to check rural migration to the towns, so as to insure the requisite amount of farm labor. Agricultural workers in Austria may be 202 AGRICULTUEAL COOPERATION IN EUROPE. classified as farm servants, who practically form members of the farmer's family, day laborers engaged by contract and employed occasionally, and permanent laborers who receive their wages partly in kind. It should be stated with reference to legislation regulating the sale of agricultural products that buying in futures on the bourse is prohibited in the case of cereals and flour. The customs policy adopted by Austria for the past seven years has had a decisive influence on the importation of foreign grain. For the protection of the farmer and his products an effective form of cattle insiu-ance has been intro- duced, based on local associations united into federations, which are now developed in all the provinces, without abandoning the voluntary principle. The provincial insurance societies work under the laws of the respective provinces and are subsidized by the State to a considerable extent. Insurance against loss by hail is carried on by private companies and has, unfortunately, not had a favorable development. I can not here discuss a whole series of measures which should be mentioned in a detailed statement, such as the laws for the protection of birds, for the control of insect pests, etc. All these do not come within the scope of your investigations. The discussion on the points already set forth and the examination of the system of farm bookkeeping elaborated under the auspices of the Austrian Agricultural Society will fully occupy the time at our disposal. QUESTIONS. Q. Reference has been made to the migration of the rural population. Is this such as to give rise to scarcity of farm labor? A. Yes. Q. Is this due to the phenomenon of urbanization or to emigration abroad ? A. To both. Q. Have you any system whereby boys can be indentured as apprentices on farms? A. No. Q. Is education compidsory in rural districts ? A. Yes; everywhere. Q. Does education accentuate the tendency to migrate to the towns ? A. Yes. Q. Do your agricultural laborers organize in unions ? A. There is a gradual growing tendency in that direction. Q. Is such organization hindered by legislative enactment ? A. No. Q. Are relations between laborers and employers on the farm unfriendly ? A. No. Q. Do your farmers live on the land or congregate in villages ? A. Mostly in villages, partly owing to the fact that in many cases their holdings are too small to support them and their families, and so they live in the villages where they can eke out a livelihood by working also at some trade. Q. Do they as a rule own their cottages or are they tenants ? A. Most of them own their cottage and a plat of land of about one-half to 1 acre. Q. I gather from your statement that it is thought very important in Austria to prevent the excessive subdivision of the land ? A. Yes; very important. Q. May I ask whether your system of rural police is connected with the metropolitan police or whether it is separate ? A. There is no connection between them. Q. Have the rural police the right to make an arrest ? A. Yes; in case of rioting or drunkenness. Q. Before whom are the persons thus arrested brought ? A. Before the burgomaster who can only inflict fines. He has no authority to settle disputes which may arise; these come within the jurisdiction of the district judge. Q. What policy is pursued to encourage landowners as distinct from tenants ? A. Most of the peasantry are landowners; tenants are an insignificant factor. Q. Can a farm laborer earn enough to support his family without their working also ? A. The question is difficult to answer. "Wlien the family can obtain work-it is to their interest to do so. Q. Have you statistics showing the minimum cost of living for a farm laborer and his family ? A. Such statistics would be very difficult to compile, as cost differs greatly in different sections. Q. Does the Austrian Government publish statistics showing the minimum cost of living for the family on the farm ? AUSTRIA. 203 A. The statistical data on this point so far collected are insufficient, but the bookkeeping department is doing something in this direction. Q. Can lands be subdivided ad infinitum under your law ? A. In Bohemia, Tyrol, and Carinthia the law requires that small holdings be held by the family undivided unless special testamentary dispositions call for it otherwise. In other provinces there is no such restriction. Q. Is the purpose of such legislation to keep the holdings big enough to support a family ? A. Yes; to support a family of five persons. Q. What taxes must the farm laborer pay ? A. None, unless his income exceeds 1,200 crowns, when he pays an income tax. Q. Is there much intemperance among the farmers ? A. Conditions are very different in different sections, but on the whole the farming population is growing re temperate. Q. Is crime increasing ? A. No. Q. Is illegitimacy increasing ? A. No. Q. Have you tramps 1 A. Yes; but they are decreasing as they are subject to stringent legal restrictions. Q. Do organized employers of labor deal with organized labor ? A. Organizations of employers do not exist in Austria. The social-democratic movement has not affected rural life. Q. Do organized employers in towns deal with organized labor ? A. There are no eriiployers' organizations in Austria. In Vienna and Lower Austria there is a small body of organized labor engaged in dairy farming. The employers deal with them, as they can get no other labor. Q. Then the demand for labor is greater than the supply ? A. Yes. Q. What is the cause ? A. The men prefer factory work, as the hours are shorter. Q. Are statistics available to show increased cost of farm labor ? - A. No; such statistics have not yet been completed. Q. Could you give an approximate idea of such increased cost ? A. The cost of labor has risen during the last decade about 50 per cent. Q. Are there any statistics to show the increase in the cost of living during the past 1 years ? A. The cost of living has increased at least 50 per cent. Q. Then farm laborers are no better off as the result of their higher wages ? A. No; except for the fact that the agricultural laborer receives a portion of his wages in kind, and so is a little better off. Q. Is agriculture taught in the rural elementary schools ? A. No; but the teachers make use of agricultural examples to illustrate their lessons in rural schools and are required to pass an examination in agriculture. The ministry of agriculture sees that the reading, books used in rural schools deal with matters touching the life of the farm. Q. Are there voluntary associations at work for rural uplift to stem the migration of the rural population to the towns ? A. No; but the ministry of agriculture is studying measures to improve the lot of the rural population, especially with a view to securing them better housing conditions and training. So far, however, these are only studies. Q. Is there any effort to organize the sports and games of children in the agricultural districts ? A. Efforts have been made recently in that direction. IMPERIAL AND ROYAL AGRICULTURAL SOCIETY OF VIENNA. Prof. Hauslbh, Secretary General. statement. Vienna. The first agricultural societies were founded in Austria in the beginning of last century, when the system of payment of agricultural laborers in kind gave way to payment in money. This change brought about new and 204 AGEICULTUEAL COOPERATION IN EtTKOPE. difficult conditions for the agriculturists, who had to turn their attention to the question of increasing the pro- ductivity of their farms and lands. The Agricultural Society of Vienna was founded in 1807 and promoted the formation of agricultural societies in all parts of the Empire for these purposes : (1 ) To promote technical im- provements and to introduce scientific agriculture. (2) To follow closely the special influence of legislation and administrative measures on the conditions of agriculture and agricultural industries, and to submit proposals on these heads to the Government and to legislative bodies. (3) To assist the farmer in the commercial side of his business, by enabling him to buy at lower prices and to sell on better terms. The members of these societies are mostly farmers, small landowners, and the owners of large estates. A glance at the map of Austria shows how widely the different sections differ geographically and, conse- quently, climatically. The result of this is that agricultural conditions are widely different in the different provinces. This is why provincial and not national organizations prevail. These societies were originally in the nature of provincial organizations subject to provincial laws, and were required to submit their statutes and by-laws to the Government authorities for approval, as in the case of political associations. But in the course of time, special organizations for promoting agricultural improve- ments were created under special laws, which prescribe certain rules for the election of their boards of directors, and they were no longer on the same footing as political societies, but assumed the character of semiofficial bodies. Thus there grew up two different kinds of organization — the agricultural societies and the agricultural boards. Before the creation of the agricultural boards, agricultural societies already existed in each province, and they continued to perform their educational work after the foundation of the agricultural boards. In most provinces there is a division of work between these two bodies, whose main duties are : (1) To promote the education and technical training of farmers by means of meetings, lectures, and the publication of pamphlets and periodicals. (2) The organization of traveling lectureships on agriculture by voluntary lecturers who travel into farming districts ; also the opening of agricultural 'schools which have been taken over later by the provincial administration. (3) To act as the representative of the agricultural interests in matters of legislation, tariff, etc. (4) To carry out practical tests and experiments with manures, in plant breeding, etc., so as to demonstrate to the farmers the value of scientific agriculture. There can be no doubt that educational institutions and experiment farms do nauch for agriculture; but it is of little use to show the farjner how he may improve his business unless he can obtain the money necessary for the introduction of these improved methods. Without this, educational efforts are useless. It has, there fore, become the business of agricultural societies to distribute subsidies to farmers so as to enable them to introduce these improvements. The contributions of the members of the societies were inadequate for the purpose and recourse was had to State and provincial financial aid for the purchase of the necessary seed, stock, etc. The use made of these subsidies, which are distributed through the agricultural societies, is under the control of the ministry of agriculture, which decides as to their advisability and exercises its direct influence on cattle and plant breeding, etc. Until five years ago the r61e played by the Agricultural Society of Vienna was similar to that of other agri- cultural societies; but in 1905, when the agricultural board for Lower Austria was founded and the society had to decide upon its future policy — whether to remain a society for the promotion of agriculture in the whole of Austria or to restrict itself to cooperating with the agricultural board — it was decided that, as its seat was in Vienna, it was the body best suited to deal with agricultural questions for the whole Empire, and that its chief object should be to organize agriculture economically and politically for the whole Empire; in short, to place itself at the head of the agrarian party. Its tradition, the confidence it enjoyed with the provincial agricul- tural boards and its sister societies, and its position in the metropolis of the Empire made it well fitted for the study of such general questions and encouraged it in this undertaking. One of its main works has been the introduction of uniform customs tariffs for agriculture for the whole Empire. It has also established a bureau for giving legal advice to agriculturists on questions affecting their professional interests ; a bureau to deal with questions of transportation as affecting farmers (freight rates and charters) , and a labor bureau for regulating the migration of farm labor. It has sections for organizing the business of fruit and vine culture, milk farming, cattle breeding, etc. Then it has its agencies for sehing milk, cattle feeds, etc. It is opening factories for feeds and artificial fertilizers. It has organized a department to advise farmers in the matter of purchasing agricultural machinery, so as to protect them against unsuitable or inferior kinds, and it has opened a permanent exhibition of agricultural machinery where the farmers can examine the same and see it in operation. In 1 908 the Agricultural Society of Vienna laid the foundation stone for the meeting of the presidents of the agricultural boards and societies of all the provinces of the Empire — a meeting which has since grown into a permanent important conference, which keeps in constant touch with the principal corporations in the various AUSTtelA. 205 provinces. This conference is in a position to take up all important general questions and problems relating to the practice and science of agriculture, such as agricultural education, legislation, administration and economy, and to promote common action in the interests of agriculture. DEPARTMENT OF FARM MANAGEMENT AND BOOKKEEPING. This department was established in 1909 in view of the fact that farmers as a rule are ignorant of the laws of bookkeeping and of the business administration of their undertakings. It is not sufficient to promote tech- nical agricultural improvements and to place the farming industry on a sound economic basis. The business and commercial sides must be given due consideration. For this reason bookkeeping offices have been organized in Vienna and in the various Austrian provinces. To promote the welfare of agriculture and of the individual farmer, it must always be borne in mind that the net proceeds of the farm are made up of the net proceeds obtained from each of the various branches of that farm;. It is therefore highly important to carefully analyze the proceeds of these various branches. Therefore, each farmer, no matter how small, should keep books so as to show the proceeds obtained from each branch of the business — ^from the stock breeding, the poultry yard, the dairy, etc. For this reason such farm bookkeeping is complicated, and many different matters have to be con- sidered. This is not only a difficult task, but a lengthy one, such as the average small farmer has neither the time nor the knowledge to perform. If the work is to be done, it must be done by means of weekly returns of a simple description, which the farmer can make and send in to the bookkeeping department of the agricultural society. The society compiles from these returns balance sheets of receipts and expenditures and sheets showing the exact amount of labor expended on each branch of the farm, together with its cost both in money and kind. These weekly returns show exactly how much money has been received and expended ; what quantities of each product have been raised, sold, and why; what labor both of men and animals has been required on the farm; the cost of work performed both by members of the family and of hired labor; and the cost of feeding adults and children, the members of the family, and the hired laborers. , All these facts are supplied by the farmer when he fills in the weekly report sheets with which he is supplied. Besides this, when a farmer joins the bookkeeping department he fills in an inventory sheet in which his farm lands, buildings, stock, crops, implements, machinery, and household furniture are accounted for, and this inventory is revised at regular intervals. This makes it possible to show the net income obtained from the farm; the amount of money and labor required for each form of cultivation; the cost of production of each product; the gross profits; and the profits on each branch of farm work for each farmer who joins the bookkeeping department. But, it may be asked, what is the utility of all this 1 The utility is twofold. In the first place this system enables the agricultural society to give the farmer useful advice on his business ; to show Mm whether or not any particular branch is profitable ; how this other could be improved; that here he is spending too much and here again too little. Thus the bookkeeping depart- ment is able to act as a kind of steward or manager of the farm and at the same time as an educator. For this reason it is not enough for the bookkeeping department to receive the inventory and the weekly returns ; it must also make an inspection of the farm. For this purpose when a member joins this department it sends an inspector to report on his farm — the soil, situation, climate, transportation facilities, vicinity to markets, whether the lands are contiguous or whether the farmer is compelled to lose time in getting backward and for- ward to his work. This information makes it possible to determine whether the returns obtained from the farm are high or low, what improvements could be made, and whether it would be profitable to make them. This enables the bookkeeping department to act as a real advisory board for the improvement of farms, thus enabling the farmer to increase his income. In all the provinces of Austria bookkeeping offices on this plan have been opened, which are thus in close touch with the farmers who send in their weekly returns. In the second place the data obtained through this bookkeeping system and sent to the central agricultural society enables it to deternaine the cost of production of each product in each province. The condition of each farm is known to the bookkeeping department by means of the report of its special inspector, and thus the rela- tion between net profit and cost of production can be determined for the different soils and climates. It is thus possible to compare the cost of production on consolidated farms as against those which are parceled out in separate lots in different places, thus showing the importance of consolidation. The influence of cost of trans- portation and of market facilities on prices can also be determined. It can be seen whether the net profit derived from a farm is due to its cereal crops, to stock breeding, or to any other form of operation. Finally, by this means the agricultural society obtains the reliable, economic, statistical data so essential for guiding its work in the development of the economic resources of the nation. These bookkeeping departments may be described as experiment stations for agricultural economics. They show whether the subsidies granted by 206 AGBIOULTTJEAL COOPBKATION IN EUEOPE. the Government through the agricultural societies are given in profitable directions, and they play a most mportant r61e in determining the tariff policy of the agrarian party. When once the cost of production of farm products can be effectively proved, agriculturists are able to protect themselves effectively and the agri- cultural society is in a position to submit to the Government reliable advice on this head. To summarize : The bookkeeping department of the agricultural society is an advisory board for the farmer, a statistical board for the economist, an advisory board for the statesman, and a guide as to the right economic policy for the nation to pursue in regard to its agriculture by showing the exact cost of production of each product. QUESTIONS. Q. Is this agricultural society an official, semiofficial, or voluntary body ? A. It is semiofficial; the Government is in direct relations with it and subsidizes, directs, and makes use of it for carrying out its purposes with regard to agriculture. Q. What I want you to make clear is this: In the United States we have a great agricultural organiza- tion — the Grange — organized with subordinate, county, and national granges; but it is a purely voluntary body; it is quite unconnected with the Government; representatives of the Government have no official status in regard to it; it is under no obligation to the Government to hold meetings or to direct its efforts along any special fine. In the case of your agricultural society is it connected with the Government ? A. Yes; the Government is officially represented at the meetings of the society. Q. Is it under law ? A. Yes; under national and provincial law. It is required to assist the Government as an advisory board in its work for the promotion of agriculture. The provincial laws require the provincial agricultm-al societies and agricultural boards to act as advisory boards to the local governments. Q. In the United States there is no connecting link between township and State agricultural organizations and the central Government. If I understand you rightly, your agricultural societies, from your central agri"- cultural society down to the local provincial agricultural societies and boards, are connected with the central Government ? A. Yes; there is close contact between the central Government and the agricultural societies and boards, but it is not an organic connection. They are not branches dependent on the department of agriculture, but the department of agriculture is in close official touch with them. Q. Does the minister of agriculture have to attend the meetings of the agricultural society ? A. The law requires that persons specially delegated for that purpose by the minister of agriculture shall attend such meetings. These persons are not government employees, but they are appointed to represent the Government at such meetings. This is true of both the central Government and of the provincial govern- ments — which would correspond to your State governments — which are represented by delegates at the meet- ings of the provincial agricultural boards and societies. Q. Have these bodies only the right to act as advisory boards or have they also the right of initiative in matters of agricultural legislation? A. They have certain rights of initiative; for instance, in matters of customs tariffs they can submit their proposals to the Government. Q. If I have understood you rightly, the following comparison could be made: Agriculture in Austria is a body in which all the organs are connected with the central organ, the heart; a body in which the circulation from the heart to all the limbs and organs proceeds normally; whereas agriculture in the United States is a body in which there is no proper circulation from the heart to the individual limbs and organs. Is that the case? A. Your comparison is correct so far as Austrian agriculture is concerned. Q. Has this system been extended to Bosnia and Herzegovina ? A. Not yet. Q. Is it difficult to induce the farmers to follow this system ? A. No difficulty is found in the case of those farmers who have followed courses of agricultural schools; on the contrary, they support the system and make very good reports. Q. Are the blanks furnished free of cost ? A. Yes; there is no charge made to the farmer; the expenses of working this system are defraj-ed by the Government. Q. Is the bookkeeping work in each province done by its agricultural society ? A. Yes; by the agricultural boards or by the agricultural societies, but always on absolutely uniform lines. Q. Do the public schools give instruction in this matter and encourage the use of these blanks ? ATJSTBU. 207 A. This is not yet done in the elementary schools, but instruction in the system is given in the agricultural and winter schools. Q. Is instruction in farm bookkeeping given in these schools ? A. Yes; and always on uniform lines with the plan I have outlined.' VIENNA CENTRAL CATTLE MARKET. Report op a Subcommittee. Vienna. In the first yard looked at it was said that 6,000 oxen could be accommodated. It was stated that sales are concluded at 3 o'clock and that at 5 o'clock the seller could receive his money. The market inspected is the only one in Vienna for cattle intended for the butcher. All cattle arriving by train on the siding constructed on the market premises must be accompanied by a bill of lading. This biU of lading is examined and if found in order the usual procedure is followed. On leaving the cars the first examination takes place. On the way to the stalls a second examination is made for the purpose of absolute protection. The cattle then pass into the stalls, of which there are 19. Five thousand head of cattle can be brought into these stalls. If any serious disease is detected, the animal is immediately slaughtered. Information was asked for in regard to sick cattle. It was said that sick cattle are examined by a com- mission and if they are found fit for consumption they may be sold. If they are found to be unfit for consumption they are chemically destroyed. All cattle are again examined after being killed. Cattle standing in the stalls are examined every day. All animals passing through the market receive two brands. One indicates the name of the commission agent and the other the consigner of the cattle. A stable large enough for 30 head of cattle was inspected. It was said to be an old one. The floor was paved with cement and electric light was installed. A fee of 20 hellers per head per day is charged for stable accommodation. This has to be paid by the seller. On the day of sale cattle are again examined on leaving the stalls. The weighing house was next inspected. It was stated that eight similar weighing houses existed. Ten animals can be weighed at one time, but as a rule only five or six are weighed at a time. No charge is made for weighing. A city official makes out a statement of the weights. The weighing itself is also done by an ofiicial of the city of Vienna in the presence of the buyers and sellers or their representatives. An official of the market is also present. The market official takes note of the buyer and seller, the brands on the cattle, the prices, etc. This note is made out in duplicate. The pigpens were then inspected. A good-size pen can be rented for 80 hellers per day. Feed for the pigs is bought by the agent in the name of the seller. From 16,000 to 20,000 pigs are sold every week. The best pigs come from Hungary and they are said to be fed on corn. Fat pigs aie said to carry about 60 per cent fat. EVIDENCE OF OFFICIALS. Q. What is the object of this market ? A. To make purchases and sales for the small butcher or farmer as easy as for the large butcher or farmer. In other words, to protect them from trusts. The seller of cattle does not receive any money direct from the ' Upon the adjournment of this hearing the members of the CommisBions inspected the weekly returns sent in to the agricultural society by the farmers. It was noticed that they are usually filled in with pencil, the figures being written in under each column. Prof. Hausler explained that each farmer is given a number which he writes on his weekly return blank; this is to insure the entirely confi- dential nature of the information supplied and to satisfy the fanner that it will not be used to supply Government officials with infor- mation that might be used for taxation purposes. The names and addresses of the farmers are only known to two officials. The returns are sent in each week, and at the end of the year the balance sheet is struck for each farm and a report supplied to the farmer. During the course of the year the bookkeeping department may note some defect in the management of the farm, such as the poor quality of the feed given to the stock, etc. Any such observations are immediately communicated to the farmer who thus has a steward in the book- keeping department. At the end of the year detailed advice on the management and improvement of the farm is given to each farmer with his yearly balance sheet. The agricultural society and the provincial societies s^nd their agents to the country districts, where they call together a few of the local farmers and give them practical instruction concerning the filling in of the blanks. If the instruction is given in the morning, in the afternoon the farmers are asked to fill in specimen blanks by themselves and to submit them to see if they have rightly understood the system. These same agents inspect the farms for the descriptive reports already referred to. In reply to an inquiry as to whether farmers act on the advice given, the secretary general stated that the department under the management of the agricultural society is of too recent date to allow of giving a decisive reply to this question, although all indications point to most favorable results. But a positive answer can be given in the case of Moravia, where such a bookkeeping department has been at work for several years. The results there have been excellent. 208 AGRICULTURAL COOPERATION" IN EUROPE. buyer. There is a cash office on the raarket, where the buyer has to pay for the cattle purchased before he is allowed to leave the market with his purchase. Within a few hours of the sale the seller can, on presenting at tha cash office the necessary documents, receive the proceeds from the sale, less expenses. The institution is obliged to pay in cash. The Vienna Central Cattle Market was originated in order to protect the small capi- talist from pressure on the part of the large capitalist. In Austria the markets are under the control of the com- munities and have to be run in accordance with the laws. If a person goes direct to the farmer and buys cattle, they can in no way pass through the institution. Q. What happens to the best cattle ? A. Generally the best quality of cattle is purchased by sugar factories and sold by them to the butcher. Q. What have sugar factories to do with cattle ? A. They have waste products which make excellent feed for fattening cattle. Q. Is this institution under State law ? A. It is a branch of a stock bank, with a capital of 42,000,000 crowns. Q. What does the bank charge for carrying through the transactions ? A. Five crowns for every thousand crowns, this charge being for taking over the responsibility in connec- tion with the cash transactions. Butchers who make purchases through the market must have a credit balance in the bank. Cash, securities, or a bUl could be deposited. If a buyer does not pay for the cattle bought, they are sold on the next market day. There are three market days a week- — ^Mondays, Wednesdays, and Thursdays. Q. What is the position of the agents ? A. A farmer may designate his cattle to an agent on the market, whose business it is to sell the cattle so intrusted to his care at the best possible price for his patron. A certain conamission is charged for this work. The price is regulated by the law of supply and demand. For example: The requirements of Vienna are, say, 5,000 cattle, and only 4,500 are in the market to be sold. The result wUl be that prices will rise. If, on the other hand, 6,000 hsad of cattle are there to be disposed of, the prices wUl fall. The quality of cattle varies greatly, and of course batter prices are paid for the better grades. Q. Does the market have inspsctors under the control of the Government? A. The market is undir the control of the city of Vienna; i. e., the municipal authorities. Cattle are sent to the market by landowners, farmars, and cattle daalers. As a rule, the larger part of the cattle sold at the market passes through the hands of the commission agents, who get a fixed commission of 3 crowns per head. Official market reports are made out of each sale, and in these the prices of the various grades are set forth. To cover the expenses of veterinary officials, a charge of 2 crowns is made by the city for horned cattle and 20 hellers for pigs. Q. Does this market make it necessary for butchers to go into the country to obtain cattle ? . A. Such a procedure on the part of the butcher would increase prices verj' much, as the cattle are raised in all parts of the Empire. No law exists, however, which prevents a man going into the country to buy cattle. Q. Can a farmer consign his cattle to the market without any prearrangement and have the cattle sold and the proceeds sent l^o him ? A. A farmer can send his cattle there without stipulating that a certain agent should sell them for him. In this case the cattle are sold and he gets the proceeds. There are three cooperative societies at work of which the small farmer could make use in connection with the transport of his cattle to this market and their sale there. Q. Is an official record kept of every animal sold ? A. Yes. At the market an official record is kept of every animal sold, i. e., the price obtained, quality, etc., is entered; and, consequently it is impossible for the farmer to be cheated. Q. Does the farmer receive the proceeds of the sale direct from the institution ? A. Yes; but there is a charge of 3 crowns per 1,000 crowns on the gross sales of cattle and 5 crowns per 1,000 crowns on small live stock. Q. Do any of the profits go to the State ? A. Yes; 10 per cent of the gross profits go to the city of Vienna, out of which new buildings, etc., are pro vided. Q. Can a farmer slaughter on his own premises ? A. Yes; provided he does so with his own employees and it is his own cattle that are killed. Q. Can he sell his own cattle that he has slaughtered ? A. Yes. Q. Can a butcher slaughter on his own premises ? A. Yes; but only small animals, such as pigs and sheep; the large cattle must be slaughtered at the public slaughterhouse. The slaughtering of cattle does not concern the market at all. AXTSTEIA. 209 Q. What are the present prices for cattle ? A. Best Hungarian cattle, 100 to 122 crowns per 100 kilos. Galician cattle, 98 to 104 crowns per 100 kilos. Small pigs, 136 to 144 crowns per 100 kilos. Large pigs, 122 to 124 crowns per 100 kilos. To consumers the best cuts of beef and pork at 2.20 to 2.50 crowns per kilo. Mutton prices range from 70 hellers to 76 hellers per kilo. RAIFFEISEN SYSTEM IN AUSTRIA. Evidence of Dr. M. R. von Erve, of the Ministry of Agriculture. Vienna. Q. I should like to know the name of the central society. A. The Limited Liability Central Cash Office of the Lower Austrian Associations. Q. How did the central society (central cash office) secure its foundation capital ? A. By the membership shares amounting to 10 crowns for each 25 members. Q. Does the central organization receive any other foundation capital except membership shares ? A. It receives also subsidies from the country of Lower Austria and from the State. The State appropri- ates 1,000,000 crowns annually to the ministry of agriculture for subsidies to cooperative agricultural societies and other agricultural unions of a noncommercial character. The State subsidies are devoted to payment of expenses and do not go to build up capital. Q. Are there any annual membership dues ? A. No. Q. What power have these subordinate or federated banks in the control of the central body ? A. The subordinate banks are stockholders in the central bank and control it like shareholders would any corporation. Q. Does each subordinate bank have only 1 vote ? A. Each affihated bank has 1 vote in the central bank. Q. What liability has each subordinate bank for the central bank ? A. Each subordinate bank is Hable for 20 times the value of its shares. The security of the central associa- tion to its creditors is the assets of the association plus 20 times the value of the membership shares paid in by the subordinate banks. Q. What is the obhgation of the central bank to the subordinate ones ? A. This central organization is compelled to extend credit as long as money is available. Q. What membership constitutes this central organization ? A.- Five hundred and forty-seven Raiffeisen societies and 227 cooperative societies for production and dis- tribution. All affiliated associations are equally bound for the MabUities of the central organization. Q. Is the central organization obhgated to use its. credit to borrow funds to supply local banks upon their application ? A. The central association is not obligated to extend credit to the affiliated banks beyond the cash in its treasury at the time. Q. Does this central bank accept notes and securities of the local banks and hypothecate them to other banks to secure funds to loan to that particular bank ? A. It is not so in Lower Austria, but in other provinces such is the case. Q. What rate of interest does the central association pay on the deposits of its federated societies ? A. According to the by-laws 4 per cent, but at this moment 4^ per cent is being paid. Q. I have in my hand a statement made by Director Meyer on the 28th of May that the mortgage institute of the country of Lower Austria is paying 5^ per cent for deposits. The commission would Uke to know how this central association of yours located in Vienna can secure deposits at 4^ per cent when the mortgage insti- tute of the country of Lower Austria, whose Habilities are guaranteed by the country of Lower Austria, is paying 5^ per cent on their deposits. A. The locals are obhgated by their by-laws to deposit their funds in the central organization and are inter- ested in maintaining low rates of interest. They are perfectly satisfied that the funds deposited with the central bank are safe and secure. The moderate claims of the members as to interest on their deposits appear to be founded on their fidelity to the association resulting from their cooperative training. Q. What security has the central bank to give to its depositors ? A. The same security as they give to their creditors. Q. What rate of interest does the central bank charge on loans to its affiliated banks ? 14174°— S. Doc. 214, 63-1 14 210 AGBICULTXIKAL COOPERATION IN EUROPE. A. Fowc and three-fourths per cent. Q. The rate established by the Austro-Hungarian Bank is 6 per cent, and the Austro-Hungarian Bank, I am told, is paying 6| to 6^ per cent for money in the open market. Now, the question I want to ask again is. Can you explain how your association can loan money at 4f per cent when the Austro-Hungarian Bank is paying 6f to 6^ per cent for money ? A. Because we are not borrowing money in the markets, but are loaning the money of oiu- depositors. There was a time when the central association had even a higher rate than the commercial banks. The purpose of the central bank is to equahze the interest rates, and the influence of the Government is to make these rates as low as possible. The result has been a lowering of the interest rates. The local banks have power to accept deposits from all citizens, hence the money deposited in the central association really comes from all classes of citizens of Lower Austria. As a result of this federation the members of the local banks are to-day borrowing money at this very low rate of interest. Q. What security does this central association demand from a local bank tor a loan ? A. The unlimited Mability of its members. Q. What measure of control has this central bank over the local banks as to rates they shall pay on their deposits ? A. No other influence than advice. There are certain concessions made by the Government of the Empire in the rates of taxation if the local bank is able to show a certain fixed difference between the rates paid on deposits and those charged on loans. This difference must not exceed 1^ per cent. Q. Does this central bank have any control over local banks to check their making excessive loans to any one member ? A. This central bank can influence the board of a local bank to refuse excessive credits. Q. I find land is rising in value here, wages are increasing, and, generally, the cost of living is increasing. What is the cause of rising prices, in your judgment ? A. The opponents of the farmei-s believe that the high protective tariff is responsible for the high cost of living. I am not of that opinion. I beheve that the producer should be paid the actual value of the products which he sells. This value has kept on increasing, due to a complex of causes, such as the high cost of labor. Moreover, all other expenses of the farmer have gone up in proportion, thereby increasing the cost of raising the various farm products. I beUeve in eliminating the middleman as much as possible, and that can be accom- plished by cooperative associations and consumers' associations. In other words, the farmer is entitled to the value of his products. Q. In joui opinion, has the Raiffeisen system and the mortgage system, as you have it in Austria, which increase the credit of the farmer, had anything to do with this increase in prices ? A. The question is a very important one. I believe that the creation of these Raiffeisen societies and of the other cooperative associations has enabled the producer to obtain the value of his product, plus the profit which enables him to five. In other words, he is not at the mercy of some commission merchant, who would exact the very lowest price in his own interest and then the highest possible price from the pubHc. My con- clusion is that while these societies are not responsible for the increased cost of hving, yet they do regulate and keep on a constant level the prices of farm products. The cooperative societies have the p\u*pose of protecting the farmers from the spoliation of commission men and middlemen and of not permitting prices to fall below the cost of production. Q. Have these beneficial results been limited to the producer or have they extended to the consumers ? A. The benefit which the consumer receives is the certainty of pure products. The army now buys its cereals direct from farmers' organizations, the advantage being the elimination of the middlemen. Dr. von Ertl has found from 6 to 12 different profits in the final price of vegetables as they reach the consumers. Q. What exemption does the individual have from execution (seizin-e) ? A. Two thousand crowns. Q. Is there any relation between this central organization and the bank of issue ? A. There are certain relations between these central agricultural associations and the Austro-Hungarian Bank by which this bank extends credit to the central associations, but to an insufficient extent. It is now proposed in a bill before Parliament to create a central cooperative bank for the purpose of extending credit to these federated societies. This question can best be studied at Berlin, Germany. Members of this bank wiU be the different central cooperative organizations in the provinces. Thej'- wiU receive credit from this bank. This bank wUl be given power to issue mortgage bonds for long-time credits for the special purpose of enabling cooperative societies to carry on warehousing and other similar undertakings requiring much capital and long-time credit. AtrsTBiA. Sll RAIFFEISEN BANK OF KREMS.* Report of a StrBCOMMiTTBB. Keems (near Vienna). This credit society was foimded ia 1893. It seems to have grown out of the needs of the farming com- munity where most of the farmers are engaged in viticulture. They were greatly in need of more capital for short periods and felt that an institution on the Raiffeisen model would greatly facilitate their opportunities for obtainihg credit. The initiative really came from the central cooperative society at Vienna. It appears that there were in Krems in 1893 two Schulze-Delitzsch banks and one land-mortgage bank, but neither of these satisfied the credit demands of the farmers. At first there were but 20 or 30 members. There are at present 357, representing 7 different communities. The value of shares was made 20 crowns, each member holding one share. The manager affirmed that the usual value of a Raiffeisen share is 10 crowns; but no special reason could be given for the higher value at Krems. There were no founders' shares, of course, and charter members were given no privileges over later members. membership — DUTIES AND PRIVILEGES. Although the bank is chiefly for farmers, it does not appear that occupation has anything to do with the qualifications for membership. The manager or president is a ropemaker, the bookkeeper a clergyman, the cashier is a pensioner; the board of directors is made up of vine growers principally. Each member must buy one share; no member has more than one vote. Only members may borrow money, and no member of this society maybe a member of any other society of similar character. Deposits are received not only from members but from anyone who Avishes to deposit. FOUNDATION CAPITAL. 1. Members' shares, about 50 at 20 crowns, or 1,000 crowns. 2. The society borrowed 10,000 crowns from the central cooperative society at 4 per cent, the same rate at which the local made loans to its members. 3. From 200 to 300 crowns were received from the provincial government as a gift for the purpose of buying books, furniture, etc. DEPOSITS AND LOANS. This local receives deposits from farmers and tradesmen in the community, both members and nonmembers, and pays a rate of 4 per cent. At present the deposits exceed the loans, and this is true of 450 out of 500 of the local credit societies in the Central Federation of Lower Austria. At present loans are made to members at 4f per cent, which is somewhat cheaper than loans obtained from the Schulze-Delitzsch and other local banks. The official rate (i. e., the commercial rate) is 7 to 7^ per cent on loans. The official discount rate of the Austro-Hungarian bank is 6 per cent on bills of exchange. This is unusually high, however. Loans to members are made chiefly on three-name paper and this is usually sufficient. The loans are for periods ranging from six months to two years, but in exceptional cases the time may be extended to four years or even more. The unlimited liability feature is the best security for small loans and in most cases for large loans. However, in certain instances, as, for example, when a loan seems to be insecure and a little more surety is wanted, mortgage credit is resorted to. This is said to be exceptional. Occasionally loans are made for a longer period, say, 10 years, on land mortgages. The repayment of the loan is made by annual payments plus the interest on the unpaid principal. There is no amortization in the strict meaning of the term. All loans to members must be passed upon by the supervision committee, here composed of nine members chosen by the general assembly of the members for four years, and called the Vorstand. This board (Vorstand) is subject to the board of control (Aufsichtsrat), also elected by the general assembly. The Aufsichtsrat has a sort of general supervision over the administration as well as the activities of the society. The Vorstand meets every month to pass on applications for loans. AU bills require two signatures for security. Loans are limited as to amoimt. The largest loan now possible is 20,000 crowns. The average loan is less than 1,000 crowns. Apparently, members may borrow op current accounts, or make use of a- line of credit. AU loans must be secured by two indorsers and all loans are made for productive purposes. ' A Bmall V illage on the River Danube, about 30 miles from Vienna. 212 AGEICtrLTXTBAL COOPERATION IN EUEOPE. RELATION TO THE CENTRAL. 1. Most of the local cooperatives are organized by the central society, although the Krems organization was made through the assistance of the provincial government (the officials pointed to this as an exceptional circumstance) . 2. The local society is federated with about 500 other banks of Lower Austria in one large central federation of cooperative societies. 3. Each local is entitled to send one delegate to the yearly general assembly of the central federation. 4. Inspection of the local is made yearly by the central and if necessary more frequently. The law gives the central a large measxire of control over the affiliated societies. GOVERNMENT SXJPERVISION. The informant testified that the Government exercised a supervision over the society through a provincial board of examiners. THE MANAGEMENT. The three authoritative bodies are the Vorstand, the Aufsichtsrat, and the general assembly. The first two are chosen by the general assembly, which is the court of last resort and has full control of the internal administration of the society. The general assembly makes public all loans and notes all irregularities. The publicity insures the bor- rower of any large sum the careful scrutiny of his neighbors as to his financial condition. In case of any irregu- larity the provincial board may step in to close the bank, although it is not certain that this power is really vested in the provincial government. The bank is open one day in the week, both for deposits and approved loans. The manager, cashier or bookkeeper, and one director must be present. This is "cashier's day." LOSSES AND FORECLOSURES. There have been no foreclosures, but the right of foreclosure is immediate and absolute should there be any failure on the part of the borrower to meet his obUgations. There is no period of redemption. The losses have been small, but 200 to 400 crowns in the last 10 years. FORMS OF ACCOUNTS. The usual current account (konto korrent) is balanced every six months and differs from deposits (depo- siten) in that these are larger usually and are generally held on shorter notice. The six months' notice is, of course, for the purpose of safeguarding the funds from sudden withdrawal. The deposits can be withdrawn on two weeks' notice if they are small; six months, if they are large accounts. IN GENERAL. The ffiial source of credit is the Austro-Hungarian bank which up to the present has not granted any favors to the RaLffeisen central in Vienna. There is now on foot a plan to provide for cheaper discounts of Raiffeisen bills of exchange by this Government bank. Discoimts of Raiffeisen biUs at banks other than the Austro-Hungarian bank are at a higher rate; hence private banks of discount are resorted to only in extremity. Union with the federation of Raiffeisen banks is not essential to the hfe of the Krems local, but it is a source of strength. The federation acts as a supervisory body and a clearing house and gives a certain back- ing to the local association. STATEMENT OF THE PRESIDENT. The Raiffeisen society in Krems is a registered cooperative society with unlhnited liability. The mem- bership of this society is unusually numerous and its organization is particularly good. There are at present 357 members, who are located in 7 different communities of the environs. The shares of the members amount •to 7,140 crowns. The society owns a buildtng estimated at 33,300 crowns. At the end of last year the account at the Central Cooperative Society in Vienna showed a surplus of 27,770 crowns. The reserve fund, amounting to 13,340 crowns, is deposited with that institution. The deposits were, at the end of 1912, 533,778 crowns, against loans of 457,294 crowns granted to members. Of the net profit of last year, amounting to 316 crowns, 285 crowns were used to pay the interest on the shares (4 per cent) and the rest carried over to the reserve fund. The rate of interest for deposits is 4 per cent, while for the loans 4| per cent is charged. Considering ATJSTEIA. 213 the normal rate of interest for loans reached at the end of 1912 (more than 7 per cent), the beneficial value of such a society for its members is unquestionable. The working expenses amounted to nearly 3,000 crowns, but it must be noted that in view of the extended business the expenses must necessarily be greater than is the case with a small society. Tl\e average working expenses of a Raiffeisen society are estimated at about 500 crowns, or 8.40 crowns per head. In accordance with the regulations of the Eaiffeisen system the loans are only available for short periods and according to the statute must not exceed one year. In exceptional cases the board of directors are allowed to extend this Umit to a period not exceeding two years in all. Contrary to most Raiffeisen societies the Krems bank grants loans against hypothecary security redeemable in annuities. The amount of the hypothecary loans must, however, not exceed more than half the total working capital of the association. Current accounts may be opened to members with a large turnover. EVIDENCE OF OFFICIALS^ Q. What are the chief occupations of the people here ? A. Nearly all are engaged in agricultural pursuits. Q. Have you any special crop ? A. Practically all grapes for wine making. Q. Did this institution arise out of the need manifested in the cultivation of the vine ? A. It was founded to secure and to grant loans and to enable the farmer to receive credit. Q. By whom was the institution founded ? A. The initiative was taken by the provincial government, but the society itself was founded by the in- habitants. Q. When was it founded ? A. In 1893. Q. Does this society meet the needs of the cultivators of the vine in this locality ? A. It might do so, perhaps ; but, as a matter of fact, there exist two other societies besides ours. One of them is a mortgage bank. Q. When this society was founded how many members did it have ? A. At first about 20 or 30 members. Q. Did one share cost 20 crowns in the beginning ? A. Each share cost 20 crowns in the beginning, but the usual price of shares of other Raiffeisen banks is only 10 crowns. Q. Was this amount paid in full by the members ? A. Yes, immediately; as otherwise a person could not become a member. Q. Why is a share higher here than is usually the case ? A. There is no special reason for this. Q. Was there at any time any distinction between founders and ordinary members. A. No ; the rights of founders and other members are the same. Q. I understand that, in connection with this institution, you have mortgage loans ? A. It is not the aim of this society to grant mortgage loans. It is only done in exceptional cases, as when a loan which has been granted has become insecure, that the society tries to get a security. Q. Why is it not safe when you have unlimited liability ? A. There is, of course, unlimited liability; but if the borrower gets into financial difficulties then the society tries to avoid a loss. As a rule unlimited liability is a security for the man who deposits his money. Q. Do I understand that anybody can deposit, but that only members can borrow ? A. That is so. Q. What arrangements have you for local supervision of your loans ? A. There is a board consisting of from 7 to 9 members and it is really their duty to look into the trust- worthiness of the members. The general meeting elects this board. Q. For how long ? A. For four years. Q. In the election of this board, or in any matter, has each member only one vote. A. Yes; only one vote. Q. Is there any supervision of this bank by a central organization ? A. The supervision is obligatory and is carried out by a provincial board; they are really officials of the Government. There exists a central cooperative society in Vienna and that central cooperative society con- trols these Raiffeisen banks. There are, therefore, two sets of supervisors. 214 AGRICtTLTURAL COOPEBATtON IN EUROPE. Q. Do they supervise different matters ? A. No ; the same. An exanaination is made at least once a year. Q. Does this bank lend money to its members at a cheaper rate of interest than would other banks ? A. Yes, as a rule. The rate of interest charged at the" present time by the national Austro-Hungarian Bank is from 7 to 7K per cent, whereas this bank grants loans to its members at 4^ per cent. Q. What is your explanation of this difference? A. Because there are practically no working expenses. The officers give their services. As a rule public men are elected as officers. At the present time the manager is a rope manufacturer, the bookkeeper a clergy- man, and the cashier a pensioner. The other gentlemen are nearly all wine growers. Q. But do they get any compensation ? A. As a rule only actual expenses are refunded. Frequently, however, the bookkeeper, who has- the most work to do, gets some compensation. Q. How much does the bookkeeper get per annum. A. From 100 to 600 crowns. Q. Has this Raiffeisen bank been the cause of other cooperative institutions being established here ? A. Not in this case. Q. Does the difference between limited and unhmited liability make any difference as to the credit ? A. As a rule it does; because a society with unhmited liability gets more deposits — the people have more trust in it. The deposits here are nearly 500,000 crowns, while the wealth of the members is, perhaps, 5,000,000 crowns. KREMS AGRICULTURAI, DISTRICT SOCIETY. Report op a Subcommittee. Kkems (near Vienna). The Krems Agricultural District Society was founded in 1861 and was reorganized in 1893. The following gentlemen now constitute the board: Director, Moritz Wohlschlaeger, property owner and town counciUor; subdirector, Franz Salomon, landowner in Stein on the Danube, in Krems; secretary, vacant; and treasurer, Ludwig Dinstl, property owner in Krems. To the society belong 80 members and 1 honorary member, and 18 clubs in the neighborhood are affihated with the district society. The aims of the Krems Agricultural District Society include : (1) The common purchase of agricultural necessities, namely, copper and sulphur for the eradication of pests in the cultivation of the vine and fruit trees and the purchase of artificial manures and agricultural imple- ments and machines for members of the society and affiliated clubs. By purchasing wholesale the goods can be deHvered better and cheaper, thus benefiting the middle and smaU farmer and vine grower and avoiding an intermediary. (2) The holding of lectures by the society itself, or by the affiliated clubs, on agriculture and on the culti- vation of the vine and other fruits. (3) The holding of district exhibitions, as, for example, for the examination of fruit and the testing of wine. These exhibits show the improvement in the cultivation of fruits and the vine in the district. Innovations in implements and machines are also displayed in order to induce the farmer to take a more active part in improv- ing agriculture in general. (4) In union with the Provincial Board of Agriculture of Lower Austria to hold yearly cattle shows in the best cattle-breeding districts for the improvement of breeds of buUs and cows. Prizes are here given by the State, the province, or by private persons for the best breeding animals. In this way the agricultural district society also encourages cattle breeding and regulates the buying and selling of useful and valuable breeding cattle. ORGANIZATION OF RURAL CREDIT IN BOHEMU. Address by Dr. Emil Rods, Councillor of the Provincial Diet. PbA(JUB. My task is to sketch briefly the historical development of the organization of rural credit in Bohemia and its relations to agricultural production and distribution. AGRIOULTUEAL STATISTICS. The Kingdom of Bohemia has an area of 51,918 square kilometers, with a population of 6,709,622 at the end of 1910. Of this area ov^r 2,599,498 hectares is agricultural land with 668,389 farm settlements. The number of AUSTBIA. 215 persons engaged in agriculture in 1912 was 1,618,156. The grain crop amounted in round figures to 29,700,000 quintals, sugar beets 47,000,000 quintals, potatoes 30,000,000 quintals. The grain crop consisted of 4,797,000 quintals of wheat, 9,842,000 quintals of corn, 8,365,000 quintals of barley, 5,345,000 quintals of oats. Of the farms 142,265 are from 2 to 5 hectares in size, and 107,724 from 1 to 2 hectares. There are also 3,388 farms over 100 hectares in size and 273 over 1,000-hectares. COOPERATION. The development of cooperation in Bohemia being of more recent date, differs in several respects from that in Germany and in other sections of Austria. The cause of this is to be sought in the special economic condi- tions of the agricultural population. Prior to 1848 the peasantry were under the domination of the great landowners, and the relations between landowner and peasant were in many respects those of master and serf. The landowners exercised all adminis- trative and political powers. Under these circumstances it was impossible for free cooperation to develop, and it took about 40 years for the farming population to acquire the requisite qualities for cooperative activity, although the cooperative principle was familiar to the old rural community and was used, perhaps unconsciously, by the autocratic government of the eighteenth century in the field of agricultural credit. This historical movement deserves brief mention, as it afforded the fpundation for an ipistitute of agricultiiral credit which is stm working. By a decree issued in 1788, all rural landowners were required to bring a part of their grain — one-third of the quantity needed for seed — to a common granary, of which there was one on every domain. From these granaries the grain needed for seed was delivered to landowners at a rate fixed in grain or in money. When the stock of grain in a granary exceeded the seed requirements for the year, the surplus was sold and the money thus realized was loaned to the landowners. With the abolition of serfdom in 1848 these grain funds were trans- formed into loan funds, which were converted by a law of the Diet in 1863 into credit banks for every domain; and, by a further law of 1883, these credit banks for each district were united into a rural district loan bank. COOPERATIVE CREDIT. There are 167 such banks in Bohemia. Their capital, derived historically from the eighteenth century, amounts to 17,000,000 crowns. The credit they afford is either personal short-term credit in the form of promissory notes or mortgage credit for land improvements and land purchase. The owners of the original farms which were required to contribute to the above-mentioned granaries are now part owners of the funds in a ratio proportionate to the value of their farms; and, when their farms are divided and sold, these shares are divided proportionately. The part owners - participate in the profits of the credit banks in like proportion. The credit banks grant loans to the part owners and to other land- owners of the district. Individual short-time credit is regularly granted on promissory notes running for six months, guaranteed by two sureties. At the end of the first six months these notes are often renewed and paid off in the autumn. LONG-TIME CREDIT. Credit for purposes of improving and purchasing land is granted on the security of a mortgage given on the land. The funds available -for granting such mortgage credit consist (1) in the capital belonging to the rural district credit banks; (2) in the savings deposits made by the public, for which savings-account books are given; and (3) those funds which the bank can secure on its credit. The rural district credit banks secure credit by discounting the notes of their members with various banks and, in some cases, directly with the Austro-Hungarian Bank. The rural district credit banks are required by law to invest their own capital and half of their deposits in mortgage loans, while the remainder may be loaned on promissory notes. Loans are made up to two-thirds of the value of the land mortgaged as valued by the board of directors. The loans are subject to recall on three months' notice, but this right is very seldom exercised; they are repay- able by amortization at the rate of 1 per cent. At the end of 1911 the loans granted on notes and personal security amounted to 75,000,000 crowns; those on mortgage security to 98,000,000 crowns. The savings deposits amounted to 207,000,000 crowns. The banks had themselves borrowed 6,000,000 crowns, mainly by discounting their own notes, and the reserve fund s amounted to 7,000,000 crowns. During the abnormal year 1912 these banks borrowed 15,000,000 crowns 216 AGRIOULTXJEAL COOPEBATION IN EUROPE. INTEREST RATES. In 1911 the rate of interest charged on loans varied from 4 to 6 per cent, 4^ per cent as a rule for mortgage loans and from 5 to 5^ per cent for loans on promissory notes and personal security. During the critical year 1912, when the discount rate of the Austro-Hungarian Bank rose from 5^ to 6 per cent, the rate of interest on loans made by the rural district credit banks stood at 5 to 6^ per cent on promissory notes and at a maximum of 5^ per cent on mortgage loans. These banks are audited and inspected by the executive committee of the Diet. Another institution founded in the days of absolutism which affords an important source of rural mort- gage credit is that of orphans' trust funds. These funds are administered by the district police courts. By an imperial decree in 1858 these funds may be invested in mortgage loans especially on rural property. The mortgage loans granted out of these funds amounted at the close of 1906 to 120,000,000 crowns at an interest rate of 4 per cent. The rural district credit banks and the orphans' trust funds supplied the credit needs of the small farmers in the second half of the nineteenth century. MORTGAGE CREDIT BANK. The development of agriculture and the need felt for capital led to the establishment in 1895 of the Land Mortgage and Credit Bank under the patronage and with the guaranty of the Kingdom of Bohemia. This bank was established not only to serve large and small landowners, but also to grant mortgage loans on town buildings. Another government bank, operating under guaranty of the Kingdom of Bohemia, supplies credit for land improvement purposes; it is the Bank of the Kingdom of Bohemia, which issues bonds for this special purpose. At the end of 1912 the value of the bonds. issued amounted to 21,796,000 crowns. It must also be remembered that rural mortgage credit is granted also, as in Germany, by the savings banks in the towns. RISE OF RAIFFEISEN CREDIT SOCIETIES. The agricultural credit afforded by the rural district credit banks, the mortgage credit bank, the savings banks, and the orphans' trust funds was soon inadequate to meet the growing needs of intensive fanning, and the lack of capital was more and more keenly felt by the peasants, who were obliged to apply for money to the professional money lender. The grievances arising from this state of affairs were recognized by all econo- mists and attempts were made to find a remedy. One of the attempted remedies was the idea of a physician named Kronpelsch, who in 1861 elaborated a scheme for rural loan banks for every parish. This project was not carried out, but in 1888 this idea found its way into Bohemia. The first German Raiffeisen cooperative bank was established in Bohemia in 1888; the first Czech one in 1890. The Diet of the Kingdom assisted in the establishment of such banks by granting small loans free of interest. OTHER COOPERATIVE SOCIETIES. When these cooperative loan banks had prepared the way and secured the necessary funds, cooperative activity was extended to agricultural production and distribution. Cooperative dairies, distilleries, starch factories, and flax mills were established, and the cooperative loan banks and other associations connected with them commenced the cooperative purchase of fertilizers and cattle feeds. Then came cooperative corn- selling and granary societies and cooperative societies for the purchase and use of farm machinery. FEDERATIONS OF CREDIT SOCIETIES. The cooperative loan banks, and with them the other cooperative societies, were soon associated in two unions, one organized in 1895 and the other in 1896.- These unions not only act as advisory boards and boards of audit, but they also perform the functions of a central bank for the cooperative societies and of a wholesale center for the supply societies. GOVERNMENT AID. The Diet of the Kingdom and the Government support the cooperative societies for production and dis- tribution by granting them loans and subsidies free of interest. At the end of 1910, government loans amounted to 593,000 crowns, government subsidies to 669,000 crowns; while the Diet loans and subsidies were for 829,000 and 960,000 crowns, respectively. The Diet of the Kingdom also tried to establish a central cooper- ative bank for the whole country. This project and a proposed public credit fund for the protection of small agricultural producers, as weU as a project for supporting the cooperative societies by loans, have not yet been fuUy carried out. AtrSTBIA. 217 Summarizing the present system of agricultural credit in Bohemia, there are in the villages and often in the small country towns Raiffeisen loan banks for personal credit and cooperative associations for production and distribution closely connected with the former. In the district towns rural district loan banks afford mortgage and personal credit; savings banks and orphans' trust funds furnish mortgage loans. In Prague, the capital of the Kingdom, there are the Bohemian and German unions of the cooperative organizations, the mortgage credit bank, the Bank of the Kingdom of Bohemia, which affords credit for land improvement, and, finally, the public credit fund for the protection of small farmers established by the Diet to support the cooper- ative societies by affording them loans, which extends its activity by assisting the rural district loan banks. AGRICULTURAL MORTGAGE CREDIT IN BOHEMIA. Dr. Hugo Mullbr, Assistant Secretary of the Mortgage Bank of the Kingdom of Bohemia. STATEMENT. Prague. With the introduction of the economic use of money into the agricultural industry the existing credit organizations could no longer satisfy the credit needs of the peasantry. It was not, however, a question of credit in general, but of a credit which would serve the peculiar needs of agriculture. The question had to be separated into personal or short-time credit as well as into foundation or ownership credit. The needs of founda- tion credit or capital can only be provided for in large measure through the form of mortgage credit, for it should be on long time, and, as in land investments, it should be amortizable, naturally cheap, not subject to call, the interest rate fixed, although the borrower is offered the possibility of taking advantage of a fall in the rate of interest. Only the mortgage bond answers these conditions, since it permits a complete mobihzation of the land. The mortgage bond originated in Prussia during the time of Frederick the Great, and it has passed through many transformations. Only the more modern forms of the mortgage bond wiU be discussed here. The bank institute pledges itself to pay iaterest on the mortgage bond to the holder named therein, and, in case of loss, to pay the nominal value. Loans are granted on such mortgages to their nominal value, but not in ready money. The mortgage bonds are handled on the exchange, and there they can at any time be exchanged for cash. This may occur in the following ways: 1. For the obhgations which the issuing institute assumes toward the holder the entire property of the institute is Hable, and, as a rule, such creditors have a preferential right above all other creditors to the rights acquired under the mortgage. The register of landed property is conclusive on this point as to all institutions. Moreover, the land is held for these obhgations. On this account the greatest possible security is required and by this course of action no unnecessary risk is taken. The institutes can thus charge the lowest rates of interest which are permissible according to current rates. Therefore, according to existing statutes, the debtor has to pay the bank no higher rate of interest than the bank pays the holder of the mortgage bond, and this is the greatest possible guaranty of the cheapness of these mortgage-bond loans. 2. The holder of the mortgage bond has no inchnation to wish for its payment. There is really no need for it, since the mortgage bond can be sold by him at any time. He has no claim to repayment within a very long term, say 57 years, unless his bond is drawn by lot for payment. For that reason an issuing institution has no need to take into consideration the rising value of money, as is the case with banks of deposit; for it can, with a few exceptions, forego the right of notice of payment against debtors. It is sufficient if the loan has been paid back within the designated time. It is therefore the fact that the long-time loan not only makes possible the plan of amortization, but also justifies the necessity of it; so that as long as the mortgage bond is in circulation, if the interest is paid on it, the amortization plan guarantees that the rate of interest can not be increased thereon. 3. Should the customary rate of interest fall, it is shown by an increased exchange value of the mortgage bond, even above par. In this case the institute can issue a mortgage bond at a lower rate of interest and the loan can be changed; that is to. say, it can call in the outstanding, nominal-rate, higher-interest-bearing mort- gage bond and issue one for a similar amount at a lower rate. Then the debtor pays to the bank this lower rate of interest, and thus takes advantage of the dechne in the customary rate, while a rise in the rate of interest does him no harm. Herein lies an important feature of the institution. The advantages of these arrangements are chiefly as follows: (1) By a rise in the customary rate of interest, as has previously been pointed out, the exchange value of the mortgage bond falls, and as the debtor must pay back the nominal amount, he suffers a loss in exchange. 218 AGEICULTUEAL COOPERATION IN ETTEOPE. Yet he makes this good in the course of a few years through the lower interest rate. Besides, he can at any time make extraordinary payments in mortgage bonds, and the bank must take these mortgage bonds at their nominal value. (2) The farmer frequently can not do much with a mortgage bond. He must dispose of it, because he needs money. Therefore, the debtor must authorize the banking house to dispose of the mortgage bond for him on the exchange. The farmer, as a matter of fact, gets practically the net proceeds. At the same time the institution also has an influence upon the rate of exchange and employs it in hindering any sudden rise or fall in exchange values. (3) In order to prevent losses which might arise should the mortgage bond not be carefully considered, the mortgage institute must be very cautious and must advance credit thereon only within narrow limits pro- portionate to the size of the mortgage. This approaches very close to the other oxg,anizations which have been described in the other papers. Now, the institutions in Bohemia which are engaged in the business of issuing mortgages and making loans in mortgage bonds are, besides a few savings banks which are engaged in the business of making cash loans, the puUic land-mortgage banks. They are estabhshed in the country districts and are engaged in every kind of banking business. The first of these banks was estabhshed in Gahcia in 1841, where it served as a credit society of registered landowners. The first land bank which was organized, not only as a pubhc legalized bank, but on the basis of the unlimited liabihty of the members, was founded in Bohemia in the year 1864. Almost all of the Austrian provincial banks came later. Naturally the whole need of agricultural first-mortgage credit has not at any time been covered by the mortgage-bond institutes. The total, however, surpasses the cash loans of the savings banks which, operating in all parts of the country, come in close touch with the population. On the other hand, mortgage-bond credit also plays an important r61e in supplying credit upon city properties. In the year 1908 the mortgage claims were as follows: Crowns. The savings banks 3, 442, 200, 000 The country banks 1, 208, 000, 000 The mortgage departments of the savings banks 190, 300, 000 Total amount 4, 840, 500, 000 The mortgage bank of the Kingdom of Bohemia shows at the present time a total of outstanding loans of 322,606,297 crowns. Of course, the importance of these facts lies in this, that the competition of other banks tends to lower the rate of interest. While naturally this is not a full recital of the facts, it is not possible to say m.ore in the short time at our disposal. QUESTIONS. Q. Are the bonds issued by the Bohemian Land Mortgage Institute guaranteed by the Government ? A. The Land Mortgage Bank is a government institution and the Government guarantees the bonds in the last resort, and this is inserted as a clause in the bond. Q. How are these bonds floated ? A. The bonds are sold in the open bourse. Q. How does the farmer receive the loan obtained on mortgage security — in cash or in bonds ? A. In bonds which are negotiable. Their present market value is 92, and they bear 4 per cent interest. The bonds of the Bohemian Land Mortgage Bank are quoted higher than those of the other provinces of Austria. At the present time the money market is abnormally low. In normal times they often sell above their face value, at 101. Q. Suppose the title of a certain tract of land is vested in Jones; Jones applies to the land-mortgage bank for a loan, offering this land as security, and on it a bond is issued. But afterwards some other claimant to the land comes along, and Jones's title is found to be defective. What is done? What recourse has the bank? A. In replying to this question it must be borne in mind that two different relations have to be considered with regard to these bonds, those of the debtor to the bank, and those of the bank to the bondholder. The bondholder has nothing to do with the man who has obtained the loan from the bank. The bank is responsible to the bondholder, and behind the bank is the guaranty of the Government. Q. Yes, but what is the relation of the landowner (the debtor) to the bank ? A. The landowner is personally liable to the bank. Q. But in case of dispute arising as to the validity of the title, who is responsible to the bank for the loan made on the land ? ATTSTBIA. 219 A. The bank only makes the oan to borrower Jones when it has learned by reference to the land register that Jones is the rightful owner of that land. Q. Then the inscription in the land register practically amounts to a judgment ? A. Yes. Q. How is a title inscribed on this land register? A. The records are kept by the law courts and guaranteed by the Austrian Government. Q. By the Imperial Austrian or by the provincial government? A. By the Imperial Austrian Government. Property can be acquired either by inheritance, purchase, or donation. If acquired by inheritance the court investigates and, when all formalities have been duly con- formed with, registers the transfer. If the land changes hands by purchase or donation, this must be certified by a deed or contract drawn up by a notary and duly attested; on the strength of this contract the court orders the inscription on the land register of the transfer by purchase or donation. Q. Does the Government then guarantee the title ? A. The Government guarantees the fulfillment of all these formalities. It is possible for a dispute as to title to arise, when it would then be settled by recourse to law; but the inscription in the land register would be final evidence. Q. If the title is subject to lawsuits, where is the security of the bond ? A. The possessor of the bond has nothing to do with the owner of the land; he is secured by the bank and in last resort by the Government. Q. Yes; but the security offered by the bank can be no better than the security offered by the landowner to the bank. In case of nonpayment, can the bank foreclose the mortgage without recourse to a lawsuit ? A. Yes; the bank seizes the land without recourse to a lawsuit. Q. And the title must be recorded in the land register and when so recorded is final ? A. Yes; after 30 days from the date of inscription of title in the land register, if no objection has been raised, the title is final. Q. Has the Government any system for associating these land-mortgage banks ? A. There is no general law. These banks are recognized by the Government, but their statutes are not the same. The Bohemian banks only have to do with Bohemia. Q. Suppose a borrower fails to repay his loan, is it necessary for the bank to sue him ? A. The borrower is obliged to pay only certain sums, which include interest and amortization. If he does not pay the aimuity, then the bank can foreclose the mortgage and take possession of the land. The bank is not compelled to begin a lawsuit, but can immediately take the property. It can seize the property because it has the mortgage in its hands. Q. Suppose the man in actual possession of the property was not the borrower, the borrower having dis- appeared, who has to pay the mortgage ? A. In Austria every piece of land is registered in a land register, and it is impossible to get a title to such land without having it entered in this book. The land register is public and its entries are accepted as final and can not be questioned. Q. Does the Government guarantee the title to the land ? A. All the property on which mortgages are held forms the collective security for the bonds. Should there be a deficit, then the bank is Uable with its funds; and should the bank be unable to pay, then the country is responsible. There has been a very small number of failures. The Government does not guarantee the title, but it does guarantee the bonds. There is no direct relation between the holder of the land mortgaged and the owner of the bonds. AGRICULTURAL COOPERATION AND GOVERNMENT AID IN AUSTRIA. Br. MoBiTZ Weden, Attorney at Law. ADDRESS. Prague. Without doubt Austria has been the land of Government aid to cooperation. In foreign countries there prevails an altogether erroneous idea concerning the efficacy of cooperation in Austria as well as concerning the influence of the Government in its development. Especially is this true with reference to the opinion which is held concerning agricultural cooperation. Long ago in Austria, especially in Bohemia, agricultural cooperation took the form of savings and loan credit societies of the Eaiffeisen type, standing in marked contrast to many other countries where agricidture 220 AGEICULTXTBAL COOPEBATION IN ETJEOPB. is no less developed, where the cooperative idea has found its first embodiment in business and economic coop- eration, and where savings and loan credit societies were established very much later. These savings and loan credit societies of the Raiffeisen type, however, were organized without any aid of the Government and without governmental or official recognition; they were established by the initiative and judgment of the people themselves. They have never received aid from pubHc sources nor made a demand for it. But they are the foundation, the beginning, and the end of agricultural cooperation in Austria. The savings and loan credit societies have organized the agricultural industry into economic cooperative societies and also provided the means for their foundation and management. They have also developed and instructed persons for the management of agricultural and economic cooperative societies and have taught these coop- erative societies how to guide and to manage themselves. As a matter of fact the Government, at the beginning of the cooperative movement in Austria, did not take a specially favorable view of it, as was also the case in Germany. It was feared that some unfavorable political results might follow the organization of societies among the common people. But as soon as the great significance of cooperative societies for the economic and social development of the people was recognized, the Government slowly became friendly toward them under this new economic form, and some time later even recognized its duty by furthering the establishment of cooperative societies and their development. So that by means of this awakening on the part of the Government, intelligent and judicious men in the governmental central office interested in the condition of the middle-class population found themselves in a position to think out a governmental program which should give the cooperative movement a wise and profitable impetus through governmental authority. This applies particularly to the agricultural cooperative societies, which had found a warm friend and advocate in the imperial minister of agriculture. This also had an influence on the welfare of the country, as it had already been recognized by the governmental authority that agricultural cooperative societies must be established and aided not alone in the interest of the farmers, but also of the whole rural middle class. It is, then, altogether erroneous to assume that the agricultural cooperative movement in Austria and in Bohemia has ever stood on government patronage. For that matter, government aid on our part restricts itself to carrying out those great responsibilities which the Government feels compelled to promote on natural grounds for their advancement and extension among wider circles of the population and into broader depart- ments of social and political economy. Government aid is solicitous for a progressive and not regressive legislation in behalf of the development of cooperation ; so that the Government, without undue taxation, believes in a good law relating to cooperation which shaU take into consideration the economic power of the cooperative societies as well as the security of the governing authority. But up to the present time the seK-government of the agricultural cooperative societies has not been disturbed by any of the existing legal enactments, nor have the societies even been deprived of functions relating to organization and management by government authority. Government aid concerns itseH further by ordering that government officials should not hinder the formation and management of cooperative societies, that bureaucratic officials learn to treat with respect the rural situation, and that the development of cooperative societies should be heartily promoted through administrative measures. Government aid also assists in the cooperative movement by establishing lecture courses in all schools of the Kingdom, from the high school down to the agricultural intermediate and winter schools, and chiefly through the support given to the agencies which extend the knowledge concerning cooperative principles and their economic value, even if, as a matter of course, this activity can not yet be spread everywhere. The Government also gives its support to the federations of agricultural cooperative societies by means of contributions for propaganda purposes, for administration, for the holding of lecture courses, for the publication of information, for the instruction of auditors and other cooperative officers, for investigating commissions, etc. But even so the amount which the Government grants toward the general expenses of these associations is altogether insignificant. In Bohemia the rural administrative service has established its own department for the agricultural coopera- tive movement; and this service, as an independent, instructive, and revisionary activity, concerns itself exclu- sively with business and economic cooperative societies without at aU encroaching upon their independent management and activity. The representative assembly has granted a fund from which newly organized Raiffeisen credit societies can secure a redeemable loan as high as 300 crowns, a redeemable loan the payment of which can actually be demanded, and this loan is a good means of propaganda. This activity of the Government, this government aid, as has been set forth in the foregoing paragraphs as the method of granting assistance in our Empire, can not be dispensed with because it is a necessary pre- requisite of every economic work. AUSIBIA. 221 This subject has also been considered in America. Ex-President Taft has set in motion in the United States an inquiry concerning the position of agricultural cooperation and rural credits in other countries, seeking by the aid of this inquiry to bring about important economic and profitable arrangements. Not only the Government but also the rural administrative service has given certain material support for the purpose of advancing the agricultural cooperative movement, and the governmental and district budgets annually contain certain items of money for credit which are intended for the promotion of the agricultural cooperative movement. The governmental sums for credit in the whole Kingdom amount to about 1,000,000 crowns, while the district sums for credit in Bohemia amount to about 300,000 crowns; insignificant amounts, it is true, in contrast with the mighty strides political economy has taken in Austria through the agricultural cooperative movement and in contrast with the increase of power and efficiency which has accrued to the Gov- ernment through the extension of economic forces. This money was granted as a so-caUed subsidy or as a noninterest-bearing loan m behalf of agricultural selling and producing cooperative societies, if these at their organization stood in need of a large initial capital, as in the case of cooperative stores, dairies, and similar societies. But the farmers can not be entirely relieved of the burden of these initial costs ; only by a rational system of self-help can they aid themselves through partial payment of part of their debt. This reimbursement, by means of the annual payment of full interest and amortization by one of the new cooperative enterprises would leave it far from a condition of prosperity, even if its annual financial statement shows a profit. It could only altogether, partly through the subsidy and partly through the noninterest-bearing loan, reimburse anywhere from 30 to 40 per cent of the initial cost. At the present time one concerns himself with results, with looking back over the deepening of the cooperative principles and the resultant development of the agricultural cooperative movement, and over the increased business knowledge of the peasantry without, however, seeking to ascribe such results to the aid of Goverimient. This direct government subsidy has in reality onfy been given at present in order to accelerate the coopera- tive movement, and this aid, on account of the dire need of agriculture, must be regarded as the only practical means of securing more rapid growth. The efforts made in Austria to bring about a centralization of the clearing houses of the agricultural cooperative societies by means of the establishment of an imperial central cooperative bank, and thereby to bring the agricultural population into close touch with the general money market, have hitherto been without results. But what has been aimed at in this direction by the Government in previous bills has not been to limit in any manner the independence of the agricultural cooperative societies. So strong are the organizations of these societies, that they would know well how to resist such an attempt with success. The provincial advisory councils are, because of the independent election of their members, a sort of honorary corporation whose instructive and .advisory activity makes them no part of the system of government aid. The agricultural cooperative movement in Austria is based on the whole upon the fundamental principles of cooperation, namely, self-help, self-government, and self-sufficiency. It has made such a brilliant and won- derful improvement in the efiiciency of the whole rural population that it has by this means strengthened the foundations of the State. From this point of view one can very well say of it that the cooperative movement, for the government aid which has been rendered to it, has in turn rendered abundant cooperative aid to the Government. QUESTIONS. Q. What cooperative societies are there in Bohemia for the marketing of products ? A. There are warehouse associations, dairies, etc. Q. Are the warehouse associations organized under a charter, or is there a law governing the association ? A. There is a general law governing all cooperative associations. Q. How do you organize a warehouse ? A. A man who is recognized as an organizer goes to the village on request and calls a meeting of the farmers. He convinces them of the importance of the association. Q. What is the next step ? A. The members are asked how much grain they can furnish. Of course, on the basis of the quantity of grain to be delivered they make an estimate of how large a building will be required, how much it will cost, etc. An estimate must be made of how much working capital they want. The working capital is often large and the shares paid by the members cover only a small part of it. In that case they must ask a bank for money, and the limit of liability must be comparatively large. But if they pay a large amount the liability is small. The members' liability is constituted by the total amount which the society owes. As a rule the farmer brings his produce to the warehouse and he receives about 70 per cent of its value in cash. Of course, the grain of the different farmers is graded. When the grain is sold the proceeds go to the warehouse. It makes 222 AGEICTJLTUEAL OOOPEEAOION IN EUEOPE. an estimate of how much is owing to the different farmers. They all receive 70 per cent of the value of their produce when they bring it to the warehouse, and of course the remaining proceeds are divided according to the amount delivered by each man. Q. How is the grain handled ? A. When the grain reaches the warehouse it is graded; after being graded and cleaned the good grain may amount to but 95 per cent of the amount delivered. The 5 per cent of waste is returned to the farmer and he gets credit for the 95 per cent dehvered to the warehouse. The grain is paid for according to grade. Q. What does the warehouse get for handling this grain ? A. There is one warehouse that charges 3 per cent and others 4 per cent. The receipts are used to cover expenses, repay loans, establish a reserve fund, and at the end of the year the rest is given back to the members, according to the amount of produce they deliver.* Cooperative dairies are founded on the same principle as the warehouses; many of them produce only butter. There may be 100 to 800 members in such associations, as compared with 300 to 1,000 in ware- house associations. The dairymen are nearly all members of these associations and they like them. It is obligatory upon the members to send all their produce for the first five years to the dairy, warehouse, or other organization to which they belong. As a rule the membership of the dairy associations does not enlarge, because the people all joined in the beginning. The membership of the other associations is on the increase. The original fee for joining was 2 crowns; now it is 30 crowns. Shares remain at the same value, since they are not marketable. BOHEMIAN RAIFFEISEN BANK OF STRANSNICE. Report of a Stjbcommittbb. Prague. Strasnice is a suburb of Prague, entirely independent in civil affairs, and connected with Prague by an electric car line. Its population is about 5,000. The inhabitants are small tradesmen and workmen of one sort or another in Prague or vicinity, and in addition a number of farmers, who have been growing wealthy by converting some of their farm land into building lots. The price of land has gone up very much recently, and the landholders have benefited accordingly. The village is prosperous and the school building very fine. ORIGIN AND ORGANIZATION. This bank was organized in 1902 by the present president (Sandskal) for the purpose of extending credit to and receiving deposits from farmers and small tradesmen, day laborers, and others of the working classes. The membership at present is 104, consisting of 25 farmers, 75 small tradesmen and mechanics, and 4 day laborers. The day laborers borrow little, but they are all depositors. The Raiffeisen principles prevail; liability is unlimited; each shareholder has a vote; the services of all the officials except the cashier or treasurer are with'out remuneration; any member may borrow money on the security of two approved iudorsers, the amount of the loan being limited by the committee on loans or the committee of control. Security other than personal is occasionally accepted, and some loans secured by land are made. It does not appear that land mortgages are used, however. ' In associations which are well managed, 3 or 4 per cent is always paid to the farmers as dividends. A nonmember can buy from the cooperative warehouse, but may not sell to it. Three or 4 per cent interest is paid to shareholders. Dividends are not paid to share- holders until all the other expenses have been met and the necessary amount has been set aside for the reserve fund. The managers receive a fixed salary, but have no interest in the business. The 30 per cent balance due to the farmers on the grain which they deliver to the cooperative warehouses for sale is paid to them after the grain has been sold, generally after an interval of six or eight weeks. Money is obtained by the warehouses from the local banks or from the Central Raiffeisen Association, which is in possession of a considerable amount of liquid money, and is of course anxious to assist the warehouses. The usual rate for money on open account is 4J per cent, rising sometimes to as high as 6i per cent in poor dis- tricts, such as Moravia. These loans are secured on the members' liability, limited to five times the value of their shares in the association and the assets of the society are also mortgaged to the central. The local societies also borrow from the central their initial capital — that is, as much of it as is not covered by the members' shares etc. — ^for building purposes, etc. If the central will not furnish these local societies with sufficient money on the ordinary cmrrent terms they then borrow on the amortization plan. The usual rate of amortization is 2 per cent on buildings, while 10 per cent must be written oft on machinery and nearly 50 per cent on transit equipment, etc. Interest is charged at the rate of 4J per cent. The central association also buys fertilizers, farm machinery, and implements for its members, but may not sell these at a profit to members. The amount of credit granted by the Central Raiffeisen Bank depends upon the management and trustworthiness of the board of the warehouse association. AUSTBIA. 223 INTEREST BATES, ETC. The usual rate of interest paid on deposits is 4 per cent, but recently the rate has risen to 5 per cent. The rate charged on loans (six months to five years) is usually 5 per cent, now 6 per cent. On money borrowed from the central federation of rural banks the rate charged this society is SJ per cent. Practically all of these loans are borrowed from the Central Association of Agricultural Cooperative Societies in Bohemia, headquarters at Prague. In general this society has more loans than deposits. LOANS. The personal security of the members and their unlimited liability is sufficient security for the central association, from whom this society borrowed 85,000 crowns last year. It appears that the normal amount which any member can borrow is fixed by the central from time to tiine, depending more or less on the amount of funds at the disposal of this central. The borrowing normal of 1913 is 200 crowns per individual member; in 1912 it was 400 crowns. This year 31,000 crowns were borrowed (according to the local bank officials, the central borrowed last year 10,000,000 crowns from the Austro- Hungarian bank of issue) . The loans thus made are on special biUs or notes signed by the local and secured by the personal Hability of the entire membership of the borrowing local and, further, by the limited liability of all the locals federated n the central association. Loans to members run from 20 to 10,000 crowns, the average lying between 500 and 1,000 crowns. Most of the loans are made to tradesmen; the farmers borrow very little. The duration of a loan is from two to four years usually. Some few are made for six months, and loans may be extended to five years. LOSSES. There have been none whatever during the 11 years of the society's existence. Four titnes during the 11 yeftrs the indorsfers have been called upon to pay the loans made by their principals. In one instance the default was due to death; in another the defaulter failed in business owing to severe competition. INTERNAL ORGANIZATION. The share capital consists of 104 shares, at 10 crowns each. On this a yearly dividend of 4 per cent is paid. This dividend is not returned to the individual members, however, but the accumulated dividends form a fund which is applied to educational and benevolent purposes, such as the purchase of books for chil- dren, subscriptions to papers and magazines, assistance to the needy, and other charities and benevolences. The board of directors is made up of three farmers, one teacher, and one small tradesman. The office of the society is in the public school building, one room being set aside, rent free, for the use of the bank. This is in consideration of the fact that in case of dissolution the assets of the society revert to the treasury of the local civil district to be used for educational purposes, provided a new credit society is not formed within 10 years, in which case the assets of the dead society are transferred to the coffers of the new organization. The books of the bank and some of the funds are kept in a safe in the room. Save for a few record books and blanks, a table, and some chairs, there is no other furniture belonging to the society. The head master of the school is president of the board of directors. The total value of the books, furniture, and equipment is perhaps not more than $100, including the safe. Financial statistics, June, 191S. Crowns. Capital, from shares ' 1, 040 Reserve fund 1, 800 Loans, last year (total) 108,000 Deposits (90,000 at present) . .' 80, 000 Profits this year 730 Expense account, year ending December, 1912. Crowns. Stationery, papers, etc 260 Central association paper and newspapers, educational matter 140 Treasurer's remuneration 450 Sundries '- HO Total 960 The officers stated that the bank paid no tax of any kind, neither trade tax nor income tax; nor did the members pay any tax on interest from deposits. Two sorts of savings accounts are kept, (a) 8 open accounts and (Z») 265 savings accounts. The same rate of interest is paid on both. 224 AGEICULTUBAL OOOPEEATION IN EtTEOPE. OTHER ACTIVITIES. The membership of the bank represents two interests, somewhat divergent. The tradesmen are the borrowers, and make more use of the bank than the farmers, except for deposits. But the rural element has used the bank for the purpose of purchase and sale. The articles purchased are coal, wood, seed, phosphates and sulphates for fertilizer, and a few other articles in general use. Last year seed potatoes were scarce and dear. Those grown in the neighborhood were not reliable, con- sequently the society began to import seed potatoes from without the province. In all about 4,000 crowns' worth of potatoes was brought in and distributed at practically cost price to the potato-growing farmers. Some wheat belonging to members is occasionally stored for a short time or is sold by the local for the members, either through the central organization or through a middleman. This branch of business is not very important and seems to be much less used than the credit facilities. A children's savings department was added, and up to the present 5,000 crowns have been received from this source. A great many children deposit small sums. The proximity to the public school makes it possible to develop this form of savings account very rapidly. The bank is open Monday of each week for two hours. KESTILTS. In general, the bank has encouraged thrift and reduced the cost of money to members. Men who could not otherwise borrow have been enabled to procure money for productive purposes. Careful supervision by the central and wise and intelligent local management have given the bank a reputation for safety and security, so that farmers with surplus money do not hesitate to deposit. The bank has been of great assistance to small tradesmen, who are the principal borrowers. GERMAN CENTRAL ASSOCIATION OF COOPERATIVE AGRICULTURAL SOCIETIES IN BOHEMIA. Report op a Subcommittee. Prague. This central was founded in 1895 by a political organization and was not very successful, partly because of the very loose form of organization, partly owing to severe competition. In 1896 it was refounded as a limited liability cooperative association, the liability being six times the shares held. The form and purpose of the association were taken from the German association. Stephen Richter, a man of high political and social standing and some business ability, was the moving spirit in its reorganization. Competition was sharp at first. The association in 1896 comprised something more than 50 local Raiffeisen societies. The Schulze-Delitzsch credit societies were already in the field and several other credit banks were endeavoring to hold the business at higher rates. Since 1896, however, the association has continued to increase. At present about 650 local Raiffeisen societies are members. ACTIVITIES OF THE CENTRAL. These are threefold: First, the handling of the money of local Raiffeisen banks. This is, perhaps, the chief function; the central is a sort of clearing house for the loans and deposits of these banks. Second, the central acts as a wholesale buying and selling agency for the locals, whether these are dis- tinctively productive and distributive societies or are organized chiefly for credit. Third, the central supervises, inspects, and, to some extent, controls the activities of the locals. CREDIT ACTIVITIES. The first object is to provide the locals with money. Because of lack of funds the central was for a time obliged to borrow money. Now, however, the deposits exceed the calls for loans. In 1912 the central had actual deposits in commercial banks amounting to 8,000,000 crowns previous to the war scare, and an additional 6,000,000 crowns invested in securities. The central association is not a bank and can not do a banking busi- ness. Until recently the banking business of the central was all done by commercial banks or by cooperative savings banks of the Schulze-Delitzsch model. THE AGRICULTURAL BANK. In 1912, however, an agricultural bank was organized by the central to receive the surplus deposits of the central organization and to do the general banking business of the association. The bank is still in the process of finding itself, but when fuUy underway it will differ little from the central Raiffeisen cooperative credit banks AUSTEIA. 225 of Hungary, except that all loans will be made on personal credit. Loans are for agricultural purposes and the bank is authorized to grant loans up to a higher percentage of the assessed valuation of the real estate and personal property than the mortgage bank which grants loans on land mortgages. MEMBEESHIP. Membership in the central is limited to local Raiffeisen societies (including cooperative production and distribution locals), which buy shares in accordance with the number of their members; one share for each 50 members or fraction. Shares are valued at 100 crowns each. DUES. (1) Each shareholder pays annual dues of 10 crowns per share for the expenses of the central. (2) Each society must subscribe for three papers published by the central, amounting to 10 crowns per year. (3) Further, the locals pay into the treasury of the central one-tenth of 1 per cent of their yearly net balances. LOANS TO CREDIT SOCIETIES. Loans are made to share-holding societies only; not to individual members of these locals. In general the loans are for productive purposes, and the total loan to any society is limited to a certain number of crowns per member. This is not fixed absolutely, varying somewhat with the state of the funds in the central, the financial standing of the local, and the duration of the loan. The rule is 400 crowns per member; that is, a local society organized with 50 members has at once a credit with the central amounting .to 20,000 crowns. This credit may be extended to 1,000 crowns per member of a local on one or two year loans. No losses on loans to locals have ever occurred; hence the unlimited liability feature of local Raiffeisen credit societies has never been invoked by this central. LOANS TO NONCKEDIT SOCIETIES. Loans are made to buying and selling societies, storage elevators, and productive cooperatives; in fact, the centrals are required to grant credit to such associations as are afiiliated with them. The liability of these noncredit societies is limited (three to five times the shares), but credits are granted up to from 50 to 70 per cent (1) on the collateral security of the members of the organization — the personal liability; (2) on the net assets of the local — capital and surplus as shown by last trial-balance sheets; and (3) on stored produce, merchandise on hand, or implements in use. Money for buildings is obtained from the local banks and is paid off by amortization. The liability feature of these societies has been invoked in certain instances. This was due to poor man- agement, to ineffective laws, and to lack of loyalty. The penalties on disloyalty have not been sufficiently severe. In the case of creameries members are required to guaranty all their milk to the society for a period of three years. A SPECIAL FEATURE. The locals furnish credit to communities in certain instances for building roads, schools, and other public improvements. Loans are made for about four years, on annual installments ordinarily. In general only those societies whose deposits for a long time have exceeded their loans grant these loans to public authorities; that is, only strong societies lend money for these purposes. RATES OF INTEREST. The present rate paid on deposits from locals which must deposit their surplus with the central is 4^ per cent; the usual rate is 4 per cent. On loans to locals the central charges from 4f to 5 per cent. The usual rate is 4^ per cent. Commercial banks usually pay 4i to 4J per cent on deposits, but it is now 5 per cent. They charge on loans from 7 to 8 per cent at present. Notwithstanding the higher rate paid on deposits by commercial savings banks, the central and the local Raifl^eisen credit societies have more deposits than they can use. It is to be noted that more than one-third of the savings deposits in these German societies in 1910 came from servants, workingmen, and children. It is significant also that the poorer districts are the depositors, while the richer districts are the borrowers. 14174°— S. Doc. 214, 63-1—15 226 AGKICULTTJEAL OOOPEEATION IN EUROPE. THE NATURE OF THE CENTRAL. The central is a clearing house for credit, buying, and selling. No money and no stores are kept in the central buildings. Forty-four officials keep the books and execute and record the transactions. Separate departments look after the deposits, loans, the piu-chases of manures and seeds, the selling of grain, potatoes, butter, etc. The central publishes three papers for its members and the stationery and forms needed by the locals, as well as other literature. The locals usually deposit their surplus with the postal savings bank and forward the certificate to the central, which acknowledges the receipt through its weekly paper or by special acknowledgment, sends on the postal certificate to a commercial savings bank for deposit or deposits it in its own agricultural bank, and makes a record of the entire transaction. The postal savings bank does its part for a very nominal fee. Purchases and sales for cooperative societies are handled in much the same manner as loans to societies. The concentration of all the activities under one society is economical and very effective. All the information is centered in one office and no duphcation is necessary. The central issues no debentures of any kind and makes no land-mortgage loans. SUPERVISION OF LOCALS. The law of the Empire gives the central association control over the locals. (1) The surpluses of the locals must be deposited with the central association. (2) Local societies need not become members of the central, but out of almost 650 German societies in Bohemia only 3 do not belong to the central body. The potential strength of the affiliated societies, the material advantages both in 'securing credit and finduig an easy outlet for deposits, and the ready method of making wholesale purchases or sales is of much greater material benefit than the small fee paid for membership. (3) The central must inspect every local at least once in two years. As a matter of fact some societies are inspected several times in that period. Moreover, there is constant correspondence and commercial inter- course between central and locals, and at any time the records in the central office show the financial status of every local and the enterprises in which they are engaged. Dubious institutions are visited much more frequently than those with proved stabiUty. No charge is made for inspection and audit unless more than three days are consumed. The inspection and supervision of newly organized locals are thorough. A representative of the central is present to advise and assist legally and otherwise in the organization. Complete files of the pro- ceedings, with Msts of the members, their property, occupations, debts, and certain other information, are filed in the central office. AU reports of this sort are on special blanks. The inspection covers auditing of accounts, methods of bookkeeping, administration, and the conduct of all activities in which the local may be engaged. The examination is minute in detail, and is made without previous annoimcement to the local. (4) All Raiffeisen credit societies must make a yearly report to the central on specified blanks. (5) Not only at the time of inspection, but at any time, the central may call the local to accoimt for any irregularity or defect and require the society to correct it. In case the local refuses to obey, the local court may be called upon to enforce the order, or the local may be expelled from the central association. One case of this sort did occur; the society was expelled and the shares were repaid, but the local went out of business. (6) The executive committee of the provincial Diet examines the affairs of the central association. The Diet has supervisory powers only. LOAN AVERAGES. The bulk of the loans made by the locals to their members Ues between 200 and 500 crowns per loan. Some societies average from 1,000 to 2,000 crowns per loan. The average loan during the years 1910 to 1912 was from 500 to 600 crowns. Loans up to 20,000 crowns are made by locals in rather exceptional instances. The. local societies average about 110 members each. BY-LAWS OF FRANCIS JOSEPH CREDIT INSTITUTION AT PRAGUE. NAME AND LOCATION OF THE INSTITUTION. Section 1. At the celebration of the fiftieth anniversary jubilee of the reign of His Majesty, the Emperor and King Francis Joseph I, the Parliament of the Kingdom of Bohemia established a credit institute for the promotion of personal credit of small agricultural producers in Bohemia under the name of "The Emperor and King Francis Joseph I, Provincial JubUee Credit Institution in behalf of Small Agri- cultural Producers." This institution is an independent legal person and has its location at Prague. AUSTEIA. 227 FOUNDATION CAPITAL. Sec. 2. The foundation capital of this institution is built upon a fund amounting to 1,000,000 crowns, which was publicly dedicated by the Diet of the Kingdom of Bohemia on February 14, 1896. This fund is not a loan; it serves as the working capital of the institution and at the same time as security for its obligations. The net profits of the foundation capital — after the cancellation of those shares which are intrusted to the institution in accordance with technical banking administration in the sense of the relative conditions involved therein — are to be added to the foi^ndation capital, in so far as the case of the last part of section 3 does not interfere. The foundation capital shall also be further strengthened through the addition to the fund of the institution of donations, bequests, and contributions which are not expressly required for any other purpose. BBSBEVE FUND. Sec. 3. In order to increase the security of the obligations of the institution, there shall be built up from a part of the foundation capital a resdrve fund to the amount of 5 per cent of the foundation capital. The reserve fund shall be invested and the profit therefrom shall be added to it so long as it does not amount to 10 per cent of the foundation capital; when that amount is reached the profit shall be added to the foundation capital. In case that the reserve fund shall be diminished through losses, then the deficiency must be made up to the above-indicated amount out of the net profits of the institution (sec. 2) in the succeeding years. EXPENSES OP FOUNDATION. Sec. 4. The foundation expenses of the institution are to be paid from the increasing profits of the foundation capital invested for its benefit. Should these not be sufficient for the purpose, the balance shall be redeemed within fivp years by amortization. institution's SPHERE OP ACTIVITY. Sec. 5. The sphere of activity of the institution includes: 1. The granting of credit, especially in the discount of notes; the granting and acceptance of lodns; acceptance of responsibility of very large general purchases, namely, of public supplies; furnishing information and advice in behalf of the organization and management of cooperative undertakings, etc. The latter includes: (1) To agricultural cooperative societies within the meaning of the law of April 9, 1873, No. 70, which engage in the purchase, sale, and manufacture of agri- cultural products and necessary supplies; which engage in the purchase and use of agricultural implements and machines; to those which also are interested in any other cooperative enterprises which have for their object the improvement of the economic condition of their members; and, furthermore, to associationa of such cooperative societies. (2) To those credit societies which are organized on the basis of the same law, especially to the Eaiffeisen loan banks and their associations, in so far as they grant credit to small farmers for for the purpose of procuring agricultural necessary requirements. 2. The rediscount of notes, the acceptances of other credit institutions and public banks for loans, and the broadening of the cash balances of the first-named class of institutions. 3. The acceptance of deposits from these corporations for safe-keeping. Especially has this institution been established, so far as these corporations are concerned, to advance all measures and to further all enterprises which have for their object the improvement of the position of small farmers. CONDITIONS for GRANTING CREDIT. Sec. 6. The conditions for the granting of credit to the organizations mentioned in section 5 have been set forth in section 17 of the standing orders of the institution. By the granting of credit opportunity is afforded to take into consideration the strengthening of the relations of both nations and to increase the rural population. MANAGEMENT OP THE INSTITUTION. Sec. 7. The management and the supervision of the institution belongs to the trustees, the council, the provincial committee, the Diet of the Kingdom of Bohemia, and to the imperial government. Sec. 8. 1. Functions of the trustees. — The direct management of the institution belongs to the trustees, who also have a general super- vision over it. The technical banking is separated from the general management of the institution and is carried on the same as any other bank. The range of the technical banking management shall be settled between the trustees of the above-named institution and the provincial committee of the Kingdom of Bohemia which supervises the institution by means of a special definite agreement. The credit which this institution takes over from that institution intrusted with the technical bank management, as well as from other banks (sec. 5, div. 2), must not surpass the foundation capital and the reserve fund. Sec. 9. 2. Membership of the trustees. — The board of trustees shall consist of (1) one member from the provincial committee, who shall preside for three years; (2) one member from the provincial committee nominated for three years as a substitute presiding member; (3) five members from the provincial committee, who shall serve for three years as members of the board; (4) one representative from the provincial committee; (5) and one representative from the banking management connected with the institution, whose appoint- ment shall be made by the provincial committee on the recommendation of the respective banking management. Only those persons can be nominated as members of the board of trustees who dwell either in Prague or in its immediate vicinity; of these members, three must either be bankers or well acquainted with banking business, and four must be intimately familiar with the conditions of the small agricultural producers in Bohemia. Moreover, the provincial committee shall nominate as members of the board of trustees for the same length of time and from the said locality two substitutes who, in case of the prevention of a member of the board being present at the meeting, shall take his place on the board. The provincial committee is in duty bound, in the matter of the nomination of members of the board of trustees, as well as of the substitutes, to bear in mind the proportionate representation of both nationalities in the country. The members and the substitute members of the board of trustees shall receive from the provincial committee an edict or decree which shall serve as their authorization. The members of the board and the substitutes shall receive no definite compensation, but they shall only receive a gift of money as an honorarium the amount of which for the three years shall always be fixed beforehand by the provin- cial committee. 228 AGEICULTUEAL COOPERATION IN EUROPE. If any member of the board of trustees should neglect to fullill his obligations to attend the meetings or should attend the same irregu. larly, which should necessitate the frequent designation of one of the chosen substitutes to fill his place thereon, the provincial committee has a right to appoint another person to his place and duties for the remaining part of his time of service. Sec. 10. The board of trustees shall hold meetings as occasion requires. The meetings shall be called either by the president or by his substitute. Whatever resolutions are passed at any meeting to which the whole membership of the board of trustees have not been invited shall be declared invalid. For a resolution of the board of trustees to be valid, it is necessary that, besides the president or his substitute, there shall be present at least three members and relative number of substitutes, and it must have been passed by a majority of those present. In case of a tie vote, the president may cast the deciding ballot. Particular provisions have been laid down in section 17 of the standing orders of the institution. Sec. 11. The substitute of the provincial committee and also the substitute of the technical banking division connected with the institution have the right to veto the resolutions of the board of trustees. This protest (veto) must be raised at the meeting immediately concerned. In that case the resolution in question must be laid before the provincial committee for determination, the result of which shall be announced within 14 days at the utmost. Should this not happen, then the vetoed resolution shall be regarded as approved by the provincial committee. ( Sec. 12. For the execution of the necessary work there shall be appointed by the board of trustees a sufficient number of officials and other employees. The expenses of the work shall fall on the institution. The determination of the number of officials and other appointees, except those nominations which as its respective choice belong to the provincial committee, shall be at the recommendation of the board of trustees. Sec. 13. S. Membership and functions of the council. — The council, which shall be organized as a source of information for the board of trustees and the provincial committee, shall consist of the representatives of small agricultural producers. Sec. 14. To this council there shall be sent (1) from the Bohemian section of the provincial agricultural council four members; (2) from the German section of the same official body, four' members; (3) from the central agricultural society of Bohemia, one member; (4) from the German Central Agricultural Association of Bohemia, one member; (5) from the Bohemian association corresponding thereto, one member; and (6) from the Central Association of the German Agricultural Cooperative Societies of Bohemia, one member. Sec. 15. The president of the board of trustees or his representative substitute shall call the council together as necessity requires and shall be the presiding officer therein. The manner of conducting the council has been laid down in section 17 of the standing orders of the institution. Sec. IB. The board of trustees has authority to look after the interests of the council in all those affairs which properly fall within the functions of the institution. Such obligation arises in case of (1) the establishment and modification of the principles of granting credit and loans, the length of time allowed for payment, and the kind of security; (2) the establishment and modification of the principles for the procuring of supplies and public works; (3) the establishment and modification of standing orders; (4) the installation of adminis- trative affairs; (5) the establishment of agencies; and (6) the handhng of investments intended for the cooperative societies engaged in the production and marketing of goods. It is the duty of the members of the council to inform themselves concerning the state of the business of provincial credit institutions and to make suggestions that come within the scope of their functions. With the consent of the management of that division of the bank intrusted with the technical banking operations, the members of the council may examine the books of the institution. Sec. 17. 4- Functions of the provincial committee. — The provincial committee is released from the provisions of these statutes and, under the provisions of the existing laws and ordinances generally prescribed for the management of institu tions, decides upon the particular business of its organization and current management and exercises a continuous supervision over the institution. Moreover, the committee is intrusted with the following clearly defined duties: (1) The issuing and modification of the standing orders of the institution concerning the affairs of the board of trustees relative to the council (sec. 16); (2) the approval of the estimates and of the balance of accounts (profit and loss account — the financial statement), as well as of the annual report before its submission to the Diet; (3) the determination of proposals by the board of trustees regarding the reimburse- ment of any deficit in the financial statement, and the decision concerning the establishment, control, and abolition of the administrative management in charge of loans granted by the Provincial Credit Institute; (4) the permission to grant loans to the amount of 20,000 crowns and over — in these amounts there shall be included the amotmts which have not been paid back by the debtor at the time of closing the new loan; (5) the approval of the resolutions of the board of trustees regarding the disposition of the reserve fund; (6) the organization of agencies, the determination of their functions, and the issuing and modifying of their business rules; (7) the preparation of proposals osten- sibly for submission to the Diet relating to the modification of the statutes and abolition of the institution; (8) the determination of com- plaints of parties against the board of trustees as well as of complaints by the board of trustees against officials and other employees of the institution; (9) the granting of consent to accept gifts, donations, and other appropriations to the institute. Sec. 18. The board of trustees is in duty bound to lay before the provincial committee information concerning the condition of the business of the Provincial Credit Institution within eight days after receiving notice thereof on the part of the banking institute carrying on the technical banking of the in.stitution. Sec. 19. The immediate supervision over the management of the institution falls on the provincial committee through its representative on the board of trustees. He is entitled to attend all meetings of the trustees, to inspect the minutes of the board as well as the books of the institution, and to require from the board of trustees an explanation of all the affairs of the institution. Sec. 20. The provincial committee can convoke a joint meeting of the committee and the trustees acting either according to its own judgment or at the request of the board of trustees of the Provincial Credit Institution. In such a meeting, however, the president and membership of the trustees have only the right to give advice. Sec. 21. 5. Functions of ike i)i«i.— The Diet of the Kingdom of Bohemia reserves to itself: (I) The approval of the statutes and amend- ments thereto; (2) the approval of the annual report; (3) the decision concerning the abolishment of the institution. The decisions imder subheads (1) and (3) relate to matters requiring for their validity the very highest approval. Sec. 22. 6. Supervisory right of the Imperial Government. — The Imperial Government holds the right of supervision according to the laws in force. AUSTEIA. 229 AGENCIES. Sec. 23. The provincial committee has authority to establish agencies outside of the capital city of Prague, in accordance with sugges- tions of the board of trustees and after having heard the council thereon. (Sec. 16, div. 5.) The duties of these agencies shall be to consider requests concerning the granting of credit as well as to consider in the furnishing of aid what kind to advance from the resourecs of the institution; to supply information concerning the credit ability of the respective parties making the requests, and to act in a supervisory capacity over the institution's debtors. The agencies have special business regulations. (Sec. 17, div. G.) ^ CiBNERAL REGULATIONS. Sec. 24. The deeds and documents issued by the Provincial Jubilee Credit Institution, in order that they shall be legally binding, must be signed by the president, or his deputy, and also by one of the members of the board of trustees. The draft of the document shall always be in one only of the two languages of the country and in this form that, under the written or stamped title which shall always appear, namely, "Emperor and King Francis Joseph I, Provincial Jubilee Credit Institution in behalf of Small Agricultural Producers," the said two members of the board of trustees shall affix their signatures. In all cases in which a decision of the board of trustees or directors requires the approval of the provincial committee, this approval must be plainly made on the respective documents by means of affixing an approval clause by the provincial committee. Sec. 25. Collectively and publicly, the announcements issuing from the Provincial Credit Institution shall appear in both languages of the country through the official organ, the Prague Gazette. Sec. 26. In the whole public service of the Provincial Jubilee Credit Institution the equal rights of both nationalities of the country and of both languages shall be observed. The replies to parties shall be in the same native language in which they were delivered or presented. ESTABLISHING AND ABOLISHING THE INSTITUTION. Sec 27. The Provincial Jubilee Creidt Institution shall enter upon its active work on December 2, 1898. Sec 28. The Provincial Jubilee Credit Institution can only be abolished by a decision of the Diet of the Kingdom of Bohemia, which is endowed with the very highest powers of approval. In such a case, the remaining property of the institution shall belong to the King- dom of Bohemia after its resulting obligations have all been settled. Even in that case, the Diet is in duty bound to make use of the property in behalf of small agricultural producers throughout the Kingdom of Bohemia. These statutes were sanctioned by the very highest authority on October 26, 1898, and made public in the Provincial Official Gazette for the Kingdom of Bohemia, No. 75, of the year 1898. RUSSIA. 231 RUSSIA. AGRICULTURAL CREDIT. Evidence of OrpiciAis of the Treasury Department. St. Petersburg. Q. What form of credit associations have you in Russia ? A. There are in Russia two types of credit associations which have made great headway in the last seven years. In 1906 they had among their members 3 per cent of the farmers of the country; in 1913 the number had risen to 21 per cent. The "loan and savings associations" which have shares, varying from 10 to 100 rubles, are not so much in favor with the peasants as the "credit associations" which have no shares and which flourish in the small villages where the funds of the inhabitants are very small. There are a few "loan and savings associations" in such places, but the share capital is reduced to a minimum. Both classes of institutions exert a great influence on rural life by means of their discounting or "inter- mediary" operations. They seek also to improve farm conditions by arranging for the collective purchase of farm implements. * Q. Where do these banks secure funds to lend to farmers ? A. The loan and savings associations get their funds from different sources; the credit associations borrow money from the imperial and government savings banks. Q. In making loans does the borrower have to secure an indorser ? A. In most credit associations loans are granted without security — they are personal loans without surety, the borrower giving his personal note. In loan and savings associations personal pledges are about 40 per cent. Q. Are there many losses ? A. The amount of losses is not great. In credit associations it is about 4 per cent; in loan and savings associations it is about 5 per cent. The losses are covered from the profits of the next year. In 1904 these associations were put under the control of the Government, and now the loss is much less than formerly. Q. What rate of interest do the peasants have to pay for money they borrow ? A. In the credit associations they pay an average interest of 11 per cent — a very high interest. In loan and savings associations they pay 9 per cent. In credit associations there are no shares ; therefore they take a high per cent. Q. What rate of interest do these associations pay their depositors ? A. In loan and savings associations the average is 6 per cent; the credit associations pay about 7 per cent. Q. Do these associations pay officers' salaries; that is, do they pay salaries to directors and the council? A. In credit associations the average salary is 300 rubles a year; that is, for the directors, supervision, etc. In loan and savings associations it is about 700 rubles a year. Q. In making loans to individual members, is the character of the member considered as the basis for the loan — what is the reaL basis when no security is asked ? A. The person who apphes for membership in the association must have property and character in order to become a member. Q. How do the rates of interest charged by these institutions compare with the rates of interest charged by State or commercial banks ? A. In savings and loan associations the rates are the same; but in credit associations they are much higher than the rates charged by the average. commercial bank. Q. What is the length of time of loans to farmers ? A. In both credit and loan and savings associations there are short-time and long-time loans. Short-time loans run from six months to one year; long-time loans, from one year to three or five years. 'Information and evidence in Russia was secured by a subcommittee. 233 234 AGEICULTUEAL COOPERATION IN EUEOPE. RUSSIAN AGRICULTURE. Mr. V. E. Brunst, of the DepFrtment of Agriculture. STATEMENT. St. Petebsbukg. The last 10 years have seen a great increase in the expenses of the ministry of agriculture. In this time they have been greater than for the 60 years preceding. These represent the local expenses. The experiment stations did not really originate until 1908. Then the experiment work took a nev?^ impetus and it is now the basis of all agricultural development. A speciaUst now resides in every division of the Empire. There are 1,100 divisions in Russia with a corresponding number of specialists. These pertain only to the development of grains and each Is local to the community; they are perfected by the people of their district. These specialists come wholly from Russian schools and colleges. The word "local" means the local or provincial governments as distinguished from the central Government. The policy of the central Government is to start agricultural activities and then transfer them to the local governments. These are gifts to the local governments, but they must furnish data to the central Government. It is the poUcy of the Government to break up communal life and communities into individual farms. The lands are owned by the village or community and the Government appropriates money to help individuals get established. The Government sends out inspectors to show indi- viduals how to farm, and the main factor in the improvement of agriculture is the experiment work. In the year 1901 there was an expenditure in this experimental work of 235,000 rubles; in 1912 the expenditure was over 4,000,000 rubles. There are nearly 4,000 agricultural societies in Russia and they have grown largely in the last six years. Of these societies 3,342 are educational. There are 558 special societies for peculiar products. These societies are a good medium between the Crown and the population. Most of these societies are small selling organiza- tions and they are the centers of the educational work. The Government is taking the initiative in carrying on educational work and the local governments are helping. Health, education, good roads, etc., are being fostered by the Government through these societies. QUESTIONS. Q. Have these increases in production been brought about by the increase in prices ? A. Yes; they are also representative of increases in area and in yield. Q. What, probably, is the principal factor with respect to the increase in yield ? A. The main factor is the intensification of culture in agriculture. Q. What is this due to? A. The use of machinery, fertilizers, and equalization of labor. Q. Has the introduction of cooperative credit had anything to do with it ? A. We can not prove it, but it is probable. GENERAL DEMOGRAPHIC AND ECONOMIC STATISTICS.' tekeitokt and population. St. Petersburg. Area, 21,463,290 square kilometers; population as estimated on January 1, 1908, 155,443,300; population according to the census of 1897, 126,896,200. The geographical distribution of the population on January 1, 1 908, was as follows : European Russia. — Fifty Russian provinces, 113,841,000 inhabitants, or 26.8 per square kilometer; 10 Polish provinces, 11,360,900 inhabitants, or 101.8 per square kilometer; Finland, 2,968,600 inhabitants, or 10.3 per square kilometer; and the Caucasus, 10,908,400 inhabitants, or 26.2 per square kilometer. Russia in Asia. — Siberia, 7,049,200 inhabitants, or 0.6 per square kilometer; and Central Asia, 9,305,200 inhabitants, or 2.9 per square kilometer. The average density of the population for the Empire on January 1, 1908, was 8.1 per square kilometer. The distribution of population according to race was as follows: Russians, 65.5 per cent; Turco-Tartars, 10.6; Poles, 6.2; Fins, 4.5; Lithuanians, 2.4; Germanic group, 1.6; KartvMe group, 1.1; Hill tribes of the Caucasus, 0.9; Armenians, 0.9; Mongols, 0.4; other nativ6 races, 5.9 per cent. According to social condition, the distribution of the population per 1,000 inhabitants was as follows: Nobility and state functionaries, 15; clergy, 5; middle classes, tradesmen and artisans, 112; peasants, 771; Cossacks, 23; and various native tribes and foreign subjects, 74 per 1,000 inhabitants. The distribution of the population according to age was as follows: Under 10 years, 27.3 per cent; from 11 to 19 years, 21.1; from 20 to 29 years, 16.2; from 30 to 39 years, 12.6; from 40 to 49 years, 9.3; from 50 to 59 years, 6.6; from 60 to 69 years, 4.3; and above 70 years, 2.6 per cent. ' Statement recommended by Russian Government and reprinted from "Monographs on Agricultural Cooperation," Volume I, of Ibe International Institute of Agriculture. RUSSIA. 235 The number of illiterate persons per 1,000 inhabitants was as follows: Males, 707; females, 869; average for the two sexes, 789. The movement of the population in 1903 was as follows: Births— males, 2,554,799; females, 2,423,506; average per 1,000 inhabitants, 48.1. Deaths— males, 1,607,428; females, 1,495,785; average per 1,000 inhab- itants, 30. The increase of the population per 1,000 inhabitants was 18.1. The marriages numbered 912,082. The number of peasants who emigrated from European Russia to Siberia from 1896 to 1898 was 2,150,748. The number of emigrants to foreign countries in 1906 was 122,191. AGRIOULTUEE AND FORESTRY. The division of land areas in 1908 as estimated in hectares was, cultivated lands, 99,085,259; meadows and grazing lands, 34,954,905; and forests, 426,540,955. The division of landed property in 1905 in European Russia, exclusive of the Polish provinces and Finland, amounted to 154,689,513 d^ciatines, divided as follows: Crown lands, 138,086,168; appanages, 7,843,015; churches, 1,871,858; convents, 739,777; towns, 2,042,570; and miscellaneous, 4,106,125. Private property, amounting to 240,502,930 deciatines, was' divided as follows: Peasants, 148,735,808 (including 124,078,089 deciatines of the nadiel)i; nobles, 53,169,008; merchants, 16,669,049; Cossacks, 14,689,498; lower middle classes, 3,828,537; foreign subjects, 352,438; clergy, 337,206; and 'miscellaneous, 2,721,386. The area, yield, and average production of the principal crops in 1909 were as foUows: Area. Wheat 26, 483, 781 hectares Bye 29, 143, 059 hectares Barley 10, 886, 947 hectares Oats 18, 732, 399 hectares Yield. 213, 425, 189 quintals 228, 077, 539 quintals 103, 899, 461 quintals 166, 450, 455 quintals Area. Average production for 1904-1908: Area. Wheat 24, 874, 999 hectares Rye 29, 732, 683 hectares Barley 9, 981, 352 hectares Yield. 157, 412, 661 quintals 203, 598, 269 quintals 75, 707, 783 quintals Corn 1, 539, 654 hectares Potatoes ,. 4, 361, 389 hectares Hay 35, 351, 396 hectares Oats 18, 316, 831 hectares Com 1, 409, 842 hectares Potatoes 4, 139, 995 hectares Yield. 10, 149, 616 quintals 324, 860, 958 quintals 491, 506, 065 quintals Yield. 134, 353, 926 quintals 12, 343, 296 quintals 275, 475, 714 quintals According to the census of 1909, the number of animals was as follows: Horses, 29,564,602; cattle, 43,377,886; sheep and goats, 61,460,853; pigs, 12,113,937. MINES, COMMERCE. The number of miners in 1908 were 582,408. The mineral and general output in 1908, as estimated in pouds (1 poud= 16.38 kilograms), was as follows: Gold, 1,862; platinum, 320; copper, 519,333; zinc, 482,973; mercury, 19,401; pig iron, 166,834,756; iron, 9,786,515; steel, 138,364,610; coal, 1,139,714,707; naphtha, 461,153,949; manganese, 31,009,287; salt, 112,468,734; cotton, 23,000,000; and tobacco, 4,500,000. The value of the imports in 1908 was 912,659,360 rubles; the exports, 998,250,391 rubles. The average from 1903 to 1907 was, in imports, 723,300,000 rubles; in exports, 1,046,600,000 rubles. These figures do not include the precious metals. NAVIGATION AND INLAND COMMUNICATION. Sea-going shipping in 1908. Ports Ships entered. Ships cleared. Number. Tonnage. Number. Tonnage. White Sea and Arctic Ocean: 339 610 953 5, 367 451 3,243 52, 957 617, 592 573, 043 4. 094. 432 556, 356 4. 808. 433 312 609 1,046 5, 394 314 3,235 ■ 52, 071 Foreisn vessels - . . . . . _ 617, 404 Baltic Sea: TliiRHian vesflels - ' 665, 251 4, 140, 595 Black Sea and Sea of Azof: 373, 556 Korpien vphrpIr 4, 788, 784 Total: TtiiRRian vessels 1,743 9,220 1, 182, 356 9, 520, 457 1,672 9,238 1, 090, 878 9, 546, 783 Total 10, 963 10, 702, 813 10, 910 10, 637, 661 ' The land the peasants received as collective property on the abolition of serfdom. 236 AGEICULTUEAL COOPERATION IN EUKOPE. STATE FINANCES. The budget passed for the year 1911 was as follows: Ordinary expenditure, in thousands of rubles, 2,527,272,220; extraordinary, 192,836,607. The ordinary revenue, in thousands of rubles, was 2,707,708,827; extraordinary, 12,400,000. MONET, WEIGHTS, AND MEASURES. Unit of value. — The ruble {-^ of an imperial) of 100 kopeks = 2.66 francs. IfeigrR— Pound = 0.409.5174 kil.; poud (40 pounds) = 16.38 kgs.; ton = 1,000 kgs.; shipping last (2 tons) = 1,965.72 kgs. Measures. — Length: Foot = 0.304794 meter; sagene (7 feet) =2.13356 meters; archine (3^ of the sagene) ; verschok (-^ of the archine); verste (500 sagenes) = 1 .067 kilometers. Superficies: Square sagene = 4.5521 square meters; square archine = 0.5080 square meter; deciatine = 109.25 ares. Capacity: V6dro (liquids) = 12,229 liters; tchetvert = 209,726 liters; tchetverik (grain) =26.2175 liters; cubic sagene = 9.632 cubic meters. AGRICULTURAL COOPERATION IN RUSSU.^ general development. St. Petersburg. The great mass of the agricultural population in Russia remained, until recent years, more or less opposed to the cooperative movement. It is none the less true that the principles of mutual aid have long been prac- tically appHed by the Russian peasants. The Russian artelle is, in fact, one of the most ancient forms of professional cooperative associations. Although opinions are divided as to its origin, it is certain that the early artelles were purely patriarchal in character. Ihey were, as a rule, small associations of peasants who periodically left their homes, either in search of temporary work as carpenters, joiners, packers, messengers, or porters in the towns, or in search of agricultural work outside their communes. The artelles differed from the ancient trade guilds in having neither rules nor regulations and by the fact that their chiefs (starosta) enjoyed, by traditional right, very extensive powers. The members of these artelles took their meals together and lodged together. A considerable number of artelles have in turn been trans- formed into large cooperative labor societies regulated by rules. Such are, for example, the cashiers' and collectors' artelles at St. Petersburg, Moscow, and Yaroslaw, which provide the large banks, workshops, factories, and shops with almost all their confidential staff. Besides these associations, there are large artelles of porters and packers, carpenters, joineis, masons, laboreis, and cartels. With very few exceptions, the members of all these artelles own little farms in their villages m which they pass a part of the year. Another characteristic feature of these artelles is that each one is generally formed of peasants from the same province. Certain large and especially prosperous artelles have at their disposal very large funds amounting to millions of rubles and have current accounts at the banks. These associations are well aware of the great influence they exert and of the prestige they enjoy. So on the registration of new members they exact in addi- tion to the subscription laid down in their rules the payment of a relatively high premium. The new members submit very readily to this exaction, because the artelle undertakes at once to procure them permanent employ- ment and even gives them a fixed allowance during the periods of forced unemployment. Any member who becomes an invalid leaves the artelle and withdraws his share of the capital. The agricultural cooperative societies properly so called are of much more recent formation. The Russian legislation of recent years is visibly tending to favor their development in every way, especially in the hope that these cooperative societies ma}' become one day important factors in the export trade in cereals and other agricultural produce. In the following sketch we shall set forth the different phases of the development of Russian agricultural cooperation in its main lines. COOPERATIVE CREDIT SOCIETIES. Among the agricultural cooperative societies, the credit societies come fu'st by right of age. The first cooperative loan and savings association was formed in 1866 at Dorovatovo, in the district of Vetlouga, Prov- ince of Kostroma. Three years later a loan and savings bank, also cooperative in character, was formed at Fellin in Livonia. The Dorovatovo association and the Fellin bank served as models for cooperative credit societies in other provinces and districts. The Fellin bank differed from the Dorovatovo cooperative association in exacting from its members an immediate money contribution, to be made once for all, while the Dorovatovo cooperative association per- mitted its members to pay up their shares by annual installments. ' Reprinted from "Monograplis on Agricultm-al Cooperation," Volume I, of the International Institute of Agriculture. RUSSIA. 237 The initiative of the founders of the Dorovatovo cooperative association excited the special interest of the Moscow Agricultural Society/ which in 1871 organized a special committee to favor the progress ^of cooperative societies of this character throughout the Empire. The imperial treasury encouraged the Moscow society in this work and granted it a subsidy of 5,000 rubles. Influential representatives of the zemstvo (independent provincial and district administrative bodies) were called to form part of the above-mentioned committee/ and gradually a large number of cooperative associations were formed similar to that of Dorovatovo in almost all the provinces of European Russia. The provincial zemstvo of Novgorod was the first to grant pecuniary subsidies to the agricultural coopera- tive credit societies. Thanks to its support, seven cooperative societies were founded in that province, receiv- ing a subsidy of 1 ,000 rubles each. On July 1 , 1 87 1 , there were 36 new agricultural cooperative credit societies at work in European Eussia, to which the zemstvos had granted loans. In the course of the six years 1872-1877, no less than 782 cooperative societies of this character were formed, and the zemstvo boards of management granted them a total subvention of 321,000 rubles. This forward movement slackened abruptly in 1878, the number of new cooperative societies falling gradually from 329 in the period 1878-1883 to 80 in 1884-1886. After 1887 the zemstvo boards of management, finding that the majority of the cooperative societies had allowed themselves to be turned aside from their mission, ceased to interest themselves in their fortunes and were from that time only anxious to recover the loans they had made to them under the form of subsidies. Experience had shown that the cooperative societies, by insisting on the formation of a share capital (to be paid up either entirely at the start or in several annual installments) only attracted a minority of the agri- cultural population, remaining entirely inaccessible to the great mass of the peasants. The zemstvo boards of management further found that a large number of peasants in comfortable circumstances, who had enough money to satisfy their personal requirements, borrowed from the cooperative societies solely to lend in their turn to a third party and that under conditions extremely burdensome for their debtors. As soon as the cooperative societies found themselves compelled to repay the zemstvo the subsidies they had received, the majority of them went into liquidation. In 1888, 395 cooperative societies had already virtually ceased .to exist. At the date of the revision of the charter of the State Bank in 1893, the subject of the reform of small agricultural credit was raised, leading to the promulgation on June 1, 1895, of a special law on "loan and savings cooperative associations" and on "agricultural cooperative credit societies." The following year official model regulations were published for these two forms of cooperative societies. The loan and savings cooperative societies were, according to the conception of the law, to have a regional character and to fill, in a certain measure, the office of central banks, for the small agricultural cooperative credit societies, whose r61e was to be purely local. It is true that the loan and savings cooperative societies, as they existed at the start, could admit as members cooperative associations, artelles, and rural communes, as well as individuals, but they remained inaccessible in fact to the small farmer, for each member had to pay up at the moment of his admission a share of 100 rubles ($53), an amount not often within the reach of a peasant. New principles having been adopted in 1904 for the general reform of small credit in Russia, the regula- tions of the loan and savings cooperative societies underwent considerable modification. The general manage- ment of the service of popular credit institutions has been intrusted to an office dependent on the State Bank and bearing the title of General Administration of Small Credit. This office has a president, chosen from among the members of the board of directors of the State Bank, and a central committee, to which belong besides the president and vice president, representatives of the imperial control (auditor's oflSce) of the depart- ments of agriculture, home affairs, and finance, and of other public services concerned. The president has power to invite, when he shall judge it to be necessary, representatives of the zemstvos and of the various asso- ciations to take part in the meetings of the central committee, with the right to speak but not to vote. The General Administration of Small Credit has the following functions: (1) It distributes donations in money to the new associations and grants subsidies to the already existing associations to increase their funds; (2) it provides for the popularizing of small credit by the publication of popular tracts; and (3) it is intrusted with the chief management and the examination of the accounts of the popular credit institutions. The General Administration of Small Credit has a large staff of examiners and revisers. Its provincial agents are: (1) The provincial committees to which the representatives of the various public services interested belong, and (2) special inspectors attached to the branches of the State Bank. All these agents must be vigi- ' This society, without being a cooperative society in the strict acceptation of the term, has for its object the development of rural economy and agricultural industry in every way. ^ Among the pioneers of the Bussian agricultural cooperative movement may be mentioned Messrs. S. Longuinine, A. Yakovlew, Prince A. Vassiltchikow, Prince A. Tcherkasski,' Messrs. A. Kochelew, D. Samarine, V. Pertsow, A. Tchouprow, N. Verestchaguine, S. Moukhortow, and J. Brylxine. 238 AGBICTJLTTJBAL COOPEEATION IN EUEOPE. lant to see that the popular credit associations and establishments conform to the regulations and instructions of the general administration. One of the first acts of the new administration of small credit was to prepare model regulations (promul- gated on March 29, 1906) for the loan and savings banks of the rural communes. The opening of these banks follows upon the decision taken in conformity thereto by at least two-thirds of the inhabitants of the commune possessing voters' rights. These banks, which are strictly cooperative in character, may enter into business relations with the zemstvo provincial and district banks instituted by the law of June 7, 1904. Among their other powers, the zemstvo banks may grant loans to small cooperative banks, artelles, artisans, small manu- facturers, and farmers. The zemstvo banks, like the banks of the small rural communes, may receive deposits from third parties and contract loans within the limits provided for in their regulations. The liability of the members of rural cooperative banks may be limited or unlimited, according as the general meeting shall decide. In order to assimilate the loan and savings cooperative societies to other rural banks, the necessary amend- ments were introduced into their regulations. The principal change introduced was the reduction from 100 rubles to 10 rubles of the amount of the share to be paid up by each member. The general provisions of the various legislative measures taken since 1904 have in fact ended in the unification of the service of all the popular banks under State control. As we have just said, the cooperative credit societies are subdivided into two groups, namely: (1) Those styled loan and savings banks, and (2) those styled credit associations. From 1871 to 1877, 966 loan and savings banks were formed, of which 416 received from the zemstvo institutions loans amounting altogether to 1,162,420 francs ($232,484). A great number of these banks had to go into liquidation, and there followed a period of decline for these establishments up to the year 1895. On January 1, 1907, there were in Eussia altogether 979 of these banks and 1,210 credit associations approaching the Eaiffeisen type at work. On September 1. 1908, the number of the first has risen to 1,386 and that of the credit associations to 2,360.' According to data furnished by 902 loan and savings banks and by 1,199 credit associations on January 1, 1907, these two groups of cooperative credit societies had the following available funds: Loan and savings banks— capital belonging to the institutions, 54,695,000 francs; capital borrowed, 110,890,000 francs. Credit associations — capital belonging to the institutions, 3,822,000 francs; capital borrowed, 36,657,000 francs. It is seen from this statement that each of the loan and savings banks on an average had at its disposal 194,000 francs of capital; while the credit associations on an average had only about 3,227 francs each. As to the number of members (with regard to which only fragmentary data are available), it varies greatly with the different regions. Some of the loan and savings banks of a regional character have between 5,000 and 7,000 members (that of Vinnitsa in Podolia, for example, has more than 7,000). The banks that had more than 1,000 members each at the beginning of 1907 were 122. The' loan and savings banks which fur- nished data as to the number of their members were 873. According to these data they had altogether 431,526 members '■' on January 1, 1907. At the same date, 1,199 credit associations had 501,379 members. We get thus the following averages: Loan and savings banks, average number of members per association, 494; credit associations, 418. ' On Jan. 1, 1909, the loan and savings banks numbered 1,116 and the credit associations 3,070. The number of cooperative societies working on Jan. 1, 1910, according to the "Messenger of the Cooperative Societies," was approximately 4,000 loan and savings banks and 3,200 mutual credit associations. The average number of members being between 450 and 500 per cooperative society, the total number of members may be estimated at about two millions. These cooperative societies have been formed in the greater number of cases in the Provinces of Perm (170 credit associations and 64 loan and savings banks) and of Kherson (242 credit associations and 59 loan and savings banks). The other provinces that possessed between 100 and 200 cooperative credit societies were 23 in number (Southern Russia, the center of the zone called the "black land " the Volga basin, Viatka, and Livonia). The provinces possessing each between 50 and 100 cooperative credit societies were 8 in num- ber. The provinces of Siberia, Transcaucasia, and Turkestan have less than 10 cooperative credit societies each. ' Mr. S. Borodai'evsky, vice director at the ministry of commerce, in his report presented at the last Brussels congress gives the follow- ing approximate figures: Loan and savings banks, number of members on Jan. 1, 1908, 545,000. Credit associations, number of mem- bers on Jan. 1, 1910, 1,693,000. BTTSSIA. 239 The financial statements of these two groups of cooperative societies give us the following totals on Janu- ary 1,1907: DEBITS. CREDITS. t 902 loan and savings banks. 1,199 credit associations. 902 loan and savings banks. 1,199 credit associations. Capital in shares Francs. 41, 706, 000 7, 951, 000 1, 583, 000 101, 651, 000 14, 183, 000 11, 000 4, 573, 000 4, 027, 000 Francs. 6, 336, 000 1, 037, 000 420, 000 20, 884, 000 9, 978, 000 40, 000 261, 000 1, 524, 000 Credit balance in current accounts Francs. 9, 504, 000 10, 829, 000 147, 032, 000 199, 000 3, 673, 000 354,000 Francs. Reserve fund 1, 553, 000 511, 000 35, 796, 000 410, 000 596, 000 128, 000 Special funds Bills and arcpDtancps Deposits : Loans contracted CroodR bought Commission account Real and personal estate Temporary amounts Interest and credit balance Cash in hand 171, 591, 000 4, 094, 000 38, 994, 000 1, 487, 000 Total Total 175, 686, 000 40, 480, 000 175, 685, 000 40,481,000 The funds belonging to the banks include members' shares, reserve fimds and funds of special destination (fimds for the extinction of debts on real estate purchased, for assistance to members, and those set apart agaiust irrecoverable claims, etc.). To the funds belongiug to the banks the available amount of the net profit is added. One of the characteristics by which the loan and savings banks are distinguished from the cooperative societies designated by the title of credit asspciations is that, with the former, the capital is chiefly composed of the shares of the members themselves, whUe the capital of the credit associations is for the most part made up of loans, generally contracted with the State bank and to a lesser degree with the respective independent provincial and district institutions (zemstvos). The total amount of capital borrowed by the credit associa- tions on January 1, 1907, was divided as follows: From the State bank, 4,729,480 francs; from the zemstvos, 361,760 francs; and from other parties, 404,320 francs. The State bank generally grants this class of cooperative societies loans for theii- capital account varying between 2,660 and 5,320 francs, according to the territorial extension of their sphere of operations; The capital borrowed from other parties is furnished to credit associations chiefly by rural communes, boards of manage- ment of the volostes, agricultural societies, and banks. Besides the loans made to the capital account at their start, the State bank grants these cooperative societies loans for a period of time in order to facilitate their current operations. Only fragmentary data are at hand on this matter. It appears from these data that, on January 1, 1907, the State bank was creditor under this head of 990 credit associations for the amount of 7,591,640 francs, and of 841 loan and savings banks for the amount of 1,095,220 francs. The loan service of these two classes of cooperative credit societies naturally forms the most interesting part of the balance sheets reproduced in the pamphlet published by the committee. The following statement gives under this head a recapitiilation for the three financial years 1905, 1906, and 1907: Number ftiof cooperative societies. Credit balance on loan accounts. Average per cooperative society. Average debt per member. Average debt per borrower. On Jan. 1, 1905: Loan and savings banks Credit associations On Jan. 1, 1906: Loan and savings banks. Credit associations On Jan. 1, 1907: Loan and savings banks. Credit associations 877 536 856 773 902 1,199 Rubles. 47, 294, 000 4, 786, 000 49, 943, 000 8, 273, 000 55, 275, 000 13, 457, 000 Rubles. 54, 000 9,000 58, 000 11, 000 61, 000 11, 000 Rubles. 123 24 125 27 129 27 Rubles. 39 46 53 According to information published by the General Management of Agriculture (Collection of Statistical and Economic Data regarding Agriculture in Eussia and in Other Countries), on December 31, 1909, the fol- lowing were the total figures presented by the mutual credit and savings associations : Number of associations, 1,476; number of members, 673,590; assets and Mabilities, 96,046,843 rubles; loans granted, 79,796,117 rubles; deposits and amounts borrowed (excluding those received from the State Bank), 65,071,078 rubles. 240 AGRICULTUKAL COOPERATION IN EUROPE. At the same date the total figures shown by the credit associations were: Number of associations, 2,691; number of members, 1,269,230; assets and liabilities, 36,545,363 rubles; loans granted, 22,159,922 rubles; deposits and amounts borrowed (excluding those received from the State Bank), 21,109,088 rubles. It is seen from this that the average debt of the members of the loan and savings banks greatly exceeds that of the members of the cooperative societies called credit associations. This is due, first of all, to the fact that the members of the loan and savings banks are generally small manufacturers and more or less well-to-do farmers. As these banks require their members to make an immediate payment toward the capital on their admission, which is not done by the small cooperative societies known as credit associations, which are not obhged to form a share capital, the result is that the first attract a contingent of members in easier circumstances. Further, it must be observed that, in the figures given above, indicating the amount of the average debt of mem- bers, no account is taken of the credit of the member in question on account of his shares. In other words, to get the net amount of the members' debt, we should, strictly speaking, deduct from the amount given above the sum paid up by the same members in hberating their shares. Now, as this sum may vary between 26. and 266 francs, according to the provisions in the rules of the different banks, it is evident that the difference between the figures shown above for the debt per member and that of the real debt of the same members may be very considerable. Popular credit in Russia being organized in such a manner that no distinction is made between the agri- cultural and the town banks, we may observe that, of the 1,199 cooperative credit societies mentioned above, only 66 are town banks. It is further to be noted that 24 of these 66 town societies extend their operations also to country districts. The loans of the cooperative credit associations in 1906 were under the following heads, their amounts being expressed in francs: For purchase of land, 645,625; various buildings, 3,184,552; agricultural works, 61,978; purchase of implements, etc., 803,852; purchase of cattle, 6,142,472; purchase of manure, 32,718; hire of lands, 4,426,772; purchase of seeds, 1,571,794; purchase of requisites, 1,792,308; hiring labor, 649,838; purchase of goods to be resold, 3,335,640; purchase of fodder, 1,204,980; payment of debts, accounts, and for various expenses, 5,935,736. It is evident that the small cooperative credit associations have especially facilitated the purchase of cattle and the lease of farm lands and rural buildings. COOPERATIVE SOCIETIES FOR PRODUCTION, PURCHASE, AND SALE. The other cooperative societies (for production, purchase, and sale) are regulated either by special rules or by uniform regulations, models of which were officially published in 1897 and 1908. The special law of 1908 had for its object the encouragement of small agricultural cooperative societies. It abolished the obUgation for members to form a capital in shares, substituting for the purchase of shares small annual payments, the amount of which is fixed by the general meeting. The simplest forms have been adopted to regulate the work of these cooperative societies, of which, as a rule, only peasants residing in the same village and on the neighboring farms, should be members. The debts of the association are secured by the whole of the assets and by the personal property of the members up to three times the amount of their annual sub- scriptions. Although the majority of the associations, in terms of their rules, propose to "arrange for the purchase of everything that may be required in agriculture," and for the sale of "every kind of agricultural produce," in practice their action is limited to operations of a certain class. Thus, for example, the great Esthonian Cooperative Society, formed in 1897 at Reval, is almost exclusively concerned with providing manures, machines, and agricultural implements, dairy plants, iron and steel goods, and building material. The Federation of the Siberian Butter-Making Societies, also regulated by the rules of 1897, devotes itseK to the exportation of butter, while the Pomiestchik ' Association, with its headquarters at St. Petersburg, was founded with the sole object of selling in the capital and in other towns the produce of the butter-making estabhshments and dairies belonging to the landowners of the Baltic provinces. A cooperative association at Warsaw concerns itself only with agricultural improvements both on its members' land and for third parties. COOPERATIVE BUTTER FACTORIES' IN WESTERN SIBERIA.^ The development of cooperation in its different phases among the Siberian butter manufacturers, exhibits characteristic features which give us a general idea of the agricultural cooperative movement in a region. of more than two miUion square kilometers. ' Landed property. ' In view of the special importance of these cooperative societies, it may be well to give details as to their working, which, for want of space, can not be done in the case of other Russian cooperative productive societies. RUSSIA. 241 Mr. N. Makorow, in a volume recently pubKshed under the title of "The Cooperative Movement among the Peasants of Western Siberia" (Moscow, 1910), furnishes data on this subject which will be reproduced here in as concise a form as possible. The Siberian butter industry is spread all over the provinces of Tobolsk and Tomsk, and a portion of the provinces of Yenissei and Orenburg, as well as of the territories of Aknaolinsk and Semipalatinsk. Besides this, the industry is making constant progress in the Province of Perm. Up to the date of the construction of the Transsiberian Railway in 1894, the population of this immense region was extremely scattered and composed principally of small farmers. Large estates were almost entirely unknown in Siberia, and average-size estates had but an insignificant r61e. According to Mr. Kaufmann, there were at the opening of the Transsiberian Railway only 719 landed estates in Siberia of a total area of 430,000 hectares. The town population formed hardly 7 per cent of the total inhabitants. This proportion decreased further to about 5 per cent toward the end of the nineteenth century, after the opening of the Transsiberian Railway for trafhc, which favored the movement of inland migration and brought hundreds of thousands of colonists to the Siberian regions.^ Together with the construction of the Transsiberian Railway, the Imperial Government provided for the study of a series of measures to be taken for the encouragement of Siberian rural economy, and it was decided, among other details, to favor the extension of the butter industry by sending into Siberia a certain number of speciaUsts as instructors. In the vast region traversed by the railway, cattle rearing formed the principal industry of the agricultural populations: The abundance and extraordinary extent of the natural meadows favored the development of this agricultural industry. A St. Petersburg merchant named Valkow was the first to inaugurate a butter factory in 1894 near the town of Kourgan. His example was soon followed by a large number of small speculators, who bought the milk by weight (at about 5 centimes per kilogram) from the peasants and exported the butter to the great centers of European Russia. These speculators were followed by the agents of various foreign firms (EngHsh, Danish, and German) by whom offices were opened at Kourgan, Omsk, Kainsk, and Bamaoul. ' These firms were not long in getting almost the whole of the Siberian export butter trade into their hands. The butter was suppHed to the exporters from hundreds of small dairies managed by private people. A great number of these small manufacturers also owned stores, where the peasants could buy on credit food and all kinds of personal necessaries. These small speculators naturally reahzed a double profit at the expense of the peasant, and this has contributed indirectly to the encouragement of the cooperative movement. The idea of cooperation was, besides, no novelty for the Siberian peasants. Artelles, which indeed are only cooperative labor associations of a special form, had been long working in the different Siberian regions. There were fishermen's and carters' artelles, peasants uniting periodically in artelles either for the gathering of cedar nuts in the forests, as these nuts form a very important article of Siberian export trade, or for the extrac- tion of tar from the fir trees or f6r the production of charcoal. Very often also peasants united in artelles to go and reap or mow on other farmers' lands. In short, cooperation in its modern form had the ground prepared for it when the first dairy speciaHsts arrived, sent by the Government to famiharize the agricultural population ' with the most improved methods of butter making. This technical staff, it is true, was very small at the begin- ning — 47 men in all, including the foremen. But fortunately they had at their head an energetic and enter- prising man, Mr. V. Sokoulski, who did not limit his action to the purely technical part of the mission that had been confided to him. Being persuaded that technical improvements had but a secondary interest for the small speculators, he himself took the initiative in the formation of cooperative societies of peasant producers. From that moment a new phase began in the production of Siberian butter; a struggle commenced between the small speculators working the butter dairies and the cooperative societies. A few years sufficed for the complete triumph of the latter. The organization of the Siberian cooperative butter factories is very simple. The members undertake by mutual contract: (1) To deUver to the cooperative society all the milk they produce; and (2) joint liabiUty for the engagements contracted by the cooperative society. The contract is registered at the office of the volostes to which the rural commune belongs, in which the society has its headquarters. At the moment of the formation of the cooperative society, each of the members makes a payment to the society in proportion to the number of cows he owns. Those who have not the money available dehver milk for an amount correspond- ing to the payment they should have made in money. The chief management of the business of the cooperative society rests with the general meeting, in which each member has only one vote, however many cows he may possess. Certain cooperative societies that include many villages substitute for the general assembly of mem- bers an assembly of delegates elected by the members in each village. The general meeting, as a rule, appoints a representative intrusted with the business management. The representative is responsible for the cash and 1 According to official data, in the course of the period 1906-1909, 2,841,602 peasants migrated into Siberia by the Transsiberian, of whom about 90 per cent permanently settled there. 14174°— S. Doc. 214, 63-1 16 242 AGEICULTUEAL COOPERATION IN EUEOPE. for the accounts of the society; he also arranges the purchase of the technical plant, the engagement of the staflp, the sale of the butter, and the settlement of accounts with each member at the end of the financial year, in conformity with the decisions of the general meeting. Sometimes the technical manager of the dairy fulfills, besides his own duties, those of business manager. Many cooperative societies have inserted in their contract with their technical manager a clause providing for reduction or increase of pay according to the quahty of the butter produced. In this clause the butter is divided into three classes. For each poud (16.38 kilos) of butter of the first quality produced the manager receives a premium of 10 kopeks (26.60 centimes); on the other hand, 10 kopeks for each poud of third-quahty butter produced is deducted from his pay. In this way the interest of the manager is all in favor of the pro- duction of butter of the best quality. The progress of the cooperative butter societies was intensified in 1902 under the management of M. A. Balakchine, who obtained the support of the departments of agriculture and finance for his work. Mr. Balak- chine and his fellow workers put themselves into direct relations with the principal Russian and foreign manu- facturers in order to provide the Siberian butter factories with the most perfect equipment. They commenced the publication of a periodical bulletin, specially meant for the Siberian cooperative societies, in order to keep them informed of the progress of the industry in which they are concerned and to encourage their united action. In 1907 more than 270 cooperative societies, consisting of the households of 52,000 peasants, were united in a federation, of which Mr. Balakchine became the representative. The following statement ^ shows the gradual development of the cooperative societies in the provinces of Tobolsk and Tomsk: Year. Tobolak. Tomsk. Year. Tobolak. TomRk. Year. Tobolsk. Tomsk. 1894 1899 21 24 34 1904 190 233 354 (?) 595 54 1895 - . - 1900 8 12 20 16 1905 114 1896 5 12 18 1901 1906 (?) 336 1897 1902 1907 1898 1903 1908 . - - 497 In 1908 the cooperative butter factories formed 59 per cent of the total number of butter factories in the Province of Tobolsk and 26.8 per cent of the butter factories in the Province of Tomsk. Mr. N. Makarow shows that the cooperative movement had been particularly important in the districts where popular reading rooms had been opened. To give an idea of the increasing prosperity of these cooperative societies the following table, reproduced from the reports of Mr. Balakchine's "Organization," gives detailed data as to the cooper- ative societies, divided into groups according to the year of their formation: Groups organized. Group comprising 33 cooperative societies organized in 1903 Group comprising 35 cooperative societies organized in 1904 Group comprising 50 cooperative societies organized in 1905 Group comprising 60 cooperative societies organized in 1906 Group comprising 85 cooperative societies organized in 1907 Year. fl903 1904 1905 1906 1907 1904 1905 1906 1907 fl905 1906 1907 /1906 \1907 1907 Num- ber of house- holds. 2,271 5,181 5,643 7,539 8,354 5,430 6,491 8,395 8,482 8,008 10, 007 11, 048 11, 898 12, 326 11, 676 Num- ber of cows. 16, 586 26, 735 27, 836 36, 266 43, 344 29, 844 34, 265 42, 130 48, 626 36, 698 50, 581 60, 579 53, 382 60, 493 55, 850 Butter pro- duced. Pcmds. 29, 586 44, 301 41,065 67, 922 70. 861 40, 703 50, 801 80, 920 84,457 59, 355 103, 638 108, 075 81, 726 89, 163 74. 862 Real and per- sonal estate. Rubles. 51, 083 81, 069 97, 720 110, 459 124, 197 43, 315 67, 249 82, 705 95, 290 80, 151 117, 560 138, 759 76, 063 102, 513 100, 843 Capital of the cooper- ative socie- ties. Rubles. 23, 083 55, 762 85, 545 109, 709 128, 197 45, 503 76,431 97, 169 107, 054 91, 337 136, 964 157, 147 80, 992 110, 743 98, 291 Average per cooperative society. House- holds. 68 157 171 228 253 155 185 239 242 160 200 220 198 205 137 Cows. 502 810 843 1,038 1,313 852 979 1,203 1,389 733 1,011 1,211 889 1,008 657 Butter pro- duced. Pouds. 896 1,342 1,244 2,058 2,143 1,162 1,451 2,312 2,413 1,187 2,072 2,161 1,362 1,486 880 Estate (real and per- sonal). Rubles. 1,570 2,456 2,961 3,347 3,775 1,237 2,183 2,363 2,722 1,603 2,351 2,775 1,267 1,708 1,186 Capital. Rubles. 699 1,689 2,592 3,324 3,824 1,300 2,180 2,776 3,058 1,826 2,739 3,142 1,348 1,845 1,156 ' This statement was prepared by Mr. N. Makarow, from the data furnished at the Congress of Russian Cooperative Societies in 1908, and from the latest official data at his disposal. BussiA. 248 The headings of the preceding table showing the averages per cooperative society point to two facts, namely: First, that the numbers of both members and cooperative societies are constantly increasing from year to year; second, that the increase of dairy cows is slower than that of members, which proves that at the start the coop- erative society attracts to itseK the households of the more prosperous peasants and that the poorer peasants follow the movement as the work of the cooperative organization develops. By the side of these strictly cooperative butter factories, semicooperative communal (voloste) butter factories have also been formed, generally in rural communes in which almost all the peasants possess dairy cows. The essential difference between these communal butter factories and the strictly cooperative factories consists in this, that the net profit of the first, instead of being divided among the members, is paid into the communp.! bank or else used for paying the land taxes due to the State. At present the majority of the Siberian cooperative butter factories furnish their butter directly to the great import markets. They also possess stores in which members may buy any goods needed for their personal use. The opening of these stores has enabled members of the cooperative societies to make large savings in their purchases. The success of the Siberian cooperative societies is confirmed by the data furnished by the inspection service of the General Management of Agriculture and Agricultural Organization with regard to the butter factories of the Province of Tomsk. According to these data, there were at the end of 1909 in the Province of Tomsk 2,061' butter factories, of which 612 were cooperative societies. In these figures, however, the butter factories (about 50 in number according to the local press) of the region of Narymsk are not included. It should be observed that the produce of the butter factories of the Province of Tomsk forms 60 per cent of the total exports of Siberian butter. The cooperative butter factories, although less numerous, are more important from the point of view of production, which produced in 1909 an average of 1,094 pouds (17,820 kilos) per cooperative butter factory and of 380 pouds (6,224 kilos) per noncooperative factory. Some cooperative butter factories of the Province of Tomsk have a thousand members each. The production of butter is principally concentrated in the southern districts. Detailed data have only been collected in the case of 434 of the cooperative butter societies above-mentioned, comprising 493 villages. These 434 cooperative societies had altogether 58,930 members, owning 296,198 dairy cows, which gives an average of 5 cows per peasant household. Besides, according to the report for the financial year 1909,' the Federation of Siberian Butter Makers, on January 1, 1910, included altogether 108 artelles (cooperative associations), 44 in the region of Kourgan, 46 in the territory of Tcheliabinsk, and 18 in that of Petropavlovsk. In the course of 1909, the federation sold the following quantities of butter: Central counting house, 127,583.01 pouds, valued at 1,722,108 rubles; Tcheliabinsk branch, 29,720.22 pouds, valued at 390,390 rubles; and the Petropavlovsk branch, 33,289.02 pouds, valued at 419,548 rubles. To meet their general expenses, the central counting house and branches receive a fixed sum of 10 kopeks (26.6 centimes) per poud of butter sold. The balance of 1909 showed a net profit of 5,464 rubles and 15 kopeks, of which 273.15 rubles have been placed to the reserve fund and 5,191 rubles divided among the artelles. It is evident from the report that the above amount of net profit was arrived at after the deduction of a loss of 1,262 rubles 26 kopelffl incurred by the TcheUabinsk branch, the arteUes of which were poorly organized. Now that this defect has been remedied, the inspection commission of the federation expects that future balance sheets will show more considerable profits. OTHER AGKICtTLTURAL COOPEKATIVE SOCIETIES. There have recently been organized, with the assistance of the General Management of Agriculture, a certain number of cooperative societies for the control of dairy cows. These are small peasants' associations which have no regulations ; the members are only mutually boimd by simple contract. The members engage an expert for their common service ; he visits the farms in turn, examines the sanitary condition of the animals, measures the quantity of milk produced by each cow, gives his advice as to the nourishment of the cattle, etc. The owner of the farm provides the expert with free board and lodging and places a vehicle at his disposal to enable him to continue his tour. Further, each member pays into the common fund a ruble (2.66 francs) a year for the salary of the expert and to defray other expenses. The General Management of Agriculture, for its part, has granted to. each of these associations as an experiment a subsidy of 400 rubles (about $200). As these associ- ations have given good results, 12 others have just been formed in the Province of Yaroslaw. ' Messenger of Finance, Commerce and Industry, No. 23, of the 6th-19th June, 1910. 244 AGEICULTUEAL COOPERATION IN EUEOPE. The advantage of uniting for their mutual benefit is beginning to be recognized by the Russian cooperative societies. Quite recently seven coopetative societies of the districts of St. Petersburg and Schlusselburg com- bined for the formation of the St. Petersburg Central Agricultural Society for collective piirchase of farm requisites and for the defense of common taterests. To this central society some 40 agricultural cooperative societies of the Province of St. Petersburg have now adhered.* GENERAL STATISTICS. Small Credit. Total results for the mutual credit and savings associations from information supplied by the management of the small credit hanks. Governments. Jan. 1, 1904. Num- ber of associ- ations. Num- ber of mem- bers. and liar bilities (in rubles). Loans granted (in rubles). Deposits and amounts borrowed (exclud- ing those received from the State bank) (rubles). Jan. 1, 1905. Num- ber of associ- ations. Num- ber of mem- bers. Assets and lia- bilities (in rubles). Loans granted (in rubles). and amoimts borrowed (exclud- ing those received from the State bank) (rubles). Jan. 1, 1906. Num- ber of associ- ations. Num- ber of mem- bers. Assets and liar bilities (in rubles). Loans granted (in rubles). Deposits and amounts borrowed (exclud- ing those received from the State bank) (rubles). Arkhangel Astrakhan Bessarabia Vihio Vitebsk Vladimir Vologda Volhynia Voronetz Vjatka Grodno , Territory of the Don Cossacks , Jekaterinoslaw Kazan Kalouga Eiew Kovno Kostroma Courland KouTsk Livonia Minsk Mohilew Moscow Nijni-Novgorod Novgorod Orenbourg Orel Perm Podolia Poltava Pskow RJasan Samara St. Petersburg. Saratow Simbirsk , Smolensk , Taurida , Tambow Tver Toula Ufa Kharkow Kherson Tchemigow , Esthonia Jaroslaw Total for 48 Gov- emments of European Russia 130 99 13,803 5,864 3,669 1,861 251 969 14,710 2,893 2,356 5,700 5,729 1,085 249 12,539 20,992 1,253 12,510 166 15, 210 8,290 2,223 2,253 1,154 5,137 56 823 19, 711 8,737 6,043 14,633 1,777 801 3,842 9,591 1,202 5,121 30, 441 4,305 4,391 2,224 943 4,564 2,495 8,678 650 37,602 861,819 375,309 156, 126 258, 718 35,910 168,027 745,345 141,042 158,633 683,956 505,010 55,654 78,434 858, 743 3,144,350 107,325 6,110,919 22,002 8,748,896 691,828 108,288 211,495 134,662 259,383' 11,999 27,416 907,417 838,662 665, 135 704,618 108,815 43, 743 344,896 680, 696 104,833 235,740 3,463,884 402, 368 475,311 81,988 47,306 427, 198 316,116 505,070 1,037,628 108,802 6,257 20,784 743,439 167,837 146,459 88,171 31,587 141,563 647, 707 120,223 97, 500 599, 569 468, 634 47, 434 53, 789 774, 584 2, 595, 291 81,820 5, 433, 212 16,469 7,486,913 591,317 89,060 147, 595 108, 171 214,460 9,662 22,431 788, 636 772, 229 513, 747 551, 505 92, 751 36, 110 289,610 585, 899 96,249 199,984 2,899,234 318, 037 386, 738 68, 621 40, 018 400, 704 266, 983 456, 700 556, 163 67, 643 895 5,400 375,014 264,059 81,939 78,017 3,734 62, 124 363,592 33,896 122,993 291,422 240,839 18, 481 32,690 523,389 1,974,880 25,101 4, 786, 715 5,290 6,905,150 418,557 71,291 70, 196 32, 485 48,373 526 3,718 283, 776 517,321 235, 712 317, 434 31,187 11, 673 95, 370 285,969 48,286 75, 270 ,909,608 139,261 177,014 21,233 17, 720 205,232 151,808 212,513 927, 694 29,571 125 79 14, 716 6,038 4,295 2,117 243 1,027 14, 679 3,268 2,639 6,337 6,200 1,120 195 14, 190 21,062 1,291 11,840 160 17,725 9,212 2,667 2,512 1,185 5,537 49 837 19,828 9,030 6,228 15, 177 1,532 811 3,979 10,311 1,188 5,074 32, 533 4,597 4,396 2,261 920 4,779 2,556 8,206 776 1,000 8,337 35,560 946,044 415,009 190, 644 262,466 35, 791 177, 763 783, 199 148, 965 189, 407 791,400 374, 372 61,335 64,308 985, 789 3, 030, 319 109,027 6,595,838 21,056 10,939,817 825,843 141, 605 232, 022 136,319 267, 569 11,492 26, 387 932. 025 869, 945 602,528 720, 722 110,392 47,258 359,318 748,600 107,461 238,937 3,904,952 418,859 488,667 84,048 42,858 487,022 370, 425 545, 603 1, 140, 708 107, 797 5,986 21,362 840,420 178,041 174, 629 105,503 31, 738 150, 782 604,051 123, 096 111, 167 705, 789 508, 088 53, 184 46, 496 896, 092 2, 573, 088 85,772 5,942,752 16,069 , 183, 473 712,217 101, 050 163, 809 109, 483 224, 452 9,032 21,503 781,365 790, 331 535,044 570,875 93,924 38,419 303, 182 634,507 90,611 201,547 3, 241, 782 329,382 405,042 71,277 31, 109 449, 173 337, 285 500,576 596,039 190 5,400 423,382 292, 181 103,210 79, 384 3,711 57, 410 386, 498 37,465 145, 485 326, 129 319,386 17, 658 24, 197 583,228 1,870,480 23,868 5,121,928 4,304 8, 461, 075 500, 716 89, 479 76, 146 31,591 51,223 735 3,821 296, 642 534, 267 249,274 329,573 32,001 13,526 100,853 30, 148 45,530 63,056 2, 192, 787 144, 753 186, 127 20,700 12, 775 243,811 174, 155 224,528 1,025,009 29,316 126 43 14,448 6,047 5,042 2,144 82 1,014 15,437 3,334 3,054 5,943 5,467 1,071 158 15, 552 18,237 1,309 11, 290 155 14, 267 11,250 3,039 2,793 1,158 5,548 46 785 19,980 9,378 6,698 14, 613 1,575 373 4,825 8,949 873 4,871 36,759 4,361 4,451 2,261 859 4,410 789 8,843 1,093 7,909 35, 693 961, 121 326,734 256,535 266.559 13,012 167,023 825,860 141, 682 222,583 794,223 411, 195 61,480 52,890 1, 110, 749 2,813,675 109, 706 5,692,059 19,255 9, 684, 535 955,980 172,434 238, 498 129, 487 258,842 10,091 24, 308 882,725 928,838 651, 224 682,838 96, 346 27,056 420,265 642,521 80,014 206, 110 4,320,562 389, 665 489, 003 79,586 41,188 453, 711 67, 995 620, 143 1,430,028 105,839 6,024 15,758 860, 702 187,500 233,551 106, 137 10, 758 143,313 702,330 115,066 120, 103 707,459 368,769 53,282 36, 171 990,285 2,340,350 87,251 4,951,113 14, 739 8,231,278 820. 177 126,929 170,628 104, 187 219,778 6,964 19,368 771,223 831. 178 579,073 563,322 81, 138 24,222 363, 036 558,271 65,516 170,764 3,617,026 314,114 407,699 68,181 30, 105 423,285 63,511 556,588 901,627 69,010 135 14,616 437,534 206,136 151,712 98,620 2,466 60,149 410,604 35,341 176,332 346,659 187,452 17,255 17, 758 670,327 1,726,342 23,158 4,449,195 3,477 7,681,723 585,373 106,062 73,541 25,284 51,623 561 4,165 211,504 642,686 272,298 309,091 26,514 6,941 116,820 252,680 33,627 42,282 2,576,326 128,737 182,334 17,471 12,548 228,500 30,945 277,616 1,262,959 28,122 627 273,109 36,095,277 30,339,499 22,634,418 665 286,427 40,335,808 33,830,289 25,259,111 284,782 38,379,675 32,183,026 24,123,846 1 Bulletin (Izvestla) of the General Management of Agriculture, No. 25, of June 20-July 3, 1910. EtTSSIA. 245 otal results for the mutual credit and savings associations from information supplied by the management of the small credit banks — Continued. Governments. Arkhangel Astrakhan Bessarabia Vilno Vitebsk Vladimir Vologda Volhynia Voronetz Vjatka Qrodno Territory of the Don Cossacks Jekaterinoslaw Kazan, Kalouga Kiew Kovno - — Kostroma Courland Koursk Livonia Minsk Mohilew Moscow NIjni-Novgorod Novgorod OrenDourg Orel Perm Fodolia Poltava Pskow Rjasan Samara St. Petersburg Saratow Simbirsk Smolensk Taurida Tambow Tver Toula Ufa Kharkow Kherson Tchernigow Esthonia Jaroslaw Total for 48 Gov- ernments o f Em'opean Eus- Jan. 1, 1907. Num7 berof associ- ations. 707 Num- ber of mem- bers. 119 45 17,621 6,402 6,157 2,271 76 993 15, 886 3,392 3,987 7,059 6,267 680 147 18, 993 19,500 1,367 12, 054 274 23,603 12, 143 4,820 3,059 1,108 5,720 46 769 27,638 9,614 7,693 12,833 1,873 236 4,979 10, 179 949 5,402 38,409 4,329 3,643 2,246 889 4,667 1,589 10,346 1,190 741 324,314 and lia- bilities (in rubles). 7,638 36,421 1,175,040 514,687 339, 162 261, 178 11,541 170,386 859,541 148,972 403, 797 1,020,727 540, 700 42,286 51,814 1,335,231 3,064,068 113,596 7,548,256 30, 204 16,430,021 1, 094, 015 241,658 236,279 126,872 281,761 10,091 23,774 994,531 945, 514 721,666 617,072 119, 931 23,972 483,726 690,373 82,514 282,776 4,567,092 388,361 392,753 81,755 47, 173 525,683 98,127 736,263 1,533,018 104,835 49,546,851 Loans granted (in rubles). 6,523 15,934 937,755 210, 726 300,377 110, 655 9,546 146,466 745,946 122,683 227,837 910, 846 487,848 36, 692 33, 973 1,192,546 2,460,672 90, 097 6,619,089 26,885 13,614,857 924, 987 180,043 170,448 99,716 235,490 6,954 18,719 835,965 833, 120 628,901 503,633 97,751 21,648 409,569 601,868 68,817 229,380 4,022,215 312,682 325,582 68,347 40,737 460,948 89,046 671, 299 961,398 68,684 41,194,800 Deposits and amounts borrowed (exclud- ing those received from the State banks) (rubles). 140 14,952 560,312 376,590 216,714 87,251 1,783 54,264 428,336 36,026 341,734 474,680 268,327 11,624 17, 649 797, 166 1,946,787 23,253 5,919,082 6,834 13,146,682 674,768 144,716 70,436 23,183 56,028 661 4,937 252,499 562,205 306,706 262,947 37,328 12,885 157,806 289,247 34,676 69,659 2,612,969 133,438 164,689 16,674 15,043 290,907 56,070 336,034 1,351,536 26,417 Jan. 1, 1908. 32,682,139 Num- ber of associ- ations. Num- ber of mem- bers. 123 102 26,276 8,266 6,979 88, 420 71 6,916 IS, 184 3,557 8,171 9,879 7.924 1,069 121 28,802 24, 109 1,454 17,774 613 25,849 8,618 7,726 3,157 1,108 5,746 and lia- bilities (in rubles). 581 27,477 13, 169 11,380 11,612 1,957 147 8,999 11,764 930 6,379 43,031 5,230 3,622 2,473 1,152 5,970 11,581 14;319 1,257" 951 491,773 7,069 28,935 1, 763, 152 669,682 461,646 283,363 11, 128 431,009 843,761 158, 929 632, 922 1,184,993 685,462 61,041 44, 165 1,786,411 3,437,642 117,269 9,431,528 52,555 19,326,227 1,453,009 421,469 236, 194 128,433 288,375 Loans granted (in rubles). 18,663 943,608 1,113,338 918,397 554, 063 123, 167 14,868 744,708 819,592 83, 820 345,359 5,236,172 400,274 380,777 86, 132 46,718 682, 125 812, 251 947, 400 ,039,208 104, 470 59,960,259 4,806 1,634,634 16,230 272, 441 409,609 142,049 8,919 378,631 724, 182 132,415 389,431 1,051,860 616,340 54,336 29, 053 1,690,801 2, 658, 778 91,518 8,284,732 46,363 16,893,706 1,241,848 336,618 173,338 103,191 238,607 and amounts borrowed (exclud- ing those received from the State banks) (rubles). 14, 139 771,438 1,018,243 840,826 451,713 100,203 11,910 626,441 697,272 69,S7lO 289,888 4,462,674 321,490 322,465 74,461 32,653 626,161 730,036 868,237 1,004,866 68,016 49,806,927 165 9,741 987,472 499,641 309,664 102,919 1,874 228,327 417,246 38,201 604,979 693,073 365, 754 17,243 13, 799 1,068,085 223, 534 26,945 7,465,735 21,641 15,660,260 886,799 278, 715 66,025 23,463 64,661 Jan. 1, 1909. Num- ber of associ- ations. 246,171 656,416 431,290 250,654 40,641 1,274 25,047 370,047 35,896 98,467 3,274,361 160,683 160,191 18,745 17,040 368,069 407,244 461,284 169,674 26,479 37,055,268 1 7 82 36 21 11 1 23 20 8 30 36 21 7 4 66 53 10 80 4 87 64 23 11 4 15 Num- ber of mem- bers. 108 473 40,890 10,984 10,331 3,151 51 11,731 16,167 3,791 13,767 12,891 9,634 2,104 220 40,476 26, 937 t,055 21,261 783 28,026 22,026 10,859 3,762 1,112 6,742 Assets and lia- bilities (in rubles). 294 14,329 17,190 16,457 11,216 2,436 984 11,316 12,193 976 6,453 46,889 6,894 3,694 2,707 1,177 6,829 18,220 18,615 1,346 1,384 1,141 497,808 6,676 47,181 2,356,018 816,571 664, 869 317,886 8,736 696,656 877,328 166,671 1,101,915 1,406,876 807,120 89,046 46,232 2,371,350 3,678,951 117,799 11,722,106 69,886 19,968,237 1,624,802 526,906 246,407 122,436 294,807 Loans granted (in rubles). 10,281 825,606 1,291,766 1,134,067 629,203 124,631 58,864 872,651 '827,197 85,997 340,369 6,440,080 465,413 366,561 96, 428 50,295 694,845 1,199,975 1,191,825 1,783,246 109, 443 67,637,205 5,231 29,006 2,126,595 373,027 565,774 190,665 7,384 614, 737 781,086 145,300 707, 177 1,241,746 735,291 81,928 29,921 2,110,777 2,828,370 93,683 10,297,006 62,651 16,147,560 1,364,218 417,041 187,790 99,168 249,052 Deposits and amounts ~ borrowed (exclud- ing those received from the State 'banks) (rubles). 7,867 664,927 1,194,666 1,037,288 425,447 103,669 47,195 734,222 719,301 71,462 287,996 4,756,629 380,787 311,913 80,981 43.549 633,011 1,075,381 1,115,719 1,085,314 67,572 56,326,758 18, 117 1,309,128 699,517 457,789 107,568 1,614 401, 166 420,404 39,389 876,078 692,927 386,430 29,518 14,046 1,368,459 2,295,309 25,966 9,427,376 24,986 16,187,949 1,063,165 321, 063 60,664 42,609 64,364 402 248,437 707,262 625,627 240,264 48, 193 24,792 364,638 333,031 36,241 79,064 3,366,811 161,602 136,339 22,842 19,396 394,032 670,740 543,012 1,690,818 24,764 45,722,906 248 AGBICULTTJEAL COOPEEATION IN EUEOPE. Total results for the mutual credit and savings associations from information supplied by the management of the small credit banks — Continued. Jan. 1, 1904. Jan. 1, 1905. Jan. 1, 1906. Governments. Num- ber of associ- ations. Num- ber of mem- bers. Assets and lia- bilities (in rubles). Loans granted (in rubles). Deposits and amounts borrowed (exclud- ing those received from the State bank) (rubles). Num- ber of associ- ations. Num- ber of mem- bers. Assets and liar biliiies (in rubles). Loans granted (in rabies). Deposits and amounts borrowed (exclud- ing those received from the State bank) (rabies). Num- ber of associ- ations. Num- ber of mem- bers. Assets and liar bill ties (in rabies). Ijoans granted (in rabies). Deposits and amounts borrowed (exclud- ing those received from the State bank) (rabies). POLAND. Warsaw 23 10 5 4 11 21 1 10 3 4 19,570 3,396 3,270 961 6,486 22,232 72 5,459 790 582 3,159,889 632,813 252,651 107,371 1,097,721 2, 772, 483 5,104 597,905 93,663 53, 161 2,669,384 656,592 224,620 94,750 1,032,527 2,363,921 4,946 574,018 83,003 51,897 1,901,397 451,207 149,907 67,028 731,747 1,757,563 4,024 390,388 56,478 31,273 24 17 7 5 14 23 1 11 3 4 19,970 4,374 3,363 1,320 7,934 21,212 87 5,635 835 726 3,306,476 722,781 281,048 142,858 1,347,199 2,821,460 5,282 720,482 116,567 71,377 2,931,974 655,613 245,805 134,112 1,200,779 2,520,874 5,074 686,044 94,186 68,651 1,984,755 487,556 159,962 84,964 886,344 1,665,689 4,122 461,458 72, 651 42,223 26 19 8 6 14 25 ll 3 5 20,647 5,525 3,904 1,644 10,005 20,653 87 7,278 1,002 1,042 3,571,287 856,354 346,525 204,552 1,641,770 2,775,515 5,823 848,936 132,577 140,784 3,125,647 757,732 309,947 187,355 1,463,674 2,498,464 5 547 814,642 125,692 134,975 2,184,036 576, 444 Kalisch Kieietz 203,146 123,723 1,032,097 1,643,013 4,637 583,150 80 868 Lomja. LubUn Plotsk. Souwalki Siediitz. 83 890 Total 92 62,818 8,772,751 7,655,658 5,541,012 109 66,456 9,535,530 8,543,112 5,849,733 118 71,787 10,524,123 9,423,675 6,470,004 CAUCASUS. Territory of the Cos- sacks of Kouban Koutais 18 22 2 1 7,441 3,714 209 875 916,222 269, 246 11,713 33,332 850,787 254, 627 11,582 30,457 541,825 103,277 3,420 4,428 20 22 2 3 10,901 3,746 219 1,552 1,430,835 277,811 14,426 93,545 1,360,627 266,770 13,327 88,882 846,337 99,204 2,233 20,669 20 15 13, 189 2,856 1,920,134 202,325 1,687,888 197,087 1,186,558 63 451 Territory of the Cos- sacks of Terek Erivan 3 1,138 124,752 98,929 34,930 Total 43 12,239 1,230,513 1,150,453 652,950 47 16,418 1,816,617 1,729,606 968,443 38 17,183 2,247,211 1,978,904 1,284,939 SIBERIA. Prov. Akmolinsk. .. . 1 3 1 4 2 30 530 119 492 186 664 19,400 13, 191 34,905 7,767 553 16,968 11,154 16,274 6,862 1 3 1 4 2 28 522 102 473 230 713 19,777 12, 189 35,857 11,010 609 16,503 10,655 15,335 10,695 2 404 42,229 41, 445 539 lenissetsk... 2,222 950 12,404 1,761 2,407 850 13,622 3,666 Prov. Semipalatinsk... Tobolsk., 1 4 3 93 469 390 11,456 36,701 14, 182 9,306 20,518 13,619 950 13,317 Total 11 1,367 75,907 51,811 17,337 11 1,355 79,546 63,797 20,445 10 1,356 104,568 84,888 19,750 Total for the Empire 773 M9,523 46,174, 14S 39,194,421 28,745,717 832 369,656 51,767,501 44,156,804 32,097,732 769 375,108 51,255,577 43,701,316 31,898,539 POLAND. Jan. 1, 1907. Jan. 1, 1908. Jan. 1, 1909. Warsaw . , . 29 22 8 6 17 25 1 11 3 5 22,148 6,250 4,047 1,789 12,394 21,415 86 7,914 1,145 1,284 4,143,605 1,041,429 389,733 246,491 2,077,453 3,651,453 5,844 989,919 174,066 198,080 3,439,386 897, 395 328,578 2,617,779 719, 702 9.VI R9A 36 25 9 8 25 30 5 15 7 8 25,555 8,137 4,972 2,268 17,179 26,506 584 9,188 1,803 2,674 4,916,416 1,571,763 632, 184 320,846 3,000,330 5,276,639 44,327 1,256,427 228,873 374,599 3,868,707 1,356,773 451,437 298,676 2,688,974 3,636,379 38,205 1,170,742 221,282 356,283 3,212,214 1,130,777 329, 566 206, 782 2,090,983 3,763,061 28,855 814,662 147,674 246,607 58 31 10 8 36 39 8 18 9 26 35,146 10,501 5,689 2,809 23,719 37, 490 1,488 11,185 2,318 7,964 6,209,639 2,065,721 664,811 443,041 4,119,089 7,081,209 113,636 1,692,843 277, 103 810,903 4,793,346 1,854,685 560,092 418,038 3,727,627 5, 102, 160 104,343 1,553,453 266,204 751,603 4,219,098 1,507,309 421 025 Kalisch Kieletz 226,069 154,078 1,835,846 11,398,018 2 785, 119 '2 437 7.^'i Lublin.... 2,922,569 5,057,099 83,560 1,140,825 176,782 562,371 Petrokow Plotsk 5,660 933,834 154,493 192,479 4,763 628,555 110,795 121, 334 Radom Seidlltz Total 127 78, 472 12,918,073 10,798,859 8,426,383 168 98,866 17,522,404 14,087,458 11,970,981 243 138,299 23,477,995 19,236,551 16,398,069 CAUCASUS. Batum 1 40 15 1 1 9 129 26,720 2,840 170 74 4,524 5,502 4,171,724 203,868 15,161 6,488 363,745 5,241 3,568,849 193,069 14,863 5,285 314,669 607 Territory of the Cos- sacks of Kouban Koutais 19 16 16,307 2,395 2,515,787 204,026 2,357,928 194,056 1,645,338 60,170 26 16 1 20,660 2,457 164 3,224,428 208,980 13,582 2,923,075 196, 193 13,229 2,064,177 66,870 5,379 2,764,275 65,116 3,478 104 Territory of the Cos- Tiflis Erivan 5 3,215 237, 738 215,266 76, 438 5 3,911 303,091 274,161 93,553 99,366 Total 40 21,917 2,957,551 2,767,250 1,820,824 48 27,192 3,760,081 3,406,668 2,229,979 67 34,457 4,765,488 4,091,976 2,922,945 SIBERIA. Prov. Akmoltnsk 1 3 1 3 3 387 99' 367 390 41,908 16,203 11,007 21,435 14,182 41,319 12,141 9,091 16,422 13,619 559 1,176 750 5,324 4,544 2 3 1 4 2 476 280 99 463 315 47,566 15,072 11,490 37, 266 19,850 47,049 12,032 9,253 16,354 18,187 775 1,107 850 13,242 4,716 2 3 1 4 3 12 550 270 94 461 477 1,174 50,563 12,822 10, 753 41,621 27,491 22,915 49,907 6,082 8,666 33, 267 25,663 17,247 2,404 752 Prov. Semipalatinsk. . . Tobolsk 430 17,652 5 464 Tomsk Provinces of the Ural 457 Total 11 1,233 104,805 92,692 12,353 12 1,633 131, 244 102,876 20,690 25 3,026 166,155 140,832 27,159 Total for the Empire 885 425,936 65,527,280 54,863,501 42,802,821 1,167 619,464 81,363,988 67,402,918 68,165,127 1,476 673,590 99,046,843 79,796,117 65,071,078 EUSSIA. 247 Total results for the mutual credit and savings associations from information supplied by the management of the small credit banks — Continued. Governments. Astraklian., Vladimir Vologda VoUiynla , Voronetz Vjatka Territory ol the Don Jekaterinoslaw Kazan Kalouga Kiew Kostroma Koursk Minsk Mohilew Moscow Nijiii-Novgorod Novgorod Orenburg Orel Penza Perm Poltava Pskow Ejasan Samara St. Petersburg Saratow Simbirsk Smolensk Taurida Tambow Tver Toula Ufa Kharkow. Kherson Tchemigow Jaroslaw Total for 47 Govern- ments of Emo- peanBussia Arkhangel Astrakhan Bessarabia Vilno Vitebsk Vladimir Vologda Volhynia Voronetz Vjatka Grodno Territory of the Don Cossacks Jekaterinoslaw Kazan Kalouga Kiew Kostroma Koursk Livonia Minsk Mohilew Moscow Nijni-No vgorod Novgorod Olonez Orenburg Orel Fenza Perm Podolia Poltava Pskow Bjasan Samara St. Petersburg Saratow Simbirsk Smolensk Taurida Tambow Tver Toula Ufa Kharkow Kherson Tchemigow Jaroslaw Totalfor47 Govern- ments of Euro- pean Bussia Jan. 1, 1904. Num- ber of associ- ations. Num- ber of mem- bers. 4S2 112 2,879 2,286 483 S,S44 831 178 503 76 7,335 1,212 1,634 2,088 1,438 3,421 173 3,484 7,490 6,815 1,004 324 14, 145 203 551 3,293 1,108 8,395 1,144 700 102 1,581 638 2,459 1,658 Assets and liar billties (in rubles). 27,042 2,193 60,578 62,500 9,618 13, 179 98, 766 15, 032 3,178 12,825 3,085 186, 140 32,794 97,386 69, 620 37,947 60,329 1,670 47,539 163,253 449,973 17,839 12,258 259, 836 21, 843 10, 910 63,073 26,723 674,956 43,850 17, 698 2,762 17,259 11,310 67,364 93,592 276 86,174 2,406,270 2,807,126 1,705,746 Loans granted (in rubles). 2,105 53,376 57,360 8,578 • 12,895 93,204 10,986 2,804 12,174 1,965 166,203 30, 730 92, 175 51, 170 30,673 47,368 1,462 45,783 141,402 420, 197 3,977 11,090 214,349 12, 149 10,251 58, 535 19, 429 528, 907 38,467 11, 726 2,276 19,072 14,211 76, 072 102,586 Deposits and amounts borrowed (exclud- ing those received from the State banks) (rubles). 23,805 1,000 40, 917 27, 122 4,383 1,568 23,480 3,930 6,645 117,347 25,811 72,738 40,449 13, 333 22,466 20 13,486 120,274 343,096 11,525 4,943 52,897 15, 105 5,297 27, 499 14,355 540,369 27,636 14,205 2 7,741 5,565 20,456 47,281 Jan. 1, 1907. 2,235 8,339 15,578 1,165 2,629 39,008 2,021 1 4 17 40 21 1 20 32 14 36 11 46 3 6 105 6 51 19 14 29 24 33 126 1,107 6,976 19,321 6,948 2,499 4,989 2,091 28,312 107,023 154,976 303,798 16, 196 52,922 952,660 68,168 1,776 2,091 7,406 9,329 8,239 72 6,342 19,345 3,812 26,086 2,681 19,963 1,527 3,070 64,525 1,062 11,847 7,442 7,239 24,392 6,708 3,740 6,380 15,746 6,690 62, 969 2,780 2,906 458,274 228, 932 803,689 104, 138 48,639 138,929 61,089 692,076 58,029 142,067 196,196 239,032 110,717 1,065 119, 904 269,316 .60,620 642,756 44,647 1,066,913 29,963 67, 953 1,516,471 73,861 259,102 212,546 141,618 2,002,480 185,815 86, 905 75,342 281,908 163,653 1,102,359 167,330 4,181 93,028 142,125 273,720 14,618 46,722 877,640 62,332 91,039 74,433 Jan. 1, 1905. Num- ber of associ- ations. Num- ber of mem- bers. 767 295 6,408 129 7,347 785 1,241 9,420 1,697 711 1,172 792 12, 733 1,375 1,802 4,091 2,709 5,149 796 6,279 131 13, 639 10,845 1,283 1,181 25,031 659 2,050 4,816 3,466 10, 435 2,025 1,611 300 6,656 1,239 9,382 1,778 730 Assets and lia- bilities (to rabies). 6,038 130,812 4,379 184, 612 18,206 36,026 194,319 29,032 22,235 31,517 16,223 320, 979 23,872 l''3,829 124,478 64, 106 76, 491 12,017 79,388 2,772 270, 127 601,301 24,242 26,665 447, 669 44,348 40,336 107,384 58,617 868,336 66,587 20,485 6,660 75,393 28, 175 199, 818 128, 767 11,260 Loans granted (in rubles). 34,920 4,990 112, 161 4,331 168,634 16,062 34, 102 176, 242 20,212 21, 862 28,912 15, 502 288,863 22,282 110,784 98, 133 56,856 70, 097 6,301 73, 942 2,761 231, 414 662,426 9,743 25,479 361, 263 22,212 33,863 96,698 39,866 710, 101 59,754 21,439 6,078 68,291 22,801 186,664 116,378 10,963 161,855 4,579,313 3,934,234 2,674,120 Deposits and amounts borrowed (exclud- ing those received from the State banks) (rubles) 38,564 2,066 88,143 65 104,562 5,992 9,127 63,054 11,420 3,073 18,670 4,985 219, 106 16,919 103, 452 74,769 19,686 32,362 595 33,549 7 192,723 449,637 14,040 12,822 76,224 19,236 14,697 49,246 31,417 726,756 46,588 20,946 416 21,047 10,738 70,866 65,694 975 Jan. 1, 1906. Num- ber of associ- ations. Num- ber of mem- bers. 1,609 940 9,185 181 666 17, 619 907 3,207 14,622 4,002 1,431 3,154 1,228 19,570 1,533 1,929 5,978 4,826 6,766 2,863 10, 963 1,480 19, 899 14,076 1,428 1,980 36,228 721 5,739 6,160 5,424 18,562 3,288 2,401 2,196 8,837 2,904 28,402 1,903 1,440 706 275,693 Assets and lia- bilities (In rubles). 77,277 22,928 170,825 3,020 17,242 448,444 28,910 109,800 577,613 54,632 41,246 78,429 32,510 492,277 41,276 131,636 154,514 120,879 98,430 46, 807 165, 433 21,087 444,672 778,326 25,806 41,813 871,387 53,919 133,797 162,015 92,073 1,627,092 115,674 49, 817 28,061 106,850 66,536 510,979 136,301 24, 188 8,104,319 Loans granted (in rubles). 67,860 19,888 146,699 2,814 15,951 406,076 26,413 106,281 522,506 47,200 36, 981 73,049 30,804 453, 481 35,953 116,347 127,770 100,082 90,078 39, 111 157,716 19,981 369,512 700, 103 11,964 39, 721 718,029 28,620 122,213 148,648 76, 436 1,261,828 101,681 37,452 24,862 82, 160 55,768 481,619 120, 993 21, 212 Deposits and amounts borrowed (exclud- ing those received from the State banks) (rubles). 7,064,841 62,581 14, 111 104,229 3,397 239,085 14,320 48,446 375,835 14,682 7,509 42,050 12,585 330,063 33,199 110,399 88,088 34,851 41,986 7, 734 64, 682 2,921 295,196 604,267 16,602 27,592 167, 881 22, 809 40,682 81,617 49, 898 1,266,063 65,566 38,838 1,646 51,878 23, 129 167,427 73,776 4,614 4,642,233 Jan. 1, 1908. 217,838 716,030 92,511 43,749 126,977 58,058 624,239 50,879 117,412 162, 133 202,278 103,124 1,039 113,743 254,913 64,833 541,927 43,263 928,442 8,662 54,621 416,640 36,391 245,608 195,492 114,447 1,700,241 168,448 59, 153 65, 817 255, 853 139,348 1,031,699 164, 744 39,025 13,073,614 158,003 616 8,743 501,028 18,303 123,656 482,172 34,036 10,034 84,880 20,530 422,650 48,401 115, 736 111,964 52,502 37,118 19,600 93,849 10,122 394,690 10, 660 816, 751 20, 704 39, 892 70, 167 34, 562 80,068 109,855 103,448 1,535,661 100, 726 66,838 8,386 137,499 63, 865 421,262 83,463 15, 194 65 10 32 101 39 1 50 49 42 13 27 13 102 15 138 6 60 19 22 41 48 13 42 69 56 172 24 11 11,633,462 6,921,792 4,307 24,910 93 28,016 2,033 5,935 69,334 10, 905 23 13,089 24,396 17,090 4,156 8,211 6,958 43,090 2,040 2,262 9,643 18,620 11,675 104 10,514 32,140 10,177 40,766 6,102 32,198 3,571 6,642 77,292 1,480 17,345 8,512 11,251 31,256 14,409 6,211 13,084 29,489 14,735 81,069 7,137 -5,124 1,850 767,194 206,460 569,889 1,242 559,651 36,382 101,971 ,773,035 206,238 5,804 432,611 1,027,934 218,933 67,846 235,928 123,197 1,020,026 79,761 166,838 264,817 410,986 153,296 2,097 204,691 467,728 169,322 1,149,263 141,188 1,537,718 43,617 92,805 1,820,437 87,829 363,439 227, 730 219, 503 2,606,108 317,550 134,126 125, 784 468,606 357,564 2,289,447 279,848 73,600 20,830,993 180,898 631,963 306 499,549 30,667 94,715 1,531,603 182,979 1,763 406,221 922,525 192,529 62,652 218,406 117,614 921,898 71,980 131,430 218,861 352, 808 139, 165 1,064 181,913 436,196 156, 869 938, 174 . 133,905 1,377,355 24,501 81, 712 652,127 43,526 339, 879 204,444 19, 922 2,048,633 274,340 96,922 104, 261 365, 783 311,487 2, 147, 513 259, 633 64,366 18,072,323 140, 194 276,926 242 287,198 4,488 47,233 1,004,626 65, 953 2,071 219, 768 643,866 60,361 16,476 143,723 24,429 614,780 69,226 122,606 144,070 290, 144 58,439 63,253 159,569 25,126 781,977 47,008 1,108,046 21,776 56,676 539, 915 34,416 154,439 112, 169 105,986 2,193,045 212,601 94,732 34,560 254, 123 142,407 1,244,385 106,379 33,680 11,853,074 Jan. 1, 1909. 11 37 101 1 2 88 13 61 122 82 2 73 62 67 18 37 26 118 1 3 73 35 1 34 93 36 101 28 99 12 35 157 4 73 26 31 50 62 26 63 97 81 205 56 17 1,336 8,985 62,-621 136 200 41,912 3,210 14,110 97,657 31,371 283 21,606 29,984 29,000 7,392 12, 602 10,516 53,455 94 2,591 3,323 12,929 23, 716 14,073 108 16,618 54, 060 16,423 67, 607 10, 142 47,741 5,286 11,607 98,019 1,687 26,265 12,158 15, 867 36, 596 21,556 10, 497 22,951 48,955 27,792 106,643 16,258 8,656 2,446 1,155,282 21, 393, 1,542, 1, 4, 870, 62, 225, 2,864, 459, 816,847 1,132,324 372,692 96, 163 342,709 229,242 1,153,449 10,661 127,184 177,346 326, 496 -506,050 196,009 2,386 349,072 885, 688 235,262 1,902,940 233,370 2,021,228 69, 161 202,888 2,246,573 69,000 581,538 287,608 316,390 2,888,418 420, 167 236,614 231,020 761,325 654,498 3,246,845 476,181 116,863 30,373,148 20,096 314,862 1,461,264 1,668 4,298 784, 269 57,610 207,801 2,568,069 385,732 6,324 760,747 1,044,269 336,950 79,743 321,646 210,824 1,044,462 10,637 101,476 154, 149 266,276 449,412 178,171 1,436 303,482 811,954 212,394 1,684,683 224,657 1,827,249 40, 065 185,596 1,974,865 37,891 535,919 269,376 278,482 2,415,336 360,319 165,237 201,514 627, 131 600, 429 2,902,369 463, 647 108, 610 26,860,772 2,903 246,594 851,127 761 642 469, 662 8,257 29, 795 1,404,832 219,226 3,593 482,406 707,216 118,361 26,538 196,997 65,293 688,498 9,195 107,436 130,067 167,817 156,198 76,603 130, 969 289,738 48,723 1,187,758 92,541 1,337,810 36, 739 118,233 876,306 21,211 281,118 145,392 143,664 2,287,368 216,638 163,638 102,429 409,683 315,460 1,927,480 168,691 67,632 16,606,896 248 a,CtEICultural cooperatioit in eubope. Total results for the mutual credit and savings associations from information furnished by the management of the small credit banhs — Continued, Jan. 1, 1904. Jan. 1, 1905. Jan. 1, 1906. Governments. Num- ber of associ- ations. Num- ber of mem- bers. Assets and lia- bilities (in rubles). Loans granted (in rubles). Deposits and amounts borrowed (exclud- ing those received from the State bank) (rubles). Num- ber of associ- ations. Num- ber of mem- bers. Assets and liar bilities (in rubles). Loans granted (in rubles). Deposits and amounts borrowed (exclud- ing those received from the State bank) (rubles). Num- ber of associ- ations. Num- ber of mem- bers. Assets and lia- bilities (in rubles). Loans granted (in rubles). Deposits and amounts borrowed (exclud- ing those received from the State bank) (rubles). POLAND. 1 1 1,433 606 99,852 26,301 107,627 27,910 93,828 24,175 1 1 2 1 15 1,680 860 254 546 9,432 91,965 30,125 10,256 37,133 681,844 79,389 29,673 9,542 31,141 518,768 81,955 26,399 6,314 30,977 490,449 1 1 2 1 15 1,727 929 464 1,156 11,159 103,522 44,604 32,999 75,187 674,730 73,159 38,701 25,253 70,657 567,618 94,310 Kalisch 39,014 28,260 67,042 579,609 1 12 245 6,699 17,293 482,612 16,848 413,009 .lUrl Plozk .Total 15 8,980 635,242 556,010 539,246 20 12,772 751,323 668,513 635,094 20 15,435 931,042 775,388 808,235 CAUCASUS. Territory of the Cos- sacks of Kouban 1 116 6,962 6,845 2,055 4 1 11 2 2 728 35 3,836 571 99 17,449 1,013 139,458 21,495 3,418 15,804 970 127,480 21,299 3,223 3,498 16 1 13 6 2 2,747 35 5,934 2,156 100 73,873 1,073 276,231 95,413 3,655 57,121 932 248,773 90,330 3,300 26,747 8 1,391 47,688 46,818 27,952 104,796 9,748 80 218,996 48,902 231 Territory of the Cos- 2 97 3,394 1,224 155 Total 11 1,604 58,044 64,887 30,162 20 5,269 182,833 168,776 118,122 38 10,971 450, 145 400,456 294,876 SIBERIA AND CENTRAL ■ ASIA. Province of Akmolinsk Tobolsk 2 1 1 572 133 149 8,798 1,103 1,149 7,882 1,020 1,112 3,439 4 1 2 738 163 487 11,773 1,341 4,335 10,497 1,192 3,264 4,214 170 630 6 956 18,302 16,702 7,286 108 4 1,303 18,311 15,248 10,862 Total 4 864 11,050 10,014 3,547 7 1,388 17,449 14,953 5,014 9 2,258 36,613 31,950 18,148 Total lor the Empire 306 97,612 3,511,460 3,027,181 2,278,700 536 181,284 5,530,918 4,786,476 3,432,350 773 304,357 9,522,119 8,272,635 5,763,492 Jan. 1, 1907. Jan. 1, 1908. Jan. 1, 1909. POLAND, Warsaw 1 1 2 3 16 1,711 976 617 2,494 12,557 112,030 58,939 46,915 145,009 794,808 74,142 40,914 34,577 137,667 653,836 103,464 51,941 41,034 130,019 698,155 2 1 4 5 16 1,806 988 1,653 4,546 14,837 114,787 81, 148 113,887 316, 365 1,068,005 80,271 54,643 105,328 296,309 900,785 102,976 73,065 100,896 280,953 966,377 4 1 6 7 16 2,454 1,202 3,263 7,759 16,998 150,026 84,053 233,685 555,163 1,435,184 116,123 75,694 224,015 533,925 1,204,720 128,734 74,509 210,307 499,154 1,326,285 Kalisch Lublin Plozk Total 23 25 1 16 11 18,355 7,639 33 8,436 4,542 1,157,701 250,412 1,058 412,716 267,152 941,136 1,024,613 28 23,830 1,694,192 1,437,336 1,524,267 34 31,676 2,458,111 2,154,477 2,238,989 CAUCASUS. Territory of the Cos- sacks of Kouban Koutais 210,402 981 375,331 241,080 134,820 58 316, 699 118, 227 58 2 28 14 1 2 20,010 130 13,945 7,044 45 148 898,628 3,022 682,545 325,728 4,576 2,937 770,883 2,880 591,404 290,085 4,160 828 561,860 96 5 36 23 2 2 35,706 912 19,696 9,520 114 134 1,855,203 20,964 1,014,724 458,898 10,263 3,141 1,498,651 17,189 891,608 418, 451 8,282 2,666 1,304,019 2,439 765,754 201,090 2,403 Stavropol .. 547,511 253,529 Territory of the Cos- sacks of Terek Tiflis 2 100 3,315 3,169 240 Total 55 20,750 924, 653 830,963 570, 044 105 39, 322 1,917,336 1,660,240 1,262,009 164 66,082 3,363,193 2,836,847 2,275,705 SIBERIA AND CENTRAL ASIA. Province of Akmolinsk Jenisseisk 7 1,370 25,844 23,567 8,994 12 2,020 41,800 38,889 17,703 15 3 1 1 1 6 18 1 1 2,865 396 305 143 344 1,471 10,482 69 115 58,642 10,744 16,601 6,299 6,427 42,465 199,343 2,010 8,380 55,089 9,131 16,535 6,206 5,610 35,747 170,778 854 8,875 22,060 1,957 5,200 25 2,366 27,559 126,799 Transbaikalia Maritime Province Province of Semipala- tinsk 1 4 11 220 758 5,258 2,830 19, 460 88,005 2,072 17,060 72,827 934 12,298 53,206 Tobolsk 1 6 268 2,362 3,812 32, 176 3,072 24,960 2,250 15,526 Territory of the Ural Cossacks 1 89 8,060 7,030 2,278 1,532 Total 14 4,000 61,832 51,689 26,770 29 8,344 160,155 137,678 86,419 47 16,190 350,911 307,825 187,498 Total of the Em- pire . . . 1,199 501,379 15,217,800 13,457,140 8,543,219 2,012 838,691 24,602,676 21,307,577 14,726,660 2,691 1,269,230 36,545,363 32,159,922 21,209,088 BITSSIA. 249 COOPERATIVE INSTITUTIONS AT NIKOLSKOE-TROIZKOE. COOPERATIVE LOAN ASSOCIATION. Evidence op the Officials. Nikolskoe-Teoizkoe. Q. What is the name of this cooperative society '( A. The Cooperative Loan Association. Q. Does the association operate under a cliarter, and where is it obtained? A. The credit associations have a regular model — that is, there is one model for all credit associations in Russia, and these regulations were made in 1905. Q. Where did you get permission to begin business ? A. Permission for small credit associations comes through the government committee of Yaroschlav. This committee makes all examinations and sends an inspector to these local credit associations. This government committee makes a report and sends it approved to St. Petersburg. Q. When did the association begin business ? A. In 1910. Q. In organizing an association, how many members are required? A. This is an organization open to all, but it must have 20 original members. Q. Has this cooperative association any capital stock paid in ? A. All capital, all fees, are divided into a foundation capital, a reserve capital, and borrowing capital. The foundation capital comes from diflferent sources. The first source is the Imperial Savings Bank, the second source is the rural council, and another source is different persons. The reserve capital is augmented from the profits — that is, the deposits bring money to the society. Money that is borrowed is secured from the Imperial Bank on short time. Q. Wliere do they get the money belonging to the society — through membership dues ? A. No. Credit associations own shares. They own capital — that is, the foundation capital; but there are funds for special purposes consisting of money furnished by the members of the association. Q. In what way do they furnish it to the association ? A. Special capital is the money which members give the association under the constitution of tlie general assembly. There are three types of deposits. When a member enters the association he gives 1, 2, or 3 rubles, according to his financial condition. That is what he begins with ; he puts that in immediately when he becomes a member. Q. Are there any other payments to be made after that? A. There are the expenses on buildings and on the granary; these expenses must be repaid by the mem- bers. In order to cover the expenses on buildings, all members pay equal amounts. Q. How many members has the association at the present time ? A. One thousand one hundred and thirty members at this time. Q. If a member dies or withdraws, does the association pay back any money ? A. No money is paid back. Q. What rate of interest does the association pay on money put here for safe-keeping ? A. The interest on money loans is 10 per cent; on loans by installment, on tools, machinery, seeds, etc., it is 8 per cent. Q. For how long are these loans made ? A. They are loans for both short and long time. Short-time loans are granted for not more than one year; long-time loans are granted for one to three, and even for five, years. Q. What security does the association require on making these loans 1 A. Most loans are granted without security. They are so-called "personal loans"; but sometimes they are granted under surety and pledge. Q. Does the association ever grant loans on land as security! A. Land can not be pledged as security. Q. Does the association find it necessary to borrow money from the Imperial Bank ? A. Up to May, 1913, this association had borrowed from the Imperial Bank 30,500 rubles. Q. Wliat rate of interest does the association pay to the Imperial Bank ? A. Six per cent at the present time, but sometimes 5^ per cent. Q. What security does the credit association give to the Imperial Bank ? A. The Imperial Bank grants money to the association on security of bills of exchange. When a credit association wishes to borrow money the Imperial Bank offers credit to the association to the amount of 31,000 250 AGEICTJLTUKAL COOPERATION IN ETJKOPE. rubles, and credit associations can receive money on this amount of credit. Then the board of directors writes a bill of exchange for the amount needed and transmits it to the bank, and the association then gets the money. The bUl of exchange is given by the board of directors. Q. Does the credit association receive deposits from people living here in the country ? A. This association has deposits up to May 1 amounting to 23,867 rubles. Q. Does the association pay the people who deposit any interest on their money ? A. The association pays three rates of interest — 4, 5, and 6 per cent. It depends on the length of time for which deposits are made. Q. On what deposits do you pay 6 per cent and for what period of time ? A. Four per cent on deposits without period; 5 per cent on deposits of not more than one year; over one year 6 per cent. Q. To what extent is a member of the credit association liable in case of loss ? A. To the amount of double his open credit. That means each member has an open credit of 100 or 200 rubles. If the member has an open credit of 100 rubles, then he must answer for losses to double that amount only; that is, this is a limited-liability association. Q. In granting these loans, is it necessary that the member shall state for what use it is borrowed ? A. Every member is pledged to give explanation to the board of directors for what purpose he asks for the loan. Q. Does the board of directors undertake to see that the money is used for the purpose for which it was borrowed ? A. The general assembly of these associations demands that the board of directors go and see for what purpose the member expends the loan. Q. Are the members of the association wiUing to keep the officers of the bank informed as to the actions of the different members ? A. Most of the membere are wiUing to explain to the board of directors for what purpose the loan is used. Q. Is the credit association inspected by any official from the Government? A. AH credit associations receiving money from the Imperial Bank are under its inspection. Q. How often are these inspections made ? A. Inspectors must examine every association once a year. Q. Do the officers of the associations have the management of the banks and the cash ? A. The councU of supervision must control the actions of the board of directors. Q. How often does the board of directors meet? A. Three times a week. Q. What officers are elected by the board of directors? A. The general assembly elects only three members and they divide the offices among themselves. One is the president of the board and one is the cashier. Q. Are these officers paid a salary? A. The members of the board of directors receive a salary. For each meeting each member receivas 1 ruble. Q. Are these officers paid an annual salary? A. The accountant receives 20 rubles per month. The cashier is a member of the board of directors and receives a salary as such. Q. Does this association own and run a granary? A. A granary is owned by the association. Q. Does the association sell grain? A. It does. Q. Does it sell for anybody except the members of the association? A. Only for members of the association. Q. In case this association were to receive more deposits than are needed for members, what would it do with the surplus? A. Buy Government stocks. Q. From what territory are the members of this association drawn? A. There is an area for action. In the area of the operations of this association there are 100 farms. Q. What is the maximum amount of loan to any one individual? A. On personal credit 300 rubles. On pledge 500 rubles. Q. Are women admitted to membership? A. As proprietresses of farms, but not two members from one family. RUSSIA. 251 Q. This association does not lend money on mortgage — that is, on land? A. There are no mortgage loans in credit associations. In the same building in which the association has its rooms, there were located a cooperative library of 600 volumes, where the books might be read but not taken out, and a cooperative restaurant, where they charge just enough for the meals to cover their actual cost. COOPERATIVE BUTTER AND CHEESE FACTORY. jEviDBNCE OF THE ■ Officials. It was learned that all the milk of the members was brought to the factory and that one half of the price is paid to the party at once. The skim milk is returned to the owner, the butter and cheese are sold, and there the other half of the price is paid to the member for his milk. Q. Do you sell butter cooperatively and do you have distributing points, or where do you sell it ? A. The manager who has the confidence of the people sells the products, having the right to do the commer- cial business. The general assembly decides what price shall be paid for milk. Q. Do they have any special agent to dispose of it? A. The manager sells it as best he can, but he has no special market. There has just been started a large association for selling nulk products, but as yet it has no influence. This association will enter that organiza- tion. Q. Do all the profits go to the members of the cooperative association in proportion to the shares or in pro- portion to the nulk they produce? A. Two per cent of the profits must go to the reserve fund. The members are paid exactly for the milk brought. A member gets 50 kopeks for 40 pounds of milk. Q.' What is the skim milk used for? A. For hogs and calves. LOCAL COOPERATIVE STORE. Evidence of the Officials. Q. Is there any other store in this place like this ? A. There are private stores. Q. Are their prices higher than they are here? A. They have to come down to our prices. Q. Well, they must make a profit. I was wondering whether or not you could pay the manufacturers unless you kept the prices at a certain figure. Are their prices higher than yours ? A. We have no such syndicate here as in other countries. The manufacturers have one price and each buyer buys at that rate. Q. Then the manufacturers make no difference in the wholesale price? A. No. KHARKOFF. KIEV, AND NEIGHBORING DISTRICTS. Report of a Subcommittee. KHARKOFF AGRICULTURAL SOCIETY. Kharkoff. This society was founded about 1880, and is one of the oldest as well as one of the best societies in Russia. Between 1880 and 1904 there was very little activity on the part of this organization and it accomplished com- paratively little for the farmers. After the peasants' revolt, however, a new life was given it, since which time it has been extremely active. It should be noted that the purpose of this society is " to promote agricultural development." The members of the society are not small farmers, many of them not farmers at all. Only a comparatively small number of landlords who are large property owners are members. The membership is largely composed of experts of one kind and another and public-spirited citizens who live in the cities of Kharkoff and the neighborhood and are interested in the development of agriculture from some point of view. On being questioned as to whether or not this group of nonfarmers was really interested in the encour- agement of cooperative organizations among farmers for the benefit of the farmers, the officials and members affirmed that they were interested and actively engaged in promoting cooperation. They also produced liter- ature which substantiated this position. Among this literature were pamphlets pertaining to cooperation, showing the advantages thereof and the methods of organization — pamphlets containing written constitutions 252 AGEIGULTTJEAL COOPERATION IN EUROPE. and by-laws for cooperative societies and literature presenting to the farmers, both peasants and landlords^ the advantages of organized effort of many kinds. All these societies have headquarters at Kharkoff and belong principally to the Government of Kharkoff, nevertheless their activities extend to several neighboring gov- ernments, where these organizations have rapidly extended in power. This agricultural society is recognized not only by the local governments but by the Government of the Russian Empire, and receives a considerable sum annually from the National Government as well as from the local governments. The agricultural society is divided into 34 principal departments, each of which is under the direc- tion of an officer whose duty it is to push with all his might the work of his department. The principal depart- ments described in detail during the morning were as follows : 1. TTie agricultural bureau. — This bureau acts as a sort of clearing house or wholesale society for local cooperative purchasing societies. Thus, during the year 1912 the agricultural bureau handled about $1,000,000 worth of seeds, implements, and fertilizers for the local cooperative societies which the agricultural society has succeeded in establishing. It should be noted that this agricultural wholesale department does business with a view to a material profit, but at the same time is able to serve the local societies to a considerable extent. The profit secured from this department is used for the publication of literature, for popular educa- tion, and for promoting the work. 2. Live-stock department. — This department up to the present time has devoted itself largely to the en- couragement of local exhibitions or fairs. In this way it is believed that the live-stock industry will be greatly promoted, as farmers are encouraged to purchase animals and to develop the industry. This depart- ment also maintains lecturers, who go among the peasants teaching the grading of Uve stock, better breeds, feeding, etc. The hve-stock department really operates a traveUng chair or itinerant hve-stock professorship. The last activity of this department is the determination to organize among the peasants live-stock breeders' associations. This work, however, is so new that no details were secured, although the plans are thoroughly outlined in the literature furnished. 3. Department of horticulture. — Like the department of Hve-stock, the department of horticulture has during the last seven years devoted much time to the estabUshment of horticultural expositions. It has also devoted much time to the education of farincrs and has helped to bring the fruit industry to a higher standard. The department of horticulture has leceiitlj' established a fruit store, which is in the nature of a wholesale society, but has a retail department. This store secures the fruit from the farms and sells it to the people living in the cities, as well as to the people outside when the surplus permits. The latest development of the department of horticulture is a scheme to purchase the necessary supphes for the local farm groups. 4. Department of agricultural science. — This department is principally interested in the promotion of agriculture and finds that the best way to do this is to encourage the establishment of agricultural courses in the country schools. The two most important activities of this department are as follows: (1) It maintains a bookstore and sells pamphlets, books, etc., to the country schools and to country people generally. (2) It operates a school-supply factory and manufactures all kinds of school supphes, including maps, charts, desks, and schoohoom equipments, which are sold directly to the country schools. 5. Department of plant breeding. — ^This department is largely devoted to the improvement of seeds and maintains a small laboratory, where seeds are tested, etc. 6. Department of refrigeration. — ^This department is interested in the investigation of transportation, especially with reference to perishable agricultural products. 7. Seed-control station. — This department is interested in the establishment of governmental test or control stations to secure clean and good seeds for agricultural purposes. It is largely interested in legislation and the supervision of agricultural planting. 8. Departm,ent of alcoJiol production. — This department is interested in experimentation and instruction in connection with the promulgation of methods of extracting alcohol from the various fruit products which could not otherwise be used to advantage. 9. Department of experimentation in potatoes. — Every effort is being made to encourage farmers gen- erally to devote at least a small area to the cultivation of potatoes. 10. Laboratory of technical chemistry. — This department maintains a laboratory and conducts various kiods of tests and experiments. 11. Agricultural implement department. — The particular purpose of this department is to encourage the introduction of all kinds of agricultural implements, and exhibits of models are maintained, which are brought to the attention of the farmers in concrete forms as well as by means of literature. 12. Department for supplying farmers with household needs. — ^This department is comparable to the first department in that it is a sort of wholesale department interested in securing such staple articles as tea, sugar, etc., at wholesale prices. RUSSIA. 253 13. Bailroad tariff bureau. — ^This office is interested in the study of transportation problems and is fighting for better rates for farm products. 14. Department of publications. — This department is in connection with the bookstore, but is a sepa- rate department operating a printing estabhshment. Among other things this department issues regularly five periodicals, as follows: (1) The Agricultural Monthly, largely devoted to rural economic problems, much attention being given regularly to the problems of cooperation. (2) The Agricultural Weekly, a weekly paper more popular in form and largely distributed among landowners and farmers. (3) The Farmer, also a weekly paper, but published only for the peasants. It is in popular form, very simple in every way, and reaches the peasants largely through a few local officials, students, and leaders, who read and talk with the peasants who are illiterate. (4) Bulletin of Local Cooperation. This is a special series, published irregularly, and deals strictly with all local cooperative problems. (5) Bulletin of the American Agricultural Bureau. The Kharkoff Agricultural Society maintains an agricultural bureau in the United States, with offices at MinneapoHs. This bureau arranges for the purchase of seeds, sample machinery, and gathers information from the experiment stations, all of which is sent to the Kharkoff Agricultural Society's headquarters. Anything seemingly impor- tant for local use is translated into the Russian language, and bulletins are issued showing the agricultural con- ditions in the United States. In addition to these regular bulletins, many miscellaneous bulletins pertaining to the peasant side of agriculture, as well as to the technical side, are printed. From this department a complete set of buUetias was secured, bringing out all the work of the agricultural society and showing that it is a really powerful organization. 15. Department of agricultural cooperation. — There are now in Russia some 20,000 agricultural cooperative societies, of which, probably, 10,000 are cooperative banks. In 1912 about 10,000 cooperative banks formed an association of rural societies and estabMshed The People's Cooperative Bank of Russia, with headquarters at Moscow. Formerly the farmers paid from 40 to 60 per cent interest; but as a result of the last few years of activity they are now able to secure money or credit at from 8 to 12 per cent, although in some districts 15 per cent or more is still paid, even where cooperative credit societies are established. There are 10,000 cooperative societies in Russia which are interested in distribution — ^in other words, in buying and selUng for farmers. About 7,000 societies are more or less in direct touch with this organization. The department of agricul- tural cooperation furnishes inspectors or promoters, who go about the country supplying hterature, organizing farmers into cooperative societies, and conducting meetings generally. The most recent result of these efforts was the organization of several beet-selhng societies. The agricultural society of Kharkoff is supported by money secured from three different sources: First, many of the departments are paying considerable profits; these profits are used for the support of other depart- ments which make no profits. Second, the National Government annually appropriates a considerable amount of money, varying from year to year, for the support of the experimental departments. Third, the zemstvo, or local government, also appropriates money annually for the support of this society, largely for administrative expenses. CREDIT INSTITUTIONS AROUND KHARKOFF. Khaekoff. In the district around Kharkoff the rural credit societies, which are strictly commercial or short-time per- sonal credit organizations operating among the very poorest class of farmers, are modeled very closely after the Raiffeisen banks of Germany. Copies of the constitution, by-laws, and rules of operation of these banks were secured, as well as statements showing the extent to which these institutions exist. The second type of rural cooperative credit institutions are known as loan and savings associations. These are share-stock institutions, some with limited and some with unhmited liabiUty features, with large membership, very similar to the Schulze-Dehtzsch banks of Germany. The Schulze-Delitzsch banks appeared first some 40 years ago, but at that time they were largely subsidized by the Government, were largely the institutions of the landowning farmers of the more important type, and did not serve the peasants except indi- rectly. Indeed, it was found that the members of these institutions, having secured a subsidy from the Gov- ernment, were using it to exploit the peasants. After some time most of these institutions disappeared by mutual consent or by general dissolution. During the last five years, however, the movement has again been undertaken with modified laws, and now the growth is very rapid. The general difference between these two types of institutions is that the Raiffeisen type of institution has absolutely no share capital, whereas the Schulze- Delitzsch is based upon share capital as a foundation. In 1895 laws were passed which encouraged the devel- opment of the latter institutions. In 1904, following the peasants revolution, new laws were enacted, which resulted in a much more rapid development of both types of credit societies. The source of money for both kinds of institutions are the government and postal savings banks. These two sets of government savings banks loan largely to the local and very small credit societies. 254 AGEICTJLTUKAL COOPEEATION IN EUROPE. The other set of rural credit societies was referred to as "peasant institutions." These societies are of very early origin and have existed probably for hundreds of years. They have many of the characteristics of Raiffei- sen banks ; but, not conforming strictly to the laws which now exist in Russia, they are little aided by Govern- ment institutions, and are rapidly dying out or being replaced by the Raififeisen societies. It is true, however, that a considerable number of these peasant societies still exist, some being in good condition. It was particu- larly noted that these institutions are strictly peasant societies, as no others than peasants may belong. Aside from the Raiffeisen banks and the Schulze-Delitzsch or loan and savings societies, which are closely related to the central government savings institutions, and the peasant institutions just described, the district is thoroughly covered by a set of institutions known as the zenlstvo banks. These correspond to what are known in the United States as State banks. The State government establishes a central State bank. This State bank establishes branches in each of the counties, and each of the county banks establishes local societies among the people in the smaller com- munities. The county zemstvo acts as intermediary between the local and State banks, and therefore the county banks are in the nature of clearing houses. The local zemstvo banks or credit societies, which are rapidly being established, are parallel to the Raiffeisen and the Schulze-Delitzsch and peasant institutions described above. These two sets of institutions are doing the same character of work, but there is no conflict so far as general policy is concerned. The local zemstvo banks, as well as the county zemstvo and State banks, deal not only in credit, but also maintain stores, warehouses, supply depots, etc. The State bank, through the county bank, starts the local bank or credit society by making a loan. This is, in fact, a loan and not a grant. The State bank charges 4^ per cent interest on this foundation or starting capital. The local institution is allowed a period of 13 years in which to return this foimdation capital or original loan. During this time the local institutions must charge a sufficiently high rate of interest on all business done, or must in other ways seciire surplus, so that at the end of the 13 years they wUl not only have returned the original money borrowed, but will also have saved that amoimt of money with which to continue as an inde- pendent institution, the foundation capital being equal to the original grant or loan. In order to be sure that the State bank does not lose this original loan, arrangements are made by which the local institution pays back one-thirteenth of the original loan each year, and therefore a form of amortization is found to be in satisfactory operation. The most interesting feature of these local credit societies, or local zemstvo banks, as they are called, is the fact that they receive deposits from all people in their vicinity. On these deposits they pay from 4 to 5 per cent interest, and thus compete with government and district savings banks. Not only is this the fact, but it was ascertained that these deposits by the people form a very large proportion of the working capital of these local zemstvo banks, additional funds being secured from time to time from the State zemstvo bank, as loans on current account through the county zemstvo banks, and also from outside institutions. On this point it was thought worth while to get more specific statements, and it was brought out that loans from other banks must not exceed in any case five times the foundation capital of the bank which is made up of the original capital loaned to the local banks by the State banks and any surplus which is accumulated. It was also brought out that these local zemstvo banks must at all times keep 20 per cent of their foimdation capital on hand, because the State bank makes the original loan and is closely related to the local banks through the county zemstvo banks, and the State government maintains a very strict supervision over all of these institutions. These local zemstvo banks loan only to members, who must state that the purpose for which they wish to borrow the money is for productive agricultural uses. The fact was brought out that peasant members are liable to twice the extent to which credit is granted, careful investigation having been made into the prop- erty, etc., of the members. Artisan peasants, as well as farmers, are members. The general work of the local zemstvo banks is classified in a rough way into three general categories. The first category was referred to as "small credit." In this category a member, who must be likewise a producer, is able to secure without any property collateral not to exceed 300 rubles. In the case of these loans every effort is made to secure an indorser, but much one-name paper is accepted and the banks find this quite satis- factory, although they prefer security. The second class of loans are those cases where members desire more than 300 rubles. Here from 300 to 1,000 rubles are loaned, but for this loan it is necessary to pledge personal or real property. If securities are not available (and generally they are not), it is necessary to give a chattel mortgage or a land-mortgage note of some type. The third class is a contradiction to many things that have been said, but it was brought out that nonproducers with good security and plenty of backing are able to borrow, but not to exceed 300 rubles. RUSSIA. 255 PRIVATE LAND-MORTGAGE SYSTEMS. Khaekoff. The longest term for which money is loaned is 66 years. The amortization system of makiiig payments by annual installments is in use. In addition to the annual installment on the origmal loan, interest must be paid at the rate of 4 per cent as the basis of operations. The cost of administration must also be included. The institutions described are exactly the same as those found in other parts of Europe. It should be kept in mind that the 4 per cent interest charged is on the par value, and the mortgage bonds issued may not sell at par. Sixty per cent of the valuation of the estate is the maximum amount which can be loaned. In the Province of KharkoflE dififerent land-mortgage banks are in operation. As a resiilt, when a farmer wished to borrow it happened frequently that he would wish to borrow more than some one land-mortgage institution would wish to loan to him. He therefore frequently visited other institutions and secured a higher valuation upon the land than was legitimate. It became necessary, therefore, some years ago for a system of valuation to be worked out, and at the present time the following general scheme obtains : The valuation made by the first bank to which application is made must be accepted by all other banks, and no land-mortgage bank is allowed to make a change in the valuation of farm property within five years It therefore is impossible for a farmer to refund his entire loan within two or three years, to secure a higher valuation, and to make a new mortgage for a higher amount. If he had already mortgaged up to the maxi- mum allowed (60 per cent of the value), even then, after five years have expired, a change is not allowed unless there has been a change in the value of the property, such as might be brought about by improved transpor- tation, improved drainage, the building of railroads, etc. There are two valuations made. The first is known as the normal or accepted valuation and is very low, so low that few are willing to accept it, and therefore they insist upon a special valuation. This valuation is made by a personal visit to the estate and a definite appraisal. The general policy in Russia is for two or three banks of this type to be operating in the same general area. In addition the peasant and nobility land-mortgage banks are in operation, and therefore no indi- vidual institution has a monopoly on the business, although they do business in exactly the same way. The foundation capital is of two types. The first is the share capital, which is under the careful inspec- tion of the Government. The second is the surplus accumulated, which belongs only to the shareholders, and is kept merely as a basis of strength. In order to control the amount of business done by banks of this type, the Government prohibits the issuing of bonds in amounts exceeding ten times the share capital. It is, there- fore, impossible for such an institution to enlarge its business by taking unlimited amounts of mortgages with- out at the same time increasing its share capital or loaning directly on mortgages from the reserve fund. At first loans were made largely to the nobfiity, the loans being very large on the average. At the present time small farmers borrow largely from these and similar institutions, and the average loan is small. Land values are rapidly increasing in Kharkoff. During the last 10 years land values have increased from 100 to 300 per cent. PEASANTS LAND-MORTGAGE BANK. Kharkoff. An institution, known as the Peasants Land-Mortgage Bank, was established about 1882 by the Govern- ment of Russia, to do business exclusively with the peasants. This institution at first gave assistance to groups of peasants — that is to say, the villages and communities, the offer being to assist these communities to come into possession of land. The average amount of land per family which was encouraged in the government of Kharkoff was about 81 acres. In different parts of Russia the Peasants Land-Mortgage Bank laid down a policy under which the amount of land per family varied according to the type of land, the general situation, etc. Under this system a group of peasants would apply to the bank for money to purchase land from the landlords. During this early period all the people who lived in the community were responsible for the entire amount of the loan; in other words, it was absolutely unlimited so far as liability is concerned. In the language of Russia, the liability was referred to as "round." The payments were divided among the members of the community in proportion to the ability of each to pay. About 1895 the Peasants Land-Mortgage Bank was given power to purchase entire estates from landlords, being given special capital for this purpose by the Crown. This land when purchased could then be divided and sold directly to the peasants. The new policy of the Crown was to establish small, separate, individual farms, whereas the earlypolicy of the bank was to loan to communities. The new policy of the bank is to purchase land, divide it, and sell the land directly to the peasants; also to loan money, not to the community but to the mdividual peasants, holding them individually liable. By this policy the bank, which is the instru- ment of the Government, proposes gradually to break up the community life and establish peasant proprietors, 256 AGEICITLTURAL COOPEBATION IN EUROPE. with the peasants living on their individual farms. Up to 1907 very little advantage of this new method was taken by the peasants, but since that time growing efforts have been made to establish the new system. As the result of the revolts of the peasants during the early part of this century, the landowners in many parts of Russia, and very largely so in the vicinity of Kharkoff, became greatly frightened. They were willing to sell, therefore, and the Peasants Land-Mortgage Bank was able to purchase large areas of land at low prices; hence there was a large banking activity. Between the years 1907 and 1912 some 16,000,000 acres of land passed through the hands of this institution, which had handled some 37,000,000 acres altogether during its entire previous life of 30 years. The new policy of the. land-mortgage banks in the reselling of large estates is to sell small farms, generally averaging from 21 to 27 acres. These farms, however, vary materially in size in different parts of Russia. About 75 per cent of all sales of land by the land-mortgage banks is now made to individuals, the balance of sales being made to communities. This is in striking contrast with the policy that was found in Italy, where community farms were being established. In 1906, by common consent, it was agreed that all lands granted to the peasants in 1862 were considered as having been paid for, so that the peasants were allowed to mortgage this land, which they did not have the right to do before. The credit given by the peasants bank is most Hberal. The general pohcy is to establish a period of repayment extending over 55^ years. The rate of interest charged to peasants, including amortization, cost of administration, and repayment of loan, amounted only to 4^ per cent. Any costs over and above this are borne by the Govermnent. The Government loans money to the peasants, the funds for this purpose being secured by the issue of bonds. The net interest rate on these bonds frequently amounts to 5 or 6 per cent, and, therefore, it is understood that the Government is losing money in this business. At the same time the Government is doing it for a purpose. It is stated by some that this facihty for buying land, which is given so freely and at so much expense by the Government, is one of the reasons for the very large increase in the value of lands during the last few years. NOBILITY LAND-MORTGAGE BANK. Kharkoff. Up to this point the Peasants Land-Mortgage Bank has been considered. It should be noted, however, that there was first established about 1882 a separate institution, Icnown as the Nobihty Land-I\Iortgage Bank. This institution was estabhshed to do business only with the nobility and had in mind the granting of loans to noblemen who owned land in Russia. In the same way that the Peasants Land-Mortgage Bank made special rates to the peasants who did business with it, even though at some sacrifice to the Government, so the No- bility Land-Mortgage Bank was more liberal than commercial banks. The institution does business with the nobility in the same way that the land-mortgage bank does with the peasants, the same rates of interest being maintained. The same foundation capital was given by the Crown to both institutions. This institution was established strictly for the nobihty, and no other persons were allowed to do business with it, except those who had purchased land from the nobihty which had been mortgaged by this bank, in which case such pur- chasers were allowed 10 years in which to settle the mortgage on the property purchased. The fact was brought out that the Peasants Land-Mortgage Bank and the Nobility Land-Mortgage Bank are strictly one and the same institution at the present time. In fact, by recent consohdation of their activities, though maintaining separate departments, they do business in exactly the same way. COUNTY BANK AND STORE AT VOLSCHANSK. VOLS'CHANSK. The committee was taken to the county zemstvo bank, which was referred to in the study at the capital. At the bank was found a small group of officers in three rather small basement rooms. In one room was a small safe, sufficiently large, however, for keeping the funds and a very simple set of books. Balance sheets were secured from this local institution showing the character of the work and the amount of business being done. The record was investigated and it was found that this small institution conformed in every way to the description already given. In connection with this county zemstvo bank a general supply station was maintained. This was found weU organized, different samples of all kinds of machinery and other general farm supplies being kept on hand. Not the least interesting thing was to find sewing machines there for farmers' wives, and it was ascertained that it was possible to purchase a sewing machine from this organization at about one-half the price paid for a similar machine in the United States. This cooperative association connected with the local government refused to buy some makes of sewing machines because the companies, although seUing at low prices, hold their prices above those asked for other equally good machines. The officials ckimed that they had reduced the price of sewing machines 50 per cent during the last few years. Among other institutions maintained by or connected with this county zemstvo bank was a very highly equipped hardware store, in which the prices of articles were found to be very low. This store is operated on KUSSIA. 257 a strictly business basis. A visit was next paid to a cooperative general merchandise store, which is also con- nected with the county zemstvo bank. This branch was as well organized as any of the others and carried on its business in the regular way. From this point the committee was escorted to the hospital and drug store, which are also maintained as cooperative institutions of the zemstvo bank. Doctors and equipment are maintained here, the hospital being provided for all kinds of emergencies. AGRICULTURAL SOCIETY AT KIEV. Kiev. A visit was paid to the headquarters of the Kiev Agricultural Society, an institution very much like the agricultural society visited at Kharkoff. The one special difference was that, as departments become strong and are able to stand alone, they have gradually withdrawn from the main society and become independent cooperative societies. The agricultural society, however, continues to take up new work, the most recent and important of which is the establishment of an exposition at Kiev. The grounds were visited and an institu- tion was found which will cost considerably more than a million. doUars for buildings which will cover about 60 acres of ground. This fair or exposition continues for four months and is complete in exhibits of live stock, agricultural implements, machinery, and all other things interesting to an agricultural population. Another feature of the work of the agricultural society is the laboratories maintained for the analysis for the members of commercial fertilizers, feeds, and soils. In addition to these activities, others similar to those of Kharkoff were found. In connection with the department having to do with the work of cooperation, it was noted that this department is interested in the promulgation and establishment of local credit societies, local stores, and various kinds of cooperative societies. Time did not permit of securing complete and accurate statistics as to the number of these institutions, but a map was furnished to the committee with fuU data shown thereon. As has already been said, the different parts of the agricultural society separate themselves from the main organization and become independent societies from time to time, as their business seems to warrant. One of these was an organization which was referred to as the "Syndicate of South Russia Societies for the Purchase of Machinery, etc." This is an organization which formerly was a department of the agricultural society, but it is now a separate cooperative society owned by the larger and more prominent farmers in the vicinity of Kiev and in other parts of south Russia. This syndicate maintains various divisions in the nature of stores and warehouses; the department devoted to the selling of grain was inspected and a copy of its report was secured. Another department was interested in supplying machinery, fertilizers, feeds, etc., to the farmers, and still another division is devoted to laboratory work in which samples of fertilizers, feeds, and soils are examined for members. This laboratory pays well, since the work is strictly on a commercial basis, proper charges being made. This society of farmers publishes a journal carrying to all members technical infornaation with reference to the activities of the larger farmers. A visit was paid to a central store interested entirely in the production of honey and wax. A consider- able number of farmers in each community form a local for the sale of honey and wax and for the purchase of supplies. There are 12 societies of this type and they have formed this central society. The store of the central society exhibited not only the character of work done and the supplies of honey and wax for sale, but also farm-equipment supplies available for distribution. This central society also conducts a small laboratory where every consignment of honey is inspected and stamped with the guaranty of this organization and sold for the members. This is one of the most valuable features of the cooperative organization. KIEV BRANCH OF THE STATE BANK. Kiev. Russia has a great central or imperial bank for the whole Empire. This institution maintains branches known as State banks in each of the Governments of Russia. Probably the largest and most thoroughly de- veloped branch is in the State of which Kiev is the capital. This branch bank was visited and it was found a remarkable structure, equal to any bank which any of the members of the committee had seen in the United States. This institution is clearly a commercial bank, is in close touch with the activities of commercial bank- ing, and loans immense sums through the various local banks of the State in which it is located. At this point there developed the most interesting feature of the work of the State bank so far as agricul- ture is concerned. During the last three years in Russia a great mass of agricultural products was marketed very quickly and a very low price was often received because of the rush in marketing. The entire Empire was seriously handicapped because of the lack of machinery for marketing products intelligently. As a result of this weakness in the marketing system, it was decided that the Imperial Bank of Russia should buUd through its different branches great warehouses for storing agricultural products which could be kept for several months. 14174°— S. Doc. 214, 63-1 17 258 AGEICULTUBAL COOPERATION IN EUROPE. The branch bank located at Kiev is an illustration, this institution having been granted a special foundation capital to engage in this Une of work. The method of procedure is as follows: The branch bank constructs a great elevator or warehouse. To this elevator farmers send their products, such as rye, wheat, oats, etc., the goods being placed in storage and properly insured for the producer who receives a written receipt for the same. On the strength of these warehouse receipts, the State bank will loan up to 60 per cent of the current market value of the products stored. At the time the committee was in Russia some 35 or 40 warehouses had already been constructed, and it was anticipated that, within two years, at least 200 of such elevators or warehouses will have been established. PEOPLES COOPERATIVE BANK OF MOSCOW. Evidence of the Officials. Moscow. Q. Is any of the stock of this bank owned by individuals ? A. Eighty-five per cent of the capital stock is owned by cooperative societies and 15 per cent by individuals; 850,000 rubles have been paid in by cooperative societies. Q. What cooperative societies are these? A. Raiffeisen societies, 786 in number. Q. What is the object of the bank? A. To give credit help to every kind of cooperative society, including cooperative stores. Q. Your business is confined to what section ? A. To the whole of Russia and Siberia. Q. How do the banks make apphcation? A. If one of the societies wants a special loan, it makes application here. The society must at the same time send a full report of its work and the report of the local inspector. There is a special inspector for each government or state, and he must certify to each report. In that case the application is looked over by the bank oflB.cials. Q. In granting these loans, do you require the borrowing bank to place its notes with you as surety ? A. A great part of the credit is given to Raiffeisen banks because they are under inspection. These inspectors supervise the work of every bank; so this bank knows the standing of the society asking the loan. Sixty-five per cent of all cooperative institutions are under the Raiffeisen system, and this is considered the best system. Q. Where a cooperative store apphes for a loan do you have a committee in that section to make inves- tigation of that store ? A. The bank has special inspectors who are sent to the places from which the applications come. If a loan is granted, it is guaranteed by the union of cooperative stores, for this union guarantees the payment of all loans made. All societies are under a imion and each union guarantees everything. Q. Are your losses small or great ? A. Very small; there are practically no losses at all. Q. Are the small bank losses great or small ? A. There is very httle loss by the small banks; their losses are only about 0.02 per cent. Q. Does this bank take deposits from individuals ? A. Yes; it can take them. Q. What rate of interest is paid on deposits ? A. Four and one-half per cent for deposits without term and 5 per cent for a term; for deposits of more than one year 5 per cent. All commercial banks of Russia give as much as 4 per cent on deposits without term. Q. About what rate do you get for loaning money ? A. For loans to correspondents — local banks — 7 per cent; for small cooperative associations 7^ per cent. Q. Does this bank borrow from the Imperial Bank ? A. Under the law the Imperial Bank could not make advances to this bank until it was 1 year old. Q. How are your loans secured ? A. They are guaranteed by special unions. Q. Do these banks grant loans on mortgage ? A. No; these banks are cooperative associations. There are other banks, noncooperative in character, which loan on mortgage for long term at a rate of interest of 5 per cent. Then there is a special State peasants bank, whose special duty it is to buy land for peasants. There are also special banks for mortgaging land. The idea of the Russian Government is to divide the commimal land in order that the peasants may own their individual farms. RUSSIA. 259 CENTRAL UNION OF DISTRIBUTIVE SOCIETIES. Statement by the Officials. Moscow. This union does business on a strictly commercial basis. It charges a profit as an ordinary business house would do, but the amount of the profit goes back to the society in two ways : First, it gives 4 per cent to the shareholders ; second, the rest of the money is divided in proportion to the amount of purchases any society has made. The society distributes to its members. The reserve fund makes the society commercially stronger. The profits of the union go to the tmion; while the profits made by the individual society go to the individual members of that union. This is merely a distributing society. Goods were bought by this central union and distributed to its membership in the year 1912 to the amoimt of 6,000,0(10 rubles on a cash basis — that is, 30 days' credit. IMPERIAL BANK OF MOSCOW. Evidence of the Officials. Moscow. The witness explained how loans are made to various credit associations, and stated that the bank was well acquainted with the workings of the credit associations through the system of inspection which pre- vailed. The bank knows the habUities of every credit association. It offers credit in two ways — namely, by bUls of exchange and by check. The bills of exchange are plain notes, in form practically the same as are used in American banks, given by bank to bank. These bank notes are signed by the president of the local association together with its board of directors. These notes are mostly for short-time credit. The Imperial Bank also gives credit for long term to the cooperative organizations. For the foundation capital with which to start a bank the loan is usually made for a period of 13 years; for granaries, etc., the loan is usually for 20 years. In the fall the peasants need money and are willing to sell their goods at almost any price. To prevent specTilation, the Imperial Bank grants money to the associations on the security of the grain. The Government takes the grain, puts it into these granaries, and loans money on it as security. Q. What rate of interest does this bank charge for money loaned ? A. For long-time credit it is 5 per cent ; for short-time credit it depends upon the money market. At the present time this bank charges 6 per cent on these short-time loans. Q. Does this bank require a certain deposit from a credit association in order that this particular credit association may borrow ? A. The Imperial Bank does not require any deposits in order to open credit. It knows exactly the h'ability of the organization to which it loans. The charter of the cooperative credit association provides that at least one-twentieth part of the whole capital shall be paid in stock in the credit association. This is a kind of reserve fund. The whole amount of credit open to associations of this kind (just of .this branch of the Imperial Bank) is 1,500,000 rubles. There are also organizations of the local government to open small credit. These also take their funds from the Imperial Bank, and the amount of money loaned to them is up to 3,000,000 rubles The savings banks have an organization of their own These have a special capital also of about 10,000,000 rubles. It is provided by law that 20,000,000 rubles each year must go to small credit associations. Q. How much interest does this bank pay a depositor ? A. Three and six-tenths per cent. Q. Does the Imperial Bank loan money on land or mortgage for a long term ? A. The bank now has a special bank for mobilization of land loans. It is the Bank of the Nobility — for the great landlords. The money that is loaned on land mortgage to peasants is loaned through the Peasants' Bank, which is a government bank. There is a special bank for the nobility. The Imperial Bank grants money in very few cases and in small amounts for amortization of loans. These amounts are loaned out on demand. Q. Can you tell us what time the Peasants Bank gives for the repayment of loans made by mortgage ? A. The Peasants' Bank gives obligations for 4^ per cent. Every year the borrower must pay not only the interest, but a certain amount of the principal back to the bank. He is allowed from 40 to 60 years to repay the loan. Q. Do you loan money to the nobility in the same way? A. Yes; we have three banks — the Imperial Bank, the Peoples Bank, and the Nobihty Bank. Q. In loaning money to peasants, what security is required ? 260 AGEICULTUKAL COOPERATION IN EUROPE. A. Almost all the peasants require money with which to buy land. They pay a small sum to the bank, the bank buys the land, and the land is the security. In other words, the bank buys the land and grants it to the peasant under mortgage. This is done by the Peoples — the Popular Bank. RURAL CREDIT BANK OF THE DISTRICT OF MOSCOW. Evidence of the Officials. Moscow. Q. Does this bank loan money to individuals or to banks ? A. Only to cooperative associations. Q. Does this bank receive deposits from private parties ? A. It accepts deposits from everybody. Q. Has this bank shares paid in ? A. The bank has no shares; but its capital is loaned by the zemstvo. Its foundation capital is bor- rowed from the crown bank and other sources; it has a revenue from taxes. Q. At what rate of interest does this bank loan to credit banks ? A. From 5 to 7 per cent; usually 6 per cent. If the loan is for three months, it is at 5 per cent; for six months, at 5^ per cent; for one year, it is 6 per cent. Six per cent is charged for loans to credit associations. Q. Does the bank charge a higher rate of interest on long than on short term loans ? A. This bank prefers short loans. This is a short-term credit association, and if money is borrowed for long' term higher rates of interest are charged. Q. This is a short-term credit association; do you make loans for 30, 60, and 90 days? A. The shortest time is for three months. It is not the custom to make a loan for a less period than three months. We prefer to make loans from three to six months. ZEMSTVO OF MOSCOW. Evidence of the Officiais. Moscow. The object of this government, or zemstvo, is to create competition in business with the merchants and money lenders, who are regarded as similar to trusts and monopohes. This government, or zemstvo, is seek- ing to bring about moderate prices and to take away the power of trusts and monopolies. It is not, how- ever, the main object of the zemstvo to compete with syndicates and trusts, as the zemstvo is itself a large organization. On accoimt of this organization, the selling prices of goods are now much lower than they used to be. Q. What of&cers are connected with the zemstvo and how are they elected ? A. The government of the local zemstvo is elected by all classes of the rural population of each district; the local zemstvos elect representatives, and these representatives, in joint meeting once in three years, elect representatives to the government or State zemstvo. Q. How many representatives are elected by the people ? A. The zemstvo for the whole government has 90 members; that of each district consists of from 40 to 60 members. The latter members elect five representatives, who have a joint meeting in Moscow. The mem- bers of the zemstvo for the government of Moscow are elected in Moscow. Q. Do these members elect one president ? A. The fuU 90 representatives of all the districts elect the president. Q. For how long is the president elected ? A. For three years. Q. Is that fixed? A. Yes; fixed by the government or State zemstvo. Q. Where does this zemstvo get its funds to loan? A. Every member of the rural population has to make a payment to the district zemstvo, which has to pay a certain percentage of its revenue to the government zemstvo of Moscow. The whole sum of this money wiU amount to about 9,000,000 rubles. It is about this amount that the government or State zemstvo receives every year for its business, and it comes through the people in the way of taxes. Q. Does this zemstvo loan money to private individuals — to farmers ? RUSSIA. 261 A. It is not the object of the zemstvo to grant loans to private people or to institutions. But, as time goes on, there appear many undertakings which want money, and the zemstvo is pledged to help certain indus- tries which have developed rapidly. So the government zemstvo does grant loans to such institutions some- times. Some years ago there were founded, to respond to these many wants, the so-called small banks for rural credit. The zemstvo loans to these rural banks, which are its own institutions. They are really small banks originated to help cooperative associations. The zemstvo understands that the subject of open credit is a very serious question, and it desires that this question should be answered quite fully. At first it wanted to give to the rural population the possibihty of borrowing for themselves. At that time it granted loans in the form of agricultural implements, etc. But now it has come to the conclusion that this is not the right way of doing things. It thinks that the population should be self-supporting, and its original idea is now modi- fi.ed. It has organized about 300 credit associations, which you have seen in the country, and they are the work of the zemstvo. Now, there are two objects in organizing such credit associations. First, it aims to teach the people how to do things. The zemstvo not only sends out instructors, but it also provides that the credit associations shall have easy money. That is why it has organized a number of credit banks where credit associations can get money on easy terms. The chief objects of the zemstvo, however, are not financial; it is rather concerned in the education of the population. In the second place, the zemstvo is concerned about communication and the buUding of roads; in getting communication, for example, between the rural popula- tion and the different villages and Httle cities. In the third place, the zemstvo deals with sanitary conditions, hospitals, and other institutions along medical fines. It also provides orphan asylums. After these interests come economical questions, such as the insurance of buildings, cattle, feeds, etc. It seeks to get statistical data and to promote agricultural work. All of these different aims can be studied only in the central union of this government zemstvo. It is impossible for the Government to satisfy all these interests of the rural population, therefore, it became necessary to organize the zemstvo in Russia. Q. Does this zemstvo receive deposits ? A. It is not financial. Some time ago the zemstvo granted implements as loans, but now the farmer must pay for his implements, and he may be granted a loan for this purpose. As I have stated above, the purposes of this zemstvo are for education, good roads, asylums, hospitals, veterinary science, insurance, etc. Q. How do you apply this money to elementary education ? A. The zemstvo first takes into consideration the wealth of the population; then it looks into the needs of the population — ^that is, what is most needed. Then it makes out plans for the betterment of aU the country. As to the question of education, the Government has now come to the introduction of a general education for everybody. After having learned of the needs of any particular community, the zemstvo seeks to help that community. When the officials have made inquiry they present a report to the assembly of the people, and the people decide how much money they can give. The people then confirm this or that plan, and the money is given. So it is known beforehand what the money wiU be used for. As to the question of insurance, that is obfigatory and nobody can escape it; but the zemstvo also teaches that it is better to build fireproof buildings. A CREDIT ASSOCIATION NEAR MOSCOW. Evidence OP the Ofpicials. Moscow. Q. How do you get your money ? A. It is withdrawn from the crown bank. This cooperative association has a credit in that bank — that is, an open account — and we give a check to get the money. It is not a loan, for we have an account in the crown bank, a balance to our credit of 30,000 rubles. Q. Is this bank operated on the Raiffeisen system? A. Yes. Q. This is a rural cooperative credit association ? A. Yes. Q. How extensive are its operations ? A. This association was founded four years ago. It now has a balance of 25,000 rubles. The organiza- tion was opened in 1908, and at the opening there were only 23 members present. The people did not show any confidence in the undertaking at first, but at the end of the year there were 331 members. At the present time there are 1,024 members, with an open credit of 61,000 rubles. Q. Where did you get the capital with which to begin the work ? A. The first capital was got from the crown bank. Q. As a loan or a gift ? 262 AGEICULTUKAL COOPERATION IN EUROPE. A. A loan to the amount of 500 rubles, and the crown bank charged 4 per cent for that money. The government bank has granted loans for different purposes to the extent of 8,500 rubles. Then there is a voluntary 2 per cent of each ruble of open credit for each member, which makes 1,000 rubles more. This capital is 1,000 rubles paid in by the members on 2 per cent; so there was 8,500 rubles from the government bank and 1,000 rubles more. Now, take into consideration the fact that the government bank did not grant the money very freely. This money was needed for commercial purposes. Then the members put upon themselves 10 per cent of open credit for the special use of commercial purposes. This 10 per cent makes a capital of 10,000 rubles; there are 21,000 rubles deposits, short credit in the bank is 30,000 rubles, the local government gives a credit of 60,000, the Peoples Bank gives 5,000 each year, and this makes a total open credit of 125,000 rubles annually. Q. Is this bank operated under a charter granted by the province ? A. Just the same as other credit associations; they all live under the same kind of a charter. Q. Does this bank receive deposits from people in this section 1 A. Only from people living in this district. Q. Does it receive deposits from nonmembers ? A. Yes. Q. What rate of interest do you pay on deposits ? A. The bank pays 5 per cent on call accounts; from one year and up it pays 6 per cent. Q. What rate of interest do you pay the crown bank for borrowed money ? A. Six per cent for short credit and 5 per cent for long-time credit. Q. Does this bank loan money on land; that is, mortgages? A. No; it is not allowed. Q. Is the amount limited as to any one member — is any one member liable to any amount ? A. The amount of the whole open credit to each member is 600 rubles; 300 rubles without guaranty and 300 rubles with security. All buildings on the land except the dwelling house can be taken as security, but the land can not be so taken. The dwelling house goes with the land and can not be taken as security. Loans are also made on cattle. Q. What rate of interest is charged by this association to members who borrow ? A. The first year it took 12 per cent because of the need of money. Q. How many directors has this bank ? A. Five members. Q. What are the officers ? A. A president, vice president, secretary, and two members. Then there is a sixth one, who does com- mission operations. Q. What officers are paid ? A. The first year no one was paid. Then the association got a little more money, so that now the presi- dent gets 900 rubles per year; the vice president gets 700 rubles; the commission agent, who does mostly com- mission operations, gets 700 rubles; a special bookkeeper gets 600 rubles; the cashier gets 300 rubles; and the secretary gets 400 rubles. Q. How often do the directors meet ? A. In the winter, three times a week; in summer, twice a week. The council of supervision meets every month. This council is composed not only of the directors but of other members, making a total membership of 10. Q. The 10 members are elected by the general assembly and meet once a month — the 5 directors meet weekly or oftener ? A. Yes; the general assembly meets twice or three times a year. Q. Is this association inspected, and how often ? A. An inspection is made every year. One year has passed since the last inspection. This inspection is made by Government officials. It is necessary to be inspected once a year by a credit inspector, and the local government also inspects. Q. What banking hours are observed ? A. From 10 to 12 o'clock in the morning, and sometimes are for a longer period. Q. Does this bank finance any other cooperative association ? A. The other cooperative organizations can enter this organization, but then they get money as members only. Q. You have an open credit account with other banks. Does the bank which opens an account with this bank require a statement as to the open accounts this association may have with other banks ? BussiA. 263 A. Of course the banks are well instructed as to the operations of the others. Before loaning money they take the general information and have printed reports of the operations of last year. Q. They do not send down individuals to investigate before making a loan ? A. No; that is not done, for the operations of every bank are well known. Q. What rate of interest does your association pay the crown bank for the loan you obtained with which to found this association ? A. Six per cent, taken from the long-credit department of the government bank. Q. Is there any difference in the rate of interest charged by this association on money loaned to members and nonmembers ? A. Only members of the association can get credit. Q. Is there any difference in the rate of interest paid on the deposits of members and nonmembers ? A. No; it is the same. Q. Are there any yearly dues levied upon members of the association ? A. There are no particular fees; there is a 10 per cent charge for commission purposes. Q. How do you get new members, and do these new members have any fees to pay upon entrance into the association ? A. The association takes great pains to know everybody. The members of the association talk to the people and try to get them interested. When a man wants to enter the association he has first to get well acquainted wi,th the organization; he must read the charter and know it and be quite sure he understands it. Then he makes application for admission, and in his application he states that he knows the charter, and he takes all of the obligations. As has been stated, his liability will be double the amount of his borrowing capacity; that is, double the amount he can borrow. He also states his wealth or financial condition. Then the board of directors passes upon this paper. They then go and see what his wealth is, and upon this investigation they take him in as a member. Q. Suppose he can not read and write ? A. They can read and write here. Q. Are there any dues for new members ? A. None. Of course the general assembly has put on 10 per cent, which they must pay on open credit. Q. What territory is embraced in your operations ? A. Every small rural credit association has a certain territory. By law it is restricted to certain limits. Here it is limited by sections of the county. When a credit association applies to open, it has to state the territory involved. Q. When you borrow from savings banks, what security, if any, does this association give to these banks ? What is the liability for each member in case of loss ? A. For security the association gives its own bills of exchange. The liability of each member for loss is twice the amount of his borrowing capacity. Q. How do you pay for the society property 1 A. It is paid for from the profits. GERMANY. 265 GERMANY. AGRICULTURE AND LAND CREDIT IN BAVARU. Address of Baron von Cbtto-Reichertshausen, President of the Bavarian Council of Agriculture. Munich. Bavaria is in area and population the second largest State in the German Empire. It is composed of 75,870 square kilometers, with 6,881,219 inhabitants, of whom 3,808,269 belong to the rural districts. The remainder of the population is included in the greater or smaller municipalities. The three greatest towns — Munich Nuremberg, and Augsburg — together have 1,032,879 inhabitants, almost a sixth of the whole population. The Kingdom is divided into eight government districts, of which seven, with 5,950,206 inhabitants, are situated on the right of the Rhine, while the eighth, the Eheinpfalz, with 937,085 inhabitants, is situated on the left of that river. The density of the population in that part of Bavaria which lies on the right of the Ehine is, under the district authorities in the rural districts, 67 per square kilometer, and in the Palatinate 155 per square kilometer. With the exception of the latter province, Bavaria is less thickly populated than the neighboring States of Wurtemberg and Saxony. About 30 years ago agriculture played the principal part among Bavarian industries. Only in more recent times have trade and industry, as well as the growth of large towns, surpassed agriculture in respect' to industrial and social organization. Nevertheless the people who depend upon agriculture, according to the statistics of 1907, amount to 40.3 per cent of the total population. The value of agricultural production for the year 1912 was as follows: Grain, potato, and meadow crops, 1,375,600,000 marks; hops, 23,110,000 marks; must, 25,900,000 marks, and wood production from the State forests, 61,200,000 marks. The forests of Bavaria amount to more than one-third of the total forest area of Germany. Live stock — horses, cattle, swine, sheep, and goats — according to the census of December 2, 1912, amount to a total of 6,567,914 animals, which have a total value of 1,809,200,000 marks. The beer production of the year 1910 amounted to 18,100,000 marks as compared with the beer production for the whole of Germany 64,400,000 marks. These figures give an idea of the importance of agriculture at the present day. The natural factors of the agricultural industry in the Kingdom of Bavaria are extremely varied. Soil and climate differ considerably in different parts of the country. The southern part of Bavaria which adjoins the Afps and the so-called Bavarian Wood situated on the eastern boundary have a raw climate and little cultivated land, but with many meadows, pastures, and much woodland. There cattle breeding is the chief industry. General agriculture and a very extensive hop culture are carried on in districts situated in the middle of the country. In two provinces, the Palatinate and Unterfranken, the vine is quite extensively cultivated. As regards land distribution, the majority of farms are operated as small and medium size holdings, a large estate being seldom found. The farms which range from 2 to 20 hectares amount to 57.7 per cent of all farms and to 65 per cent of the land devoted to agriculture. Large holdings of 20 hectares and over amount to 6.2 per cent of all farms, with 30.1 per cent of the total cultivated area, while 36.1 per cent of the farms which are parceled out are under 2 hectares in size and include only 3.9 per cent of the total area under cultivation. From the point of view of land distribution in farms, the great significance of cooperative societies and their credit arrangements for Bavaria may readily be inferred. It can be said that the gratifying increase in land cultivation is due to the advantages which small farmers derive from personal and real credit afforded by these societies. They enable farmers to secure more readily and cheaply than formerly articles necessary for agriculture, such as seeds, artificial fertilizers, and agricultural machinery and implements of every kind. The development of the organization of such societies in Bavaria has taken place during the last 30 years. In 1881 there were only 41 Raiffeisen institutions for the purpose of lending money to farmers; to-day the number of agricultural credit societies in the Kir^dom of Bavaria, alone amounts to 3,523. REAL-ESTATE CREDIT. To meet the demand for agricultural real-estate credit in Bavaria, several institutions have been founded, which may be classified as follows: 1. The Bavarian Agricultural Bank which is a registered limited liability cooperative society conforming to the requirements of the imperial law relating to business and trading societies. 2. Several land-mortgage banks which are organized as joint-stock companies. 267 268 AGEICULTUEAL COOPEBATION IN EtTEOPE. BAVARIAN AGRICXJLTTIRAL BANK. The Bavarian Agricultural Bank is modeled on the examples of the Prussian land banks or land-mortgage credit associations known as "Landschaften, " and on the agricultural credit societies of Saxony. In accordance with the rules governing these societies, loans for agricultural purposes are only granted to members — designated as "Genossen," which is equivalent to "associate " in the eyes of the law — who for every 5,000-mark loan have to pay up a share of 100 marks, thus becoming liable for the obligations of the society up to the limited amount of 1,000 marks for each share. This cooperative organization assures the mutual utility feature of the enterprise, while tendencies toward using it for tmdue gain and profit are checked, and the conditions of the loan can be adapted to meet the special circumstances of agricultural production and income. The Bavarian Agricultural Bank was incorporated in 1896 after the by-laws had been approved by the Bavarian Government. This bank has the legal status of a private bank, but it is endowed with State funds, of which 1,000,000 marks have been advanced to the bank free of interest, besides a further loan of 4,000,000 marks, on which 3 per cent interest is charged. This subsidy naturally gives the government a wholesome right of inspection and supervision. The bank makes loans to its associates on the following conditions: (1) Long-time loans on farm or forest lands, which can not be repaid or called in by either party, but are registered as mortgage loans and are amortized by annual payments to a sinking fund. (2) Long-time loans to rural communities with amortization, but which are not registered as mortgage loans. (3) Ordinary mortgage loans on farm or forest lands without amortization, but with right of relinquishment by either party. This kind of loan is only granted in exceptional cases, and the value of such loans may not exceed one-tenth of aU the loans made by the bank. One-half the value of land as assessed for taxation purposes may be advanced as a loan by the bank, but no loan can be for less than 50 marks. The loans are given in cash to private parties and in the form of negotiable mortgage bonds to rural communities. A certain number of the bonds are repaid every year, the numbers being drawn by lot. The annual payments due on the first-mentioned long-time loans which can not be repaid or called in are: (1) The rate of interest at which they were issued plus (2) an amortization quota of at least one-half per cent, and (3) a further quota for management expenses, now equal to one-fourth per cent, but which is calculated only for the amount of capital still due; that is, for the capital minus what has been paid in amortization. The present rate of interest on mortgages and loans to rural communities is 4J^ per cent, the whole annual pay- ments thus amounting to 4 5^ to 5 per cent. The working capital and current expenses of the bank are supplied by members' shares, the two above- mentioned loans advanced by the State, and the issue of mortgage bonds and notes. The bank issues personal bonds bearing interest, liable to refundment by lottery, and also similar notes for loans to towns or rural communities which are divided into series bearing the same rate of interest. In accordance with the principles on which it was founded, the Bavarian Agricultural Bank aims chiefly at satisfying the demand for credit on the part of small and medium-size farm owners. After 15 years' life the bank now holds the second place among the different credit institutions of Bavaria and has an outstanding mortgage capital of 140,700,000 marks. JOINT-STOCK COMPANY MORTGAGE BANKS. The oldest of these establishments is the Bavarian Mortgage and Exchange Bank, founded in 1834. This bank was followed by three others in 1871, namely, the South German Land Credit Bank, the Bavarian Union Bank, and the Bavarian Commercial Bank. AU these concerns lend money on agricultural mortgages, but they are founded on profit-making principles. The Bavarian Mortgage and Exchange Bank was the first to organize in 1864, procuring its working capital by the issue of bonds and by lending money on mortgages. All these Joint-stock mortgage banks are organized in accordance with the imperial mortgage-bank law of 1899 and the regulations prescribed by the Bavarian Government, which exercises supreme supervision over all mortgage banks. The routine and management of all these banks are the same. The rate of interest on mortgages is generally one-half per cent higher than that on the mortgage bonds. This small difference of one-half per cent must cover aU expenses for salaries, taxes, risk, etc., and it is expected to bring in the business profits of these banks. The special costs or charges occasioned by the delivery of the bonds or granting of mortgages are generally borne by the debtor and are deducted from the amoimt of the loan. The costs include: (1) Loss due to the rate of exchange at which the bond is sold; (2) the commission paid by these banks to other brokers on the sale of the bonds; and (3) the stamp duty collected by the German Empire, amounting to one-half per cent, as well GERMANY. 269 as the imperial "Talon-tax," an annual tax of about one-fiftieth per cent. The brokers employed by the mortgage banks generally receive a commission of one-fourth per cent of the value of the loan. As a rule, loans are paid in cash; bonds are rarely taken and only when the debtor wishes to keep them as a permanent investment. If the debtor wisheg, the deduction made from the loan to cover charges can be reduced ; they are then paid in small annual installments of about one-half per cent on the capital loaned. The rule that only one-half the value of the land as assessed for taxation can be granted on mortgage loan has proved to be sound, judging by the experiences obtained in Bavaria, where mostly small agricultural land- owners come into consideration. Whereas most mortgage banks keep their capital at the service of urban prop- erty and make their loans on it, the Bavarian institutions of this kind have always considered it their special duty to satisfy the demands of the Bavarian farmers, thereby not only enabling them to cultivate and improve their lands, but also to safeguard and preserve the property that in most cases has come down to them from many generations. DEVELOPMENT OF GERMAN AGRICULTURE. Address of Dr. Nikola Kaumanns, Sometime German Imperial Special Commissioner of Agriculture to the United States. Munich. You will discover while passing through Germany how much of our success has been due to our agricultural associations. As regards their objects and activities, the German agricultural, commercial, and productive associations may be grouped into three main divisions, namely, credit associations, purchase associations, and dairy associations. To-day there are in Germany 24,724 of these associations altogether. They include 15,990 credit associations, 2,346 purchasing associations, 3,415 dairy associations, and 2,973 various other kinds of societies. You will no doubt be surprised to hear that German agriculture had many more diSiculties to contend with than agriculture in the United States or in most countries of the world. We do not possess in Germany the first essential requirement for a good crop, namely, a good soU. Our soils are on the average very poor. Even in old Roman times German soU was known to be very poor. But for our increasingly heavy crops, we have in the first place to thank German agricultural science and the small farmer. German tillage holds the first place in the world. In certain districts you wiU also find horse and cattle breeding, grape culture, and general fruit culture. On your trip through Germany you will have a chance to see some of aU these different types. The statistics of Germany's surface area are as follows: 24,432,354 hectares of arable soil; 487,716 hectares of garden land; 5,951,630 hectares of meadow; 853,806 hectares of pasture; 2,532,649 hectares of swamp, peat, moor, and other poor lands; 115,368 hectares of vineyards; 7,679,754 hectares of forest; and 1,057,202 hectares of buildings, stables, roads, and waters. Grain culture predominates in German agriculture. This is best shown by comparison: Grain, 14,754,077 hectares; potatoes, 3,173,830 hectares; forage plants, 2,584,682 hectares; sugar beets, 513,822 hectares; vege- tables in the fields, 265,536 hectares; other crops, 1,062,663 hectares. The agricultural population in Germany is principally small holders. We divide the rural holdings in Germany into small, medium, and large size. We have also very small holdings, so small that a man and his family have to do some outside work. Let me give you a brief sketch of the sizes of the different German farms from the smallest to the largest ones. The smallest land holdings under 20 ar contain 232,451 hectares and number 1,262,230 holdings; small land holdings and rural holdings from 20 ar to 2 hectares in size contain 2,259,550 hectares, or 2,116,279 holdings; little rural holdings from 2 to 5 hectares in size contain 4,306,420 hectares, or 1,006,277 holdings. Medium-size rural holdings, from 5 to 20 hectares, contain 13,768,520 hectares, or 1,065,539 holdings. Large ' holdings from 20 to 100 hectares in size contain 12,623,010 hectares, or 262,191 holdings. Large estates from 100 to 1,000 hectares in size contain 9,222,873 hectares, or 23,197 estates. Feudal estates of more than 1,000 hectares in size contain 693,657 hectares, or 369 estates. A careful study of plant nutrition, and of improved methods of rotation together with the increasing use of fei-tilizers and chemical manures, have resulted in a combination of practice and science which has brought wonderful success to Germany. To-day, with her 66,000,000 inhabitants and her ever-increasing output of grain from poor lands, she is becoming more and more independent of foreign countries. To-day Germany imports only 5 per cent of her foodstuffs, and her agricultural authorities are firmly convinced that in the near future that country will be entirely independent of foreign supplies. This wonderful production is obtained from a country which is smaller than the State of Texas. 270 AGKICULTUEAL OOOPEBATION IN EXJEOPE. Tiie feeding and breeding of animals have also been the subject of scientific inquiry. Germany will be pleased to show you in Oldenburg, Hanover, and Westphalia some of the best breeds of cattle and horses in the world. The results of scientific investigations were applied in the agricultural high schools, which from the beginning of the nineteenth century were founded as isolated institutions and were generally affiliated with the universities. During the last '40 years the German Government has been more anxious to promote in secondary schools the education and training of the farming population and thus to put the fruits of scientific research within the reach of all. The winter courses in agriculture have been of exceptional benefit to the rural population, and this teaching force also acts as traveling teachers during the summer. A great number of professional publications, many of a popular character, convey to the farmer by practical hints the fruits of scientific labor. Thus the past century witnessed the triumphant rise of agriculture from the bondage of past custom. Resting on a solid basis of constantly progressing scientific knowledge, rational agriculture was everywhere welcomed. However, it can not be said to have prevailed everywhere. The German farmer is thoroughly conservative and clings to many ancient habits and customs which are none the better for age. With great difficulty is he brought to introduce new and more profitable practices. This stubborn adherence to old methods which hinders the greater productiveness of German agriculture is of course to be deplored. However, the conservatism of the German farmer is also the source of much good. It adds an element of idealism to German agriculture, it guards the farmer against considering his land merely as a source of pecuniary gain. The Ger- man farmer is attached with h?art and soul to the soil which he calls his own. He calls it his homestead in its fullest sense; it is a part of his very being. To you who have heard about the wonderful increase in German agriculture, how pessimistic must some of your prophets appear who declare that, with its increasing population, your country will m a few years find it necessary to look for foreign suj)plies. You have only to take up intensive farming as it is done already in some of your States — Wisconsin, Michigan, Illinois, Iowa, Missouri, and Nebraska — and with your better soil you will be more than able to meet the needs of your over increasing population. COOPERATION IN BAVARIA. Baron von Hbrman-Schobn, Formerly Agricultural Expert of the German Embassy at Washington. ADDRESS. Munich. On entering Germany and Bavaria in particular, you must realize that the German Empire is a federation of States similar in many ways to the United States of America. The Kingdom of Bavaria with its capital at Mumch is, next to Prussia, the largest of these confederate States. Whereas Germany is a little larger than the State of California and smaller than the State of Texas, it now has 66,000,000 inhabitants and the popula- tion increases every year by about 1,000,000 souls. Bavaria alone has over 7,000,000 inhabitants and its size is about equal to that of the State of South Carolina. So you see that our country is much more thickly popu- lated than any of the States of your Union, since we have about 320 inhabitants to the square mile, while the United States have but 31 to the square mile. Considering further that our country is not so rich in natural resources as yours and that our climatic conditions are far worse in many ways, you will get a key to the reason of development along the line of the institutions which you have come to study and which we shall be very glad to explain in every detail. In visiting Germany you have come to the birthplace of rural credit and cooperative systems, the originators of which, Raiffeisen and Schulze-Dehtzsch, were both born in our fatherland; the former, in 1818, in the Rhein- provinz, the latter in 1808, in Saxony. Their life work has spread over the whole of our Empire with greater rapidity and intensity than either of them ever dared to dream. The data and figures you are to hear from us to-day will apply to Bavaria alone, although many organi- zations for agricultural credit and cooperative endeavor are the same all over Germany. Our legislation is in many instances much more centralized by our constitution than is the case in the United States. We have, for instance, an imperial law, covering the whole of Germany, providing for mortgage-credit banks and cooper- ative societies. In addition to these imperial laws, enforcing one and the same system all over the Empire, we have some special laws in the single States, and you will find some interesting acts and regulations for Bavaria due to the special development in this State of the matters you are studying. Speaking first of agricultural credit, we have in Bavaria for long-term mortgage credit seven joint-stock mortgage banks and the Bavarian Agricultural Bank founded on a cooperative basis. Whereas the Bavarian Mortgage and Exchange Bank, by far the largest of our joint-stock mortgage banks, was founded in 1834 in GERMANY. 271 its original form, the Bavarian Agricultural Bank was established in the year 1896 with Government aid and subsidies and has increased its activities and its bond issues year after year, thus showing the benefit of its work to the farming population. The savings banks, especially in the rural districts, are of some value also for mortgage credit, but have a mere local importance. As to personal or short-term credit, we have the different organizations of cooperative banks with their central banks. The largest in Bavaria is the Bavarian National Union. Next in size is the Niimberg Union of Societies of the Raiffeisen Federation, spreading all over Germany. The development and increase of these local cooperative banks have been enormous, and they seem well worth your particular attention. Besides these organizations for agricultural credit which are more or less the same all over Germany, you will find in Bavaria a most beneficial institution called the Imperial Bavarian Land Improvement Institute. This was organized by the Bavarian law of 1884. Through it the Government grants loans at a comparatively low rate of interest for purposes of improving the soil, ion drainage and regulation of waterways, for cultivating hitherto unproductive land, for planting vineyards and orchards, for securing the use of electricity to com- munities, for erecting sanitary dwellings for agricidtural laborers, etc. The Government has issued to date bonds amounting to over 13,000,000 marks for these purposes. You will find this kind of Government aid for agricultural improvements in no other State of the German , Empire, at least not organized in the same way, and, therefore, we wish to call your special attention to it. In connection with this I should like to mention the government organizations for the improvement of the soil. The Bavarian Government has established all over the country special offices with highly trained engineers at the head of each, whose duty it is to help every farmer requesting it in his endeavors to improve his land. The engineering work, the development of plans, and the supervision during the work are done free of charge, and thus every security is given that the work will be done in the best possible way and no unnecessary expenses incurred. The cooperative societies have spread all over Germany in the last decades with unprecedented power and rapidity. There is not the smallest village or borough where you will not find some kind of cooperative enterprise. The variety of cooperative societies is so large and their number so great that it would exceed the time allowed for these remarks to enumerate them. There is one organization, however, which is entirely cooperative, a special institution of the Kingdom of Bavaria. It is the Imperial Insm-ance Council, comprising cooperative insurance against fire and hail and the insurance of cattle and horses against death and compulsory slaughter. All these forms of insurance are under State control and management, working with State subsidies on the basis of voluntary cooperation of the members. The Bavarian Government has developed these forms of insurance on original lines distinctly different fromi the methods employed in the other States of the Empire and in some ways of the whole of Europe. As I am speaking to you about the Kingdom of Bavaria alone, I may mention that we have in this State an agricultural council of our own, being the semiofficial organization of the farmers and agricultural interests in the State and the adviser of the Government for all agricultural legislation confined to Bavaria. The repre- sentatives of our Bavarian agricultural council are also members of the imperial agricultural council in Berlin, so that we have our vote on all agricultural matters affecting the whole of the German Empire. Besides this you will find many voluntary bodies in Bavaria organized for the benefit of farmers in general or for some par- ticular branches of their work. Our limited time does not allow me, however, to give you more details and I hope that the different points mentioned will suffice. It seems to me that we are on the eve of a new age of cooperative work. The eternal laws of evolution seem to tend in that direction. The cooperative idea, having begun on a small scale in little country villages, has developed to a large tree, giving shade and strength to whole nations and embracing the farming interests of large continents. But the development does not stop here. It begins to embrace the whole of the civilized world. The very fact of your visit to our country is proof of the beginning of the new era, when aU the farmers on both sides of the Atlantic will cooperate for the betterment of their class, for universal progress, and for the advancement of civiHzation. QUESTIONS. Q. Have you a general knowledge of the Council of Agriculture system ? A. Yes. Q. Is there a difference between the Council of Agriculture of Germany and that of Bavaria ? A. A slight difference. The Imperial German Council of Agriculture covers the whole of Germany; the Bavarian Council of Agriculture is confined to Bavaria, but it is federated with the Imperial Council of Agriculture. Q. What is the Council of Agriculture ? 272 AGRICULTURAL COOPERATION IN EUROPE. A. The Imperial German Council of Agriculture is the semiofficial link connecting the official body, the Imperial Goverimient, with the unofficial, the people actually engaged in agriculture. It works from the top down and from the bottom up. Q. Are your cooperative rural credit systems under state law and national law, or are they under State law alone ? A. They are under both national and state laws. We have imperial laws covering the whole of Germany for both joint-stock mortgage banks and for cooperative societies. These laws cover the general principles underlying the whole subject and are national laws. Besides these we have special laws enacted in the several States regulating such joint-stock and cooperative banks in detail, in accordance with the dififerent require- ments of the several States. Q. Then your Imperial Government enacts the general laws governing these cooperative societies, while the detail laws are enacted by the States ? A. Yes. Q. Could your cooperative rural credit systems be carried on in Germany under State laws without the imperial laws ? A. They could be carried on, but not as effectively as they are now. Q. Do you mean that the rate of interest would not be as low as it is now ? A. I do not mean that; but, if each State legislated and there were no broad underlying principles enacted by the Imperial Government, we should have a great variety of laws, resulting in great confusion. Q. Such confusion would, of course, tend to discourage the sale of bonds — ^is that not so ? A. Yes; it would. Q. In order that the lowest ruling rate of interest may become acceptable to the bondholder, it is neces- sary to afford him the greatest possible degree of security, is it not ? A. Yes. Q. Then all questions in relation to the title of the land on which the bond is secured would have to be so handled by national and State laws as to allow of no possibility of any flaw in the title ? A. Yes; that is so. The title to the land must be recorded in the land register, and this land register must be under national control. Q. Such a land register also exists in the United States, but in itself it offers no guaranty of the validity of the title, for in spite of it questions may arise as to the validity of a title and give rise to a lawsuit. How does the case stand in Germany ? Do such cases of disputed titles lead to lawsuits ? Or can the land on which the mortgage bond is secured be foreclosed in default of payment without recourse to a lawsuit ? A. In Germany a mortgage bank can get an injunction from the courts for foreclosure of such lands with- out recourse to a lawsuit. The mortgage bank simply goes through a legal formality with the official aid of the court, which gives judgment in its favor. Q. Then the court can give a judgment on such points as validity of title which judgment is final? A. Yes. Q. What would you think of a cooperative rural credit system which was started by bankers and run by bankers taking mortgages on individual farms 1 A. Such a system would not be a cooperative system. Q. What would this kind of bank be likely to do ? A. It probably would not help the interests of the farmers for any length of time. Q. Then, is it the true cooperative system of banking which is of benefit to the farmer according to your experience ? A. Yes. Q. Supposing there were no cooperative banks in Germany, would the rate of interest to farmers then be higher ? A. Generally speaking, it would. Certainly there would not be the present prevailing stability in rates of interest. Q. Have you trusts in food products in Germany ? A. We have no trusts, in the American sense of the word. Q. By whom are the products of the farm distributed ? A. Partly by farmers, partly by cooperative societies, and partly by traders. Q. If there were no farmers' cooperative societies, do you think that the farm products would be dis- tributed by trusts ? A. The development would undoubtedly tend that way. GEBMANY. 273 BAVARIAN CENTRAL COOPERATIVE BANK. Baron Ribdeber von Paab zv Schonau. ADDRESS. MtJNlCtt. The Bavatian Central Cooperative Bank Was formed at the same time as the Bavarian National Union, in November, 1893. This bank is, like other similar institutions in Germany, a society with limited Hability. Each member has to purchase a share of 500 marks, and his liability is 1,000 marks for each share. Not more than 300 shares are allowed to one member. A share must be purchased for every loan of 8,000 marks or part of this sum. The organs of administration are, the committee of management, the board of supervision, and the gen- eral annual meeting of the members. The business is divided into four branches — the banking, supply, grain, and estate departments. At the head of each department is a director who is a member of the committee of management and is directly responsible for his department. The first director is responsible for the whole man* agement of the bank. The working capital of the central bank is made up of the owned capital of the society, consisting of shares and reserves, and the deposits of members and nonmembers. The owned capital amounted to 2,790,000 marks in 1912. The State, by a law passed in 1900, has put a working capital of 4,100,000 marks at the disposal of the bank, of which 200,000 marks are granted without interest, while 3 per cent is charged for the remaining 3,900,000 marks. The deposits amounted to 28,500,000 marks at the end of 1912. The loans granted by the Central Cooperative Bank to agricultural cooperative societies are secured by the unlimited liability of the members of the cooperative society. The normal credit granted amounts to 5 per cent of the value of the estate, fixed in accordance with the taxes paid or by valuation by experts. For credit beyond this limit securities or special notes must be deposited. In such cases a somewhat higher interest is charged. Collateral must also be deposited by societies having high liabilities and by societies seeking credit for purposes not connected with agriculture. The task of the supply department is to secure the advantages of cooperative purchase to the affiliated societies. The commodities thus supplied are of good quality and cheap in price. As for the purchase of Thomas phosphate and potash, the two principal artificial manures, special arrangements have been made by the three largest central organizations in Germany which, representing an effective demand of great mag- nitude, are able to exercise considerable influence upon the determination of prices as well as upon the quality of the commodities furnished. Other artificial manures, foodstuffs, seed, etc., are supplied independently by the Bavarian Central Cooperative Bank. Special attention is devoted to the control of artificial manures and other goods. The Bavarian Central Cooperative Bank has stipulated in its contracts with wholesale supply agencies for the right to free analyses of commodities and for compensation for any deficiency thus ascertained. The expense of analyses is borne by the wholesale firms and eventually by the central bank. The advantages secured by the machinery branch are very considerable. Machinery is supplied at very reduced prices and free of commission, the quality being guarantied. Expert advice as to the suitability for local conditions of any particular machine is also readily given by the department. On the profits obtained by the supply department, bonuses are allotted to the purchasers. Twenty per cent of the profits are written to the reserve. The granary department has lately aided in the centralization of the Bavarian grain trade. ' Now 170 cooperative granaries carry on a large part of the grain business. They buy the corn from the farmers at fixed prices, clean it, and sell it to dealers and others. Eecently the granaries have also taken up the cooperative sale of other agricultural produce, such as potatoes, etc. The development of the Bavarian Central Cooperative Bank has been very favorable and we may hope that it will continue. A few statistics on the situation of the bank at the end of 1912 are as follows: Number of members, 2,537; par value of shares issued, 1,645,800 marks; reserves, 1,146,917 marks; loans, 29,010,839 marks; savings deposits, 28,493,693 marks; general turnover, 777,432,088 marks; and profits, 324,174 marks. The vast majority of rural cooperative societies in Bavaria have combined to form central org-anizations, namely, the Bavarian National Union and the Central Cooperative Loan Bank. The object aimed at by the national union, which was founded in 1893, is to promote cooperation and the affairs of affiliated societies by (1) the discussion, development, and representation of their common interests; (2) the improvement of the organization and the conduct of business in the individual societies by expert advice; (3) the undertaking of audit and inspection; (4) stimulating and inducing the formation and affiliation of new agricultural cooperative societies; and (5) promotion of popular weKare not only in an economic sense, but also in a moral and spiritual sense by pubMc opinion along the line of Christian principles. 14174°— S. Doc. 214, 63-1 18 274 AGEICULTUBAL CO0PBEATION IN EUEOPE. This extensive program is carried out by the different organizations of the union. The union prepares the ground for the establishment of new societies, sending officials free of charge to address meetings and to supervise all necessary legal formalities. The audit and inspection of local societies, the union's most important work, are carried out by a staff of about 30 agents with professional training. The union keeps up a professional school, which every year turns out about 60 men thoroughly trained in the technique of cooperative enter- prise. These men are put at the disposal of the cooperative societies, which employ them to their advantage in agricultural and cooperative matters. The union also maintains an office for legal advice, where every year hundreds of legal questions are dealt with free of charge. Finally, the union's journal is to be mentioned, a periodical which contains general information upon current cooperative matters, articles on the different branches of cooperative activity, and advice upon general topics. The local cooperative banks constitute the greatest number of cooperative societies, namely, about 3,600 with more than 300,000 members, three-quarters of whom are affiliated with the union. The chief object of these local banks is the maintenance of a savings and loan bank to handle banking and credit transactions as weU as to promote thrift; but they are also agencies for the supply of agricultural requirements to their mem- bers. Savings deposits are accepted by the local brinks and interest granted thereon. On the other hand, the need of credit is met by the banks at reasonable rates, with the obligation upon the borrowers of repayment by installments within a fixed time (10 years). Adequate security, which may consist of a pledge, mortgage, deposit of securities, etc., has to be provided by the borrower. During the last two years the local cooperative banks have taken up land purchase. When properties come into the market, land speculators often buy and divide them in order to obtain high prices. The prevalence of these transactions, which tended to increase further the already heavy indebtedness upon small landed property, led the Bavarian legislature to pass an act in 1910 by which the right of first option on purchase was given to cooperative societies in the case of property sales in rural districts. It is obvious, however, that the exercise of this privilege will require a large amount of prudence, experience, and sense of pubhc utility. The development of local cooperative banks in Bavaria has been very satisfactory, and it is agreeable to state that the confidence of the rural people in these institutions is steadily increasing. In 1911 the savings deposits and loans reached the sum of 297,910,282 marks; the shares of the members the sum of 3,215,931 marks, and the reserves the sum of 11,486,050 marks. It is, however, to be remembered that these figures do not cover the whole of the German Empire, but only the Kingdom of Bavaria with less than 8,000,000 inhabitants. The general expenses of administration, including the salaries of the audit agents, were 1,019,000 marks in 1911, on a turnover of 524,821,995 marks, which means 1.88 marks of expense for every 1,000 marks of turn- over. The balance sheet for aU the local cooperative banks in Bavaria in 1911 shows assets of 363,445,265 marks, and liabilities of 362,031,715 marks, leaving a profit of 1,413,550 marks. Apart from the local cooperative banks, we find in Bavaria 580 supply societies with 30,300 members. According to their importance and the amount of business transacted, they may be enumerated in the following order: Dairy societies, cattle-breeding societies, cooperative stores, pasture societies, granaries, and feed-stuff societies. QUESTIONS. Q. Kindly explain the Hmited hability of shareholders in the Bavarian Central Loan Bank. A. For every share of 500 marks a shareholder is Hable for 1,000 marks. There is double liabUity in the central bank. . The UabUity of the members of the local organizations is unlimited. Q. Kindly explain how the central bank secures its working capital. A. The working capital consists of (1) the owned capital of the bank; that is to say, the shares which have been issued and the reserves; (2) besides the net owned capital there are the deposits of the affihated societies and of nonmembers. Q. Where do deposits come from ? A. From the local banks. Q. Then the central bank does not take deposits from the people of Munich ? A. No; only from the local associations. Q. Whence is the working capital obtained ? A. 4,100,000 marks are subscribed by the State, of which 200,000 marks are without interest charge; on 3,900,000 marks there is an interest charge of 3 per cent. Q. Is this money to be paid to the State ? A. Yes ; but there is no date fixed for the repayment of this sum. It is an advance and not a gift. Q. Does the central bank issue any debenture bonds ? A. No; it has nothing to do with the issue of bonds of any kind. GEEMANT. 275 Q. "What is the relation of the central bank to the local banks in the matter of supervision ? A. This is provided for by law. Q. Has it any control over the local banks other than the auditing of their books ? A. It has a staff of about 30 trained agents, and these agents go about to inspect the books of the different cooperative societies. Of course, their visits are not announced beforehand; they come whenever they hke and make such visits once, twice, or three times a year. Q. Who starts the local banks? Does the initiative come from the people of the local community or from the central bank at Munich ? A. It may come from the central bank or from the local community. Q. Is it the business of the central bank to take the initiative in forming such organizations ? A. Yes, certainly; it sends agents to help form the local societies. Q. Does the local bank or society loan money on mortgage as well as on personal security? A. Yes; the land is valued on the basis of the assessment for taxation. Loans up to the amount of 5 per cent of this valuation are always granted on purely personal security; for loans higher than this 5 per cent of assessed valuation other security has to be provided. I am speaking of the local banks. The local institutions loan on mortgage if the loan exceeds 5 per cent of the value pf the lajid. Up to 5 per cent of the value personal security alone is required. Q. Are personal loans a large part of the local banking business ? A. Yes; it is the maia portion of the business. Q. Do the cooperative banks loan on mortgages ? A. No; the cooperative local banks only give personal short-time credit; but to make that safe the loan is inscribed on the land owned by the borrower. A regular mortgage is not given. For that kuid of business we have regular joint-stock mortgage banks. Q. What institutions are loaning on land ? A. The agricultural bank and the joint-stock mortgage banks. The two lines are entirely separate. Q. How are deposits in cooperative banks safeguarded ? A. There is no law requiring a certain amount of deposits to be kept in the bank. Q. What is the rate of interest on deposits in local banks ? A. From 4 to 4^ per cent, and on savings deposits 4^ per cent. Q. What dividends are paid on shares ? A. Four per cent. Q. What taxes do local cooperative banks have to pay ? A. No taxes. Q. Are mortgages also free from taxation ? A. A fee has to be paid. Q. How much is that? A. One-half of 1 per cent is the regular government tax. Q. Then there is no other tax than the registration fee ? A. Nothing else. Q. The Government, then, gives mortgages on land a special preference, but other personal property is taxed ? A. Yes; there is only a registration fee on mortgages and nothing else. Q. Does the holder of the mortgage pay an income tax? A. Certainly; there is no difference between income derived from mortgages and from other personal property. Q. Do the local banks also give credit on open account ? A. Certainly; on open savings accounts. Q. Does the bank have to pay interest on these accounts ? A. No. Q. About land titles in Bavaria — does the Government guarantee title; do land companies guarantee title; or do lawyers search the title and guarantee it ? A. A notary certifies to the title. The man who wants a loan has to go to a notary and state the exact conditions of the loan, and then, when the loan is registered, it has to be inscribed in the land register. He brings the tiole into court. Q. Is such a title indisputable ? A. Yes; our land here is registered. Each tract is measured, numbered, and registered in the official registry, and the mortgage is registered in the same registry. Q. From the time the loan is made no one can arise to dispute the title ? 276 AGKICULTUKAL COOPEEATION IN EUHOPE. A. It is absolutely safe; so that if a man who has placed a mortgage on his land, and a year later wants more money, goes to the bank with a second mortgage, a court of law before registering the second mortgage must look up the title to see whether he is entitled to the additional loan. It is government guaranty of title by control. Q. What preferences do these land-mortgage and cooperative banks have over commercial banks ? A. The agricultural bank is subsidized by the State and is entirely free from taxation. Q. Do ordinary commercial banks pay taxes ? A. Yes. Q. What does the central bank charge the local banks for inspection ? A. The local banks each pay 20 marks yearly to the central bank and besides that 12 marks a day for audit. Q. What would that amoimt to per year ? A. Not more than 30 marks a year. The audit takes about two and a half days a year. MORTGAGE CREDIT IN BAVARIA. Statement by De. A. Schlesinqer, United States Vice Consul and Deputy Consul General at Munich. Munich. In regard to the systems of land-mortgage banks and their methods in Bavaria, the following points are important. The banks issue bonds or debentures having as their joint security first mortgages on real estate; these bonds are commonly issued in small denominations in negotiable terms so as to pass current from one purchaser to another; the market values of these bonds are falling; that 10 years ago land-mortgage bonds bearing 3^ per cent interest were issued and sold at par; that now similar bonds bearing 4 per cent interest were selling at 98. Mortgages on real estate and on improved city property are usually executed at 50 per cent of the market value of such property. However, by their methods of appraisement city property at times is mortgaged to 70 per cent of its selUng value. The bonds based upon mortgages of rural and urban property both bear the same rate of interest. These bonds are sold in Germany principally to small investors, the bonds beuig issued in denominations ranging from $25 to $2,500 to accommodate this class of investors. It is the ordinary custom in Germany for the bank which issues these bonds to re-buy them when offered on the market in order to protect their seUing value. The bank usually makes a small discount of about one point in 1,000 in making this re-purchase. The bonds are at once offered for sale and are not held by the bank as an investment. The banks use their reserves for the purpose of making these purchases. Land-mortgage banks in Germany have the right to accept deposits. Land-mortgage bonds in Bavaria are declared by law to be a proper investment for all trust funds, and these securities are thus placed in the same class as city and State bonds for such purposes. An issue of land-mortgage bonds bearing an interest rate of 3^ per cent was quoted on the stock exchange May 9, 1913, at 87.80, this rate being paid for bonds which were withdrawn. Current bonds of the same issue — that is, bonds which had not yet matured nor been drawn by lot to be canceled under the amortization feature of the bonds — were quoted at 86.10. Four per cent bonds were quoted at from 98 to 98.50, these quotations being taken from the Munich latest news issue of May 9. At the same date Bavarian State 4 per cent bonds were quoted at 98. Quotations for May 31, which was the latest date obtainable, show no change from these quotations. The bonds for which these quotations were made have no government guaranty, either by the mperial or provincial government. Banks issuing these bonds charge a commission of 1^ per cent and the borrower is given the privilege of repaying his loan in the same class of bonds that he receives. The borrower, however, can not exercise this privilege except in a certain way. He has no right of repayment before 10 years and then must give notice six months prior to the expiration of the 10 years of Ms intention to make such repayment. In Munich, interest rates are rising. The commercial rate on money secured by collateral at the moment was 7 per cent; on bank notes 6 per cent. These quotations refer to the government rate — that is, the rate fixed by the bank of issue. Private rates are usually a httle lower than the government rate. There is a general rise of prices throughout the province which, in the opinion of the vice consul, is due to the increased consumption and greater luxury of the people,. the increase of population, the higher wages paid, and to the fact that the demand for foodstuffs is greater than the supply. Throughout the Province of Bavaria there is still the system of middlemen who purchase from the farmer and sell to the consumer, so that there is no perfected scheme of direct selling between producer and consumer. GERMANY. 277 COOPERATIVE PRODUCTION, DISTRIBUTION, AND RURAL LIFE IN BAVARIA. Evidence of Officials of the Bavarian Central Bank and of the National Union. Production. Munich. Q. Please name the different cooperative societies for aiding production. A. By far the largest number of these societies are creameries ; but there are a good many for purchasing cattle as well as grazing associations. Then we have cooperative societies for breeding hogs and for procuring electric power for members; also cooperative granaries and wineries, and cooperative associations for the use of thrashing machines. Q. Have you any cooperative societies for assisting in the improvement of the soil ? A. We have cooperative societies for drainage of the soil. Q. What do you consider the most important form of cooperative association for production ? A. Creameries, not only for the sale of milk, but for manufacturing cheese and butter. Q. Whence does the initiative come for starting these cooperative associations ? A. The initiative sometimes comes from the central bank and sometimes from the farmers themselves. Q. Is cooperative finance a great aid to cooperative production ? A. Yes ; it is absolutely vital. Q. Do these cooperative associations consist of farmers ? " A. Yes. Q. WiU you please give a brief explanation of societies for production of electric power ? A. These societies are something entirely new. Electricity has only recently been applied to agriculture. The farmers seeing the great results obtained by its use started to organize cooperative associations for the production of electricity. Then the Government took up the question and divided the cotmtry into different sections, assigning to each section control of the water power in that section; this water power is then trans- formed into electricity by joint-stock companies; the farmers' cooperative societies purchase it from the joint- stock companies. Q. Does the Government regulate the rate charged for this electricity ? A. The small original societies which built their own plants did as they chose; but, now that the Govern- ment has divided the whole country into different sections, it has made contracts with the joint-stock compa^ nies authorizing them to develop the water power under certain conditions and at certain rates. Q. How is the cost of electricity regulated which is provided by joint-stock companies ? A. The tendency now is to form very large joint-stock companies for the production of electricity. Of course these companies want interest on their capital. Now, the Government knows that the people who buy these water-power concessions want a certain profit on their capital. Hence they are allowed a certain percentage and agree on stipulated rates for electricity. Q. What proportion of the electricity generated by water power is purchased by joint-stock companies and what proportion by the active cooperative societies ? A. About one-fifth by cooperative societies and four-fifths by large joint-stock companies. Q. What price per kilo is charged by the joint-stock companies to villages and individual customers ? A. This is almost impossible to answer, as the price varies enormously according to the location of the machinery and the situation of the villages and individuals from the plant; but, on the average, we pay for light in the country from 40 to 50 pfennigs and about half of this amount for power. Q. What is the cost to members of cooperative societies for electricity produced by themselves ? A. This is also very difficult to answer; it would depend on whether they have the necessary water power or not. Q. Who owns the water rights ? A. The Government has control of the water right unless some private party can prove a title. Q. Does the Government sell out its rights ? A. No; in a certain number of years the whole plant reverts to the Government. Q. What is done to improve seed and increase the production of cereals, especially by suppliers of seed ? A. We have been doing a great deal recently to improve the seed for sowing purposes, but not on a coop- erative basis. Only farmers of certain districts have seeds tested. Q. What part does cooperative finance play in the forming of these other cooperative societies ? Is there any particular bank that assists their foundation ? A. In Bavaria there is a large agricultural bank which is cooperative, but it is for long-term mortgage. Thef cooperatiA^e credit facilities are absolutely necessary for the formation of these other societies. 278 AGEICXJLTUEAL COOPEEATION IN EUROPE. Q. Do farmers have fertilizer manufacturing plants ? A. I do not know of one. Fertilizer is chiefly purchased through the local cooperative society. Q. Will you please explain a few of the details of the cooperative societies for the purchase of machinery ? A. The societies are only large enough to enable the members. to use the machinery at the right time; for instance, thrashing machines can be operated for a number of months, whereas the number of plows has to be suificieut to permit the plowing to be done in the required time. Distribution. Q. What is the average capacity of one of the cooperative gianaries ? A. It is generally smaU; on an average, a granary would hold from 5,000 to 10,000 tons. Q. About how many farmers belong to the average society operating granaries ? A. About 50 farmers. The granaries not only sell the products of their members but they purchase products from outside farmers. Q. What is the average investment in one of these granaries ? A. Between 40,000 and 100,000 marks. In the case of cooperative distributing societies, general stores and fertilizers are sold in the same house by the same society. Q. Is this grain loaded into cars in bulk or in sacks ? A. All in sacks, and it is delivered to the granary in sacks. Q. How many cows contribute to the average cooperative dairy? What is the investment and what is the product ? A. Between 400 and 600 cows contribute to the da,iry. The cost of erecting the plant is between 20,000 and 50,000 marks. Every day an average society handles from 2,000 to 6,000 liters of milk. The same prin- ciples apply to all these institutions. Q. Have you cooperative societies for handling potatoes, fruits, and vegetables ? A. We have such societies for the sale of potatoes, sugar beets, fruit, etc. Q. Do they make investment for storehouses ? A. Practically no investment for plant. Q. Ai'e there any instructions given by these cooperative societies to their members as to the manner of preparing their products for market ? Do they set up any standard of packing ? A. No; the products are deUvered to the society which repacks them. The better qualities are assembled together. Q. In case one farmer brings in a superior quality of fruits and another an inferior quaUty, the society grades and pays accordingly 1 A. Yes; there is not as yet, however, a well-established standardizing. Q. What assistance or information is given to the producers by the Government for marketing their sup- plies, such as showing when certain fruits or vegetables should be marketed ? A. Men are appointed by the Government whose business it is to go into the country occasionally and instruct people as to the best way to handle their farm products. There are special men for different lines. Moreover, the Central Bank has a periodical in which every member has a right to advertise free everything he has for sale. That, of course, is read by others. But there is no government pubUcation on the subject. Q. Does the granary advance any money to a farmer on his stored grain ? A. That used to be the case, but we found it did not pay. Q. Can not a farmer take grain to a granary and store it, and if he wants to borrow money on that grain before it is sold, can he get a certificate upon which to get money from the granary ? A. The farmers who are members of cooperative societies have such small farms that the amount of grain stored is not very large; they sell it immediately. Q. Are there any cooperative stores in the villages which sell to the population and buy products m exchange ? A. This is done by taking grain in exchange for fertihzers. Q. Do these granaries and other institutions make a fixed charge for the services rendered and then dis- tribute the profits if there are any ? A. Yes. Q. In what way have these cooperative granaries or other institutions for marketing crops resulted in any great betterment to individual farmers? A. These societies have managed to get a fair market price for the farmer who does not, as a rule, know ■^hat price he should get. GEEMANY. 279 Q. What proportion of the producers belong to these cooperative societies ? A. About 15 to 20 per cent. Q. The Government, as it is understood, owns the raihoads. What effort is made to ascertain whether farm producers pay a fair rate for transportation or whether they are charged an excessive rate ? Are there any societies that look into the rates for particular products? A. We have an organization formed of members of the whole community which) together with the council of the State railroads, forms a commission to take up these questions,' but the control is in the hands of the Government. Q. The commission advises the Government as to the rates ? A. Yes. Rural Liee. Q. What is the law for the purchase of land thrown on the market ? A. This law, passed two years ago, is only for the Kingdom of Bavaria. It was found that a great deal of injury was done by land agents to farmers who were obliged to sell their farms on account of certain con- ditions. To prevent this damage cooperative societies have been formed. Q. It is simply a State law for Bavaria ? A. Yes. Q. Does the journal pubUshed by the central bank showing the products members have for sale deal with any questions for the betterment of country Ufe, such as societies, fairs, or any other questions pertaining to country Mfe ? A. It only deals with subjects connected with the cooperative societies. We have other papers which treat of the subjects you mention. The papers are free of charge to the members. ^^ CROP AND LIVE-STOCK INSURANCE IN BAVARIA. Db. von Englert, President. ADDRESS. Munich. There are four pubhc insurance institutions in Bavaria. They include insurance against fire and hail and the insurance of cattle and horses against fatal disease or accident. Each of the four institutions does busiaess over the whole Kingdom of Bavaria. Insurance against fire and hail is immediate; that of cattle and horses is mediate— that is, the owners of these animals form special societies for the insurance of cattle and horses, and these societies are reinsured by the public insurance institutions. The haU and live-stock institutions have always enjoyed regular State subsidies. The public institutions are administered by the royal insurance chamber, a State office; their finances are managed by the royal bank. The local insurance societies for cattle and horses are self-governing bodies. In the matters of insurance against haU and the insurance of cattle and horses the insured farmers are rep- resented by three committees, chosen from their number, who are attached to the royal insurance chamber with certain powers. Both the hail and live-stock institutions and the local live-stock insurance societies are of the mutual type. The premiums for the insurance against fire and haU are fixed every year in advance; those for the insurance of cattle and horses are assessed at the end of the year to cover the actual losses. The institu- tions and societies for the insurance of cattle and horses are voluntary. In fact, no one is required to insure himself in any one of the four institutions. The fire insurance institutions, however, have a monopoly on the insurance of buildings. Insurance institution against fire. ^-This institution, founded in 1811, insures buildings and attachments (machinery, furniture, fixtures, etc.) agaiast damages caused by fire, lightning, and certain explosives. The premium depends upon the amount insured, the kind of building, its position, and its material construction and contents. This institution, unlike the other three, does not receive subsidies from the State. On the contrary, it hands over to the State 10 per cent of the premiums paid (at present about 1,000,000 marks a year), to be used for the organization and equipment of fire brigades and the installation of water-supply systems. Insurance institution against hail. — This institution, founded in 188'4, insures every sort of agricultural produce, including hops, tobacco, wine, and garden vegetables, ornamental garden products, and tree nur- series against loss by hail. The institution fixes the harvest value of each sort of product, establishing sev- eral classes of returns per hectare. The farmer selects for his grain or fruit the class of return most likely 280 AGEICULTUEAL COOPEEATION IN EUEOPE. to be obtained. The premium depends on the sum insured, the danger of the locality, and the susceptibility of the fruit to injury. Ihe damages are estimated by independent men of the same calling who are officially sworn in and paid by the institution. As the institution has fixed premiums and does not levy afterpayments, it may happen in years of great disaster that the premiums are not sufficient to cover the damages in full. In such cases the indemnifica- tions may be curtailed accordingly. There is a provision that one-fourth of the reserve fund may be used to cover such emergency. Hence it seldom happens that less than 80 per cent of the losses are paid. In 1912 the insurance institution against hail insured 172,000 people, the sum insured being 284,000,000 miarks. Insurance' institutions for horses and cattle. — The institution for the insurance of horses was started in 1900, and it insures horses and similar animals. The institution for the insurance of cattle was started in 1896, and it insures aU other sorts of live stock, though at present only cattle and goats are insured. Both institutions are run on similar lines. The institutions pay damages for animals that have died, animals that had to be killed, cattle killed by order of the sanitary police, or horses killed because they had become absolutely unserviceable. The value of the animals insured is ascertained by an appraisal committee of the local society at the time of insur- ance and every six months thereafter. The insurance actually paid for loss of cattle is 70, 80, or 90 per cent of the market value; for horses it is always 70 per cent of the value. At the close of the year the amount paid by each institution is distributed to the affiliated local societies. The societies, after deducting their own costs, apportion the balance to their members. On December 31, 1912, the institution for insurance of cattle showed about 1,600 societies, 80,000 members, 300,000 animals insured, and 90,000,000 marks of insurance in force. The institution for insurance of horses showed about 500 societies, 40,000 members, 90,000 horses insured, and 70,000,000 marks of insurance in force. QUESTIONS. Q. If I correctly understand the sj^stem for insurance of live stock, these societies are cooperative and are federated under the supervision of the Government. You say you fix the rate for hail insurance on the first of the year? A. Yes; and that rate is based on the experience of preceding years — aU previous years, as far as possible. Q. What relation does the live-stock department bear to the insurance department? A. The insurance department is independent. Q. Does a veterinary surgeon inspect the cattle before being insured? A. Yes. Q. Do these cooperative insurance societies carry on a commercial business as well as a cooperative business for members only? A. They do a cooperative business and that for members only. Q. Are there any private corporations for the insurance of crops or live stock? A. There are several private institutions, two for haU, and others for live stock. Q. Is there any material difference between the rates charged by private corporations and rates charged by cooperative societies ? A. The rates are different, but there is no real competition between the two. The rates of private societies are based on future payments; in case of great loss the premiums are higher; whereas the commercial or cooper- ative companies have fixed rates, so that the insurance of the State is safer than private insurance. The addi- tional levy averages more in the instance of the State companies. The State pays a subsidy to the societies and nearly the whole profit is given to the members; and, in the case of insurance of horses, the members receive more than they pay in. I^ast year there were 60,000,000 marks paid m by insurers and 62,000,000 marks paid back. Q. What period of time does your experience with cooperative insurance cover ? A. Insurance against loss of stock, since 1896, and against loss of horses, since 1900. Q. During that period of 13 to 20 years, has cooperative insurance grown faster than insurance by private corporations ? A. Yes. Q. Then farmers are inclining more to official than to private corporations 1 A. Yes; more to oflicial than to private institutions. Q. What proportionof farmers insure their crops or stock? A. One-fourth of all horbes and one-tenth of aU live stock are insured. Q. At what age, say, for horses, does insurance begin? A. It begins from about the eighth month. GERMANY. 281 Q. Is there such insurance for hogs ? A. Yes; it begins at three months. Q. Is there any age limit of insurance ? A. Yes; horses 15 years old are no longer received, but when they are once insured the insurance remains in force. Q. At what period of farm operations do you fix the insurance of crops ? A. There is no fixed date. Q. Does the Government publish annually the operations of this department ? A. Yes. ROYAL LAND IMPROVEMENT INSTITUTE OF BAVARIA. L Prof. Dr. Spoettle, Imperial Councillor. STATEMENT. Munich. Owing to the topography of the land, the peculiar conditions of water in Bavaria, and the agricultural requirements of the country, the question of land improvement is of great importance. It is tnie that the waste land capable of possible cultivation may be regarded as inconsiderable when compared with the land already under cultivation; but there exist great expanses of fields and meadows which may be improved by drainage or irrigation or that can be protected against the havoc of inundation. The principal problem in land improve- ment in Bavaria is to preserve and increase the productiveness of the area already under cultivation. Before 1850 some attempt was made toward improved land cultivation in Bavaria. Indeed, the necessary technical experts were appointed to make prelimmary surveys. But the technical service for agriculture was not sufiicientiy organized for this work until 1902. Under the present law, each county is required to appoint the necessary number of expert officials, the State contributing a certain amount to theu- pay. On January 1, 1909, the whole of the technical service of agriculture was taken over by the State ana attached to the State building department. By royal order in December, 1908, the Land Cultivation Board is charged with the external service ; their work is to promote cultivation of land and especially to make proposals for fresh undertakings in cultivation of all kinds whatsoever. It is their duty to prepare, execute, and supervise such undertakings; to supervise the private rivers that are placed under their control; to work out fresh schemes for keeping those rivers witnin their banks, and to assist in the execution of the water law. The assistance given by the cultivation board is gratuitous. Neither societies, communities, nor private persons need make any payment for their services. In 1912 the cultivation servide cost over 600,000 marks, not including the considerable sums granted by the State and county for new undertakings in cultivation. Up to the present time 24 cultivation offices have been instituted, each office having charge of an average area of about 2,000 square kilometers of lana used for agricultural purposes. Special importance is attached to the training of officials of high and medium rank. There is a special department for cultivation engineers in the Technical High School in Munich, where they may attend lectures and receive instruction in natural sciences, engineering, and political economy, as well as in agricidtural science. In .1909 a special technical cultivation school was started at Pfarrkirchen, in the neighborhood of Mimich, for the training of efficient officials of medium rank. It was attached to the agricultural school already there, although it remains under the management of the president of the cultivation office of Pfarrkirchen. Since 1902 the work of the cultivation offices has been continually increasing. Accordhig to official sta- tistics, the value of the improved land has risen by 42,000,000 marks during the last 10 years; whereas the expenditures for the work of improvement amounted to only 23,700,000 marks. This signal accomplishment could not have been achieved were it not for the fact that, besides the cultivation service, there are extensive institutions designed to improve the cultivation of the land and promote agriculture. QUESTIONS. Q. Regarding this land which the Government has taken into its hands, what was the condition of the land when taken over ? Was it raw land ? A. Partly so; some of it is under cultivation and some has water standing on the fields a part of the year so that drainage had to be put in. Q. Is the title in the State f A. No; it is all private property. There is very little land belonging to the State. 282 AGKICULTUEAL COOPEKATION IN ETJEOPE. Q. Does the State take control of the property ? A. No; it only helps the farmers either to drain or to irrigate. The profits accruing go to the owner. Q. Do some of the rivers overflow the lands ? A. Yes ; the lands are protected by levees which are built by the Government, after which the village has to maintain them. Q. Are officers who conduct this work distributed throughout the Kingdom ? A. Yes. Q. Where are the headquarters ? A. The central office is in Munich. Q. Is help forced or given on request ? A. It is mostly asked for. Q. Is this work confined to certain districts ? A. Yes; to Bavaria. Q. How do you drain your land ? A. Mostly by tUe. Q. Do you issue bonds against certain districts ? A. No; the Government takes care of that. Q. Is the entire cost of work paid for by the Government ? A. No; the Government makes the plans, but the people have to pay the costs of installation. Q. Do you find that the sanitary conditions of these areas have been unproved 1 A. Yes. II. Dr. Brand, Imperial Councillor. STATEMENT. In the distribution of agricultural land in Bavaria small and medium-size farms predominate. Cheap credit, with easy facilities in the matter of sureties, and the repayment of loans by moderate installments were an urgent need for the farmer. In order to supply this need, the State of Bavaria resolved to form organiza- tions which should make it possible, by intervention and the use of State credit, to promote agriculture by granting loans at moderate interest repayable by small installments. For this purpose the Royal Land Improvement Institute was founded by the law of April 21, 1884. The favorable results obtained by this organization led to the enlargement by law of the work assigned to it which no longer remains limited to agri- culture. The following features of the institute may be specially noted: 1 . Juridical status of tJie institute. — It is a State institution. It assets and liabilities are the assets and liabilities of the State. 2. Object of the institute. — The purpose of the institution is to grant loans within the limits of the means at its disposal at any time: (1) For a series of agricultural imdertakings in the widest sense; and (2) for the con- struction of dams and water-power works, as well as of reservoirs, through the agency of the smaller commu- nities and public-water companies, mainly for the purpose of producing and distributing electric power for small business undertakings and for agriculture. 3. Funds of the institute. — In order to procure the means for such undertakings, bonds are issued to the landowners in values of 5,000, 1,000, 500, 200, and 100 marks, interest on which is paid semiannually. The rate of interest is not legally fixed, so that the Government can, for the benefit of both the institute and the farmer, take advantage of fluctuations in the rate of interest. At present two kinds of bonds, at 3J and 4^ per cent interest, are in circulation and are still being issued. They are admitted to the stock exchanges of Munich and Frankfort on the Main. The highest amount for which such bonds may be issued at present, as established by special laws, is 70,000,000 marks. The bonds issued form a special State debt under a constitutional guaranty. This debt comes under the general laws regulating State debts. The bondholders have no right to demand payment of their State bonds before maturity, but the State has the privilege of recalling any part or the whole amount of the bonds in circulation. The money received in repayment of loans and the savings realized on interest, as well as the ordinary cash repayments of loans, diminish the total amount of the loans as compared with the value of the bonds issued against them. It seemed necessary, therefore, to call in parts of the loans at frequent intervals. This, however, was avoided by applying the sums received in payment of debts, the savings on interest, and the ordinary money payments to the sinking fund to the granting of new loans at the same rate of interest. If the means of the institution are not sufficient to meet the interest and the repayments of the bonds, then, the bonds being a State debt, the deficiency is made up from the fimds of the State. GEEMA^TY. 283 4. Organization of the institute and cooperation with public aMthorities.—Th.e chief features of the organiza- tion and administration of the Land Improvement Institute are as follows : (1) Administration of the finances. — The agricultural bonded debt and the assets of the institute are ad- ministered as a special fund by the general treasury of the State debt administration. The duty of the treasury is, therefore, to administer the funds of the institute. (2) Finance commission for agriculture. — For examining applications for loans, for effecting the execu- tion of loans, and for supervising the use of loans a special commission, known as the financial commission for agriculture, has been formed in the department of the interior. This commission consists of one of the higher officials from the Bavarian offices of justice, finance and the interior, together with a member from the coun- cil of agriculture. The commission is subject to the department of the interior. (3) Cost of management. — In the State budget 19,850 marks are provided for the ruiming expenses of the' institute for each of the financial years 1912 and 1913. (4) Preparation of requests for loans. — The requests for loans are drawn up by the civil administrative authority of the district in which the work is to be undertaken. For the preparation of such requests detailed instructions and special blanks are provided. Plans and specifications in minute detail, showing every item of cost of the tmdertaking, must be attached, and, in the case of loans for which security must be given, the abstract of the register of the land tax, the abstract of the register of landed property, and a certified estimate of the value of the land to be pledged must be furnished. The project must be worked out or at least exam- ined by a public expert. The civil authorities of the district must see that the application is perfected and must lay it, with an expression of opinion, before the royal commission of agriculture. (5) Freedom from taxes. — The law provides that aU financial negotiations and transactions in matters relating to agriculture under this institute are tax free. Costs which arise from the services of experts, for legal and other assistance in the preparation of the required data, and for providing security are to be defrayed by the applicant for the loan. In reality the cost of expert service is very small, since public experts are usu- ally at the disposal of the applicant. Their services are gratuitous. (6) Payment of interest and repayment of loans. — On loans concerned with land cultivation, the interest rate is one-fourth per cent lower than the rate of the agricultural bonds which are issued against the loan; that is, if a loan is granted in 3J per cent bonds, the borrower pays only 3| per cent interest. The one-fourth per cent is paid by the State. On loans for the production of electric power and the buUding of small dweUing houses, the rate of interest is the same as that of the bonds issued against the actual loan; that is, a loan granted in 3i per cent bonds is loaned at 3| per cent. These State favors to , agricultural undertakings are granted for the reason that in many cases projects are initiated from which no income is expected or only after many years. The borrower must discharge the loan by the annual payment of a certain sum (amortization) in addition to the interest. The two sums together form the agricultural income. The repayment rate is fixed according to the original sum lent and remains the same every year. Special amortization tables have been drawn up covering every loan at different interest rates. These tables show at a glance how much is already paid and how much still remains to be paid at any date between the granting and the repayment of the loan. (7) Limit of loans. — The amount of the loan may not exceed the estimated increase in value from the agri- cultural undertaking projected. Neither may the loan exceed the cost of the undertaking. Loans which may ordy be granted to communities for building small dwelling houses for agricultural laborers can always be granted to the full amount of the cost of the ground and building provided the community itself undertakes the work. If, however, the community turns over the loan to societies which exist for the public benefit or to individual agricultural landowners to build such houses, the loan may only be granted to 90 per cent of the cost thereof. (8) Provisions of security. — ^Loans for land improvement are granted to communities, districts, and bodies under State inspection without security. If individuals wish a loan they must secure it by a first mortgage on their agricultural and forest land, and such loan can not exceed one-half the value of the property as estimated by sworn experts officially nominated. (9) Other alligations of borrowers. — ^Loans may be applied only to the execution of those undertakings for which they are lent. The officials of the district have authority to supervise the expenditure of the loan. The biuldirigs erected by such loans must be kept in good condition by the borrower. In case any loan is mis- applied or not expended for the purpose for which it was granted, the commission may in its judgment refuse the payment of further installments or make them dependent upon fulfillment of stipulated conditions. (10) Advancement of loans. — ^Loans are granted in gold or in bonds to the nominal value. (11) Loans and bonds in circulation. — The total amount of loan assets at the end of 1912 was as follows Loans at 3^ per cent, 43,037,246.62 marks; loans at 3f per cent, 8,451,659.32 marks; and loans at 4 per cent, 1,582,987.66 marks — a total of 53,071,893.60 marks for all classes of loan assets. 284 AGBICULTUBAL COOPEKATION IN EtTEOPE. The total amount of bonds in circulation at the end of 1912 was as follows: Bonds at 3i per cent, face value, 42,742,400 marks; and bonds at 4 per cent, face value, 9,909,500 marks— a total of 52,651,900 marks. (12) Notice and repayment of debts. — The loan on the side of the institute can not be terminated by notice. In exceptional cases the commission is authorized to give notice for termination of the loan (that is, the re- mainder of the loan not repaid), which must In that case be repaid after the expiration of six months. It is somewhat gratifying that the institute has seldom been obliged to make use of this right to give notice duriag its existence. The debtor is alsoat hberty, after three months' notice, to pay back the loan before the expira- tion of the determined repayment period ui bonds corresponding in interest rate and to the nominal value of the unpaid part of the debt. QUESTIONS. Q. For what purposes may a farmer borrow money from this institution ? A. There is no money advanced for the purchase of land, but for the improvement of land. Villages get money from the State for the erection of buildings, and the estates of the village become security for the loan. The institute has nothing to do with bonds, but has to do with mortgages. Government bonds, the amount of which is determined by the mortgages executed, are guaranteed by the State of Bavaria. This whole law was originally made to provide money to build irrigation ditches and to drain land. In case of building being done by cooperative societies no mortgage is taken, the value being noted in a kind of mortgage in the books; whereas if a private person gets money from the banks he has to execute a mortgage. Q. The work of this royal institute is connected with the organization for land improvement which has for its object the development of lands through irrigation and drainage? A. Yes. Q. What kinds of buildings did you refer to ? A. Cottages for workingmen. Q. Can a farmer sign an application and get a loan direct from the State ? A. No; not from the State, but from the institute. A workingman can not get monej* for himself; he has to apply through the community; the community is liable to the institution. Q. Are the bonds sold readily on the market ? A. Yes. Q. State the details of the methods by which the community gives its collective liability for borrowing money. A. Our townships, covering possibly 50 or 60 square miles, are composed of about 50 or 60 communities. These communities receive applications for loans, and the estates of the applicants become security for the loans. The community collects its own taxes; it is purely a civil organization. The community contracts the loan through the bank. A certain number of communities compose a township, a certain number of townships compose a province, and a certain number of provinces compose a State. Q. Underlying the mortgage is the fact that the State of Bavaria guarantees the title to the land ? A. Yes. Q. Who owns the land comprised in a township ? A. The private owners. Q. Who owns the land upon which a building is to be erected ? A. Some private party. Q. Do you find objection to this State aid to private famUies ? A. No; because these small dwellings are a benefit to the community itself, and there is no objection raised against it. Q. There is no objection to it by the merchants or private institutions ? A. None whatever. Q. Are these houses buUt in the community ? A. Yes. Q. Is that method of locating people in the community welcomed ? A. Yes. BAVARIAN SAVINGS BANKS. Count Spretti, Superior Councillor. ADDRESS. Munich. The pubUc savings banks of Bavaria were founded and are operated by the communes and districts. The communes and districts are not required to establish savings banks; they have done so more and more of their GEEMANY. 285 own accord in order to give their citizens the opportunity of granting and receiving loans, to insure cheap credit for public purposes, and to win a smaU profit themselves. At the end of 1911 Bavaria had about 6,900,000 inhabitants in 8,000 communes. She had 379 public savings banks, of which 224 were carried on by communes and 155 by districts, as compared with 253 savings banks existing in 1869. On the whole, the savings banks developed before the cooperative unions, and the depositors in the savings banks are by no means all members of cooperative unions. Comparatively few savings banks are operated by the districts, because the districts would not establish banks in competition with the communal savings banks already in existence. According to the statistics of 1911, there is a savings bank for every 18,272 inhabitants. It should be borne in mind that, especially of late years, a network of loan societies covers Bavaria, extending even to small villages, with which people can deposit their savings. Both the savings banks and the communes and districts operating them are under strict supervision by the State. The highest inspection authority is the ministry of the interior. Each savings bank has its own rules and standing orders, more or less detailed according to the size of the bank; but on the whole they all follow the "Fundamental Rules," published by the ministry of the interior on June 1, 1911. The main purpose of the savings bank is to give the people opportunity to deposit small savings, and especially trustee funds, in a safe bank, where they can draw interest, thereby granting the poorer people and those inexperienced in business the opportunity of accumulating a small capital. At first the savings banks accepted money only from the poor, especially servants and workingmen, thus bearing somewhat the character of a benevolent society. Every restriction as to the class of depositors has been removed, but it is still the aim of the savings banks to become the depositories of the poorer classes, though at a low rate of interest. The deposits may not exceed a certain amoxmt (as a rule, 5,000 to 10,000 marks). In larger towns, where this limit has been set, 75 to 80 per cent of all deposits are below 600 marks. The savings banks are not meant to replace private banks. Subordinate to this principal purpose is a second, namely, to serve the needs of small landowners and tradesmen by granting them loans, thus permitting the deposits to flow out again for productive purposes whence it came. According to the requirements of the population, the business is often carried on very simply. SmaU savings banks in the coimtry are often open only on certain days and at certain hours. Every depositor receives a savings book, in which aU deposits, withdrawals, and interest accumulations are entered. It serves as a certificate for the depositor in whose hands it remains. "When paying out money, the savings bank has the right but not the duty to ascertain whether the person withdrawing the money is the legal owner of the book. The savings bank is not liable for money paid to a holder of a book who is not the real owner. Savings accounts can be "locked." For example, an entry can be made allowing pajrment only on permission of the guardian or the Court of Guardians; or, in the case of donation to charitable institutions, on permission of the authorities; or on the assent of a third person or only after a specified time. In this way deposits can be held in trust for children imtil they become of age, marry, or have served in the army. Despite the fluctuating rate of interest of the general money market, the interest rate of the savings bank remains very steady. Some small savings banks grant interest only from the first of the month following the date of deposit, while others grant interest from the day of deposit. A gradation of the rate of interest according to the amount of the deposit is allowed only where the rate of interest decreases as the deposit increases. At the end of 1911 the rate of interest was between 3 and 4 per cent — 113 savings banks paid less than 3^ per cent, 255 paid between 3^ and 4 per cent, but only 11 paid 4 per cent, and these 11 were aU savings banks of medium-size communes. The large savings banks in medium-size towns paid lower rates on the whole than those of small communes and districts. Of the communes independent of counties and the larger communes of the Palatinate, 26 paid ■ below 3^ per cent, 27 paid between 3^ and 4 per cent, but none paid 4 per cent; whereas only 47 of the savings banks of the other communes and 40 of the districts paid below 3^ per cent, 113 and 115, respectively, paid up to 4 per cent, and 11 paid 4 per cent. It seems that in the country there is competition with the loan societies, whereas in towns depositors desiring a higher interest rate patronize the large banks. At the end of 1911 the number of depositors was 1,091,001. The population of the country is 6,925,020; hence there was one depositor for every 6.3 inhabitants. The savings banks of the 44 medium-size towns and the larger communes of the Palatinate had 581,000 depositors; the savings banks of the other communes, 233,000 depositors; those of the districts, 276,000 depositors. It should be taken into consideration that the depositors in banks of the medium-size towns are largely noninhabitants of the town itself, but of the sur- rounding country — farmers who come frequently into town on business. About 20.2 per cent of aU deposits were withdrawn, but this loss was more than made good by 176,000 new accounts opened. ^86 AGfitCUL1:UBAL COOPEEATION IN EtTftOPE. In the five years from 1907 to 1911, the number of depositors in the savings banks has increased 13.6 per cent; in Munich the increase was 36.7 per cent. The increase is greatest (19.2 per cent) in the savings banks of the medium-size towns and the larger communes of the Palatinate. In the other communes it was only 8.3 per cent; in the districts only 7.3 per cent. AMOUNT OF DEPOSITS. At the end of 1911 the deposits amounted to 638,000,000 marks. Of this total, 299,000,000 marks are deposited in the savings banks of the medium-size towns and the larger communes of the Palatinate, 157,000,000 marks in those of the other communes, and 181,000,000 in the savings banks of the districts. The increase for 1910 was 4.9 per cent (in the medium-size towns, 5.3 per cent; in the other communes and in the districts, 4.7 and 4.6, respectively). The Palatinate and Middle Franconia, counties with the greatest trade and in- dustry, showed an increase of 7.4 and 6.2 per cent, respectively; the county of Lower Bavaria, which is almost altogether agricultural, showed an increase of 2.3 per cent. In the previous years the general increase was as follows: In 1902, 9.2 per cent; 1903, 9.9 per cent; 1904, 8.6 per cent; 1905, 6.8 per cent; 1906, 5.8 per cent; 1907, 3 per cent; 1908, 2.6 per cent; 1909, 7.1 per cent. The fluctuation shown is due to the general state of trade. The increase in the deposits of savings banks in the country is smaller than in the larger towns, because the savings banks in the larger towns receive a good deal of money from the surrounding villages. Land in Bavaria is to a great extent parceled out into medium-size and small farms, the owners of which consume much of their own agricultural produce. The rural people are incUned to invest their savings in improvements on their own property, often at prices that do not pay. A good part of the country population also moves into the towns. The average amount due each depositor is somewhat higher in the country savings bank than in the town banks. In the medium-size towns and the larger communes of the Palatinate the average deposit account was 575 marks. In the savings banks of the other communes and of the districts it was 672 and 657 marks, respectively. This circumstance may be explained by the fact that, in many cases, people who are at the same time customers of a bank in town make use of the savings banks Hkewise. The savings banks also serve largely for short-time deposits. This is especially true in the towns where money changes hands frequently and where daily interest is granted. With the increase in the number of deposits the savings banks themselves grow. Only 27 have less than 100,000 marks, 105 have from 100,000 to 500,000 marks, 161 have between 500,000 and 2,000,000 marks, and 83 have over 2,000,000 marks. The costs of management are small. They are only 0.22 mark for every 100 marks of deposits (0.22 per cent). The investment of money by savings banks is subject to certain restrictions required by the State. The first care is that the money shall be secured and hquid. From the beginning most of the funds have been invested in mortgages. In trading districts not more than 50 per cent may be so invested; in agricultura districts not more than 70 per cent. In 1911 the available capital was 679,000,000 marks. Of this amount, 327,000,000 marks, or 48 per cent, were invested in mortgages. In the agriculttiral county of Lower Bavaria and in the trading county of the Palatinate mortgage investments amount to 64 and 66 per cent, respectively; whereas in Middle Franconia, a county of trade and industry, such investments were only 30 per cent. The savings banks of the districts inyested 56 per cent of their available funds in mortgages. As trade and industry increase and towns grow larger in Bavaria, the number of mortgages granted on other than agricultural build- ings increases. In 1911 mortgages on nonagricultural buildings amounted to 49.4 per cent; those on agricul- tural buildings to 50.6 per cent. The savings banks have the important duty of suppljraig small, landed proprietors with cheap credit. The loan rate of interest on mortgages is generally one-half per cent higher than the deposit rate. The savings banks also endeavor to facihtate the discharge of debts by encouraging repayment through the accumulation" of sinking funds, reserving the right of recall of loans. That is to say, the annual amount paid includes one- half or 1 per cent applied to the amortization of the debt in addition to the actual interest on the loan. Most mortgage banks in Bavaria follow this custom. The borrowing hmit of the communes must not exceed 30 per cent of the total capital of the bank. The savings banks may also make loans on the personal paper and drafts of first-class firms indorsed by one of the nine big Bavarian banks. At least one-fourth of the capital must be held in cash reserves, drafts, bank notes, or bonds of the imperial treasury, the German states, or the communes. To insure the capital, a reserve fund equal to at least 8 per cent of the capital must be accumulated. When this amount is reached, any surplus may be used for charitable or other purposes in the interests of the depositors — for example, to provide meals for poor school children, to send them to the country for their health, as contributions toward hospitals for consumptives, and the like. When the reserve fund has reached from 5 to 8 per cent of the capital, 3 per cent may be used for such pur- poses; if the reserve fund amounts to from 8 to 10 per cent of the capital, 4 per cent may be so used; and if it surpasses 10 per cent, 5 per cent may be used for these purposes. GEEMAKY, 28*7 To encourage thrift, especially among the young, the savings banks distribute savings cash boxes for home and school. Then they issue saving stamps or collect small weekly or monthly payments at the doors of deposi- tors, either gratuitously or for a very small charge. QUESTIONS. Q. Are these banks in their internal organization entirely noncooperative ? A. They are not cooperative societies, but the banks represent the communities themselves. The com- munities authorized by the State are regarded as the authority itself. Q. Are there shareholders ? A. No. Q. Do you receive a government grant on starting a savings bank ? A. No; there is goverimient supervision, but no direct money granted. Q. Is the attitude of the savings banks sympathetic toward the cooperative loan institutions ? A. They do the same kind of business, but an effort is made to find ways by which both institutions can be on friendly terms. Q. Do these savings banks loan money to cooperative societies, such as distributive associations and pro- ductive associations? A. Only in certain cases do cooperative societies get money from the savings banks ; appHcation has always to be made to the State. The same rule applies as to individuals. Q. In rural districts are loans on mortgages granted to a higher percentage of the valuation of the prop- erty than on mortgages in mixed country or village districts ? A. No; there is no difference between rural districts and communities or towns. There is a certain hmit to the loans which may be granted. Savings banks in towns can grant loans only to the extent of 50 per cent of their whole capital, but savings banks in the rural districts can grant 70 per cent. Q. Why is this difference ? A. Because savings banks in towns must keep on hand a larger reserve to pay depositors than in rural districts; therefore, the rural savings banks may grant more loans. Q. Are the country savings banks allowed to loan a higher percentage of their funds ? A. They are allowed to invest in mortgage loans a higher percentage of their available funds. Q. Wh.0 fixes the amount to be advanced on mortgage loans ? A. The ministry has decreed that not more than 50 per cent shall be granted on a loan. Q. Is there any investigation of the security offered after a mortgage loan has been made? A. Yes; the ministry prescribes that every year this must be investigated, and if the value of the prop- erty has deteriorated a corresponding portion of the loan must be returned ; but this is rarely the case. Q. Wh.en the Bavarian savings banks advance money on mortgages, do they sometimes advance it for specific purposes ? A. Yes. Q. Do they then investigate to see that it has been so expended ? A. Yes. Q. Under what conditions are mortgages called in ? A. When a mortgage is taken, there is a certain stipulation made before an official of the State, and inspec- tion is always made to see that the conditions are complied with. If not, then the savings bank requires repayment of the money; but this is very exceptional. Q. Can the supervisor or inspector call in any money from a particular borrower when the amount of money loaned on an estate exceeds the amount the estate is entitled to receive ? A. Sometimes the loan does exceed the usual percentage, but the State must first grant permission. Q. To what extent are loans advanced to communes ? A. There are rules prescribed for savings banks — 50 per cent on mortgages and 25 per cent to commu- nities which have no property in land. Q. Have you special forms of investment, such as loans on promissory notes with sufficient security? A. Yes; to individuals who do not give mortgages money may be loaned on notes with two indorsements. Q. What proportion of the deposits of savings banks must be held in legal tender? A. Twenty-five per cent. Q. Do savings banks do a checking business on current accounts ? A. The larger savings banks do, but the smaller ones do not; they do not know the business. Q. What is the term of notice required for calling in a mortgage ? A. That depends on the stipulations; it is a matter of contract. Q, Does it, as a rule, vary as between loans on mortgage and individual loans with personal security ? 288 AGEICULTUEAL COOPERATION IN EUROPE. A. On mortgages, as a rule, three months' notice is given, although mortgages are usually paid by amor- tization. Loans to individuals on two indorsements must be paid ia one year. Q. Are farm mortgage loans made at a different rate of interest than town mortgage loans ? A. There is no difference. Q. Have private banks been forced out of business by savings banks ? A. There is no competition. Private banks have been asked if they have ever felt any interference by the savings banks in their business, and they say they have not. Q. Does a community enjoy any local or other preference in borrowing from savings banks ? A. No; there is no preference. Q. What is the distinction between active and passive mortgage rates ? A. There is no legal difference. It is called active when the debtor pays and passive when the creditor pays for the expenses. AGRICULTURAL ORGANIZATION AND RURAL LIFE IN BAVARIA. Evidence of Prop. Kbatts. rural schools. Munich. Q. In your elementary rural schools is any phase of agriculture taught? A. In the elementary rural schools there is nothing taught about agriculture; ia the secondary schools there is some such teaching. There are Sunday afternoon schools, but only a little agricultural instruction is given. We are beginning to form coeducational schools which are not yet completed. The idea is to teach the sons of farmers agricultural practice and political economy. Q. Are the teachers in the elementary schools men or women ? A. Both men and women. Q. Is agriculture taught in the secondary schools ? A. Yes. Q. How does the high school cooperate with the board of agriculture ? A. In this country we have local schools with courses extending over seven years; attendance is compul- sory. After this the pupil must attend school for two more years on Sunday afternoons. In this further school- ing the schoolmaster gives instruction in gardening, fruit culture, etc. For the peasants' sons there are winter schools which are maintained by the provinces. Almost every province has a winter school supported by pro- vincial taxation, but the farmers have to pay from 200 to 250 marks for the term. There are schools where irrigation and drainage are taught. Then there are other schools, academies, and universities where scientific agriculture is taught. Q. Then the taxes are not sufficient to operate the schools ? A. No; boys have to help pay. Q. They do not get any help directly from the agricultural college ? A. No. Q. Is domestic science taught in the schools for girls ? A. In some of the winter schools they have courses for girls in cooking, housekeeping, etc. Q. In what way do these rural high schools improve home life or country life in general ? A. They are improving it. Q. Do these schools encourage vocational studies ? For instance, in agriculture, do they specialize on any one subject? A. Yes; they do. Q. Do you have agricultural colleges ? A. Yes ; there are 3 regular agricultural schools and 50 schools where peasant boys are taught in the winter. The young men have to attend these schools the whole winter; whereas, where agricultural instruction is given by the schoolmaster, it is given only two or three times a week. Q. Under what authority are the agricultural colleges organized ? A. Under the minister of agriculture or the minister of education. Q. Does the curriculum of colleges encourage vocational studies ? A. It does not pay to do so. Q. To what extent are colleges organized to carry out work in the nature of traveling professorships of agri- culture ? GEEMANY. , . 289 A. The colleges are not required to give such instruction, but some do. The masters of the winter schools give special lectures. Q. Has this been successful in meeting the needs of the community ? A. Yes. Q. Does the Government aid in any way in sending these men out ? A. Yes; all these schools are State schools and the expenses are paid by the State. Q. Are the elementary schools in Bavaria run wholly from the taxes of the community, or are they supple- mented by an appropriation made by the State of Bavaria ? A. The community has to pay the expenses for schooling, but the different districts give subsidies to the community to assist in defraying the expense. Q. Is there any State supervision of these schools ? A. Of course; in each department there is a State official who has to supervise the whole instruction. We have eight departments in Bavaria and separate supervisors for each department; every school is visited each year. HIGHWAYS. Q. ^Tiat is the method of construction of highways ? A. There are three kinds of roads in Bavaria: Village roads built by the village, district roads built by the district, and State roads buUt by the State. The State roads have a sohd-rock foundation and are macadam- ized; the district and village roads are lighter. Q. Could you give any idea of the cost per mile ? A. That depends on the distance of the material from the road, etc., pfobably from 8,000 to 10,000 marks per kilometer for State roads. Q. "What is your system for keeping roads in repair ? A. We have two systems: The old system of putting stones on the road and allowing the wagons to work them in; and another of having them rolled by a steam roller. One man is allotted a section of 1 mile which he has to keep in condition. There is a State office which looks after roads and rivers, etc. Q. Are road officers district or provincial ? A. All are dependent on the State. Q. You say there are no special taxes for the building of roads ? A. No; if a village has paved a road it can levy toUs for repairs. Q. What effect has good roads on betterment of production and distribution ? A. All. these roads are necessarily of great importance, because they afford a means of carrjring produce to the railroad stations. Q. What benefit have good roads conferred on social life ? A. Not much. TELEPHONES AND PARCEL POST. Q. Do farmers generally have telephones ? A. Not as a general rule. Every community has a telephone for the whole community. Q. Have you a parcel post system ? A. Yes. Q. Do farmers use the parcel post for the marketing of supplies ? A. In general, no. ROTATION OF CROPS FOR LAND IMPROVEMENT IN BAVARIA. Evidence of Peof. Dr. Spobttle. Munich. Q. Give us the rotation of crops on the lighter land of your own farm. A. The idea is always to have a grain crop and then a leaf crop. The three-year rotation is potatoes, clover, and fodder. My seven-year rotation is (1) beets heavily manured, (2) oats, (3) clover, (4) wheat, (5) rye, (6) beans, and (7) rye or oats. Q. Do you turn under any crops ? A. No ; but they do in northern Germany. Q. How many leguminous crops do you get into the land ? A. About once every seven years, clover. 14174°— S. Doc. 214, 63-1 ^19 S90 AGRiCULTURA.L COOPfeBAllON IN EUEOPE. Q. Do you grow alfalfa ? A. Yes. Q. Do you grow grain crops in this rotation for feed or sale ? A. The peasants grow grain for sale; the larger farmers for feed. Horse beans are grown as fodder. Q. In this rotation, do you plow deeper one year in seven ? A. Yes; for the beets, from 26 to 36 centimeters. In heavy soil I grow beets, in the lighter soil potatoes. Q. Does land improve under this rotation ? A. Yes; all the time. Q. Do you manure once in every seven years ? Q. Yes; with stable manure. Q. Do you use artificial plari.t food ? A. Yes; stable manure for beets and potatoes from 3 to 5 tons per acre; the next year oats with clover; after clover comes wheat; then superphosphate; rye is not given any fertilizer except saltpeter; after rye comes beans on heavy soil and peas on lighter soil; potash is applied on the lighter soil. Q. Do you ever top-dress with Chile saltpeter ? A. Yes, rye; with from 80 to 100 pounds per acre. RURAL COOPERATIVE SYSTEM IN WURTTEMBERG. Superior Councillor Baier, President of the Association of Rural Cooperative Societies in Wurttemberg. ADDRESS. Stuttgart. The consolidation of farmers in Wurttemberg into cooperative societies has proved to be the proper method for promoting agricultural betterment. Through such consolidation the small farmer has aU the advantages of the larger farmer and is consequently able to improve his position. The members are proud of the elevation of their rank through this consohdation, and, through the cooperative work, the self-reliance, the mental and the moral power of the farmers are considerably improved. In Wurttemberg there are generally only small and medium-size farms. The rural cooperative system is entitled to much credit for its share in the promotion of agricultural betterment of small and medium farmers. RUEAL STATISTICS. Before making my report regarding the rural cooperative system of our country, it will be necessary to give some details in regard to rural population and rural ownership. These statistics, as well as many details of my report, were obtained from the pamphlet entitled "Agriculture and Eural Promotion in Wurttemberg," which was pubUshed for the second time in 1908 by the Royal Department of Agriculture with the authorization of the Royal Departments of the Interior, the Churches and Education. As far as possible the statistical and other information is given to date. According to the census of 1907, Wurttemberg has a population of 2,300,000, of which 882,421 persons, or 37.7 per cent, are engaged in agriculture (gardeners, raisers of hve stock, and persons engaged in forestry and fishery are included); 258,682 males and 238,110 females are exclusively engaged in agriculture. According to statistics of 1907, there were 314,829 farms withan area of 1,453,898 hectares, and 181,531, or 57.6 percent, large farms with an area of 1,150,170 hectares, or 79.1 per cent. The total acreage is divided as follows: Medium-size farms, from 5 to 20 hectares, 46.1 per cent; small farms, from 2 to 5 hectares, 24.6 per cent; large farms, from 20 to 100 hectares, 17.9 per cent; very small farms, 9.7 per cent; and very large farms, 1.7 per cent. Small and medium-size farms predominate in the departments of Neckar and the Black Forest (70 and 75 per cent, respectively). In the departments of the Jagst and Danube, the medium-size and large farms predominate (75 and 80 per cent, respectively). There are few farms in Wurttemberg having an area of over 100 hectares. RURAL PRODUCTION. The rural production must also be considered. General agiiculture predominates in some parts of Wurttem- berg and raising live stock in others. The former prevails, especially in the departments of Neckar and Jagst and in some parts of the Black Forest; the latter predominates especially. in the department of the Danube. All kinds of grain are raised. The acreage of oats is 150,549 hectares, corn 146,350 hectares, barley 98,296 hectares, rye 40,641 hectares, wheat 39,559 hectares, and other grains 12,240 hectares. GEBMANY. 291 Cattle raising is very important in Wurttemberg. Statistics show that there are in the German Eiiipire 58.9 head of cattle per 100 hectares; iii Wurttemberg, however, there are 86.2 head of cattle pet 100 hectares. In Germany there are 33 head of cattle pfer 100 iiihdbitahts ; in "Wurttemberg the number ife 45.5. As far as the number of cattle is concQrhed, Wuttteinber^ is among the leading States, iconsidfeting its acfeage; and' is in the same class as Oldenburg and Bremen. Compared with the nuiiiber of inhabitants, it is only surpassed by Bavaria, Mecklehburg, Oldenburg, and Waldeck. Hog raising is a little neglected. Horse raising is of some importance in the level parts of Wurttemberg and is promoted by the Government. Eaising and keeping of goats must also be mentioned. This is especially found in such parts of the country where the industrial population predominates. Raising of other live stock is not influenced thereby. In order to make the statement coniplete, it is also necessary to show where the population is residing. Besides the capital city of Stuttgart, with 286,000 inhabitants, there are 16 large and medium cities and 41 towns, some of thefti very small, with a rural character, and a total of 1,899 communities. Few farmers live on their farms; they generally live in villages, in some instances in small villages having less than 100 inhab- itants. In some parts of the departments of the Danube and the Black Forest, however, farmers do live on their farms. A comparison of statistics regarding loaii associations and other cooperative societies shows the growing extension of rural cooperative credit, purchasing associations, and other rural cooperative systems in Wurttemberg. LAWS AND REGULATIONS CONCERNING ETJKAL COOPERATIVE ASSOCIATIONS. Rural cooperative associations are formed for the purpose of promoting agricultural interests through a joint cooperative system. These associations must be entered in the official register of cooperalive associations in compliance with the imperial law of May 1, 1889, as amended May 20, 1898. Associations not intending to engage in commercial business must be entered in the official register of societies (pars. 705 to 740 of the civil law code) . In this register of societies are entered the 64 rural district societies of Wurttemberg, and especially the existing societies for promoting vine, fruit, and hop culture; also local rural societies, cooperative horse- breeding societies, and other cattle-raising associations, together with State, district, and local associations for raising goats, poultry, fish, and bees. Associations are at present formed to promote the raising of hogs. About 800 cattle-insurance associations are also entered in this register. The business of the organized and registered rural cooperative associations consists especially in granting loans (personal credit is generally given by savings banks and the Wurttemberg Credit Association in Stuttgart), in cooperative purchasing and marketing, cooperative dairy business, cooperative use of all kinds of agricultural machines, thrashing associations, and grain mills. For the purpose of providing cheap money for farmers rural financial loan associations have been formed. The Raiflfeisen system is in use. Without exception the statutes of the associations do not limit the liability of their members. They have been organized to enable the rural population to obtain credit. They differ from commercial credit associations of the Schulze-Delitzsch system. Each loan association confines its opera- tions to one community, and consequently is able to ascertain with less trouble and loss of time the financial standing of parties seeking credit. Each member can only purchase one share in cooperative loan associations. No increasing dividends are paid, but only interest, which is based on the average interest rate charged to borrowers. No charge is made for administration with the exception of accounting. For these reasons loans can be made at a low rate of interest. In many instances savings banks are operated in connection with these cooperative loan associations. In accordance with rural reefuirements, credit is granted up to five years, and the principal must be paid back by amortization. Bank loans at high interest with commission at each renewal are thus eliminated. Loans are never made on promissory notes. The first cooperative loan associations were formed in Wurttemberg ia 1880, because the small and medium farmer had difficulty in obtaining money at a fair rate of interest, and many were ruined on account of exor- bitant commissions and rates ot interest. This has now been entirely changed. It has likewise been found that cooperative purchasing is also of great advantage, as the bubiness of the farmer is steadily increasing and a great deal of money is required for mineral fertilizers, fodder, improved seeds, installation of electric power, purchasiug of cattle for breeding purposes, and higher wages. For these reasons cooperative purchasing and cooperative loan association's are of advantage to farmers. Active cooperative loan associations are in operation all over the Country. In a few places local commercial orgaxdzations prevented the formation of a. local cooperative loan association. It has been proven, howcYer, that they can do a satisfactory buiineps in many places jointly with conimcrcial organizati(;)ns. It hiust not be overlooked that many farmers obtain credit from the 123 c66f)erative commercial associations' in Wurttemberg; and, on the other hand, many snVall mer- chants and business men obtain credit from the local rural cooperative loan associations. The- establishment 292 AGKICULTUEAL COOPEBATION IN EUBOPE. of branches on a large scale by the leading banks in Stuttgart is a disadvantage not only to rural cooperative loan associations, but still more so to the cooperative commercial associations. The savings bank must also be mentioned in this connection. Besides the State Savings Bank in Stuttgart, there is a county savings bank in each of the 64 counties. If money is scarce these savi^igs banks call in their loans, and thereby prevent the balancing of the movement of money among the rural population. Nearly all the rural cooperative loan associations belong to the Association of Rural Cooperative Societies of Wurttemberg, and the following statistics give the essential facts of their annual reports: 1881 (24 asso- ciations). 1891 (358 asso- ciations). 1901 (891 asso- ciations). 1911 (1.207 asso- ciations). Total business Marks. 733, 265 Marks. 29, 479, 692 10, 358, 463 10, 293, 107 69. 813 218'. 536 237, 768 30, 056 Marks. 105,030,622 46, 596, 991 46, 376. 147 222i 590 1, 437, 410 1, 404, 273 193, 916 Marks. 231, 258. 777 Resources : 112, 117, 972 Liabilities 111, 676, 517 Profit 3,828 6,437 453, 076 Reserves 3, 978, 297 Capital stock 2, 617. 018 Costs of administration 433. 955 To a large extent (79 per cent in 1911) the cooperative loan associations in Wurttemberg attend to the rural cooperative purchasing. The rural cooperative loan associations are able to do this in a very satisfac- tory manner on account of their financial organization, the liability of their members, and their bookkeeping. There is no trouble on account of the joint business of making loans and cooperative purchasing. In some parts of Wurttemberg the associations report that members are slow in settling their accounts. The cooperative rural loan associations have been established m almost every part of Wurttemberg, and for that reason it was not deemed necessary to establish independent purchasing associations. The only exception is in the depart- ment of the Danube where the central cooperative rural association, which does not belong to the consolidated associations, was established. In that part of Wurttemberg there are not so many rural cooperative loan associations as in other parts of Wurttemberg. At present rural cooperative purchasing associations outside of Wurttemberg are trying to establish branches in Wurttemberg, especially in viDages near the frontier. It has been proved, however, that two organizations at the same place can not do a satisfactory business for their members. It is believed that this movement will soon be stopped. The following statistics show the development of cooperative purchase of fertilizers, fodder, seeds, etc.: Marks. 1881. 5 associations purchased goods valued at 3, 867 1891. 161 associations purchased goods valued at 337, 346 1901. 533 associations purchased goods valued at 1 , 342, 678 1911. 1,058 associations purchased goods valued at 6, 994, 716 A number of rural cooperative associations engage in the sale of aU kinds of grains and other products and in renting of thrashing outfits. Many of the fural cooperative loan associations take charge of the sale of land and thus prevent the pro- fessional dealer in farm lands from realizing large profits. It is hoped that in the near future the associations wiU have the legal option for the purchase of all farm lands which may be for sale. Cooperative grain-seUing associations have been established in some parts of Wurttemberg. There are a few small ones and a few large ones. They are operated in a businesslike manner. At present there is no necessity to consolidate these grain-seUing associations. They easily dispose of aU their grain to mills, breweries and the military authorities. The following statistics show the cooperative sale of all kinds of grain during the year 1911-12, as expressed in doppel-zentners, a German weight of 220 poimds: Wheat, 16,958; barley; 32,082; oats, 9,235; rye, 1,120; corn, 2,447; miscellaneous, 2,252; or a total of 64,044 doppel-zentners. COOPERATIVE DAIRY ASSOCIATIONS. The following statistics show the annual business of the dairy associations which belong to the consolidated cooperative associations during the year 1910: Number of associations, 260; number of members, 21,735; number of members supplying milk, 20,519; amount of milk supplied by members, 677,092 hectoliters; butter produced, 27,268 doppel-zentners; and cheese produced, 3,270 doppel-zentners. Some of the cooperative dairy associations engage in the sale of milk for their members. No statistics of other cooperative associations are available. GERMANY. 293 There is also a cooperative association for the sale of live stock. Nearly all rural societies and rural cooperative associations are members. This association is subsidized by the Government, and has an office in the slaughterhouse in Stuttgart. CONSOLIDATION OP RTXRAL COOPERATIVE ASSOCIATIONS IN WXIBTTEMBEKG. Soon after the formation of the first few rural cooperative loan associations it was deemed advisable to consolidate all rural cooperative associations. In 1881 there were 32 cooperative associations, and it was decided to consolidate them. At a meeting of delegates July 26, 1881, the Consolidated Kural Cooperative Credit Association was formed, consisting of 23 societies and 1,150 members. Until 1897 only cooperative loan associations were admitted to membership, but the statutes were changed in 1897 and all rural cooperative associations applying for membership were admitted. The association was registered in 1900 as the Con- solidated Rural Cooperative Association in Wurttemberg. From the beginning nearly every rural cooperative loan association became a member. The following statistics show the development of the consolidated asso- ciation: Year. Number of cooperative loan associ- ations. Number of members. Average membership of each association. 1881 1891 1901 1911 24 358 891 1,207 1,797 31, 479 86,702 138, 541 75 88 97 114 On January 1, 1913, the consolidated association consisted of — Membera. 1,239 rural cooperative loan associations 142, 000 274 cooperative dairy associations 23, 500 39 cooperative milk-selling associations 4, 400 15 cooperative vine-growing associations 1, 017 8 cooperative grain-selling associations 2, 833 10 cooperative threshing associations 534 1 cooperative fertilizer-selling association 131 1 cooperative cattle-breeding association 77 1 hog-breeding association 40 5 cooperative grain-milling associations 715 4 rural cooperative general store associations 512 1 consolidated dairy of the Wurttemberg Alagu 13 1 cooperative leaf tobacco-selling association 79 1 cooperative rural central bank , 1, 268 Total (1,600 associations) 177, 119 According to the statutes the consolidated cooperative association was formed for the purpose of (1) inspect- ing the cooperative associations belonging to the consolidate)^^ cooperative association in compliance with the law; and (2) joint care of the interests of all associations and members. The following means are employed to attain the latter purpose: (a) Joint representation in all mutual matters; (&) mutual organizations and offices, especially the cooperative central bank in Stuttgart; (c) advising the cooperative associations ia all matters, also assistance in the formation of new cooperative associations ; and (d) cooperative purchasing and marketing of rural products. j Eural cooperative associations entered in the official register of cooperative associations may become members, provided then- statutes. do not differ to a krge extent from the model statutes of the consolidated cooperative association and are drawn up in compliance with these statutes and the resolutions of the association. The consolidated cooperative association is regularly issuing model statutes, sample forms for bookkeeping and accounting, and guides for treasurers, trustees, and managers of rural cooperative loan associations. The inspection of the various associations was also immediately taken up. At present there are 20 inspectors and 3 assistant inspectors. The inspectors examine the records and accounts and at the same time give advice to the accountants how to improve their methods of keeping their books and accounts. The accountants must first send all their records to the inspector's office where they are carefully examined by him. After this examina- tion the inspector calls on the accountant and finishes the inspection at his place of business. A report regarding t^e examination is given to the local association with suggestions how to improve it^ bysiRess methods. If the 294 AGRICULTURAL COOP-EBATION IN EUROPE. suggestions are Bot closely followed, the credit of the local aspociation is stopped at the central cooperative bank and the local association is expelled from the consolidated cooperative association. All cooperative associations are inspected at least once every year. In accordance with the result of the e.xamination, the associations are divided into three classes. In 1912 these classes contained the following percentages, respectively: Class 1, 61.5 per cent; class 2, 38.06 per cent; and class 3, 0.39 per cent. Sometimes inspections are made unexpectedly. There are several chief inspectors for the supervision of the inspectors. There is an advantage in the examination of the accounts at the office of the inspector. The examination can there be done very carefully, traveling expenses are saved, and the inspectors are in touch not only with each other, but also with the administration, the central bank, and the cooperative purchasing department. The following institutions wer.' organized by the Consolidated Rural Cooperative Association: The rural cooperative cent:al bank, the purchasing department, advisory and legal departments, and lectures on coopera- tive matters. CENTRAL COOPERATIVE BANK. Soon after the formation of the Consolidated Rural Cooperative Association, an arrangem.ent was made with the Imperial Bank in Stuttgart to attend to the financial matters of the association. In the first year (1881-82) the total financial transactions amounted to 220,000 marks. In the last year before the establish- ment of the Central Cooperative Bank, the annual financial transactions amounted to 9,160,000. On July 1, 1893, the Rural Cooperative Central Bank (Ltd.), was established to act as the bank of the cooperative members. This bank does a general banking business for members, receives deposits which draw interest, and gives creait to associations m need of funds. The central cooperative baiik is an independent institution, but only coopera- tive associations belonging to the Consolidated- Rural Cooperative Association can becomt; members. The central cooperative bank is also a menibei' of the Consolidated Rural Cooperative Association. The liability of each association amoi'nts to 1,000 nmik.:; per share. Each share costs 100 marks, and one-tenth of this sum must be paid in at the time of admittance. One association can not buy more than 10 shares. The members can not join a similar enterprise without the consent of the trustees of the central bank. The statutes provide that an association holding membership in the central bank may borrow to the extent of 1 00 mark.? per member. For each 5,000 marks of credit, one share in the central bank must be held. In some instances extraordinary credit is granted. The president and trustees of the central bank fix the rate of interest for deposits and loans. The working capital of the central bank consists of the resources of the anhociations, deposits, and other assets Statistics showing the development of the Central Cooperative Bank from 1899 to 1911. End of year— Number of members. Shares. Liability. Deposits. Total loans. llegular credits. Extraordinary credit. 1899.... 1902.... 1905.... 1908...- 1909..-- 1910.-.- 1911---- 1912.... 788 916 1,017 1,126 1,160 1,186 1,228 1,268 1,370 1,629 1,915 2,439 2, 543 2,654 2,844 3,011 Marks. 1,370,000 1, 629, 000 1, 915, 000 2, 439, 000 2, 543, 000 2, 654, 000 2, 844, 000 3, Oil, 000 Marks. 78, 230 101, 813 131, 578 180, 317 191, 834 204, 107 222, 666 239, 899 Marks. 5, 914, 500 7, 010, 400 8, 429, 200 10, 715, 000 11, 188, 600 11, 742, 900 12, 533, 500 13, 194, 000 -Moris. 272, 000 785, 800 871, 100 1, 376, 000 2, 383, 300 3, 059, 300 Other financia,! transactions of the central bank were as follows : Year. Deposits of associations. Loans. Cash transactions. Total. 1894 1902 ' 1912 Marks. 4, 073, 039 11, 463, 258 25, 570, 660 Marks. 6, 050, 343 11, 664, 773 30, 149, 503 Marks. 10, 123, 382 23, 128, 031 55, 720, 163 Marks. 14, 465, 128 30, 830, 726 113, 010, 872 GEEMANY. The table below shows the proportions of debit and credit at the end of the following years: 295 Year. Balance due ' associatioBs in macks. Debts of associations in marks. 1894 1895 1899 1900 1901 1902 1903 1904 1905 1906 1907 1910 1911 1912 792, 998 1, 492, 946 48, 958 2, 273, 971 2, 770, 855 2, 583, 109 3, 781, 531 5, 453, 576 2, 931, 673 1, 324, 298 800, 043 3, 090, 035 4, 064, 772 543, 711 •The imfavorable situa,tion in 1912 was caused by poor crops during the past few years and the prevalence of anthrax in Wurttemberg during 191 i. It appears from the foregoing statements that the supply and de- mand of money do not always tally. Sometimes the supply of money is larger than the demand, and at other times the demand is larger than the supply, so that the resources of the central bank are insufficient to satisfy all demands. The cause of this fluctuation is that the farmers have large receipts only when they sell their crops. At other times, especially in the spring, farmers are in need of money. It is therefore impossible to balance supply and demand. Formerly, when the resources of the central bank were insufficient, it applied to other banks for assistance. But such credit being too expensive, the Government was appealed to and granted credit from time to time. Finally a law was passed February 4, 1889, authorizing the royal treasury depart- ment to grant loans to the central cooperative bank up to 1,000,000 marks at 3 per cent interest. These loans could be called in at any time without notice. Recently an application for an increase of this amount has been submitted to the Royal Government. The following table shows the changes in the rates of interest from 1899 to 1912: Period. July 1, 1898, to Dec. 31, 1899.. Jan. 1, 1900, to Mar. 31, 1900.. Apr. 1, 1900, to Dec. 31, 1900.. Jan. 1, 1901, to Sept. 14, 1901.. Sept. 15, 1901, to May 14, 1906 May 15, 1906, to Dec. 31, 1906. Jan. 1, 1907, to June 30, 1907.. July 1, 1907, to June 30, 1908.. Julyl, 1908 Jan. 1, 1912 Extraordinary Rate of interest. Deposits. Per c&nt. 3 3i 3i 34 3 3i 3i 4 3i 4 Loans. Per cent. 4 4 4i 4i 4 4 4i 4i 4i 4i Difference. Per cent. 1 1 Ten per cent of the annual profits of the central bank are put aside to provide reserves and working capital. From the balance interest is paid on the shares of the associations, said interest not to exceed 4 per cent per annum. The balance is used to increase the reserves and the working capital, and a share of it is turned over sometimes to the Consolidated Rural Cooperative Association. The following table shows the result of the business during various years: Year. Net profits. Iteserves. Working capital. 1894 1900 1910 1911 1912 Marks. 11, 888 21, 539 52, 706 49, 789 Marks. 1,800 15,000 75, 000 85, 000 85, 000 Marks. 13, 533 68, 227 257, 671 279, 162 264, 102 JjDss 9,012 marks and sl^rinkagp in vfilue of investment pecurities 80,810 mar){p 296 AQBICULTUEAL COOPEEATIOHr IN EUROPE. Besides the assistance of the Royal Government in granting credit to the central bank, the Government allows regularly 5,000 marks for its administrative purposes. The net costs of administration for the year 1912 amounted to 22,117.43 marks. Taxes are not included in this amount. The costs of administration are, therefore, 30.7 pfennigs per 100 marks. Net transactions amounted to 72,088,354 marks (less postal check accounts) and averaged 9 pfennigs for all accounts in 1912 against an average of 21 pfennigs for 1909 of the central cooperative banks belonging to the German Consolidated Cooperative Association. COOPERATIVE PURCHASING DEPARTMENT. Besides inspecting the accounts and books of the various cooperative associations, cooperative purchasing of all rural necessities is an important branch of the Consolidated Rural Cooperative Association. Already in the first few years of its existence, the consolidated association purchased all supplies for the various associations on a large scale. The necessary experience, however, was lacking; the enterprise proved to be a failure and was discontinued in 1888. But 10 years later there was a general demand to revive cooperative purchasing and the cooperative purchasing department was established. The cooperative purchasing department buys all goods ordered by the various associations at the lowest possible price and of the best quality. Good care is taken of the interests of the associations, it being insisted that aU goods shaU be properly packed, shipped in time, and correct weight charged. Freight charges are carefully examined; also bills and all other charges and expenses. Upon receipt of goods they are immediately forwarded to the associations and, therefore, no warehouses are required. The purchasing department holds membership in the Consolidated German Cooperative Fertilizer Purchasing Association. During the year 1911-12 the following orders were executed: Three thousand four hundred and eighty-two cars of fertilizer, valued at 1,705,345 marks; 1,170 cars of fod- der, valued at 1,803,424 marks; 53 cars of sulphate of copper, etc., valued at 270,426 marks; 1,273 cars of coal and coke, valued at 204,448 marks; 1,238 machines and implements for farms and dairies, valued at 120,374 marks, the total amount paid for purchases being 4,104,017 marks. The annual report of the purchasing de- partment for the fiscal year 1911-12 shows a total business for the year amounting to 7,905,139 marks; re- sources, 314,338 marks; liabilities, 207,485 marks; reserves, 106,853 marks; cost of administration, 25,168 marks; rebates and dividends for purchasers, 103,702 marks; discounts for purchasers, 15,262 marks; refunded freight charges, 668 marks; and refunded for shortage in weight, 18,606 marks. ORGANIZATION OF THE INSTITUTIONS. All matters of the consolidated association are attended to by the president, the trustees, and the general meeting. The president represents the corporation in all legal and other matters. One of his duties is the appointment of all ofiicials of the association. The board of trustees of the association, in which the trustees of the central bank are also represented, administers the funds of the association, receives the reports of inspec- tors, fixes the salaries of officials and discharges them, if necessary. The trustees receive no compensation for their services, the position being an honorary one. At the general meeting the president is elected; all associations have the right to vote at this meeting. The annual report is submitted and examined at the general meeting; all other accounts are audited and, if found correct, the president, board of trustees, and accountants are released from all responsibility. All complaints, changes of statutes, etc., must come before this general meeting. The inspection office is in charge of a director of the central bank. There are 2 chief inspectors, 18 inspectors, and 3 assistant inspectors. The secretary of the consolidated cooperative association assists the president in the transaction of the routine business. A director of the central bank is in charge of the purchasing department, which is run in a business-like manner. The assistant director, as well as all employees, are mer- chants or mercantile clerks. At present there are eight employees. The central bank is an independent organization. There is a president, cashier, directors, bank examiner, and board of trustees consisting of eight persons. There are three employees. Nearly all the employees of the consolidated cooperative association, the purchasing department, and the central bank are entitled to a pension. The costs of administration of the consolidated cooperative association (with the exception of the purchasing department), which consist especially in expenses for inspecting associations, have increased to a large extent during the past years. In order to pay these expenses, from 5 to 20 marks per annum and extras according to membership are collected from the various associations. This levy, however, is insufficient; therefore the GEBMANY. 297 consolidated cooperative association has received since its formation government assistance to meet the ex- penses of inspection and the costs of administration. This government assistance amounts at times to as much as 70 per cent of the total costs and expenses. During the past few years the Government granted 40,000 marks per annum, equal to 53 per cent of the total expenses. OTHER INSTITUTIONS. The advisory department, which was established January 1, 1913, has'been joined by 200 associations. In order to advance the interests of cooperation, lectures were held during last winter for accountants and regard- ing cooperative work. There were also practical lessons given in cooperative bookkeeping. In the foregoing the institutions of the Consolidated Rural Cooperative Association of Wurttemberg have been shown. Only associations which have been registered in the official register of cooperative associations are admitted to membership. The independence of each association is not limited through membership in the consolidated association, and especially is there no mutual risk or liability among the various associations. It is not compulsory to make purchases through the purchasing department or to join the central bank. The associations may convince themselves that it is to their advantage to make purchases through the purchasing department and to join the central bank, and also the joint cooperative interest may convince them. If, how- ever, an association joins the central bank, the association becomes liable for the amounts already mentioned and can not join another similar enterprise. All associations holdiag membership in the consolidated cooperative association are obliged to work for the common interests of the consolidated association. Each individual association must expect the same from their members, because this is the cooperative duty of each association. The consolidated cooperative association has never solicited new associations, but left it to each commimity to organize a cooperative organization and to join the consolidated association. This is the reason why only 20 cooperative loan associations have been dissolved since the foundation of the Consolidated Rural Cooperative Association. The consolidated association has always been against hasty organization of cooperative associations. The simple economic situation of the parties interested is the reason that the business methods of the associations are also simple. The bookkeeping of the various associations is not complicated and transactions with the central bank are also very simple. Losses and other disappointments are also to be recorded. These, however, were not very extensive. Embezzlements were generally under 100 marks, and only in one instance was the amount over 200 marks. Only three associations have resigned from the consolidated cooperative association; but they, as well as others belonging to the Neuwieder association, have again joined the Consolidated Rural Cooperative Association of Wurttemberg. The Consolidated Rural Cooperative Association will maintain its sound principles which it owes to Prof. Dr. von Leemann, the honorary president and founder of the consolidated institution for the benefit of rural cooperative work. We hope that, through mutual cooperation of the consolidated association, as well as through the central bank and the various associations, the rural interests of our country will be promoted. QUESTIONS. Q. How many banking systems exist in Wurttemberg ? A- There are four different classes: (1) The State-aided Imperial Bank, with its local branch in every town, which performs all kinds of commercial banking business except buying and selling securities. (2) Sav- ings banks, some of which will only accept deposits from poor people, while others accept deposits from all classes. These are-under strict government supervision and may only invest their funds in gilt-edge seciirities; some of their money is invested in agricultural loans on mortgage. (3) Mortgage banks, of which in Wurttem- berg there is the Credit Union, which makes loans to farmers on amortization mortgages that can not b.e recalled and which has taken the farmer out of the power of the private bank. (4) The cooperative hanks for personal credit. These sometimes grant loans on real estate, but this is exceptional and is not desirable. These subdivide into (a) the Raifleisen banks and (b) the Schulze-Dehtzsch banks. The Schulze-Dehtzsch banks are more particularly for urban centers and only afford short-time credit. The Raifleisen banks give longer credit and are especially designed to meet the needs of the agricultural population. Q. Are the Raiffeisen banks confined to rural credit? A. Yes; the banks are rural, but persons other than farmers may become members. Q. Then they are intended primarily for country use, but small tradesmen living in the country may become members ? A. Yes. Q. How is their capital raised ? 298 AGBICULTUKAL COOPERATION IN EUROPE. A. Capital is raised first by the members' shares, which must be subscribed for on joining the society, and which average $25. Besides this, outside loans are obtained on the coUeetive security offered by the mernbers, who become collectively and severally liable for the money borrowed. For instance, 50 members, e^ch worth about S500, represent a collective and adequate security good for $25,000. Q. Do these banks receive deposits ? A. Yes. Q. What interest do they pay to depositors ? A. Four per cent as a rule. Q. What interest is charged to borrowers ? A. One-half per cent more than that paid to depositors. Q. What is the maximum time for which loans are made ? A- Five years is the maximum; as a rule loans are not made for more than four years. Q. If the loan is extended to five years, can it be repaid in installments ? A. It can be repaid at any time. Q. What security must the borrower give ? A. Indorsers or collateral. Q. Do the Raiffeisen banks loan money on the amortization plan ? A. No. Q. Can local commercial banks compete favorably with the Raiffeisen banks? A. No ; their credit is more expensive. Q. You say that the borrower pays only one-half per cent more than is paid to depositors ? A. Yes. Q. What rates of interest were charged before the Raiffeisen banks were in existence 1 A. From 6 to 8 per cent and higher; usury prevailed. Q. Then the benefit they have conferred has been the reduction of interest rates from 6 to 8 per cent to 4 and 5 per cent ? A. Yes. Q. What becomes of any profits these banks may make ? A. The shareholders receive a 4 per cent dividend and the surplus is written to the reserve. Q. Do the officials of the Raiffeisen banks receive compensation ? A. Only the cashier, who is paid at the rate of one-tenth of 1 per cent on turnover. The other officials are not compensated. Q. Are the Raiffeisen banks subject to government supervision? A. No; this is their special feature and characteristic. Q. How are the directors chosen ? A. By the members. Q. How long do they serve ? A. Four years. Q. Are the Raiffeisen banks federated ? A. Yes; in Wurttemberg they are federated into a special central bank. Q. Is the central bank under State supervision ? A. A member of the Government has the right of inspection, as the State has made an advance to the cen- tral bank of 1,000,000 marks to aid it. It is now proposed that this advance be increased to 3,000,000 marks. On this advance the State receives 3 per cent interest. Q. What has the central bank done with this advance ? A. The central bank acts as a clearing house for the local banks and the advance has been used to make loans to local bainks. . Q. Then, to protect this advance from the State of one million marks, the Government has its inspector in this central bank ? A. Yes. Q. What are the duties and powers of this inspector or examiner ? A. He examines the books of the bank and is present at its meetings. Q. To whom does he report ? A. He reports to the minister of the interior, who is the head of the Government. Q. Should he find the condition of the bank unsound, could he close it ? A. No ; neither the inspector nor the Government can close the bank, but he would report the bad man- agement and the Government would withdraw its loan. It should, however, be remarked in this connection GEBMANY. , 299 th^t HO money has b^en lost; the local banks have never failed. Sometimes it has happened that an account- ant of a local bank has mismanaged or misappropriated funds, but this is very rare. In such ca-ses the local members have assessed themselves to make up such loss, the highest amount yet paid on such assessment hav ing been $25 per member. Q. In case of failure, who is the preferi'ed creditor — the State or the depositors ? A. There are no preferred creditors; all are on an equal footing. Q. Have you postal savings banks in Wurttemberg? A. No. Q. Do farmers organize for collective mortgage loans on their land in Wurttemberg ? A. No; in Wurttemberg we do not have the Landschaft or land-mortgage system which prevails in the north of Germany. Q. Then the farmer who requires a larger loan than the Raiffeisen bank can give has fo go to a private bank? A. Yes. Q. You have no cooperative system to meet such wants ? A. No; but there is an agitation for founding such a system. Farmers now obtain such loans from pri- vate banks, savings banks, or the Wurttemberg Credit Union. Q. Do Raiflfeisen banks pay taxes ? A. Yes; they pay income tax and business taxes. Q. The same as other banks ? A. Yes. Q. Are the Schulze-Delitzsch banks the same for the cities as the Raiffeise^ banks are for the country ? A. Not exactly. The area of operation of the Raiffeisen banks is strictly limited to one village; the Schulze-Delitzsch banks have a more extended area of operation, often working for a whole county. Q. Then the Raiffeisen banks are neighborhood banks ? A. Yes. Q. And the Schulze-Delitzsch banks are not ? A. No ; they are not. Q. What is the income tax charged? A. This question can not be answered offhand; the income tax is a graduated one. Q. Does the Central Raiffeisen Bank regulate the size of loan made by the local banks ? A. No. Q. What is the maximum loan made by the local banks ? A. Each bank fixes its own maximum. Q. Is th^t maximum determined by a certain ratio which has to be observed between capital and loans, as in the United States ? A. No; it is determined by the amount of cash which the local bank has on hand and by the discretion of the director in assigning loans to each member proportionate to the security he can offer. Q. Are the loans made on notes ? A. Yes; on simple promissory notes. Q. Must those notes be indorsed ? A. In case of absence of collateral — yes. Q. The printed paper handed us on the organization of Raiffeisen banks states on page 8 that loans are never made on promissory notes. How is that ? A. It is due to a misapprehension on the part of the translator. There are two kinds of notes. One is promissory notes wMch, if unpaid, give rise to a lawsuit on the part of the creditor; the other is known as judgment notes and, if unpaid, entail immediate execution. Q. Please explain the differepce. Do Raiffeisen banks make loans on promissory notes backed by col- lateral or on indorsed notes ? A. Raiffeisen banks do not make loans on judgment notes, but on promissory notes. The statement referred to on page 3 of the printed leaflet is an error. Q. Do Raiffeisen banks market their members' notes ? A. No; never. Q. Can these banks call in loans before their term of expiration ? A. Yes; on four weeks' notice. Q. If R^ffeisen banks nqed more capital than they obtain from deposits or than is granted them by the central bank, where do they go for it ? 300 AGEICULTUBAL COOPERATION IN ET7E0PE. A. They can obtain the loans they need from the central bank; for if the central bank is short of money, it can in its turn obtain loans of commercial banks — ^for instance, from the Imperial Bank. A special imperial German law provides for the cooperative banks of the whole country recognizing the local bank as a corporate unit which can issue a note as such and thus obtain a loan from the central bank. Q. Can local Raiffeisen banks obtain loans from other sources ? A. Yes; they can secure loans from private parties if they choose. Q. Do the deposits as a rule equal the loans ? A . This differs at different times of the year, according to the season and the needs of the farming population. Q. is it the purpose of the central bank to equalize the funds at the disposal of local banks ? A. Yes; sxactly so. Q. Do Schulze-Dehtzsch banks loan money on the same kind of security as Raiffeisen banks '': A. Yes. Q. If an individual member of a Raiffeisen bank defaults, 1 imderstand that the loss is made up by an assessment of the members? A. Yes. Q. When a farmer requires a loan on his land repayable by amortization, to whom does he apply in Wurt- temberg ? A. He applies to the savings banks or to the Credit Union. Q. Is this Credit Union a private bank organized for profit ? A. All those who receive loans become members of the bank; it is not organized for private profit. Q. For how long a period does it grant loans ? A. For periods up to 50 years; the charge for amortization is then one-half of 1 per cent. Q. I understand that the Credit Union deals with the individual farmer, not with a collective group of farmers ? A. Yes; vdth the individual farmer. Q. Have you no association for making collective mortgage loans ? A. No. Q. From what source does the Credit Union get its funds ? A. It issues bonds. Q. What security is there behind the bonds ? A. The mortgages. Q. Who buys the bonds ? A. The bonds are sold to the pubhc; at the present time they sell at 95. Q. What rate of interest does the Credit Union charge and what does it pay ? A. It now charges 4 per cent and it pays 4 per cent. The rate it charges is the lowest market rate. Q. What is the attitude of private banks to Raiffeisen and Schulze-Delitzsch banks ? A. While there is some rivalry, it may be said that their attitude is not on the whole unfriendly, as they do not cater to the same kind of customers. CREDIT UNION OF WURTTEMBERG. Addresa of Mr. von Seitz, Managing Director. Stuttgart. The Credit Union is a.n association organized 85 years ago for the benefit of the landed borrower. The first founders were members of the Wurttemberg land-owning nobility under the leadership of the Prince of Furstenberg. It is purely a cooperative or mutual institution. AU profits ultimately go to the borrower. Membership in the association is gained by becoming a borrower and in no other way. The advantage of membership lies in being able to borrow through the medium of the association at the lowest possible market rate. The association lends money only on first mortgages on rity and country property, preference being given to country loans. Owing to the present scarcity of money, loans at this time are confined almost entirely to country lands. When money is abundant, city loans are cheerfully granted, because of the relatively lower cost of administration which they require. All loans are confined to the amortization plan on terms payable in installments of from 10 to 50 years at the option of the borrower. The present outstanding bonds aggregate 105,000,000 marks. The pfesent amount of mortgages or Ijand aggregate 110,000,000 marks. GBEMANT. 301 The money realized on the sale of bonds is used for the payment of mortgages. The sale of bonds is chiefly made in Wurttemberg, because they are in greater demand there since they may be used as investments for trust funds and, consequently, they command a higher price. The present market rate of the association bond is 97.50 on a 4 per cent interest basis. The present outlook is that prices will drop somewhat lower owing to large prospective loans being put on the market on more Uberal terms which will have to be met by bonds offered by the association. On a 50-year amortization mortgage, the interest of the borrower is at the rate of 4.85 per cent, arrived at as follows: Interest 4 per cent, amortization 0.66 per cent, advance to reserve, returnable with compound interest at the expiration of the loan, 0.19 per cent — total 4.85 per cent. When the association was started 85 years ago it began without capital. In starting a loan a premium equivalent to 4.17 per cent is charged to the borrower and this is added to the loan in order to create the reserve mentioned above. This premium, however, has always been returned with compound interest to the borrower at the final payment of the loan. The present reserve fund is 7,734,142 marks. The rate charged borrowers does not include cost of administration. This is covered by profits made by the association in buying in below par' their own bonds whenever opportunity offers and by discounting bills of exchange and drafts. The association bonds are quoted daily on the stock exchanges in Stuttgart and Frankfort. When favorable quotations are offered, the association takes advantage of the opportunity by buying in and canceling such bonds. Payment on mortgages can not be forced until maturity, nor can the rate of interest be raised so long as payments are promptly made by the borrower; but, if the market rate for money goes down; the association can convert its bonds to those bearing a lower rate of interest, and this reduction is given to the borrower. A government representative is charged with the examination of the association. He attends' all monthly meetings of the trustees and is furnished with aU papiers regarding the loans. He has the right to disapprove and censure a loan, although a formal approval by the Government is not necessary for the validity of a loan. The state representative has the right to go fuUy into all the affairs of the association. While there is no maximum loan, the minimum loan is 300 marks. These loans are made on a basis of 50 per cent of the values specially determined by the local municipal authorities where the loans are to be granted. The association must get a court judgment before foreclosing when there is default of payment. It may foreclose immediately, but usually a term extending to two years is given to the borrower. The legal procedure itself takes from two to three months. Owing to the present hard times there were 20 foreclosures during the first five months of 1913, equal to 25 per cent of the total number of loans granted. Thus far in the history of the association there have been practically no losses of any importance, the maxi- mum loss ever suffered being not more than 3,000 marks. Stamp taxes are payable on the bonds of the association. The association also pays an income tax on its net annual earnings. The total tax for 1912 was 60,000 marks. The item of taxes is charged against the cost of administration, which is at the rate of 18 per cent on the amount of loans granted. The association does not accept deposits. The borrower gets the full amount of the loan in ready money. If the market price of the bonds is not sufficient to cover the amount of the loan, the premium, which at present averages from 2 to 2^ per cent of the loan, is deducted from this payment. Bonds offered on return payment of mortgages are only accepted by the association at market value, which, however, does not impose any penalty for anticipated payment of loans. The manager is appointed by the trustees, who are chosen by the members every three years. The trustees receive an annual salary of $1,500. The manager receives an annual salary of 14,000 marks, an apartment, and a right to a pension. 302 AGRICULTUKAL COOPERATION IN EUROPE. AGRICULTURAL CREDIT IN THE GRAND DUCHY OF BADEN.» Mr. Robert Haeckbr, Councillor and Managing Director of the Federation of Agricultural Credit Associations at Freiburg. ADDRESS. Strassbueg. In the Grand Duchy of Baden the credit on real property is supphed chiefly by pubhc savings banks, the Rhine Mortgage Bank, the General Loan Institute, church endowments and other funds of public utility, and private persons. We, therefore, in Baden do not as in Prussia, for instance, deal with State institutes, which are entirely divested of the character of earning money, but we deal with private credit institutes for real property. The town and district savings banks prefer to issue credit on mortgage. Of their property totaling 906,700,000 marks, about 73.4 per cent is chiefly invested in loans agaiast stipulated pledges, and about 6.1 per cent in earnests for purchasing estates. Although the savings banks are indulgent and loyal creditors of cultiva- tors, they can not completely satisfy all the demands made on an agricultural credit institute for real property; for this credit by its very nature must be of long duration, and, owing to its purpose, it can not be ended by notice, but must be entered into with the provision that the debt shall be repaid by annuities. Under such a permanent investment of funds by savings banks, the latter probably would not always have cash enough at their disposal if a "run" on the banks should arise, as it did in 1911. Quite different is the position of the land credit department, established in 1893 by the Rhine Mortgage Bank in Mannheim according to agreement with the department of the interior for granting rural loans in the Grand Duchy of Baden. This institution lends money for long terms and can without diSiculty grant loans which are repayable by a sinking fund and which can not be ended by notice, because it procures its funds not by savings which can be drawn out at any time, but by the issue of mortgages. The total of loans made to rural debtors and communities has risen from $1,500,000 in 1893 to over $6,000,000 in 1912. If the public has not availed itself of this land credit department to the extent expected, it is, no doubt, due chiefly to the fact that in recent times not only the endowments but also the savings banks grant loans on land to a greater extent and with more favorable conditions than formerly, and that the latter have also been ready to grant loans on annuity payments. For supplying personal credit there exist in Baden: (1) The land credit associations united in a federation for the whole Grand Duchy; (2) the savings banks, with and without the guaranty of the community; (3) the Schuke-Delitzch loan associations; and (4) a small number of Raiffeisen and similar savings banks which exist outside of the general federation. The savings banks which, as we have seen, act chiefly as credit agencies for real property, play only a sub- ordinate part with regard to personal credit. Thus, in the year 1911, only 3.2 per cent of all active capital was invested in loans to private parties against a bond. The Schulze-Delitzsch and aUied credit institutes, such as loan banks, commercial banks, popular banks, etc., are by their organization exactly suited to commerce and trade. Yet this does not prevent them from also, and even with preference, serving the requirements of agricultural personal credit. Indeed, in places which still lack land credit associations, they constitute, with the savings banks, almost the only sources of obtaining money. Nevertheless, they are unable to satisfy completely the credit requirements of the rural population. Their whole business is commercial and in usual banking form; consequently, their business premises are chiefly in towns. Their chief principle is that the turnover shall be rapid, frequent, and as high as possible. These associations render commerce and trade inestimable service. But thej- grant short credit of three months, which, however, can be prolonged. The loans which the cultivator obtains are to be appHed " " Agrimlt'u.ral Credit in the Grand Duchy of Baden" {reprint from an article by Mr. Rudolf Baendel, published in "Blatter fiir Oenos- senschaften," of June 28, 1913, p. 470, and translated from the German for the Commissions): A few days ago, before the agricultural Commissiors from America. Mi. Haecker, agricultural councilor, director of the Federation of the Baden Agricultural Credit Associations, delivered a lecture in Strassburg in which the above subject was treated. On this occasion the lecturer passed the following erroneous judgment on the Schulze-Delitzsch associations, thus leading his audience astrav: The Schulze-Delitzsch and allied credit institutes (loan hanks, trade banks, popular banks, etc.) are by their organization exactly suited to commerce and trade. Yet this does not prevent them from also and even by preference serving the requirements ol the rural population. Their whole business working is commercial and in banking form; consequently their business promises are chiefly in towns; their chief principle is that the turnover be rapid, frequent, and as high as possible. These associations render commerce and trade inestimable services, but they give short credit (three months), which, however, can be prolonged. Nevertheless loans which the cultivator obtains are applied to improvements, machines, cattle, artificial manure, seeds, etc., and therefore essentially constitute that part of his working capital which can only be paid back in the course of several years. Moreover, the ususil rate of interest, still further increased hy the Commission charged for the frequent prolongations of credit make the loans of these banks too dear. Attacks of this sort against tlie associations of the Schulze-Delitzsch system were formerly more frequently in vogue than to-day; the excellent statistics of tlie General Schulze-Delitzsch Federation have provided the irrefutable proof of the untenabilitv of such asser- tions. Now, if one begins again in Baden by general statements to deny to the Schulze-Delitzsch associations the capacitv of supplying the agricultural need of credit, these misstatements, considering their effect outside, must in no case be left uncontradicted. I can not on this occasion resist the temptation of thoroughly comparing the activity of the Schulze-Delitzsch associations, which are united in the GEBMANT. 303 to impfo^emeiits, to the purchase of machilies, cattle, artificial manure, seeds, etc., arid, therefore, such btoks are not Well suited to supply that part of the fariner's working capital which can Only be paid back in the course of years. Furthermore, the usual rate of interest, still further increased by the commission charged for the frequent prolongations of credit, makes the loans of these banks too dear. The agricultural credit associations, such as loan banks and land credit banks, are the institutions whiteh pay most attention to the specifically agricultural trade circumstances concerning the duration of loanfe arid the conditibriS of repayriaerit; for, owirig to their orgariization, they are locally best acquainted with the credit seeker. These associations are, as already mentioned, united in a federation which embraces the whole Grand Duchy of Baden, arid this federation has undertakeri the task of promoting agricultural cooperation and the retail trade often corineCted with it in rural districts. The fiu-ther objects of the federation are not only to render continual expert advice to its associations, temporary discussions, the education of its managing members, the representation of riiutual interests, etc., but also a thorough supervision which shall embrace the whole buisiness administration. The fedetatiori operates under sections 51 and 53 of the national law of May 1, 1889. Furthermore, the establishment of a morietary adjusting institute, or clearing house, enables the associations to deposit their surplus inoney at interest with the privilege of withdrawal at any time, arid, in case of necessity, to obtain nioney at a low rate of interest within the range of the credit granted to them by the bank which undertakes this monetary adjustment. These agricultural credit associations, with few exceptions, limit their business circle to the conimunities in which they have their premises or to the parish in which several neighboring communities are united. In this and in several other respects, they are very similar to the Kaiffeisen credit societies. They are registered associations with unlimited liability. At present they number 450 with about 70,000 members, and they are spread over the whole country. New associations of this sort are continually aflBliatihg with the general federation. In proportion as their number increases, other credit institutions are less used. These associa- Upper and Lower Baden Federations (southern and northern) with that of the Baden Agricultural Credit Associations. As the statistics for 1912 are not yet to hand, the results of iQll shall be placed side by side. The statistics of 1911 comprise 91 Schulze-Delitzscii asso- ciations, which send in their business reports, with 83,194 members, whereas the Agricultural Federation contained 437 credit associa- tions with only 65,720 members. • The business activity of these two groups is represented in the following: Comparison of the Schu^ze-Delitzsch mth the agricultural credit associations in Baden. [According to the balance sheet of Dec. 31, 1911.] Sohulze- DelitZBch associations. Agricultural associations. Assets. Cash in hand Stock and shares Balance at banker's Drafts or bills of exchange Loans against pledge Claims in accounts current Sureties given by the bank Loans and advances Mortgages and purchase moneys Small claims and interest in arrears Inventory of fixtures, etc Bank buildings ; Houses, land, estates Liabilities. Members' business shares Reserves Deposits Bank debt Accounts-current debt Bills accepted Mortgage debts. , Surety liabilities Unpaid petties Interest paid in advance Net profit (2,841,501 marks) Marks. 2,912,598 11,662,603 8,967,402 18,009,775 2,974,980 87, 737, 726 2, 136, 572 45,100,224 22, 126, 160 2,348,699 104, 753 2,959,820 2,773,177 Marks. 1,702,457 1,473,270 3,999,572 6,036,814 60,958,496 12, 053, 143 2, 424, 627 87,398 417,118 209,814,479 89,152,895 710, ( 554,1 120,836,492 9,071,748 27,37^,609 2,504,913 245, (■) 209,814,479 5,293,545 3,337,899 3,834,524 4,939,018, 1,049,681 JU 42,493 ■ 70,548 586, 187 9,152,895 1 Distributed. The -working capital of the Schulze-Delitzsch associations therefore consists of 27.50 per cent of their own (45,265,014 marks) and of 72.50 per cent outside capital (164,549,465 marks); against this, the working capital of the agricultural associations consists of only 10.80 per cent of their own (8,631,444 marks) and of 89.20 per cent outside capital (79,936,264 marks). The Schulze-Delitzsch associations keep in readiness as liquid capital 44,527,358 marks (27.06 per cent of the outside moneys); against this the agricultural associations keep only 7 175 299 matks (9 per cent). For estimating the liquidity (continual possession of sufficient cash or its equivalent) it must, however, be further stated that in the Schulze-Delitzsch banks more than half of all deposits are invested for longer terms of notice; whereas in 304 AGMCULTUEAL COOPEBATION IN EUEOPE. tions aim to procure for their members the financial means necessary for their business or their agriculture, under mutual guaranty and in loans bearing interest, as well as to facilitate the investment of idle money, thus improving the circumstances of their members in every respect. The associations grant loans to members only to the maximum amount fixed by the general assembly and only on adequate security (mostly a double surety), namely: (1) Loans with a definite time for repayment and reimbursement by installments; (2) loans which can be renewed by the board of directors, with the consent of the indorsers, once or oftener, with the strict stipulation that these prolongations do not become a disguise to conceal permanent investments of capital; and (3) loans by credit granted iu accoimt current to the extent of a surety's guaranty. The association can also acquire titles of property, such as sale records, earnests of pur- chase, auction money, etc. Such acquisitions are, however, to be limited as far as possible to the district in which the association is situated. The land credit associations are managed by a board of directors consisting of three or five members; the conduct of the business is superintended by a committee composed of from three to six members. The cash business and bookkeeping are conducted by an accountant appointed jointly by the board of directors and the committee of superintendence. This accountant must not be a member of the board of directors nor of the committee of superintendence. The directors and superintendents perform their duties for the most part gratuitously. The cashier (accountant) usually receives a moderate remuneration reckoned according to the turnover. The net profit is passed to the reserve fund after paying interest on the business shares, which are seldom fixed higher than 120 marks per member. As soon as sufficient reserve fund has accumulated, the reduction of interest on loans is taken into consideration. The pajTnent of interest for the business shares may exceed by not more than 1 per cent the interest paid on the average for loans in the previous business year. the agricultural associations the term of notice is agreed upon for at most three months. We might take this opportunity to advise the Agricultural Federation to divide the heading, "Outstanding loans to members," into "Loans on mortgage'' and "Loans on surety," on the supposition that at this place a considerable percentage of "Hard and fast loans on mortgage" would accumulate. Under the heading "Arrears of interest" 1,214,543 marks, or 57 per cent, appear in the assets of the Schulze-DeUtzsch associations, against which the agricultural associations have to claim 2,386,184 marks for arrears of interest, or fully 2.67 per cent of their total assets, The 83,194 members of the Schulze-Delitzsch organization are divided into 28.43 per cent independent farmers; 24.82 per cent inde- pendent craftsmen; 15.56 per cent independent workers (working for their own account) in industry, commerce, and transport; 15.06 per cent employees and workmen in preceding three professions; and 16.13 per cent in other callings, whereas the 65,720 members of the agricultural association are naturally peasants and farmers in a very preponderating proportion. It is not surprising for u.s — but it is really so for other circles — that the independent land cultivators show the greatest percentage in the Baden Schulze-Delitzsch banks. The total granting of credit by the Baden Schulze-Delitzsch banks in 1911 amounted to 455,227,269 marks. If it be supposed that the various professions participate in receiving credit in proportion to the number of their members, we reach the following result: Per cent. Marks. Borrowing farmers and peasants 28.43 24.82 46.75 129,421,113 112,987,408 212,818,748 According to statistics the Schulze-Delitzsch associations have lent to the cultivators 129,421,113 marks, against which the agricultural banks have only placed 97,151,781 marks at the disposal of their members, who, however, are absolutely not all cultivators. According to statistics the Schulze-Delitzsch associations charged their debtors interest on loans as follows: 29 associations, between 4 and 5 per cent. 2 associations, 4 to 5i per cent. 4 associations, 4i to 6 per cent. 34 associations, 5 per cent. 7 associations, 5 to 5i per cent. 9 associations, S to 6 per cent. 1 association, 5J per cent. 1 association, 6i per cent. 4 associations, 5i per cent. Of the 91 Schulze-Delitzsch associations, only 32 charge a commission for prolongation of credit: 1 association, i per cent. 1 association, J per cent. 23 associations, J per cent. 5 associations, i to iV P^r cent. 2 associations, i to i per cent. Sixteen associations charge this prolongation commission every 3 months; eleven, 6 months, one, 9 months; three, 12 months; two, not definite. Statistics do not show what rate of interest is charged by the agricultural banks to their debtors; it would, however, not be putting it too high at 5 to 5^ per cent on the average. In any case it must not be unknown to the Federation management that various agricultural banks also charge prolongation fees. How does the result of this investigation agree with the assertion that the Schulze-Delitzsch banks are too dear? In general all the above-mentioned attacks against the Schulze-Delitzsch system are repulsed by these comparisons of figures. Pre- cisely on account of the businesslike performance of their work, precisely on account of their embracing all banking transactions, the Schulze-Delitzsch associations have achieved their colossal and incomparable success. A well-conducted Schulze-Delitzsch association GBBMANY. 305 The means for supplying credit are the capital and savings deposited in the association. Moreover, a banking credit averaging 200 marks per member is at the disposal of the associations. Nearly all deposits and loans are for the accounts of cultivators, because the trade in rural districts is almost always inseparably connected with agriculture. The average time for the repajrment of loans is from one to five years! The board of directors is in duty bound to exercise control over the expenditure of the loan. This control is not difficult, because the members of the association live near one another within a business circle limited by the community or the parish. The rural credit banks in the Grand Duchy of Baden since their foundation in 1873 have eradicated a considerable parti of the usury in rural districts. It can be proved, for instance, that usury has been defeated in the purchase and sale of large and small estates. For purposes of establishing a monetary adjusting institute the Federation of Agricultural Credit Asso- ciations has made an agreement with the Rhine Mortgage Bank in Mannheim to the effect that this bank binds itself to make advances to all associations belonging to the federation within the range of the credit granted to each separate association, and also to receive their surplus cash. These deposits bear interest and can be withdrawn at any moment. The rate of interest for loans and deposits is always determined by the federation directors in agreement with the bank. If the funds of the adjustment institution are exhausted through the withdrawal of money by the associations, the bank advances more money. The government of the Grand Duchy passed a measure which, proved especially beneficial. This measure instructed the amortization bank, at times when the loans by the monetary adjustment institution exceed the deposits, to advance cash to the amoTont of 1,500,000 marks. The financial turnover of the adjustment institution, the Ehine Mortgage Bank in Mannheim, amounted last year to nearly $3,400,000, with 5,099 transactions. On the average 17 deposits and loans took place daily at the bank. In the regular business with the land credit associations 14,600 documents have been handled, or about 49 documents every day, The development of the associations and of the federation can be seen from the following table: Year. Number of associations. Number of members. Total turnover. 1873 1883 1893 1903 1912 2 35 116 , 309 450 95 4,246 14, 534 43, 794 67, 988 115, 543 1, 153, 500 4, 664, 800 14,800,000 24, 900, 000 The total profit in 1912 amoimted to $139,000; the reserve fund to $825,385, and the business shares to $1,281,400. The agricultural credit associations enjoy the most powerful support of the government of the Grand Duchy, which has not only placed at the disposal of the adjusting institution a credit of $353,000 at a low rate of interest, but has granted considerable amounts from the state treasury for the payment of the expenses of the federation and the work of revision. The federation revision is carried out accurately and punctually by auditors appointed by the federation who are thorough expert state accountants, and yet without in any way encroaching on the independence of the associacions. This revision is not limited to an examination of the cash and the bookkeeping, but it embraces the whole business management on the basis of the rules made by the law and the statutes. The results of the annual revision are communicated to the federation directors never aims at a rapid turnover and a large profit; it only has the sole principle, on the basis of self-help, self-management, and self-respon- sibility, to procure for its trustworthy members as cheaply and advantageously as possible the moneys necessary for the working of their business. It will only then fulfill its object if it at the same time educates its members and especially its debtors to be thrifty and to pay their debts regularly. This will evidently not hinder it from easily taking into account the peculiarities of each profession. Therefore let any one name to me a single association of the Schulze-Delitzsch system which does not satisfy the wants of its agricultural members. The Schulze-Delitzsch organization very rightly dissuades for the most important reasons the granting of long-term credit; other sys- tems in course of time will have to make up their minds to do the same, whether they like it or not. All false assertions are, however, refuted most effectively by the fact that the Schulze-Delitzsch associations increase from year to year in extent, in turnover, in members, and in the amount of credit given, although since several years the network of agricultural credit associations always gets more dense around them. One would suppose that, if the Schulze-Delitzsch banks were no longer in the position of supplying the agricultural need of credit, the cultivators would then most rapidly turn their backs on this style of association and apply to the agricultural credit associations which shoot out of the earth like mushrooms. Of all this the Schulze-Delitzsch associations remark little— almost nothing. Since their existence, the cultivators have formed a faithful part of their membership; these cultivators will not be influenced by such groundless statements; they will remain faithful to their association, thanks to which their business has become great, and from which they have always received help, and by which they are always served with the greatest indulgence, according to the state of their business. I hope the American Commissions will not be led astray by false representations and one-sided teachings. 14174°— S. Doc. 214. 63-1 20 306 AGRICULTUEAL COOPERATION IN EUBOPB. and to each association. The former take care that any possible shortcomings or transgressions against the rules are promptly dealt with. The two great purchasing unions in Baden — the Cooperative Federation of Agricultural Associations and the Farmers' Union — make an indirect use of the agricultural credit associations, in so far as they and their members avail themselves of their services in places where land-credit associations exist. To accommodate these societies, the credit associations borrow the necessary money from the adjusting bank to the extent of their credit. The above Baden Cooperative Federation of Agricultural Associations possesses also a central bank, a limited Hability association, with a total guaranty fimd of $396,000,000, a turnover of $8,400,000, and a reserve fund of $9,882. The Farmers' Bank, also a limited liability association of the Baden Farmer's' Union, has a cash turnover of $5,000,000 and a total turnover of $11,000,000, with reserves to the amoimt of $11,583. These banks must not only supply money for the large totals of purchases and sales of goods made by both unions, but they have also the specific task of bringing about the adjustment of the surpluses and financial demands of the associations which have joined them. The associations which come into the federation with guaranteed lines of credit can withdraw advances from the banks to the extent of their credit and deposit their surplus cash with the banks at interest. The separate associations are thus able to defer the payment for the required agricultural articles and are not obliged to require immediate cash payment from the farmers. The rapid extension and brilliant development of our credit associations are not the result of chance, but of the manner of their organization. No credit institution can, without endangering its members, grant such extensive personal credit as our associations. People who Hve close to one another in a vUlage know each other's possessions, business circumstances, and character so accurately that errors in estimating the capacity and trustworthiness of loan seekers are scarcely possible. Thus the risk to the bank is diminished and its opportunity for helping people is increased. Likewise, a careful supervision of the objects for which these loans are spent is possible, as well as an immediate knowledge of any changes in the fortune and earning capac- ity of members, especially of debtors. As a result of this supervision, the banks have suffered no losses during the past 30 years. Without boasting, it may be asserted that our credit associations have not only become usefiol organi- zations for promoting economy and domestic Ufe, but are also powerful means for promoting agriculture and the welfare of the people. QXJESTIONS. Q. Do your associations lend money for the purchase of land ? A. No; they lend money to farmers, which they must pay back. If a peasant can not pay interest on his mortgage, the associations lend him money for that purpose, but he must pay this back when he has a good harvest. The associations do not lend him any money for buying land; mortgage institutions do that. Q. Would it be possible for him to buy a farm, paying a certain percentage of the purchase price in cash, give a mortgage for th§ remainder of the purchase price, and then borrow from the credit association in sufii- cient amount to pay off the mortgage ? A. Supposing a peasant wants to buy a piece of land, having only one-fourth of the purchase price in cash and he asks the association for a loan of the remaining three-fourths, so that he can pay off the balance; the association will only lend it on the condition that he binds himself to pay it back in definite installments. It will not lend him money if he can only pay the interest on it. ' - Q. About how many installments would he have to pay and over what period of time would the mortgage extend ? A. On the average it would extend over 10 years. There is a mortgage bank in Mannheim which under- takes to pay three-fourths the value for any peasant, and he has 40 years in which to repay the loan. It is not paid back in a lump sum, but is paid back by amortization. Q. The fact is that your local bank does not lend three-fourths of the purchase price, but simply has an arrangement with the central bank in Mannheim to get the money ? A. The object of these associations is not to buy land but for personal credit for such purposes as paying interest, buying cattle, etc. Q. Does your association act as agent and get money from the bank in Mannheim ? A. Yes. Q. Your bank then requires the borrower to pay the money back in installments 1 A. Yes; part of the principal, the interest, and certain bank charges. Q. Is there a portion of the bank charges included in each installment ? A. Yes; the cost of the agency is one-tenth of 1 per cent only for personal credit; at the mortgage banks no extra charge is made, the only charge being for interest and principal. Q. Are your rural credit associations share associations, i. e., were shares sold in the beginning ? GERMANY. 307 A. At the beginning they were like a lot of partners with unlimited liability, and they paid in from 20 to 120 marks each. They were not shareholders, as each gave so much capital — as low as 20 marks or as high as 120 marks. According to section 30 of the statutes the amount paid in by each participating association is fixed at 100 marks; this is termed the business share, and has to be paid at once. Q. What interest is being paid on these shares at the present time ? A. Five and 6 per cent. Q. What rate are you charging on loans borrowed for productive purposes ? A. From 4^ to 5 per cent. Q. For what purposes are the majority of loans granted at the present time ? A. For articles required, such as the purchase of cattle, artificial manures, machines, etc. Q. From what people does the initiative usually come for the institution of a new association ? A. There are 450 associations joined together into one federation. The managing director starts the bank; he has eight associates who help him. Q. The eight feUow directors are engaged in that kind of work ? A. Yes ; it is an honorary office. Q. Do you have instances in which a group of farmers in a community having no bank simply come together and agree that they want a bank and then come to the director, or coworker, and say, "Will you form us a bank?" A. Yes; there are some instances in which farmers have done that; there was an example of that eight weeks ago. Q. Do you find any person other than the farmer himself taking an active interest in such organiization ? A. Yes; small artisans, shoemakers, locksmiths, etc. Q. In what respect does this rural credit association differ from the Raiffeisen system? A. The Raiffeisen shares are lower; the associations have a reserve which a Raiffeisen bank does not have The association system has been taken from the Raiffeisen, but it has been improved. A Raiffeisen bank has shares of 10 or 20 marks, not higher, and when there is a profit it goes for charitable purposes, whereas the shares of this association go up as high as 120 marks and, if it makes a profit, it goes to the reserve. Its total property is 9,000,000 marks. Q. If a peasant who owns no land but wants to buy his own farm comes to your bank, how can you help him get the land ? A. We simply direct the peasant to the savings bank, which would advance the money with the dis- tinct understanding that it would have to be repaid within 10 years; otherwise the savings bank would have nothing to do with it. Q. Do the directors devote aU thejr time to this work ? A. No; they devote only a part of their time to this work; the remainder is spent in some government office. SCHULZE-DELITZSCH FEDERATION OF BADEN. Evidence of Mr. Rudolf Habndel.' Steassburg. • Mr. Haendel stated that his local credit institution had formerly belonged to the Federation of Agricultural Credit Associations in the Grand Duchy of Baden. Q. Why did your association withdraw from the Federation of Agricultural Credit Associations in the Grand Duchy of Baden and go over to the Schulze-DeUtzsch Federation ? A. Because the director of the Agricultural Federation had told our association that it must continue to deal with farmers and peasants only, as in the past, and this association wanted to extend its business by dealing not only with farmers and peasants, but also with men of other callings in Lichtental, such as inn- keepers, woodcutters, etc. Our association therefore withdrew from the Agricultural Federation and went over to the Schulze-Delitzsch Federation, which does business not only with farmers and peasants, but also with all persons who require credit, and which works both in towns and villages. When the peasants require loans men of other callings often have savings to deposit. This financial adjustment is impossible in an asso- ciation of which nearly all the members are farmers or peasants. Q. When you quitted the old federation, did you join a Schulze-Delitzsch Federation ? A. Yes- we joined the Schulze-Delitzsch Federation, which is divided into two separate federations in the Grand Duchy of Baden, viz, the Northern Federation, or Unterbadischer Verband, containing 52 associations, ' See footnote on page 302. 308 AGEICULTURAL COOPEEATION IN EXIKOPE. and the Southern Federation, or Oberbadischer Verband, containing 39 associations. These two federations are really subfederations forming part of the Greneral Schulze-Delitzsch Federation of Germany, acquisition and business associations based on self-help. We jouied the northern of these two Baden subfederations. Q. Why are there two federations instead of one ? A. The Schulze-Delitzsch system has much more complicated work, and it would be impossible for one managing director to attend to all the work, so they had to divide into two federations. The division into provincial subfederations was here chiefly caused by the way in which the General Federation came into exist- ence. These subfederations were originally independent federations. Later on they united and founded the General Federation. Q. When you left the old federation, how did your members avoid the unlimited liability of the Agricul- tural Associations ? How did creditors avoid loss of security when you went from an unlimited-liability bank to a limited-liability bank ? A. Our association under Schulze-Delitzsch continues to have unlimited liability, just as we had when we were in the Agricultural Federation. Out of the 52 Schulze-Delitzsch associations in the north of the Grand Duchy and the 39 in the south, 77 have unlimited liability and 14 have limited liability. Q. When this bank was a member of the Agricultural Federation, and was therefore liable for the debts of its other associations in certain proportion, how did it escape the liabilities of its federation, when it went over to the Schulze-Delitzsch Federation ? A. The directors of the Agricultural Federation have only to revise the business working and accounts and to give advice. There is no liability of the whole federation. Each association is liable for itself. Q. Do you mean to say that the individual bank was not liable to the old federation for any of the debts contracted by the federation ? A. The federation does not contract any debts, but only gives advice and performs revisions. Q. How did this bank first get its capital? A. The working capital of our association is composed of our own property (business shares of its mem- bers and reserve fund) and of capital deposited at the bank (savings bank deposits). In the old federation the business share or membership fee was 100 marks, which could be paid either at once or in yearly installments of 10 marks. Since we joined the Schulze-Delitzsch federation, we have in- creased the business share to 400 marks, which can also be paid either at once or in yearly installments of 20 marks. Besides this business share or membership fee each member in our Schulze-Delitzsch association has to pay an entrance fee of 10 marks. This entrance fee was formerly also 10 marks when our association belonged to the Agricultural Federation. In other associations, both ia the Agricultural and Schulze-Delitzsch Federa- tions, the amount of the entrance fee varies from 1 to 20 marks. The entrance fee is only paid once, i. e., it is not payable again every year. If the bank makes a net profit, a portion of it must by law be given to the reserve fund, usually 10 to 20 marks, whereas members who have paid the whole of their share, receive dividend on 400 marks. Q. Do only those members obtain credit who have paid their business share in full, or do the other mem- bers also obtain credit? A. We give credit to all members, whether they have paid the whole of their business share or only a part of it, even if they have only paid 40 marks. Q. Is there any Hmitation to the dividend paid on capital stock ? A. The Agricultural Federation generally pays 5 per cent ; sometimes 6 per cent. Schulze-Dehtzsch pays on the average 6 per cent. There has never been an association which has paid more than 10 per cent, but there is no legal limitation. Q. Have you received any working capital other than membership fees and profits earned by the bank? A. Savings-bank deposits have produced some of the capital; besides these deposits there is the Dresdner Bank, Frankfort on the Main, which allows us a credit of 100,000 marks. Every Schulze-Delitzsch association receives from the Dresdner Bank a credit in proportion to the amount of its property and according to the quahty of its business working and to the revision report of the federation reviser. Q. What securities do you give the bank for the 100,000 marks ? A. The bank knows that there are 600 members here, most of whom own land and houses, and that they are responsible for every debt. The unlimited habiHty of these 600 members is the security for the 100,000 marks. Q. Has the Grand Duchy of Baden contributed directly or indirectly any funds for this bank ? A. No. This bank would not accept it if offered. On the other hand, the association of the Agricultural Federation have asked for help and the State has helped them, but the State made the condition that it would GEEMANY, 309 exercise the supreme superintendence over them; now the Schulze-Delitzsch people say they will not allow the State to superintend them and they will rely on self-help and independence. That is the dififerencc between the associations of the Agricultural Federation and those of Schulze-Delitzsch in this respect. Q. Do these Schulze-Delitzsch banks lend money to anyone who applies for a loan, provided he has ample security, or do they loan only to their members ? A. They lend money only to members — no money to nonmembers. Supposing a nonmember comes to us and wants to borrow 200 marks, we would say to him, " You must borroMf from us 250 marks and pay 40 marks of that for stock and 10 of it for membership fee to become a member of the association." Q. What rate of interest does this banlc pay at present on deposits ? A. Four per cent. Q. What did it pay when in the Agricultural Federation ? A. Not more than 4 per cent. Two or three years ago it only paid 3 J or 3^ : it pays 4 per cent now because there is a lack of money. If our members put deposits in the bank they get one-fourth per cent more interest than the general public. Thus if the bank pays 3f per cent interest to the general public, its members get 4 per cent. At the present time th partly by the provincial govern- ment, and partly by the chamber of agriculture. The proportion of the cost of operation paid by each institu- tion can not be determined exactly, but in general they participate equally. The cost of operation is almost 8,000 marks per annum. The apportionment of the local district is raised by a tax based on income. The salary of the director is 2,600 marks a year and the use of three living rooms rent free. The instructional corps consists of a director, whp is the principal and local manager of the enterprise, and who teaches agriculture and the natural sciences; two teachers of German from the local schools; a teacher of mathematics and surveying; a teacher of religion, also from the local schools; and the field instructor in agronomy for the district, who teaches agronomy. This is the list of teachers for one year. In alternate years animal husbandry takes the place of agronomy, hence other provincial instructors. The district veterinarian, etc., are called in. During the summer the various instructors employed by the government take up the work of itinerant instruction, giving lectures, demonstrations, advice, etc., to farmers in the district. The director testified that he gives 30 to 40 lectures per month during the summer. For this work the government appro- priates a lump sum for traveling expenses. The school. — ^The school year runs from November till March, about five months yearly. The pupils num- ber about 35 to 38. This is as large a school as can be handled efficiently Under present conditions. Only boys and young men are admitted; girls are excluded. The minimum age is 16 years. The pupils of the last school year ranged in age from 17 to 23, but at times pupils 33 years old have been admitted. No pupil can gain entrance who has not had two years of practical farming. Only a common-school education is needed for admission. The course is divided into two parts, which should be taken in consecutive winters. One year emphasis is laid on agronomy and related sciences; the next year on animal husbandry. During the course the weekly program is as follows: First year: Hoare. Elements of chemistry 6 Plant culture 10 Plijrsics - 1 Agricultural economics 3 Bookkeeping 2 German ; 5 Surveying and mathematics 4 Field crops, etc 2 33 Second year: Hours. Chemistry 6 Animal husbandry 10 Physics 1 Economics 3 Bookkeeping 2 German 5 Surveying and calculation 4 Field studies 2 33 In addition to the indoor work and lectures, the school owns a small piece of land, which is used for experimental and demonstration purposes by the pupils, especially during the summer. The instruction is rather elementary, but is intended to be thorough and practical. The school and experimental garden are in the center of the village of Rheinbach, and most of the pupils come from the surrounding neighborhood, several on foot and some by railroad or bicycle, returning home nightly. ' Submitted on the authority of Mr. C. Schillinger, director. 348 AGRICULTURAL COOPERATION IN EUROPE. The pupils are for the most part the sons of small farmers, who go home to their farms upon completing their two years' course. The school does not prepare for the agricultural department of any of the universities nor for any higher agricultural school. Its purpose seems to be very similar to that of the short courses in agriculture in the agricultural colleges of the United States. The fees for tuition are 30 marks for the first year and 25 marks for the second year. AGRICULTURAL COOPERATIVE SOCIETY FOR PURCHASE AND SALE AT BRUHL. This is an association of about 400 members, to sell and buy cooperatively. It was founded in 1902 with a membership composed chiefly of large farmers. This type of member it has retained. The members, who have a total acreage of from 90,000 to 100,000 acres, contribute one share of 50 marks for each 50 acres included in their holding. For this they are entitled to a dividend of 4 per cent on the value of their shares, and are held responsible for an amount equal to six times the value of the shares held. Last year they had a total turnover in both buying and selling of about 3,500,000 marks. This yielded a profit of 54,000 marks. In transacting business for its members the organization charged on sales made for the farmer 1 per cent, of which one-half of 1 per cent was returned at the end of the year, and on purchases made IJ per cent, of which 1^ per cent was returned at the end of the year. The organization is a completely independent one, and exercises no compulsion or restriction as to the right of its members to deal elsewhere. It was pointed out that the farmer, however, seldom bought directly, but almost entirely through the association. Last year it dealt in about 1,000,000 marks of wheat, 500,000 marks of fertilizers, and 2,000,000 marks of foodstuffs. The institution has established in connection with its operations an agricultural bank, with current accounts for members. Last year there was a turnover of about 4,000,000 marks. No speculation is entered upon and no losses result. Money is loaned farmers on their grain and other produce. As a rule farmers do not store grain in the warehouses, a capacious structure of three floors. If the farmer so desires, however, it may be done. The institution sells directly to the large mills, and keeps the farmer in touch with prices by means of the telephone. On December 31, 1912, the membership stood at 364, the number of shares at 1,140, the capital at 57,000 marks, the liability of members at 342,000 marks. The reserve fund now amounts to about 200,000 marks, the accumulation of 11 years activity. To this each year about 20,000 to 25,000 marks is added. The founder of the institution was Mr. Roellgen of Bruhl. GERMAN BANKING. Evidence of De. Paul Landenburg, of the Joint Stock Disco'unt Bank. Hannhiem. Q. What is the commercial rate of interest in this city for 60 to 90 day loans ? A. We have a bank rate here now of 6 per cent. It is very high, because there is a great stringency in the market now. A borrower would now have to pay 1 per cent above the bank rate — that is, 7 per cent; then there is one-fourth per cent commission, and if after three months he renews the loan, another 1 per cent is added, which makes about 8 per cent per year. Q. At this moment it would be about 8 per cent ? A. Yes. Q. At this moment what is your bank paying on deposits ? A. It depends on the length of time. Only lately we decided to pay less. That is we have concluded that we pay too much for deposits as a rule and that we charge too little for loans. We don't make enough profit out of this business. The chief of our bureau, who wants this bank to be A'ery liquid, came to the conclusion that we had to form a kind of syndicate. The rate we pay on deposits varies as the length of time deposited. We have a printed list of the rates paid on a placard which we hang on the wall in the bank showing what we pay on each day. Q. We find in Germany that the cooperative associations have been organized into rural banking asso- ciations. Why did not commercial banks, like yours, reach out in the country and pick up that busiaess ? A. We did reach out in a certain way, but only to the small and large towiis. Our company was a private bank for about six years. It is of about 125 years standing. It was too much trouble to organize banks in every little community. GEEMANY. 349 Q. Does your bank rediscount any of the paper which is collected by these rural banking associations ? A. No. We have no connection with them. Our chief business is current accounts and deposits and discounts and investments in stocks and bonds which we bring on the market. Q. Does your bank buy and sell land-mortgage bonds ? A. No. Q. Do you consider the land bonds as issued in Germany a safe investment ? A. It depends on the country. Q. Wherever we have gone in Germany we have found a general rise in prices. What in your opinion is the cause of that ? A. The cause of it is the tariff — especially for corn, wheat, and all such things, on which we have a very high tariff. Q. We are inquiring particularly into the operation of these rural banks. Do the Raiffeisen type of banks throughout Germany have the reputation of being well managed and safe banking institutions ? A. We have never come into contact with them. We consider them unimportant from our standpoint. Q. What is the law here in regard to the exemptions which can be claimed by a debtor when you proceed against him to collect his debt ? A. He can withhold things which he absolutely needs for his living, his bed and things to cook with, but only those things which are absolutely necessary to his daily life. RURAL SCHOOL AT DIESKAU. Evidence of Mr. Tunze, Principal. DiESKAXj (neak Halle). Q. I want to ask if any agriculture is taught in this school ? A. No. Q. What do you teach? A. Religion; only Protestant. Q. How do you teach religion ? A. The principal thing is from the book. There is a religion book for the evangelical schools prepared by the men whose names it bears. Q. Do you teach the Bible ? A. Every child has a Bible. Sometimes the teacher takes the lesson that he wants to impart from the Bible direct. Q. How much time is given each day to religion and the Bible ? A. Five hours a week. At the present time they have a lot of work to do; the children have three hours in the forenoon and two hours in the afternoon of school. Q. How much of that time is devoted exclusively to religion ? A. Five hours a week is devoted to religion. Q. But every day ? A. For religion, four to five hours a week. School time is three hours in the forenoon and two hours in the afternoon, and religion is taught five hours per week. Q. How old are the oldest children that are in the school ? A. They start at 6 years of age and continue till they are 14. Q. Do you take the children out on excursions ? A. Yes. Q. What months do you keep school ? A. The school year consists of 40 weelcs. Q. When is the vacation; is it in the summer or in the winter? A. There are holidays at Christmas and at Easter time. All the children have to work here now, so they have their summer vacation next month, as that is the busy time for the farmer. Q. So they have the vacation in the summer ? A. Yes. Q. What do you teach the children when you take them on these excursions ? A. I give them nature study. Q. What does the teacher do with these plants I see? Why have you got these in the school? A. For nature study. 850 AGMCtTLtURAL COOPEEATlOlT IN EUROPE. Q. How much time do you give to teaching the children nature study ? A. Two hours a week. Q. Does the pastor teach reUgion in the schools ? A. In the summertime one, in the wintertime two hours a week, the children go to Dieskau to the clergy- man, the pastor, to be prepared for confirmation. Q. Is there a continuation- school here in the village ? After the child is 14 where do they go ! Is there an evening school ? A. No; no evening school. Q. Does anybody come to the village from outside to teach agriculture ? A. Only myself. Q. Do you teach agriculture to the farmers ! A. No ; only to the children. Q. How? A. I give them ears of corn in their hand and explain. Q. You do not give lectures to the farmers ? A. No; only to the children. I teach them nature study twice a week; and the farmers when they want to leam they go to Halle and take the course there. When the children are through with this school they go to the schools at Wurttemberg and Magdeburg, but these are only the children of those who own land, such as Mr. Walther's children. It costs a lot of money; you can not send everyone. Q. Does anybody come here to the village to teach the farmers agriculture ? A. No. Q. Do the farmers have meetings in this schoolroom for anything ? Do the farmers themselves, the people of the village, not the children but the older people, have meetings in this schoolhouse ? A. No. Q. In the evening or at any time ? A. There is nothing in the evening. Q. You teach nature study to aU the children; do you teach anything about cooking to the girls ? A. No. Q. May I ask you how long you have been here ? A. Five years. Q. Did you ever study agriculture ? A. Not much. Q. Would you object to telling us how much your salary is ? A. One thousand four hundred marks a year; also every three years I receive a gratuity of from 200 to 250 marks. Q. Have you a house ? A. Yes; free. My house is above the schoolroom. Q. Do you have any land ? A. A quarter of a hectare. Q. Do you have your own garden ? A. Yes. Q. Do you keep a cow ? A. No; no animals. Q. I want to ask you one more question: Since you have been here — you have been here five years— have any boys gone to the University of Agricultural Institutes ? A. No. Q. Have they gone to the gymnasium ? A. I can do what I like with my own children. Q. I want to know if any have actually gone to the gymnasium from this school ? A. Five children have gone from here to the gymnasium at Halle, but they are the children of the big farmers ; none from the school. No one has gone to the gymnasium from this school. Q. Is there a library in the village ? A. There is a school library. Q. How many books ? A. Seventy books. Q. Do you direct the reading of the children? Do you help the children to pick out books ? A. The teacher gives them the books. GBKMANT. 351 Q. Just one more question about the play of the children: Do you take charge of the play of the children? A. Yes ; I take charge of the play of the children. Q. What kind of play do they indulge in ? A. Football, beating drums, etc; (The children, consisting of 50 to 60 boys and girls, were then called into the room and sang a number of folk songs and national songs.) COOPERATIVE STEAM DAIRY OF STENNOWITZ. Evidence of Mr. Schulzb, Manager. Kleinktigel (neae Halle). Q. What is the name of this institution ? A. The Steam Dairy of Stennowitz. Each share in the cooperative society is represented by two cows, but you may have as many shares as you Hke. Q. How many cows are there altogether ? A. Two hundred and twenty-five to two hundred and fifty cows altogether. Q. What do you manufacture ? A. Only butter. Q. Is it an individual affair, or is it cooperative ? A. It is cooperative. There are 14 members with two cows apiece for a share; altogether they have from 225 to 250 cows. They make 110 pounds of butter per day. Q. Where do you sell your butter ? A. We take our butter to Halle and sell it there ourselves. Some representatives of the Society take it. Sometimes we sell it privately and sometimes we sell it to the dehkatessen shops in Halle. This' year we are getting 1 mark 30 pfennigs to 1 mark 40 pfennigs a pound for it. We do not pay any commission. Last year the price of butter was higher, and we got as much as 1 mark 50 pfennigs to 1 mark 65 pfennigs a pound for it. Q. How do you collect your milk? Does each individual bring it to the creamery, or have you some system by which you collect? A. Each man brings his own milk here, except in the case of four members who five in a different village, and they have united and one brings it one week, and another another week, so each man brings it once in four weeks. Q. These 14 interested persons, are they the only ones that bring milk, or do you have any outside milk? A. We can have it if we want it, but it is not usually to our interest to do so. Sometimes milk is quite cheap. When we buy milk from other people we have to pay a tax on it. When we use our own, we pay no tax on it. (We do not pay a tax if we take milk only from our own members, but when we take milk from other places, we have to pay a tax.) Q. Is it really a tax? A. Yes it is a tax. Q. For the Government? A. We pay it to the village, the town itself. Q. Must the members bring all their milk here ? A. Yes, they must bring all; they can not sell it anywhere else. Q. What is the cost of a share ? A. Twelve marks for one share, but each member must possess 2 cows. You can have as many shares as you hke, and every share represents 2 cows. Mr. Walther has 12 shares at 12 marks each and he has 30 cows. Q. How does the price you reserve compare with the outside price, the independent price outside your association ? A. We get 15 per cent more for our butter than for butter which is made by hand iu private houses, because the butter made in private houses is not so good; there is more water in it, so we get 15 per cent more for our butter. Q. How are you paid ? A. My salary is 1,800 marks per annmn, I have a free house, and free butter and milk. I live above the factory; I have three rooms upstairs. Q. Where did you receive your training ? 352 AGEICULTURAL COOPEBATION IN EUBOPE. A. At Stargardt in Posen, There is a dairy school at that place. In every German town there is one school in which dairying is taught. When the children are 14 years old if they want to study dairying they go to this particular dairy school. They must study here ia this dairy for two or three years before they go to the dairy school. They stay here two or three years, according to whether they learn quickly or not, and then they go to the dairy schools from here. I have only one pupil here. Q. How does it pay ? A. This dairy is connected with a central association in Halle; we must report to them, and an annual revision is made, and we can get a loan from them if need be. Q. Do members get any dividends on their shares ? A. We pay them according to the quantity of milk they bring in. We pay them so much for their milk and then we pay them according to the butter fat that is ia the milk. They get so much more according to the percentage of butter fat that is in the milk. I figure it out on an average at 3 per cent of butter fat. If they get a higher percentage we give them an extra price for it. Q. But there are no dividends? A. Whatever profits we have, over and above working expenses, we put into the central society in Halle to draw upon as we need it, as a reserve. Q. How long has the dairy been established ? A. About 15 years. Q. What do you do with the by-products of the dairy; the skim milk and the buttermilk, and the by-products ? A. The buttermilk goes back to the farmer who makes cheese of it, and he gives it to the pigs as well, if there is too much. Q. Do you make cheese here ? A. No. Q. Do the people make cheese out of skimmilk? A. Yes, they make it at home by hand. The farmers take the buttermilk and feed the pigs with it. Q. Does this industry really depend upon this Raiflfeisen system of banks? A. Yes; it is absolutely connected with that. The cooperative dairy owns the land and pays 2 per cent on the house, 10 per cent on the machinery, and 20 per cent on the wagons. By amortization they are paying this off gradually. When we have paid this money on these various things then whatever is left over is divided amongst ourselves as dividends, according to the quantity of milk that we have dehvered. Q. Is there a time set when you must pay off the cost of this building to the association ? A. We pay it off by amortization. Q. In the deed of mortgage no doubt it would be stated when the money advanced ought to be paid off. What do you mean by 2 per cent on the house ; do you mean 2 per cent amortization ? A. Yes; we pay 2 per cent amortization on the house. For instance, if we borrowed 110,000 on the house we pay $200 a year, because the house does not decay; on the machinery we pay 10 per cent, because machinery decays more rapidly; on the wagon we pay 20 per cent, because that decays more rapidly still; so for amortiza- tion we must pay in that way. We have 25 years ia which to repay the money advanced. We pay 3^ per cent for the money and the other percentages are for the purpose of repaying the money. AGRICULTURAL SAVINGS AND LOAN BANK OF NIEMBERG. Rbfobt of a Subcomuittee. NiEMBERG (near HaIXE) . The Agricultural Savings and Loan Bank of Niemberg is situated about 12 kilometers from Halle, a city of 180,000 inhabitants. The bank is located in a second floor-room adjoining the large Niemberg Creamery. On the third floor of the building is situated the home of the director. The union of the banking room, the big creamery, and the comfortable hving quarters of the director, all under one roof, furnished a good example of German business management and thrift. 2. History. — ^The bank was foimded in 1908 by Mr. Heinrich Dechow, who is also a director of the coopera- tive creamery, which was established 15 years before. It started with 25 members, and now has a membership of 52. The bank belongs to the Imperial Federation, and was organized for the purpose of receiving money from its own members to lend to its own members. 3. Character or class. — ^Unlimited liiabUity. GEEMANT. 353 4. Membership. — Membership is earned by the purchase of one share of the value of 10 marks. Any person may become a member who pays a fee of 1 mark, which represents property to the value of 1,500 marks. Most of the members are farmers. Members are elected by the board of directors, unless a new member desires to buy the shares of a deceased or a retiring member, in which case he must be elected by the general assembly. 5. Management and meetings. — The general assembly of all members meets once a year; each man has one vote regardless of the number of shares he holds. The general assembly elects the board of directors and the council of supervision. The board of directors is composed of three and the council of supervision of six members elected annually by the general assembly. In most cases it is the custom for the cashier to be paid by results — that is, the turnover — but the cashier of this bank receives a salary of 500 marks per annum. The board of directors meets four times a week; two out of three make a quorum. The bank is open from 8 to 12, 2 tiU 7, and on Sunday from 9 to 11. 6. Expenses of management. — Cashier's salary, 500 marks; 150 marks for printing and 150 marks paid annually to the Imperial Federation, the head bank at Darmstadt. No taxes except when business is done with outsiders. Initial cost of equipment, one safe at 400 marks and one safe at 250 marks. The larger one held the cash chest and the smailler one the books, etc. No other prices available. 7. Sources of income. — {a) Shares. — Two hundred and sixty-two shares at 10 marks per share, which must be paid for in cash. A member can own up to 80 shares. Dividend on shares, 4 per cent when there is a net profit. Q)) There are no membership fees. (c) Deposits. — Eighty depositors, 36,000 marks deposited in 1912. Members receive 4 per cent on deposits and nonmembers 3^ per cent, but the bank receives from the HaUe bank 4^ per cent interest on its deposits. (e) Profits. — No profits accrued in 1912, owing to the fact that the bank had purchased government bonds which decreased in value because of the world-wide stringent money conditions. 8. Loans. — (a) Character. — Personal, no indorsement required. Basis of credit is the assessment value of the applicant's property. (6) Duration. — Three months, with right of renewal for a further three months. No limit to the number of renewals. (c) Maximum or average amount. — The amount of the loan varies; there is no set sum. The largest loan on record is 3,000 marks. {d) Guaranty. — ^Personal. (e) Interest. — Members pay to the bank for money borrowed 5^ per cent, and each loan of 1,000 marks is charged 1 mark to cover expenses. (/) Number of loans. — ^Fifty loans were granted in 1912, amounting to 19,000 marks. Most of the members have other banking facilities in HaUe, and as this bank does not accept checks the large farmers deal with the head bank in Halle, where checks are accepted and paid. 9. Profits. — ^There were no profits in 1912. There is a surplus of 16,000 marks deposited in the central bank in Halle. 10. Surplus {designated " reserve fund" in Europe). — This is retained on hand, and amounts to 500 marks. •Subscriptions are given from the same to the Sisters of Mercy and to the Child Welfare Association. 11. Losses and foreclosures. — No loss in the history of the bank. 12. Supervision. — No supervision by the Government, but the law demands that the central federation shall make a thorough examination and audit every two years. In fact, the central federation makes an annual audit. The greater the turnover the more frequent are the audits. 13. Relation to central organization. — The bank belongs to the central federation with headquarters at Darmstadt. The sum paid to the central federation by this bank amounts to 150 marks per annum. 14. Relation to other cooperative and noncooperative societies. — The bank, which is situated in the same building as the cooperative creamery, obtains the use of one room rent free, but there is no official connection between the two. Miscellaneous. — Business turnover last year about a million marks. When a man retires from the society he is responsible for two years for his stock liability of 200 marks for each share held. QUESTIONS. Q. Suppose a man loses one-half of his wealth, what would be the effect on his credit with the bank ? A. If he lost more than one-half of his property we would attempt to aid him in a modest way, at all events we would try to see that he did not have to sell his shares. In case he fell ill and was incapacitated the proba- 14174°— S. Doe. 214, 63-1—^23 354 AGRICULTURAL COOPERATION IN EUROPE. bilities are that tie would have to sell his shares, for we do not give charity* direct, but through the Sisters of Mercy and the Child Welfare Association. So far we have had no case like this in the bank. The limit on time deposits is six months, because at the end of six months the bank wants to know if the money is to j-emain for a further six months. The bank does not accept long-time deposits. LANDSCHAFT SYSTEM. Dr. Brodnitz, Professor of Political Economy in the University of Halle, ADDRESS. Halle. A landschaft is a landholders' cooperative association for the purpose of getting mortgage credit only, and it is a corporation, an association controlled by the Prussian Government. You wiU have noticed that other cooperative societies are not at all controlled by the Federal or Prussian Government, but this land of association, the landschaft, is so controlled. As I have told you, the landschaft is an association of land- holders for getting money on mortgage, and to make clear to you the merit of the landschaft I will show you the situation before the landschaft was estabUshed and since its estabhshment. For instance, here is a landowner — I will call him A — who wants to get money on mortgage. I speak of the time when there was no landschaft. How may he get this money? He has to go to the money market to find there a man who will give him money, whom I will call B. It wiU not be very easy to find the man I call B, because, for instance, in time of war, or panic, or in bad seasons, there will be a scarcity of money, and it wiU be difiicult to find a man who has money to loan on mortgage. And even in good times the diffi- culty is very great for B, because he has to get a valuation of the land held by A. It is a very difficult task to get a good valuation, a valuation you can trust. A will have to pay a middleman to find B. He will have to pay for advertisements in the papers and also for the valuation. Finally, he may get the money, but only at a high rate of interest, because B will always say, "Well, you know, there is a scarcity of money. I want 4^ or 5 per cent." As you see, this is a very expensive way to get the money. Then B will give the money only for, say, 5 or 10 years, after which he may come and teU A, "Well, I want my money; you can have it again, but now I will charge you 1 per cent more than I did for the first 10 years"; and so, you see, A is always in a dangerous situation. He is not sure that in case he wants the money he will find a money lender, and when he has found one who will give the money he is not sure of the rate of interest he will have to pay 10 or 15 years later. When the landschaft is established, how is money obtained ? There is then no relation between A and B. There is only the man A, and he goes to the landschaft. He is now a member of the landschaft, you know, and he goes there and says, "I am a member of the landschaft, and I want money." He wiU say, "My land is worth 100,000 marks." The rule of the landschaft is that it will give the borrower 66 per cent of the value of his land; that is to say, in this case 66,000 marks. First, there is a new valuation of the land, and you must notice that this valuation is made by absolutely independent assessors. It is made, first of all, by members of the landschaft, by the land- holders Hving all around A. Two or three of them are sent to value the land. Then, there is another check by an independent assessor — for instance, by the professor of agriculture in our university — and lastly there is a check by the officials of the landschaft. So you get a valuation of the land which is reUable, absolutely reliable. You can be sure that, as a rule, it is an undervaluation; that the real market value is higher than the valuation given by the independent assessors. The landschaft then says, "Your land has a market value of 100,000 marks and you can get 66,000 marks." But it will not give him this sum in money; it wiU give him bonds. For these bonds the gentleman called A has to give a mortgage registered in the books kept by the civil law officers. Thus, you see, there is a mort- gage taken out for 66,000 marks, and for this mortgage A gets bonds to the nominal value of 66,000 marks. What is A to do with these bonds ? Of course, he does not want to keep the bonds. He only wants the money, and so he will sell the bonds. He may sell them himself through his banker, or, as a rule, they are sold for him by the banking department attached to the landschaft. They are sold for him in the open mar- ket to a buyer, and now, you see, the gentleman called B is again coming up. He is the man who buys those bonds given to A, and those bonds are sold by the landschaft banking department to B, and so, you see, there is no direct relation between A and B. B does not know A and A does not know B. Now, what is the relation between B and the landschaft, and what is the relation between A and the landschaft? First of all, let us examine the relation of B to the landschaft. B has bought the bonds, and why does he buy them ? Because they are trust funds. In Prussia the law says that widows' and orphans' GERMANY. 355 money may be invested only in government or in landschaft bonds, and so you will see the extreme security and stability of landschaft bonds. There are always men la the market who have trust money to invest, and so any day at any time you can sell these bonds. B, who has bought the bonds, gets interest, not from A but from the landschaft. On the 1st of April he gets the interest, which, as a rule, is 3^ per cent, and he gets his 3^ per cent from the landschaft. And now for the relation between the landschaft and A. The day before the landschaft pays the interest to B, A must pay interest for the mortgage to the landschaft; but while B gets SJ per cent, A will have to pay 4 per cent. You see, there is a difference of one-half per cent. B gets only 3 J per cent, but A pays 4 per cent. The one-half per cent is used, first of all, to meet running business expenses. There is a certain money outlay for running the landschaft, and that is paid out of this one-half per cent. The rest is paid to the slak- ing fund, so that in 45 or 54 years the whole mortgage is paid back to the landschaft. There is no mortgage on the land of A. You see, this money, the money A has received, is loaned to him until the mortgage is paid off, amortized. The loan can not be called in untU after 5 or 10 years. But, you wiU say, if B wants his money back to invest in industrial purposes, or what not, what can he do ? He can sell the bonds he has bought. It is the same as if you were a shareholder in an industrial com- pany. You can not ask the company for your money back. You can only sell the shares you have bought. That is the way in which B may get back his money if he prefers to invest it, say, in an industrial concern. That is the way in which A can get his money. He gets it through the landschaft, and the landschaft issues bonds. When these bonds are recognized as trust investment bonds, there must be a great security about them, and this security is afforded by state control. You must notice that there is only one landschaft in each pohtical district. There are one or two thousand cooperative associations in the Province of Saxony, and a new one can be established at any time, but a landschaft is only estabhshed once, and it is estabhshed under statutes and regulations approved by the Government and the King. You must get a charter from the King in order to estabhsh a landschaft. All the officers of the landschaft are appointed by the King. They are absolutely independent. You will allow me to say a few words about the different situation of ofl&cials in America and in Europe. You wiU notice that we in Prussia have not a party system. You have got what we call a "spoib system," but with us aU officers — ^for instance, the professors of our universities — are appointed by the King, and they can not be removed from their positions except by a judgment given by the judges in the law courts. So, you see, practically speaking, officials in Prussia can not be removed from their positions. They are appointed for life, and so they are absolutely independent. " . The directors of the landschaft are appointed by the King, and the books and accoums are inspected and audited every month by law officers, and, besides this, there is a special deputy commissioner appointed by the King to control the whole running of the landschaft. For instance, in our province it is the governor of the province, the president, who is the commissioner of the King to the landschaft. So, you see, you have every possible guaranty that there will never be any overvaluation of the land, and that they will never give more than 66 per cent of its market value. And now you wUl ask what happens in the event of A not paying up the interest due. A does not pay the interest because he is a bad fellow. Then his land is sold in the open market. You see, the market value of the land is 100,000 marks, and you may realize 100,000 marks or 90,000 marks for his land. Of this, say 90,000 marks, the landschaft wiU get the 66,000 marks it has given in bonds, and the rest, the 24,000 marks, the difference between 90,000 and 66,000 marks, goes to the landowner who has not paid up the interest. I should say that the landschaft is the best way and the only way to get cooperative mortgage credit. You can not do that business on the lines of the private associations, as, for instance, the Raiffeisen association. The Raiffeisen association is a very good one, the best one we have for agricultural purposes; but still it is only for daily-life credit and not for mortgage credit. But in case you should adopt the landschaft system in the United States you would have to be sure that you can get the same control as we have in Prussia. You would have to have like control in the United States. You must be sure that your assessors and officials are absolutely independent. Then it will be a good thing to have the landschaft in the United States. QUESTIONS. Q. After the charter is obtained from the King for the establishment of the landschaft what is the next step ? A. The bonds are then issued. Q. Do the members of the landschaft subscribe stock ? 356 AGEICULTUEAL COOPEEATION IN EUROPE. A. The members have to pay in a certain sum to begin with, of course, but it will only be a very small one, just enough money to pay for a clerk, have a business office, and so on, no more. On the day they get the charter they can start giving out bonds. Q. Do your borrowers, the landowners, put up the capital ? A. The landowners get the bonds. Q. But who puts up the capital ? A. The capital is obtained on the bonds issued by the landschaft. The landschaft has no capital. Q. It has no capital at all ? A. No; it only has a small sum paid by the members to meet running business expenses, each member, for instance, has to pay a fee of 10 marks. Q. As the borrower reduced his mortgage by amortization, how does the landschaft protect B, the holder of the bonds ? Is not B's security getting less and less all the time ? A. No. Q. Let me make my point clear. I think it is a point we shall have to clear up in our nainds. If A gets 66,000 marks on his land and B buys the bond, as A amortizes his loan to the landschaft, B is stUl holding bonds to the amount of 66,000 marks. A gradually reduces his debt to 65,000, 64,000, 63,000 marks. But how does B stand ? Is he stiU holding bonds to the amount of 66,000 marks ? A. Yes. Q. Then how is B protected against the reduction of that amount by A ? A. Well, you see, there is no relation at all between A and B. The bonds are not guaranteed by the mortgage of A, not at all. Q. How does the landschaft protect B when the security is being reduced? A. Well, there is no change in the mortgage until it is fully paid up. Q. That is what I am talking about. A. There is no change made in the register books until the mortgage is fuUy paid up. Q. The mortgage still stands at 66,000 marks ? A. Yes. Q. What is that mortgage of 66,000 marks on ? Supposing A has reduced his mortgage to 20,000 and B has a bond for 66,000 marks, what security does the other 46,000 marks rest on ? A is relieved entirely; what other security has the landschaft ? A. Well, until the mortgage is entirely amortized the landschaft has the same security as on the first day. Q. Does not the landschaft reduce its bonds as the amortization is paid in and so balance things ? A. No ; there is no change made in the register from the first day to the last one; no change. There is always on the register a mortgage of 66,000 mai'ks. Q. We are all driving at the same thing; what does the landschaft do with the money it receives from A in amortization of his mortgage 1 What does it do with this money if it does not give it to B ? A. It buys bonds in the market. Q. What kind of bonds ? A. Its own bonds. Q. We found in the provincial bank of Nassau that most of the bonds were sold to investors in the prov- ince. I have been given to understand that most of the German mortgage bonds are sold at home. Now in the United States we have ceirtain States where probably it would be difficult or perhaps impossible to dispose of the mortgage bonds within the State; they are not investing States. It is probable that some of our State bonds would find an extremely wide market outside of the State; therefore it may be essential to have in the United States a national mortgage bank with the name of America, not the name of one State, behind it. Does it seem to you practicable to create a cooperative machine to cover 3,000,000 square miles of land? A. You are quite right. I would call your attention to the fact that we have one central landschaft in Prussia, too. Q. But it has not worked, has it ? A. It has not worked very well. Q. You say A must be a member of the landschaft before he can get a loan. Now suppose all of us here are members of the landschaft. Is there any obligation or is there any mortgage on the land of all of us by reason of that membership in the event of the landschaft being badly managed ? A. No. Q. Then the creditor would lose entirely ? A. Well, he can not lose, because at the same moment that he gives his 66,000 marks a mortgage is taken on A's land. GEEMANY. 357 Q. I understand that, but suppose I am a member of the landschaft and have a loan from the landschaft, is my land mortgaged for the general credit of the landschaft ? A. No; not at all. Q. Does the landschaft receive deposits ? A. No; it does no banking business." For such business there is a special department attached to the landschaft, but not controlled by it, nor by the Government. It is only in the same building. When you go to see the landschaft here in Halle you will find on the first floor the landschaft bank; that is, the banking department, and on the upper floors there is the landschaft itself. Q. The banldng department receives deposits ? A. Yes. Q. Yesterday some of us learned that the landschaft had a capitalization, and we understood, rather vaguely, that the capital was furnished to the landschaft by the landschaft bank. Did we get a correct version ? A. You mean that the capital is given to the landschaft by the landschaft bank ? For what purpose ? I do not understand. Q. We do not know; that was the impression we received. A. No; it was a mistake. Q. It is erroneous ? A. Yes. You see the bonds given to A will be sold for convenience by the bank department of the land- schaft; but this is only a convenience. You can go to any banker you like. Q. If the landschaft fails to sell the bonds at par, A, the borrower, has to stand the loss ? A. Yes. Q. Our questions may appear rather impertinent, but they are pertinent to us in our endeavor to apply what we find to our own conditions. The question I am going to ask would arise with us in our country should we adopt this landschaft system. A has reduced his mortgage in the course of a number of years from 66,000 marks to 46,000 marks ? A. Yes. Q. No obligation to this effect has been made, except book entries ? A. Yes. Q. Suppose that we had a landschaft — this would not be possible in Germany perhaps — but suppose with our system we had a landschaft and it failed. How is A protected, if his repayments in the form of amortiza- tion are merely attested by a book entry, and he still has a mortgage of 66,000 marks against his land? Could he have an offset? A. If I understand you rightly you mean that there is a mortgage on his land of 66,000 marks, but in reaUty he owes only 46,000 marks? Q. Yes. A. Then, of course, he has only to pay back 46,000 marks in case the landschaft fails, because this book entry protects him. Q. The book entry would be taken into account in the event of failure of the landschaft ? A. Yes; that is so. Q. I can not understand why B should buy a bond bearing 3J^ per cent interest of the landschaft, when the landschaft has no capital and has nobody who is held responsible to B. I could understand why B would buy A's bond, because that is guaranteed by a mortgage on A's land; but when B accepts the bond of the land- schaft, which appears to have no capital, I can not see the sense on the part of B in buying it? A. One moment. You say the landschaft has no capital. But you must understand that that means that it has no money capital, but it owns all the mortgages. The moment the landschaft has given out those bonds to the amount of 66,000 marks, the landschaft owns 66,000 marks, you see. And so B can buy the bonds, because though the landschaft does not own a money capital, it owns a mortgage capital of 66,000 marks. Q. Supposing that the landschaft should fall into the hands of a set of thieves that use up aU this amorti- zation fund which is paid into it, where would B stand ? A. That is a question that I touched on at the end of my speech. If it is possible that there may be thieves among the directors, you could not run a landschaft in America. It can be run only by absolutely trustworthy and independent officers. Q. Half a dozen members around me have asked me to foUow up a little further the inquiry as to how B is protected. As we understand it now, the owner of the bond, B, is protected by the landschaft only? A. Yes. Q. But when the landschaft bank started, would not the purpose of that be to cover the bonds, to cover the debts of the landschaft? A. No, only the man who has a mortgage on his land is liable. 358 AGEICULTUEAL COOPEHATION IN ETJEOPB. Q. And only to the extent of his mortgage ? A. Yes. Q. There is no unlimited liability ? A. No. Q. Does the Government guarantee the title ? A. You mean is A's title to the land guaranteed by the Government ? Q. Yes. A. Yes; the title is guaranteed by the law books, by the register. In Prussia there can be no doubt about the title. Q. Does it never happen that a title proves defective ? A. You mean when A's title is defective 1 Well, that is an impossible thing in Prussia. We have no defective titles. Q. Has A any option to discharge his mortgage before the expiration of the fixed period ? A. No; but when his mortgage has sunk, say, to 46,000 marks, he can go, to the landschaft and ask for those 20,000 marks back, so that the mortgage again stands at 66,000 marks, you see. Q. Can A pay off the balance of 46,000 marks at one time, if he chooses ? A. Yes ; by giving back the bonds. Q. By buying bonds on the market ? A. Yes; and giving them to the landschaft. Q. Then the situation with respect to bonds is as follows : A can go into the open market and buy bonds at the market price and release his debt by simply presenting the bonds ? A. Yes. Q. In other words, he protects himself by purchasing the bonds against a loss in the price of the bonds ? A. Yes. Q. Could you tell us quite briefly why the central landschaft has not succeeded; why it has only worked on a limited scale? A. Yes. It has been established some 15 years; but, as you know, the first landschaft was established some 150 years ago, and so people in the provinces are accustomed to buy landschaft bonds of their respective prov- inces. They are not accustomed to buying the central landschaft bonds, and so they do not sell very well. It might be otherwise in America, but here in Prussia the market for landschaft bonds is a restricted one. For instance, the bonds given out by our Saxony landschaft are sold and bought in Halle and in Magdeburg, and it is seldom that they are bought and sold in Berlin. Q. Very seldom ? A. Yes ; because this central landschaft has been formed in this way, that one member of each landschaft has been commissioned to Berlin to the central landschaft. The number of members, the governors of this central landschaft, is a very restricted one. Q. And that is the only cooperative feature it has ? A. Yes. I think I must warn you. I think I have told you that, as a rule, the mortgages are paid off in, say, 45 or 54 years. But as a rule in Prussia the mortgages are never paid off; when the gentleman called A has paid back, say, 20,000 marks, he goes to the landschaft and asks for those 20,000 marks back again, and so the business continues. Q. In the Province of Nassau we were told that they woidd not allow that in their district credit bank. That bank forced the borrowers to pay amortization until their mortgages were all wiped out, and the officials of that bank claim that Nassau is freer from debt than any other province of Germany. Do you think the optional right of the mortgagor to go to the landschaft and get back what he has repaid is a bad or a good thing ? Does it not keep him in debt ? A. I can not say; it depends. In the case of a farmer who is running his business on old-fashioned lines, on old Prussian lines, it is best for him to be obliged to pay off the whole of the mortgage; but for a progres- sive man who wants to run his farm on more modem lines, who wants to invest money in his farm so as to get a better income, then it is right to give him back his 20,000 marks so that he may improve his farm, so that he may reinvest this money in his farm. There is an institute on the same lines as the landschaft in Berlin for Berlin householders. It is called the Berlin Bond Issuing Society, and it holds its charter not from the King but from the city authorities. The householder who wants money gets bonds from this institute in the same way as the landowner, the farmer, but he has the option of paying off the mortgage either by giving back bonds he has bought or by paying it off in cash. And he is guided in making his decision in the following way: Take, for instance, the market price of such bonds issued by the Berlin landschaft as 96. Now, in this case, the borrower will buy bonds and give them back to the landschaft, which takes them at their nominal value; but if the GBBMANY. 359 price of the bonds be high, for instance 102, of course he will not buy bonds but will pay the landschaft in cash. So you see this places a certain risk on this institute. What I mean is that in case the market price of the bonds is low the borrower will give bonds in payment of his loan, bonds which are reckoned at 100, and in case the price is high he will give 100 marks for the 100 marks he got, and for those 100 marks the institute has to buy in bonds at 102. So you see there is a certain risk in this to the institute, but we only have this system in Berlin; we do not have it in the landschaften of the provinces. Q. Has the rate of interest on these bonds varied ? A. Yes; it has. It was very much higher 100 years ago than it is to-day, and it varies just n6w in the different provinces. Even here in Saxony we have bonds bearing different rates of interest; for instance we have bonds at 3, 3i, and 4 per cent. Q. In the same landschaft ? A. Yes; and the member can choose whether he will have bonds at 3 or 4 per cent. You see there is this difference: If he takes a bond at 3 per cent he will get in the market a price for these bonds of, say, only 76; if he takes bonds at 4 per cent he will get .a higher price in the market for those bonds. That is the difference. Q. What has been the cost of operating the landschaft ? A. I can not teU you the figure, but the cost is very low. Q. Has the landschaft created a reserve fund ? Built up a reserve ? A. Yes; it has. Q. What does it do with the reserve fund ? Does it ever make a distribution among its members in the way of a dividend ? • A. No. Q. Is it building the reserve up to strengthen itself ? A. Yes. Q. Does the landschaft find it necessary to buy in its own bonds when they come upon the market in order to protect the market rate ? A. No. Q. It does not undertake to do this at all ? A. No; you see the variations in the price of such bonds are very small; the price of these bonds is very stable. Q. If a private bondholder needed to realize upon the bonds in large amounts, would the landschaft bank, which is affiliated to the landschaft, undertake to buy them in and protect them so as to prevent the rate of interest faUing ? A. No. Q. If the rate of interest goes down and the bonds are selling at 65 the borrower has to suffer; they are not guaranteed ? A. No; there is no protection. You mean, I suppose, that there is a risk that the borrower who has sold his bonds at, say, 95, when he wants to buy them back must pay for the same bonds at 98 ? If that is your question he is not protected against that risk. Q. Does your landschaft ever find it necessary to borrow money ? A. No. Q. Does the landschaft bank borrow money from the bank of issue ? A. No ; it has deposits. Q. Suppose the deposits should be withdrawn ? A. You see the landschaft bank has nothing whatever to do with the landschaft. It is only in the same building. Q. You are speaking of the landschaft ? A. Yes. It never borrows money. It gives out bonds. Q. Are we to hear from the landschaft bank to-morrow ? A. Yes. Q. If the man who has the mortgage buys his bonds at 97 you say he can turn them back into the company at 100 par value, and the company must take them at par when the market is 97 ? A. Not in the case of the ordinary landschaft. Only in the case of the special landschaft in Berlin of which I told you. Q. Not with your landschaft ? A. No. Q. The Berlin institute does that on the theory that by accepting them at 100 it insures a constant demand for the bonds immediately they fall below par value ? A. Yes. 360 AGRICULTURAL COOPERATION IN EUROPE. Q, That is the point I was trying to bring out, whether anything is done to promote the stability of the market. Does the law in Prussia allow the landschaft to accept its own bonds at less than par ? A. Yes; at the market price. Q. At whatever the market price may be ? A. Yes. You see there is no risk. The landschaft gets the bonds back and sells them in the market the same day. Q. Suppose A goes to the bank with his mortgage for 66,000 marks, they do not give him any money but they give him landschaft bonds for 66,000 marks. Well, the landschaft bank then sells the bonds to B for 66,000 marks? A. Yes; they are sold either by A or by the landschaft bank. Q. And A may only get 95 ? A. Yes. Q. Suppose some kind of good fortune comes to A withiu six months by which he realizes cash, and he is in a position to pay up those bonds. He goes on the market, goes to B, and buys those bonds back for 97. Do you mean that the landschaft would not allow A a credit on his obligation ? A. No; I mean that A can give back the bonds at the price they have on the market that day. Q. At what the bonds are worth that day? A. Yes. Q. Then if he takes the bonds back to the bank he has his mortgage released on the spot, dollar for dollar ? A. Yes. Q. He has already suffered any loss he is to suffer at the other end ? A. Yes; he has sold bonds at 95, and he has bought them back at 97, and so he will have lost 2 per cent; you are quite right in your statement. Q. The point is this — I think there is a misunderstanding: If A buys bonds at 97 he can discharge his whole debt at the rate of 97 ; he does not have to discharge his debt at the rate of 100. If he buys at 97 can he discharge at the rate of 97 ? A. Yes. Q. He takes the ordinary risk of the money market ? That is all that he does ? A. Yes. Q. Suppose that some calamity happened to the landschaft, and the borrower could not pay the interest and the landschaft was forced to foreclose. Of course, under those conditions there would not be such a demand for real estate. Would it be possible to burst the bank ? A. I do not see how. Q. How does the value of these bonds in Prussia compare with government bonds ? A. It is just a little lower, because they only have a restricted market. I am not sure, but I think gov- ernment 4 per cent bonds stand to-day at 97 in Berlin, and landschaft bonds at 95; they are somewhat lower. Q. How does the fluctuation in value over a period of years compare in the case of these bonds with gov- ernment bonds ? Are they as steady in value as government bonds ? A. No ; they go the same way except in times of crisis. For instance, just 100 years ago, when there was a great crisis in Prussia, the value of landschaft bonds was much higher than that of government bonds, because the Government could not pay interest owing to the wars against Napoleon, but the landschaft did pay interest. But in ordinary times the price of landschaft bonds is a trifle lower than that of government bonds. Q. Somewhat lower but about as steady in value ? A. Yes. Q. We were endeavoring to establish the other day the value of a State guaranty for a mortgage bond in Nassau, and we were told that there was a guaranty at the hands of the administrative district. A. Yes. Q. They quoted their 4 per cent bonds on the market at 99. Could you pick out a landschaft without government guaranty and compare the prices? A. It is somewhat lower than in the case of guaranteed stock. You will not reach 99 for an ordinary land- schaft bond. Q. How does the rate A pays compare with the rate an ordinary outside borrower pays on a similar mort- gage, in an ordinary business way? A. It would be as a rule the same rate A has to pay. You mean. Does he pay more or less than to an ordi- nary money lender ? Q. Yes. GEEMANT. 361 A. As a rule the rate would be the same, but you see A does not pay for the valuation, nor for a middleman to find him this B, and then as a rule the way is this : After five years the ordinary money lender will say, "Now, you can keep the money, but you will have to pay higher interest; you will have to pay me 1 per cent more for allowing you to keep the money." Q. Does the borrower through the landschaf t have to pay record fees ? A. Yes. Q. And other incidental expenses connected with the mortgage? A. Yes ; he has to pay all fees and so on, but they are lower, of course, than in the case of ordinary business mortgages, because the Government does not ask such high fees from the landschaft as it does from an ordinary money lender. Q. Are the appraisers paid 1 A. Yes. Q. Have any landschaft 'bonds ever been sold out of Germany ? A. I do not think so. Q. Are you familiar with Mr. Cahill's book on German rural credits ? A. Nb; I do not know it. Q. That book states on the subject of these landschaft bonds that they are secured by collective mortgage securities and not by individual mortgages. A. Yes. Q. I understand from you that that is not the case. I would like to know whether Mr. Cahill's statement is incorrect. It is rather a serious matter. A. No; that is a misunderstanding. That means that B is not protected by the mortgage given by A because he does not know the name of A, but that he is protected by the whole number of mortgages held by the landschaft — the mortgages of A, B, C, and D, and so forth. Q. I think I can make that clear in our own terms. By the specific mortgage B may hold bonds that have been issued to A, but B is not secured by the specific mortgage that A has given; B is protected by the general mortgages given to the landschaft company. Is that not so ? A. Yes. Q. In that sense it is collective ? A. Yes. Q. Suppose a case of overvaluation should arise, when you come to sell the property of a man who did not pay the interest on his bonds, and that property was not sufiicient; if the bonds are secured by collective mortgages then you have the right to sell the property of the other members in order to make up the deficiency ? A. No; because, you see, overvaluation is impossible, because the landschaft only gives the borrower 66 per cent of the lowest possible valuation of his land. The land is valued by different appraisers and the lowest value is taken, and on this value he is given 66 per cent. Q. But in the course of 40 years the property might depreciate from outside causes, or from being poorly handled. A. In that case also the mortgage is lowered by the sinking fund. There is a set-off. Q. Having, as I believe, explained to you the pecuUar economic condition of American agriculture, I should be pleased to have you tell me whether you can, from your European experience, suggest an adaptable mode of rural cooperative credit for the United States. A. You must state, before I can answer, whether you mean mortgage credit or not. Q. Let us say mortgage credit. A. Well, I should propose to introduce the landschaft system for the reasons I have already given. Q. Will the system you speak of permit of cooperative finance and cooperative distribution of the products at the same time by the same group of people ? A. No. Q. Will you be good enough to enter fully into this matter, and in such clear, untechnical terms as will make the subject plain to the average farmer? A. The landschaft can not do seUtng or buying business because there is a certain risk in doing so. But the landschaft must .run its business without any risk because it gives out mortgage bonds which are recognized as "Trust investments" — that is, investments for orphans and widows' money and other funds held in trust. The administration of such funds must necessarily be rendered absolutely safe. Q. You would then divide into two divisions the cooperative branches of this work: First, cooperative finance; second, cooperative distribution of the farmers' products. Is that so ? A. No; there must be three divisions, not two. 362 AGEIOULTUEAL COOPEEATION IN EUROPE. Q. Please explain. A. First, there must be cooperative mortgage credit, i. e. a landschaft. Secondly, there must be a peoples' cooperative bank for daily-life credit, open accounts. Thirdly, there must be cooperative buying and selling associations. Q. Would you please give a running statement of the operation of the three proposed plans worked by the same group of people ? A. First the group would get money from the landschaft through the sale of the bonds. With a part of this money the group could start the cooperative bank, and then it could begin with cooperative buying and selling in its various branches. Thus the money would be got from the landschaft, part of the same would be deposited with the cooperative bank, and that bank would finance the cooperative buying and selling business. Q. Do you mean in substance that the same cooperative group would have to form and to operate under three different and separate systems ? That they would form three different kinds of cooperative associations ? A. Yes; I mean they would have to start three independent cooperative associations. Q. Would it be necessary for each member of a cooperative group to belong, under this system, as a mem- ber to the three kinds of cooperative associations ? A. No; not at all. Q. Could an outsider in the vicinity join any one, two, or all three of these cooperative associations ? A. Yes. Q. These three systems, then, organized for one group, would permit of cooperative finance, cooperative distribution, and cooperative purchasing, and, besides, that would make it possible to place the cooperative members of the group in a position to conduct their daily expenditures on a cash basis, would it not ? A. Yes. Q. To do all this to the best advantage, would it not be requisite to obtain the money at the lowest rate of interest ? A. Of course it would. Q. How can that be done ? A. First by getting money through issuing landschaft bonds at a low rate of interest; secondly by the deposits made by the cooperators with the cooperative bank, which would be the second organization above noted. Q. Why is it that the landschaft bonds can be issued at a low rate of interest ? A. Because the landschaft obtains its funds through negotiable bonds so Uquid and secure in character as to enable those bonds to be sold in the open market at as high a price for the bonds and at as low a rate of interest as government bonds. Q. What will give such security to those bonds ? A. The mortgages and government control. Q. Do you mean government guaranty? A. No ; I mean rigorous supervision by the Government. Q. What guaranty will there be for this rigorous supervision ? A. The best possible, for the bonds at the high prices at which they will sell and at the low interest which they will bring wiU not tempt regular money lenders to invest in them. They will be bought up mainly as in- vestments for the funds of widows and orphans. This being the case, there will be every reason to beheve that these investments will be safeguarded by the Government with such caution and care as to preclude all danger of fraud or repudiation. And this great care and caution would give these bonds a value as high and perhaps render them steadier even than government bonds, especially in times of war and panic, as for instance was the case in 1806, during the Napoleonic wars, when the landschaft bonds were high and the government bonds low. Q. Of the landschaften, the Raiffeisen, and the Schulze-DeHtzsch systems, which do you think would be the best adapted to the United States ? A. These three organizations have different goals. The landschaften are the' best ones and the only ones for mortgage credit; for personal credit the other two are both adaptable. But as far as we can judge from German experience, the Raiffeisen system would be the better. Q. Does the landschaften system deal with farmers individually, or with a number of farmers collectively in a district? A. They are composed of a number of farmers situated iu the same political district, not necessarily neigh- bors. GBBMANY. 363 Q. Are the bonds sold in the open market? A. They are sold in the open market with the help of the landschaften. The landschaft has a special banking department for transacting its budness. Q. What rate of interest is paid on these bonds ? A.. Three, three and one-half, and four per cent. Q. How is the title of the land secured? A. It is secured by books kept by the law offices. Q. Is the landschaften system under government control? A. Yes ; its organization and its statutes are under the supervision of the State. There is a special national commissioner, appointed by the King, to supervise them. RELATIONS OF THE GOVERNMENT WITH THE LANDSCHAFTEN. Evidence of PKOff. Stbinbbuck. Halle. Q. Which system of cooperative rural credit do you think will be the best for the United States ? A. I think it will not be so practical to have the Raiffeisen system as it will be to have a system based on businesslike lines such as the German Imperial Federation. I give this answer in view of the commercial character of the American people. Q. A landschaft system is only good when the bonds sell high and the interest is low. Does that not mean national government guaranty? A. The Government gives no guaranty. Q. Does the National Government have anything to do with the landschaften? A. The National Government does not guarantee or finance the landschaften but controls them; the King of Prussia ratifies the directors for life. The landschaften have autonomous management, but changes in their constitution and more important regulations are subject to authorization of the Government. Q. Who sees whetherthe national laws on the landschaften are properly carried out? A. The books of the landschaft and its cash accounts are examined once a month by a national judge. Q. Why in Prussia have they got the landschaft system when in other German States, such as Bavaria^ they have other forms of land-mortgage banks ? A. The reason is that Prussia has the largest territory and wants a decentraUzed system; secondly, there is a historical reason, because it was a Prussian merchant, Biifing by name, who first had the idea of estab- lishing the landschaften in 1763 and obtained the practical support of Frederick the Great. In the case of the landschaften there is government supervision, in the case of the other land-mortgage banks the government itself is the bank .and provides the money. Q. Then without the control of the Prussian Government you could not have a landschaft ? Neither could there be a State mortgage bank without the intervention of the King? A. That is so. LANDSCHAFT OF THE PROVINCE OF SAXONY. Statement by Baron von Gutstadt, Director. Halle. The landschaft is an old institution. Frederick the Great founded it in Saxony, where many of the nobility of the province formed a union under the control of the King of Prussia. They issued bonds on their lands and assumed and had control of the debts of the province; the land mortgage bonds were issued and credit thus secured. After the success of the landschaft had been thoroughly established, other provinces of Germany, in eastern Prussia, formed the same kind of associations for the issuance of the land credit bonds. In contrast to the landschaften of the eastern provinces, those in the western part of the province organized independently. The landowners came together and took security on the registration value of their lands, issuing mortgages on the basis of two-thirds of the value of the property so mortgaged. These were originally blanket mortgages on the aggregate landed properties and each person came in on the basis of the value of his registered property. Members are liable for the sum which they have borrowed plus 5 per cent. The 5 per cent further Uability is simply an additional guaranty or security for the loan. The borrower is given bonds to the nominal value of the sum he wishes to borrow, he deposits them in the Landschaft Bank and is given their market value in cash — that is, he exchanges bonds for currency, receiving 364 AGBICULTXJEAL COOPERATION IN EUKOPE. the current market price for the bonds. Theoretically the bonds are sold by the bank at the current rate of exchange on the Bourse, and the money is paid over to the borrower by the bank. The farmer pays, according to the state of the market, from 3 to 3J4 per cent interest. Naturally the market value on the bond is regu- lated by the amount of interest it bears; to-day 3 per cent bonds are selling at 81, and the 3^ per cent bonds for 91; this is only at the present time; 10 years ago the bonds stood above par. In the year 1896 the 3 per cent bonds were so high that this bank made 40,000,000 marks on the sale of the bonds. In regard to these bonds which the Landschaf t Bank sells, and in regard to the interest which the bank charges : The bank charges one-fourth of 1 per cent for its services, and in addition to this the borrower (the landowner) is compelled to pay amortization at the rate of three-fourths of 1 per cent a year. Under no cir- cumstances can the landschaft foreclose the mortgages or demand any payment other than the amortization, unless the borrower fails to keep up the amortization or interest on the loan. There are exceptions under which he may have an extension of time, but usually it is not asked for. He is not absolutely assured that the loan may not be called, but he is assured that the interest wiU never be any higher than at the time of procuring the loan; this fundamental principle is the key to the success of the landschaft. The landschaft is an autonomous association, administered as follows: The members come together in general assembly; the general assembly elects its own council of administration, and this councU of adminis- tration appoints the board of directors. The board of directors consists of a general director and two other directors; at least one of them must be an active member of the landschaft. In addition there are several other directors, one a lawyei* (syndic) who handles all the legal business of the landschaft. The official mem- bers of the board are state officials indirectly under state control. The legal officer of the landschaft does the same work as that performed by a notary. There is also a large office force. A royal commissioner, with the minister of agriculture, has direct super- vision of the work of the landschaft. Moreover, certain state functions have been taken over by the land- schaft. It has legal power to enforce payment of all debts due without recourse to law, not only in cases involving personal property, but also in connection with real property by reason of the fact that the mortgaged property comes under the control of the landschaft when it loans money on it. The debt is paid off by three-fourths of 1 per cent amortization per year. The money paid in to the amorti- zation fund each year is used to redeem outstanding mortgage bonds. The landschaft purchases these bonds at the rate prevailing on the market. If the bonds are bought in at the same market rate at which the bonds were sold in the first place, the borrower loses nothing on the transaction. In case the value of the bonds rises above par, the landschaft is entitled to the premium over the amount due the bondholders. The landschaft has the right to redeem any bonds at par. A great advantage to the farmer lies in the fact that if the bonds are below par, he can pay off his amortization just that much sooner; if above par, he has to pay par value only. In addition to the amortization, there is a security fund. The landschaft has no desire to earn money; it has no use for earnings except to pay running expenses. No dividends are paid, for there are no shares and no divided profits. However, a surplus is accumulated and placed to the credit of the landschaft until the fund reaches 5 per cent of the outstanding obligations of the association. The Landschaft Bank was established to deal in the bonds of the association, mainly to see that they have a market. This bank handles all the money of the association and carries on whatever publicity campaign is necessary to develop a market for the bonds and to secure as wide a circulation for them as possible. The landschaft formed the Landschaft Bank some years ago with a capital of 3,000,000 marks ($750,000), but over and above the 3,000,000 marks the landschaft does not hold itself liable for the debts of the Landschaft Bank. The Landschaft Bank does both real and personal credit business as well as all the usual commercial banking transactions. LANDSCHAFT BANK OF HALLE. The Disectob. statement. Halle. The basis for a system of land-mortgage credit of this kind is a completely organized land-registry system whereby land-titles are absolutely fixed — that is, to have some system whereby it is possible to tell absolutely by records in these books what stands against the land at any moment. In every district there is a representative of the land3chaft through whom practically all the local business is transacted. These men (syndics) have many notarial and court functions and settle practically all minor disputes, grievances, and irregularities out of court. Gfraver matters are settled by the directors — usually by mail — whose decision is final unless set aside by the courts. In general practically aU legal matters of whatever kind are settled out of court. If in the registers there is something that is not satisfactory to the landschaft, that question has to be cleared. GERMANY. 365 After everything is cleared on the registry books the question of the amount of the loans is taken up. How much shall we give him? The basis of the loan is twenty to thirty times the net income of the land. That is the easiest way to make the calculation, but if the man wants more than this method would give him, we send two appraisers as agents of the landschaft, who, with the county representative, go out and put a valuation on the land on which the applicant desires to borrow. We loan up to two-thirds of the valuation. Sometimes the value instead of being twenty or thirty times the income is from forty to one hundred times the income or even more; so that, if a man wants credit based on the old valuation of 1863, he never gets as much money as he could by having the landschaft make the valuation. Of course the farmer need not come to this bank; there are many kinds of organizations which ordinarily will lend him money; but on account of the tightness of the money market we are often the last resource of the farmer. The savings banks are not always able to lend him money, whereas he can always get it here. When all matters have beerl arranged by the landschaft and the mortgage has been made out and registered, the borrower immediately receives the amount of his loan in bonds; these are at once cashed by the bank at the market price, the bank taking the responsibility of mar- keting the bonds. QUESTIONS. Q. Suppose that a man wants a loan of less than two-thirds the appraised value of his land, is it necessary for him to get a mortgage on the whole ? A. We may loan on less than the complete area, but when we do we see that the part on which the loan is placed contains the improvements. Q. What is the average loan, also the largest and smallest ? A. The limitations are that a man can not belong to the organization unless the register shows he is pos- sessed of 4 acres, but he can borrow as little as he chooses; and on the other hand, loans have run up to 3,000,000 marks on one estate. Sometimes in the case of larger loans a fourth appraiser is added. Q. Who are the purchasers of these bonds? A. These bonds are placed very much as other state obligations are at the present day. At the present time they are mainly held by private individuals, farmers, and savings banks. These bonds are looked upon as gilt-edge security by the public. The landschaft can and does keep track of its property mortgaged — that is, we see to it that the property is not allowed to depreciate. Q. Are the bonds sold in foreign countries or have they a home market? A. Efforts have been made to get the bonds into the foreign markets but with very little success. Q. Is it the thrift of the German people and their saving proclivities that have made these institutions possible by furnishing a market for your own bonds ? A. It is not so much that Germans must save as that their standard of Uving is so moderate that they can save. The Germans prefer to sleep well rather than to eat well. If a man comes to one of our borrowers for advice as to where to get money, he wiU be asked whether he desires to sleep well or to eat well; if the former, he is told to come to our institution; if the latter he is told to go to the savings banks for the loan. The develop- ment of industry has produced a condition whereby these bonds are not as generally acceptable as before, because much money has been invested in industries and has contributed to their success without much loss. At the present time, therefore, there is greater difficulty than formerly in placing the bonds. A hundred years ago (in war times) when government securities were very low and the iacome therefrom was not certain, these bonds had a greater value than the government bonds. Q. When the borrower repays his loan by means of the bonds, are the bonds accepted at par or at the market price ? A. It is a case of drawing. When a man wants to repay his loan, he pays in his money and then the land- schaft draws a certain number of bonds at random. The bonds that are drawn are then paid for like any other bonds — are simply paid at face value, and do not bear interest after that date. One can not present a bond to the Landschaft Bank and get the cash for it. He must go into the open market. There is a provision in the bond to this effect. For the purpose of canceling any individual mortgage, bond numbers are drawn and called for publicly in the newspapers, and then uiterest ceases. Of course these bonds are redeemed at their face value. A man can buy bonds on the market and require the institution to accept them in cancellation of a debt. The farmer never has to pay more than par in cancehng his debt. If the bonds are above par, the bank draws numbers and calls for the bonds, and if the bonds are below par, the bank goes into open market and buys them. As the bonds are based on mortgages, they have great value as an investment. A man owing 1,000 marks and want- ing to pay it can go into the open market and buy, and if the bond, whose face value is 100 marks, is selhng for 87, he can go into the market with 8,700 marks and buy 87 bonds and cancel the 1,000 marks mortgage. 860 AGRIOULTUEAL COOPERATION IN EUROPE. Q. Suppose a man has land valued at 100,000 marks, and you have loaned him 66,000 marks on that land, and by amortization he has reduced his debt to 46,000 marks, have you credited him on the mortgage with the 20,000 marks that he has paid, or is that merely a matter of book entry ? A. Yes; only book entry. Every man giving a mortgage has his own book account, but he does not have a book. Q. After he has reduced his mortgage to 46,000 marks, suppose he desires to get 10,000 marks more, will you advance another 10,000 marks without making another mortgage; simply making the loan on the book entry ? A. He can borrow up to 66,000 marks on the book record. He gets new bonds. Q. Do you make another appraisal to see that he has kept the land in proper shape ? A. No ; not as a rule ; but the right is reserved to do so at any time. Q. Does the bank have anything to do with bonds other than its own ? Does it purchase any other bonds 1 A. It does a regular banking business, but primarily exists on the business of the landschaft. It buys other bonds, but does not speculate. The men who deal with the institution primarily for the purpose of get- ting money on mortgages receive better terms than they can get at other institutions. Q. We should like to have some further explanation of the relation existing between the landschaft and the Landschaft Bank, so far as the management and control are concerned. Is the personnel of one the same as the personnel of the other ? A. The officers are all the same. Q. Has the Landschaft Bank any capital ? A. Yes; the 3,000,000 marks it received from the landschaft. The Landschaft Bank began as a daughter institution with an initial gift of 2,000,000 marks, which was afterwards raised to 3,000,000 marks, as a working capital. Q. Did this come out of the profits made by the landschaft ? A. It accrued little by little out of the profits and savings of the landschaft, which, according to law, was at the disposal of the board of directors. They took the 3,000,000 marks and put it into the bank as capital. Q. Then to whom does the capital belong? A. It has no legal entity. This is a question which has not been determined. The whole organization of the bank is for the purpose of making it easier to amortize mortgages which have been taken by the landschaft. The profits all go to the landschaft, and when the special guaranty reserve funds are at the right level no more has to be paid into them. Then the landschaft puts any surplus back into the bank again. The amortization goes on, but not at the nominal three-fourths of 1 per cent; the profits very often make the amortization as much as 1 per cent, and in some instances even more. Q. Are the profits appUed to the benefit of the borrowers ? A. Yes. This building was built from the remainder of the one-fourth of 1 per cent after paying the operat- ing expenses. Every man who gets money from the landschaft pays 1 mark for every 1,000 for general expenses (entrance fee), and in addition, one-fourth of 1 per cent for general expenditures. The Landschaft Bank rents its rooms from the landschaft. Like every other bank in existence we carry accounts at the Imperial Bank and other banks, and check back and forth just as any commercial bank. Just as any commercial bank we are accorded a Une of credit both by the Imperial Bank and the large commercial banks on ordinary paper which any other bank would have to, present to that bank. Q. Suppose some other bank owns bonds of the landschaft, would the Imperial Bank accept them as collateral for loans ? A. Yes; in just the same way as any commercial bank. The Imperial Bank will loan on om: bonds. The landschaft has credit which can be called on at the Deutsche Bank (this is a private share bank in Berlin) to the extent of 3,000,000 marks without any security. I want to emphasize the fact that the fundamental principle is the estabUshment of a complete and absolutely correct registry of property in the region where you want to do business of this kind. Q. Will bonds in the hands of other banks be accepted by the Imperial Bank as security for loans ? A. Yes. Not because this organization is as it is, but because this organization is one of a system whose paper is acceptable anywhere and everywhere. The paper of this landschaft is more Hquid than any industrial paper, because there is always a ready market for it. It is the desire of the landschaft to get the bonds per- manently placed into the hands of those who will hold them and not throw them on the Bourse in BerUn and thereby lower the standard of the bonds. The landschaft can not go into the exchanges and attempt to hold up the values. GERMANY. 'Sdl CHAMBER OF AGRICULTURE AT HALLE. Dk. Landers, of the Chamber. statement. Halle. The chamber of agriculture has the duty and the high obUgation to represent the whole Province of Saxony and it has its own administration and management of agriculture, just as any State has its own administration. It has the administration of the whole Province of Saxony. All that occurs in the chamber of agriculture must be reported to the minister of the board of agriculture in Berlia, and the moneys which are sent by the minister are divided among the chamber of agriculture here. The chamber of agriculture represents all branches of agriculture, the culture of fruit, the breeding of cattle and horses, etc. There are separate committees for the following purposes : 1. For agricultural unions and schools. 2. For the cultivation of the land and matters of experiment. 3. For promoting the breeding of animals; 4. For agricultural machiaery. 5. For promoting fruit, wine, and garden culture. 6. For forestry. 7. For bookkeeping. 8. For the affairs of the laborer. 9. For political economy. The chamber of agriculture is composed of members who are elected ax the proviace, belong to the province, and who must be farmers. The plenary assembly consists of 112 members, who are elected for a period of six years, and at present, according to the rules of the chamber of agriculture, 40 members in addition have been elected for three years and have the right of speech. The board of control consists of 13 members: President, first vice president, second vice president, and 10 ordinary members. Representatives or substitutes are elected for the 10 mem- bers, as well as for the second vice president, making ia aU 11 elective members. For the cai:rying on of the different branches of the work conmaittees are chosen. The chamber receives its funds from taxes which amount to 350,000 marks and assistance from the Gov- ernment and the State to the extent of 250,000 marks; and the income of the chamber is 850,000 marks. For all work done in the chamber there is a sort of tax or contribution raised. Experience has shown that the farmer only appreciates that which he has to pay for, and on the other hand when he pays he has the right to express himself; or, ia other words, if dissatisfied to show it. Our experience has been that where farmers get sonaething for nothing they do not take advantage of it, but as soon as a httle tax is levied many of them johi. The revenue and the expenditure amount to over 3,000,000 marks; income and expenditure alike. The number of officials is 375 ; part are employed here in. the chamber and part in the province and in the various institutes. Schools have been erected and organized. There are agricultural winter schools for the sons of peasants; five schools of husbandry for the girls, the daughters of the farmers or peasants; a school for farm managers, and a school for the culture of wine and vegetables. Apart from these schools there are a number of institutes for farm experiments, the idea of which came from America. There is a station for controlling manures; another for the preservation of farms, which also came from America; an institute for animal diseases; a poultry farm; a place where one can get all tools and implements for agriculture, where they have exhibition of all machinery so that the small peasants can come and see for themselves. There is a registry office for farm laborers, and farmers pay certain contributions to this. In Germany there are 400,000 farm laborers employed, 80,000 in the Province of Saxony. Out of this 80,000, 25,000 are provided for through the registry office. There are prizes offered for good work or good serv- ice — faithful service. If the farmers wish to build houses they can come to the chamber for advice. There is also a division of meadow and pasture land; also fpr fruit growing. There are hkewise small unions for insur- ance of cattle in the province. There is also a law division here, where any discussion can take place and rights can be averred, and a bookkeeping division, where farmers can get knowledge of how to keep books (and facts concerning the taxes charged). The agriculture of the province is supported by the chamber. There are 250 farmers' unions in the Province and they have about 33,000 members. Every Saturday the members receive a newspaper which gives aU the information of the chamber. Each union has the right to claim a lecture or address upon the questions which most interest them. The sum required for remuneration 368 AGEICULTUEAL COOPERATION IN EUROPE. is only 10 marks. Last year 800 lectures or addresses were held in these rarious unions. These lectures serve two purposes — that of giving the farmer the information which is so necessary for him, and of bringing the farmers and the ofl&cials together. Every farmer in the Province of Saxony can write direct to the chamber for infor- mation, and much use is made of this privilege; the smallest farmer seeks advice from the chamber. The farmer asks questions upon every detail that comes to his notice on the farm. Questions are asked on such matters as boundary lines which are in dispute; how to manure crops; where he should send his daughter to learn agriculture; when any of his products are not forwarded; in short, for whatever news or information he wants he appeals to the chamber. There is an annual meeting in this hall for the plenary assembly and the annual meeting of the farmers. QUESTIONS. Q. Does this chamber correspond to what we have in the United States, a Federal Government depart- ment of agriculture, having general supervision of all agriculture and rural development? I do not undertand what part of its revenue is provided by the National Government and what part by the province. A. Three hundred and fifty thousand marks are provincial land taxes of Saxony (the smallest farmer pays 50 pfennigs and the tax rises higher according to the size of the farm) ; 250,000 marks are from the Kingdom of Prussia. Q. Does this chamber of agriculture supervise the agricultural schools as well as the agricultural organiza- tions and experiment stations ? A. Not the agricultural high school, but all secondary schools are under the control of the chamber. Q. Is there a general assembly which considers all problems of agriculture in Saxony ? A. Yes. Q. Does that general assembly determine how much money shall go for the different purposes ? Does it divide this general fund ? A. Every school has what you would call a budget, and everybody has to pay a certain amount for the lectures. The chamber helps out the poorer schools more than the wealthy ones. Q. You do not understand my question. There are 600,000 marks available for this general assembly to be applied for ah agricultural purposes. Does this assembly, in general discussion, determine how much shall go to agricultural experiment stations and how much shall go to the schools ? A. That is decided by the board. Q. Is the general assembly elected by the people for a long term of years ? A. In Germany we have provinces. Each Province is divided into counties, each county is divided into districts, each district is divided into precincts, and they elect the members according to the population. Q. It is not an ordinary government department? A. No; it is quite a different institution. It is under the agricultural institution in Berlin. The chamber of agriculture is entirely independent. The secretary of agriculture is what you would call a controller. Q. Is the money appropriated by the board of control ? A. The money which the State gives is used for the development of agriculture in the Province of Saxony; the chamber has no right to use it for running expenses. Q. You say that the province provides 350,000 marks, and the State 250,000, the doctor spoke of 850,000. Where does the balance come from ? A. All the institutions have to pay a certain amount for the work done by the chamber, and the 250,000 comes from that source. For instance, if clubs send manures, etc., for analysis there is a charge for that. Q. An understanding of the organization and government of this chamber is very essential. Do the people in the several provinces and counties and subdivisions of Saxony, elect the members to the general assembly, and then does the general assembly elect the board of control? A. The 112 members who compose the general assembly are elected by 39 voting districts; 28 provincial circuits, each forming a voting district for itself; 11 provincial circuits vote along with the neighboring towns; every voting district having a land tax production of 400,000 thalers has two delegates; a land tax of 400,000 to 650,000 thalers has three delegates, a land tax above 650,000 thalers has 4 delegates. Q. Does this general assembly of 112 members fix the tax on the land for this income ? A. Yes. Q. Is the taxing body also the administrative body? A. It has the right to make the tax higher; surely it would not cut it down. Q. What proportion of the farmers in Saxony belong to these cooperative unions ? A. There are 90,000 farmers in this chamber. Q. What is the farming population of Saxony ? A. One hundred and twenty thousand. QEBMANY. 369 Q. Practically all the farming population belongs to this institution ? A. Yes. Q. What is the population of Saxony? A. Three millions. Q. Does the provincial government of Saxony exercise any control at all over this assembly ? A. No; it is absolutely independent. Q. Does the Kingdom of Prussia exercise any control except to limit the application of the 250,000 marks to agricultural development? A. No. Q. Then the only restraint on this assembly is the restriction upon the use of the 250,000 marks from the State? A. Yes. Q. Are the farmers who vote in these elections landowners or also tenants ? A. Only the farmers who pay taxes. Q. What proportion of the land in Saxony is cultivated by owners, and what proportion by tenants ? A. There are quite a number of large farms in Saxony which are occupied by renters; the small farms are worked by the owners; we have nearly all proprietors in this province. When you have large farms there are more renters. Q. What proportion of the people in Saxony own their farms ? A. Twenty-nine per cent of the land is in the hands of renters. Q. Must the ofl&cers of this chamber be approved by the ministry of agriculture ? A. No. The secretary of agriculture has nothing to do with the ofl&cers of the chamber. It is absolutely independent. AGRICULTXIRAL SCHOOLS. .Q. Are these minor schools of agriculture correlated or coordinated with the higher schools, so that the children can go from the lower to the higher schools? A. No. The high schools expect more education than the agricultural school provides. Q. How many winter schools are connected with this chamber? A. Twelve winter schools. They have altogether 800 pupils in the winter schools, which open the end of October and close ia March. Q. Are there any winter classes for adult farmers ? A. No; they are instructed by the lecturers of the union. Q. We have been told that certain tenant farmers who do not own land, but pay taxes on personal property, are permitted to vote in the election of members to the general assembly. Is that correct ? A. Only members who own and pay taxes on land can vote in this assembly — land taxpayers in the coun- try, not those in town. Q. Can women become members of this chamber ? A. No. Q. Could a woman who owns a farm vote in this assembly ? A. No. Q. What are the girls taught in the schools provided for them ? A. Husbandry and how to keep house. They learn everything that a farmer's wife should know. Q. Since the service of this chamber is to promote agriculture, does it help the farmers to market their prod- ucts to the best advantage ? A. Yes. There is a paper published by the chamber which goes to every farmer and keeps him always informed. Q. The chamber does not itself attempt to gather the products and sell them for him ? It only furnishes him with the information as to where it is needed ? A. Yes; that is all. Q. Does the Kingdom of Prussia undertake to promote the work of agriculture beyond the work of this chamber ? A. Germany has no agricultural department. Q. Then all work of agricultural development is done through this chamber by the local government, and such aid as Prussia gives to that purpose comes in the form of an appropriation ? 14174 °_S. Doc. 214, 63-1 2i 370 AGEICULTURAL COOPEBATION IN EUROPE. A. No. The chamber of agriculture is a private institution of the province; it has nothing to do with the Prussian Government. The Prussian Government can do what it wishes, but this is an independent insti- tution. Q. Whence comes the authority for the taxation of farmers? Is this chamber permitted by the law of Germany to levy taxes? A. You see the province can never make a law for Germany; the province can only give an order and not a law. The power of taxation belongs to the Government and not to the province. Q. Does this chamber make any report to the government of Saxony ? A. No; to the agricultural department of Prussia in BerUn; not to the Province of Saxony. The president of the council of Saxony has a seat in this assembly as a representative of the State. Q. Of the 90,000 laborers provided for through the bureau of registry, what percentage are married people — people with families — and what percentage are individuals who come and go ? A. They must be young men, girls, and boys from 18 to 30 years old; the girls could stay on as servants. A law, however, was recently passed prohibiting them from staying; they will have to leave the province after they have finished the work in the fields. Q. What effect upon the wages of farm laborers has this bureau of registration had ? A. The wages are higher. Q. Will you kindly explain how the wages have been raised ? A. By virtue of these registration offices furnishing quantities of help, factories and industries sprang up, and as these attracted the laborers to the towns, it was necessary to raise farm wages in order to keep the people on the land. The industries have forced the farmers to pay higher wages. Q. It is not quite clear to us why there should be a change in the regulations. A. You see the laborers are compelled to leave the province. We are not dealing with laborers for fac- tories, but with agricultural laborers. The farmer must know every year how many laborers he can use. He is given a card on which he writes for a certain number of laborers, and every laborer is numbered and regis- tered in a control book, and after the work is over the province is forced to send the people back to the homes from whence they came. ORGANIZATION OF THE CHAMBER OF AGRICULTURE. Statement Translated from the German by Mr. Gobde. Halle. 1. The Chamber of Agriculture was founded on January 30, 1896. It superseded the central agricultural club ("Grange") of June 26, 1842, and the association for the betterment of agricultural working conditions founded December 9, 1890. 2. The representative assembly consists of 112 regular members, elected for a period of 6 years, and of 10 members with a consulting vote, who are specially nominated for 3 years, in accordance with No. 14 of the law relating to the Chamber of Agriculture and with No. 6 of the constitution. The 112 regular members are elected in 39 districts, of which 28 counties form one elective district each, and 11 counties are united with the neighboring cities into electoral districts. Every district with an assessment tax value of 300,000 marks has the right to elect 2 deputies; with a tax value of 300,000 marks to 487,000 marks, 3 deputies; and above 487,500 marks, 4 deputies. 3. The chamber is managed by a board of 13 directors, namely, the president. Count von Schulenberg; the vice-president, von Nathusius; the second vice president, Wesche-Raunitz; and 10 other members. Each of these 10 as well as the second vice-president has a substitute. 4. The constitution provides for 12 committees, of which at present 9 are in existence. For each committee 5 members of the chamber are elected by the assembly. These 5 have the right to nominate 8 other men to join them, who need not be members of the chamber, so that every committee may consist of 13 persons. The 9 existing committees work on the following subjects: I. Agriculture and experimental work. II. Animal husbandry. III. Agricultural implements and machinery. IV. Farmers clubs and agricultural schools. V. Fruit raising, vine growing and gardening. VI. Forestry. VII. Farmers bookkeeping. GEEMANY, 371 VIII. Farm hand and workmen conditions. IX. Agricultural politics and economic questions. 5. Besides these committees, two permanent committees are also at work: a. For the finances. h. For the control and audit of the accounts. 6. The chamber has also nominated a number of boards of trustees for different institutions, namely, one for the experiment station for agricultural chemistry, one for the institute of plant protection (research of plant diseases), one for the poultry farm of CroeUwitz, one for the insurance of cattle, one for the school of pasture and meadowlands at Schleusingen, one for each of the 1 1 agricultural wiiiter schools, one for each of the 5 girls' household schools, and one for each of the 4 schools for blacksmiths (scientific horseshoeing) . 7. The chamber had on April 1, 1911 a fortune of about 745,000 marks, which was mostly invested in the different buildings and lands owned by the chamber at Halle. ' 8. The assets and habilities of the Chamber of Agriculture were: 1897, 283,620 marks; 1904, 870,982 marks; 1912, 1,431,240 marks. The income of the chamber for the year 1912 was derived (a) 17.5 per cent from the State; (&) 7.7 per cent from the province, the counties and other subsidies; (c) 18.3 per cent from taxes levied for the purpose of the chamber from the farmers; {d) 56.5 per cent from fees and other similar sources. 9. The staff of the chamber, including 125 teachers of agricultural schools and 90 workmen, number at present 500, of which 90 are college graduates. 10. The managing director is counselor of economy Dr. Kaabe; his substitute is Secretary Haake. ADMINISTRATIVE DEPARTMENTS. ^ There are 14 departments, of which 9 correspond with the 9 committees. 1. Farmers^ clubs and agricultural schools. — There were, in 1910, 250 clubs with 29,044 members connected with this department, while 1,182 pupils attended the different schools. 2. Agriculture and experimental work. — On 56 farms with about 6,780 acres the growing of seed grain was promoted in 1910. Twenty-three small farmers during the period 1906-1910 received prizes for good farming amounting altogether to oyer 1,200 marks. Several thousand experiments of fertilization and trials of seed grain were also made on farms during this period. 3. Animal husbandry. — The department managed the business for 1 horse-breeding, 5 cattle-breeding, 1 pig-raising, and 1 goat-breeding associations. Connected with the department were also 24 associations for testing cows, owning 8,248 cows together. The department also helped farmers in creating new pasture lands, in buying breeding stock, etc. 4. Machinery and implements were tested and judged for farming purposes. 5. Fruit raising. — One hundred and twenty-four clubs, with 13,478 members interested in growing fruit and in gardening, were connected with this department in 1910. The department publishes a monthly paper, gives prizes for shows, and provides the farmers and garden- ers with plants and trees. 6. Forestry.— This department provides the farmers with seed and seedlings and gives premiums for the reforestation of land. It also supervises the management of forests on the lands of the farmers. In 1910 there were about 30,785 acres of private forests. 7. Bookkeeping. ^This department does at present the bookkeeping for 150 farms and estates, comprising about 100,000 acres. 8. Day labor on farms. — -This department provides the farmers with farm hands and gives advice in case of breach of contract, etc. It also gives prizes to servants and farm hands for long and faithful service. 9. Economy. — ^Political and agricultural economic questions are dealt with. 10. Building department. — ^Advice and plans for buildings are given to farmers and supervision of con- struction works is also made. 11. Insurance. — Insurance is taken out for boars and bulls, stock and horses, by the chamber; it also assists the farmer in insuring his crops against damage by hail. A number of small local cooperative stock insurance associations (1910:105) are connected with the chamber. It has made special arrangements with a hail in- surance company as well as with two life insurance companies and with an accident insurance company in the interest of farmers. 12. Legal assistance. — Assistance and advice are given by this department to farmers. 13. Library and paper department. — ^A weekly agricultural paper is published in an edition of 30,000, also booklets on different subjects. There is a library of 13,000 volumes. 372 AGEICULTURAL COOPERATION IN BXJEOPE. 14. Draijiage and irrigation. — Drainage and irrigation as well as the cultivation of meadows and pasture- land, and other work for the improvement of land are handled by this department. SCIENTIFIC AND OTHER INSTITUTES. There is — 1 . Station for agricultural chemistry and bacteriology connected with a laboratory. — Extension work is done by experimenting with fertilizers and feeds among the farmers. 2. Laboratory. — For examining fertilizers, feeds, milk and dairy products, and soils for use in plant breed- ing by farmers. 3. Station for plant protection. — Scientific research and advice are furnished to farmers relating ta plant diseases. 4. Institute jor bacteriological research and protection worJc regarding animal maladies. — Special work in fighting tuberculosis, calf dysentery, killing rats and mice with infectious maladies, etc. 5. Institute for raising poultry and teaching poultry breeding. 6. Warehouse for selling machinery to farmers and doing repairing. AGRICULTURAL ASSOCUTIONS OF SAXONY. Dr. Raabe. statement. Halle. This house is the headquarters of the chamber of agriculture and also of the cooperative associations, so that the farmer finds here everything in the way of advice that he needs. This house occupies an area of two hectares of garden, and it cost 1,000,000 marks. The representatives of the different associations rent head- quarters here. In the Province of Saxony there are 1,200 associations — 705 credit associations, 271 dairy asso- ciations, 30 electrical agricultural associations, 5 granaries, and various other associations. These 1,200 associations are fonned into a union. Then there are here also an agricultural bank and a central association ior buying and selling products. The bank last year did 600,000,000 marks turnover, and the central association had a turnover of 22,000,000 marks. This afternoon you will have an opportunity to see the association where they sell agricultural machinery, and also another association which has a granary, a little bank, and a buying and selling association, which is also banker for the httle farmer; but in this State we have very few httle farmers, as in Wurttemberg and other provinces. The httle banks of villages take care that the money which farmers bring from agriculture goes back to agriculture and that it does not get into industry or towns. If there is too much money it goes to Halle; if not needed there, it goes to the large institution in Berlin, and if that does not use the money, it goes to the Imperial Bank. It is like the irrigation and drainage system: If there is too much water it is put in a reservoir for preservation. Banks are very necessary for German agri- culturists, more from the personal credit side than from the real credit side. The expense of cultivation in 1816 was 17 marks per acre, and to-day the expense to the farmers is 160 marks. In 1911 in the Province of Saxony we had a very bad year owing to drought, and the province lost that year in foodstuffs over 200,000,000 marks; that was a time when cooperative banks were called upon to supply credit to the farmers and they showed how essential they were. QUESTIONS. Q. You said farms in Saxony were larger than in Wurttemberg. How much land in Saxony does a family cultivate ? A. From 5 to 20 acres. Q. Does Saxony export to any other State any farm products, or are they all consumed in Saxon}- ? A. Yes; it exports beets. Q. In other words, Saxony produces more than it consumes ? A. Yes; as regards sugar beets. Q. About what price, as compared with Liverpool and London prices, does Saxony wheat and beef bring? A. On the average it is cheaper than in foreign markets. Q. You mean the farmer gets less here? A. No; the price the people pay for beef is cheaper than in other markets. From 1870 to 1880 we exported a lot of beef to England; to-day the laborers here are eating more meat, consequently we now import 3 per cent of our meat. GERMANY. 373 Q. Is there any report of income on the farm ? A. Yes; the income has increased also. The net income per acre from 1870 to 1880 was 10.4 marks on the average, and last year we had an income of 51.5 marks. The net income is much higher than the outlay. From 1905 to 1906 the net income on 42 farm places in the Province of Saxony was 26.27 marks. In figuring the net income, the owners' time or labor is counted at the rate of the highest wages paid to farm managers. Q. Do the general cooperative and selling institutions deal in grain, and also buy fertilizers for members, and confine their operations altogether to members ? A. Yes. Q. Is it customary for farmers to store their grain in warehouses and take a receipt for it, and then borrow money on that receipt ? A. That is not necessary. It is much cheaper to get money from the rural bank. They usually sell their wheat as soon as it is harvested. They very seldom store their wheat. Q. Then there is no holdiag of wheat for higher prices ? A. No; the German law forbids trading on future prices. Sometimes in Germany individual farmers hold for better prices, but not in this province. Q. You say dealing in futures is prohibited in this country. You mean to say that there is no buying or selling on margin ? A. No. Q. Does that relate to any other farm product ? A. Yes. Q. Does that relate to bonds ? A. It relates only to farm products. Since 1894-5 we have had a great development. The farmers can not now speculate. To-day, when the price is 20 marks, then it is your right to keep your wheat until you think the price will be higher, but speculation on trade is forbidden. Q. When was this chamber of agriculture organized? A. In 1895. Q. Is there much fluctuation in prices in Saxony ? A. In general they follow the world market. AGRICULTURAL EDUCATION IN THE GERMAN EMPIRE. Address of Dr. Wohltmann, President of the Agricultural Institute of the University of Halle. Halle. The first of the higher institutions for agriculture in Germany was founded 100 years ago by Albert Thaer, who opened the Agricultural Academy at Moglin, near Berlin, in 1806. On this model were founded the acade- mies at Hohenheim, Schleissheim, Regenwalds, Weende, Idstein, Tharandf, Prosken, Waldan, Hofgaismar, Eldener, and Poppelsdorf . But these institutions were not successful, because they were situated in the country in connection with large farms, so that the professors and students were isolated and out of touch with the intellectual movement of the age. In 1861 Prof. Liebig, the founder of agricultural chemistry in Germany, advocated that higher agricultural education should be given in the universities. The first attempt in this direction was made in 1 862 by His Excel- lency Kuhn, my predecessor as president of this institute, where he remained until 1909, dying at the age of 84. The fundamental principle underlying the agricultural institute of the university is that it must be in complete union with the university, just as are the medical, chemical, and botanical institutes, and that the students must receive a thorough education in all branches of science, in addition to agriculture. This close connection between the agricultural institute and the university has the great advantage that the professors do not work in isolation in this country, but are active members of a large scientific body dealing with all branches of knowledge. The successful example set by the institute at Halle was followed by the universities of Gottingen, Kiel, Konigsberg, Breslau, Leipzig, Jena, Giessen, and Rostock. The agricultural institute at Munich is not con- nected with the university, but with the technical high school of that place. The agricultural academies which I have mentioned could not compete with the institutes connected with the universities, and in most cases had to discontinue, with the exception of the academies of Hohenheim and Weihenstephan, which are isolated in the country, and those of Poppelsdorf and Berlin, which are loosely con- nected with their respective universities. These last two also have divisions for land surveying and agricul- tural engineering. 374 AQEICULTUEAL COOPEBATION IN EUKOPE. Higher agricultural education in Germany is of two varieties, that which comes under the board of educa- tion — i. e., the institutes connected with the universities; and that which comes under the board of agriculture — i. e., the agricultural academies or high schools. The students of these schools have passed either the final examination of our gratnmar schools (gynmasia) ; or have passed six classes in the grammar school, and have accordingly the right to serve only one year in the army. We have three examinations, which may be briefly stated, as foUows: (a) After two years' study; on the success of which a diploma is granted. (b) After three years' study; iipon which a certificate as a teacher of agriculture is awarded. (c) After three years' study; upon which a doctor's degree is conferred and a certificate as inspector of live stock or inspector of plant breeding is given. These persons are ofiicials of the chamber of agriculture. In Halle from 60 to 70 students are passed every year. Agricultural students in this institute are mostly between the ages of 19 and 28. They come to study after having been engaged in practical farm work from two to five years, which is very desirable. There are also other establishments for agricultural education in Germany. For instance, there are the secondary agricultural schools, called Landwirtschaftliche Schulen, which give a certificate entitling the holder to serve only one year in the army. The students leave them at the age of 16 and 17, when they go in for practical farm work, and after that they very often go to the universities. In these secondary schools the students are taught languages, natural history, etc. (as in a grammar school), as well as agriculture, but they do not do farm work. There are 26 such schools in Germany, of which 18 are in Prussia. There are also the lower schools, which can not confer the right of serving only one year in the army. Of these there are several different kinds: (a). Ackerbauschulen, or farm schools, for the sons of small farmers owning from 20 to 200 acres, who frequent them after leaving the pubhc elementary schools. The course lasts from one and a haK to two years, and is both practical and theoretical. There are 50 such in Germany, of which 20 are in Prussia. (b) Agricultural winter schools for farmers' sons, who work in summer on the farm and go to school in the winter. The instruction is only theoretical. The students are generally between 15 and 20 years of age and frequent the schools for two winter terms. There are some 300 of them in Germany, of which 180 are in Prussia. (c) Landliche Fortbildungsschulen, comparable to English evening continuation schools, first opened in Germany in 1856 in the Rheinland districts. These are continuation schools frequented after completing a course at the pubHc elementary schools, and give special training in agricultural science and business methods. Instruction is given for four hours a week or more, generally by teachers of the pubhc elementarj^ schools. There are 3,500 such schools in Germany, of which 3,000 are located in Prussia. Besides these institutions there are special schools for spirit distilUng, brewing, sheep breeding, bee keeping^ horticulture, fruit culture, wine culture, meadow culture, dairying, sugar refining, and schools of domestic economy for girls, as well as traveling schools for housekeeping and dairying. Of such schools there are about 200 in Germany. There are also special classes and lectures arranged by the chamber of agriculture, the agricultural socie- ties, and the agricultural academies for teaching practical farmers recent progress in stock breeding, plant breeding, tilling, manuring, etc. These courses are held every year or every two or three years and last from two to fourteen days. They are usually well attended. Those in Halle are followed by upward of 500 farmers. Some of them give special courses in bookkeeping, cellar keeping, dairying, forestry, horticulture, wine making, etc., in accordance with local requirements. The traveling teachers of agriculture should also be mentioned who give lectures to agricultural societies and at meetings of farmers in the country districts during the summer months, making experiments with the farmers in manuring, hve-stock feeding, and in growing and comparing different kinds of plants. These travel- ing teachers also give advice to the farmers on all branches of agriculture. There are some 300 of them in Germany; We also have colonial institutes and schools. The Oriental Seminary in Berlin, the Colonial Institute in Hamburg, the Colonial Academy in Halle, which is a society of university professors for the study of colonial science, and the Colonial School at Witenhausen, which is a private institute founded by patriotic men for farmers and planters going to our colonies. It has some 80 pupils from 17 to 25 years of age, and the curric- ulum is similar to that of the Enghsh college at Cirencester. In the Agricultural Institute at HaUe we have 10 professors, 1 assistant, 7 lecturers, 1 farm manager with 2 assistants, 1 secretary with 2 clerks, 1 gardener, and 60 to 100 laborers in the fields and stables. The farm covers 115 hectares, and the cost of upkeep is about 200,000 marks a year, exclusive of the salary of the professors and other employees. GEEMANY. 375 TRADING SOCIETY OF THE COOPERATIVE UNION OF SAXONY. Report of a Stjboommittbb. Halle. The Halle Cooperative Trading Society of the Cooperative Union of Saxony is the successor of the Halle Granary Society, which was founded in 1896 with 60 members. Shares were 5 marks each, with a liabihty of 100 marks each. Each member was obliged to take shares in proportion to the area of his land, the maxi- mum number of shares being 100. At first there was no penalty for disloyalty, but in 1903 the shares were raised to 100 marks and each member was required to deHver a minimum of 3' tons of grain and to buy at least 2 tons of manure and feed- ings stuffs each year from the society. This society was ultimately merged into the Central Trading Society of the Saxon Cooperative Union; the shares of the warehouse society being taken over by the trading society, which guaranteed a dividend of 4i per cent — 3^ per cent to the member and 1 per cent in liquidation of a debt of 1,936,000 marks. The Cooperative Trading Society (for buying and selhng) is owned by 800 local societies or local banks. The 800 locals own shares in the central association, which acts as a general agency for buying and selling and as a central bank for the local banks. When it needs money not supplied by the local banks it borrows from the Imperial Bank at Berlin. It buys supplies of machinery and fertiUzers for the locals and sells grain for them. In 1912 this central agency bought for its 800 locals 24,000,000 marks of stock, feedstuffs, and fertilizers. There are 17 of such cooperative trading societies in Germany. This is the second in size. The capital stock is 350,000 marks. Each local must subscribe for one share of 300 marks. Each local has one vote, regardless of the number of shares owned. The annual turnover is 35,000,000 marks. Each mem- ber of a local bank must purchase a 5-mark share and is Uable for 200 marks; this gives him an open account of 150 marks. The number of shares to which a member of a local bank is entitled is based on his income, as shown by the tax books; for every mark of land tax he pays he is allowed one share. The land holdings of the members run from 25 acres to 12,000 acres. The society is not estabUshed for profit. If a profit is accumulated, it is divided among the locals on the basis of the value of business transacted with the central association, and by a local it is divided among the members on the basis of the business furnished by each member. There are 20 supervisors, who separately visit the 800 locals and report on the conmiercial standing of each. They visit the locals unawares and may demand a statement for any date in the past. Any member has the right to demand an auditing of the books at any time, having them sent to the head office or by sending for an auditor to come to the local bank. COOPERATIVE MILLS. The miU owned at Halle is located on a canal which has connection with the sea. It is eight stories high. All grain is handled by machinery in loading and unloading. The mill produces commercial stock food from inferior grain, palm-oil meal, locus beans (from Africa), cottonseed meal (from the United States), molasses and bran "(equal parts), peas, and rice (from India). No flour milling is done in order to avoid competiton with the big flour mills. The shares are apportioned among the locals according to the volume of business, 20,000 marks for one share. Individuals may be members who have good reasons for not belonging to a local association. ORGANIZATION AND OPERATION OF THE LOCAL RURAL BANK AT RITZAN. Evidence op the Officials. RiTZAN (near Halle). This institution is a savings and loan bank based on limited liability with 48 members. It is a member of the central organization at Halle. Q. What are the conditions of membership in this bank ? A. Farmers can belong to the bank whether they have property or not. If members have no property, they have only a very small amount of credit. The thing works in this way. In Germany everyone pays an income tax. The bank gets the income-tax record of their members, and for every mark that they pay for income they are entitled to a credit of 150 marks, but they are also linblej for every mark of income tax, to the extent of 200 marks. Q. How much membership fee is charged ? 376 AGEICTJtTTJEAL COOPEBATION IN EtTROPE. A. Five marks; but those 5 marks remain the property of the member and draw for him 4 per cent interest. Q. Is the membership limited to farmers ? A. No. Q. You spoke about the limit to which members could get credit. Is it with or without security that they can get that limit ? A. No security — members are limited to the proportion of credit based on their income tax. The bank pays 3% per cent for savings; it has 69,000 marks of savings here composed of the savings of school children, maids, and aU kinds of people. Q. What is the smallest amount that the bank will accept as a savings deposit ? A. One mark. They are very saving people. Q. Does the bank inquire into the purposes for which the money is to be used before making the loan? A. No. In the first place it only pays to members, and in the second place each member is entitled to a certain credit, and he can not be a member unless the bank knows him to be reliable and responsible, so it does not inquire into the purposes of the loan. The bank does not loan on long time; it is for current needs. It needs no signature on the paper except that of the man drawing the money, not even the name of his wife. Q. What is the longest time for which a loan is negotiable ? A. The bank does not lend upon any time limit. The man simply gets the money, and as soon as he can he pays it back, paying, of course, the interest so long as he has the money. If the bank wants its money, or has reason to believe that he is not doing right, he is called upon for the money. The loans are for three, six, or nine months, but the bank tries to clean up its books once a year. Q. Do the people who have money in the bank borrow from the bank at the same time ? A. That is entirely optional; some do one way, some another. Q. How many loans has the bank outstanding at this time ? A. About 50,000 marks. Q. What do they do with this surplus money that they have ? A. That goes to Halle. For instance, if they get 1,000 marks at any time, they send it to Halle, and if they have a call for money here and have not it on hands, they ask Halle for it. Q. They are federated with the Halle bank. Do they send all the money to the Halle bank and when they want money do they go there and ask for it ? What does the Halle bank pay them for this money ? A. Four and one-half per cent. They have now at Halle 1,900 marks deposited in the central bank. For this they get 4J per cent. If they should have a sudden call for money and they should withdraw the money from Halle, and the Central Bank of HaUe lent them some more money, they would have to pay the central bank at Halle 5 per cent for the loan above their deposits. Q. How much do they charge their own members for money ? A. Four and three-fourths per cent, which makes their profit 1 per cent on money that is loaned out, and three-fourths per cent on money that is on deposit in Halle. But if, for instance, the bank at Halle sup- plies them with funds at 5^ per cent and they loan part of that frnid to a member, the member only pays 4| per cent interest and the bank puts up the difference out of its profits to cover the loss. Q. How much capital stock do they own of the Halle central institution ? A. They have two shares of 300 marks each. Q. What is their liability to the central bank at Halle ? A. AU they lose is their shares, equal to 600 marks. They have a credit of 69,800 marks. Q. How is the credit determined ? A. That is determined by the amoiant of business this bank does with the central bank in Halle. Q. What percentage of dividend does this bank at Halle pay them on their share capital of 600 marks ? A. Four per cent. Q. Why is it preferable to organize a bank here with limited liabrity instead of a Raiffeisen bank which has unlimited liability ? A. It would be impossible to organize a bank here with unlimited liability. The trouble would be that if the bank went wrong it would wipe the poorer classes away and give all the power to the rich people, and the rich people would get the control of the bank. Last year there was a failure where a man robbed them of 200,000 marks, in Luburg; and another man went away with 2,000 marks at Schkolen-Reibitz. They have had a reserve fund of 1,603.31 marks since 1902. The profits from the sale of foodstuffs, fertilizers, merchandise, etc., amounted to 1,271.52 marks. Many people fail to join because they do not want their private worth or busi- ness known. That is one of the objections to these banks. GERMANY. 377 Q. Who examines the books — these books lying on the table ? A. There are a committee of- three elected as directors and an advisory committee. The directors ex- amine the books every month, the advisory committee every three months, and once a year the books are gone over by an accountant from the central organization. Q. What have been the losses of this bank ? A. There was a business man who was thought to be safe; he got involved and lost them 180 marks. That was paid out of the reserve fund. Q. If this bank were not here, would you join a bank with unlimited liability ? A. No. Q. Are there many land mortgage banks loaning money in this section ? A. They have about 12,000 marks out on mortgages. Q. Do they take these mortgages as security after a loan is made or do they take them at the time the loan is made ? A. Always before they give the money on it. Q. When they loan on land, what rate of interest do they charge ? A. Four per cent. They are not allowed to pay out any dividends. The business is conducted just so as to cover expenses. Q. Is there any connection between this bank and the cooperative store here ? A. No. Q. Do any of the officers of the bank draw a salary ? " A. One gets 75 marks per month because he attends to the buying, etc. He goes around, or sends around, a list when the time comes to the members and they sign for so much stuff that they want to purchase and then he buys it and pays for it, and then he lets the members have it either on terms of cash or credit, and on that the bank makes a small profit. The bank also has a membership in a central milling plant in Halle which entitles it to that line of credit. The stuff is paid for in three weeks by the bank, and then it makes arrange- ments with its members according to the desires of such members. AGRICULTURAL CENTRAL LOAN BANK OF GERMANY. Report of a Subcommittee. statement;! Berlin. The Agricultural Central Loan Bank is a central bank;, hereinafter referred to as "central bank/' for about 5,000 local Raiffeisen banking associations, hereafter referred to as "locals," throughout Germany. Neither the central bank nor any of the locals is controlled or in any manner subsidized or fostered by the Govern- ment or province. The central bank maintains branches in almost every province, located in some principal city, in order to facihtate the business conducted between the locals and the central bank and in order to keep in closer contact with the operations and needs of the locals. The locals operate under the general Eaiffeisen principles, some with hmited and others with unhmited UabiHty. They do not have uniform by-laws, but the following form generally prevails : Any person of -good moral standing may become a member upon payment of 10 marks, provided he is a resident of the local community or village; such person need not be a farmer nor the owner of any real estate; each member has one vote; property of the members is appraised in order to establish a credit rating; indorsers are required; loans are made after investigating the needs of the borrower if such needs are approved by the local management; partial payments are required in order graduaUy to repay loans, such partial payments usually being one-tenth of the original principal each year and balance renewed from season to season so long as such payments are met. The central bank acts as a medium between the different locals in transferring unemployed funds, where there is a surplus of such funds, into local communities where they may be needed and where the local demand is greater than the supply. The central bank also borrows money from outside sources when the locals need greater assistance than their combined resources provide. The central bank exercises supervisory authority over locals and will refuse credit to locals which do not conform to estabhshed rules for safe and careful con- duct of business. A central bank will not loan to any one local at any one time an amount exceeding 10 per ' This statement ie based on an interview with Mr. Oscar Schwarz, Director. 378 AGRICULTUBAL COOPERATION IN EUEOPE. cent of the combined assessed valuation of the property of the individual members of such local. The central bank is owned by the locals, the locals each owning from one to five shares of 1,000 marks per share of stock in the central bank, which is thus made a joint-stock bank. The interesting information was voluntarily given by Mr. Schwarz that the central bank has now borrowed 20,000,000 marks which has been reloaned to the different locals. The central bank is paying interest at the rate of from 4^ per cent to 6 per cent for this loan (the rates being higher at the present time than ordinarily). The secmity hypothecated for this borrowed money is the "obUgations" of the locals to the central bank, the central bank usually obtaining about 60 per cent of the face value of such obHgations of the locals. The central bank charges the locals three-fourths of 1 per cent higher rate of interest than it is required to pay, in addition to which at the end of each year a charge of one-tenth of 1 per cent of the total loans to each local made during the year is exacted. These charges defray all expenses of operating the central bank and provide for a reserve fund and a reasonable dividend. While the banks under Government control have the first call on the Imperial Bank for assistance iu case of need, the Raiffeisen central bank has always been able to obtain needed assistance from the Imperial Bank or from large privately owned joint-stock banks. In the opinion of Mr. Schwarz, the advantage that the banks controlled by the Government have in having the first call on the Imperial Bank for assistance is greatly overcome by the freedom of operating a bank without Government control. This he explains by referring to the matter as the "lack of restraint and formality and red tape." Up to 1911 all such locals were under Government control. Mr. Schwarz being connected with the business before that time, stated emphatically that he knew the advantages -and disadvantages. When asked in the beginning of the interview if his central bank or the locals were under Government control, he answered: "Thank God, no." After withdramng from Government control, credit was not at first extended very freely to this central bank, but now it has no trouble whatever in obtaining credit either from the Imperial Bank or from privately capital- ized banks. Mr. Schwarz stated that there has never been a failure of any of the locals associated with this central bank, although some have had to quit for lack of business, but that all liabilities of such locals had been paid in full. An examiner employed by the central bank is kept in the field to check up the locals. This examiner is under bond, and in case of loss to any local on account of his failure to perform his duty as examiner his bonds- man is required to make good the loss. There have been some cases of default and dishonesty of the cashiers of locals. The rates of interest received by locals vary with different locals, and may be changed at any time by the local management. All locals receive deposits from members and nonmembers, pa^dng interest on all deposits, but not paying a uniform rate. Long-time deposits draw a higher rate of interest than those left for a shorter period. Loans are made by locals to members only. This central bank discourages any local entering a field already occupied by a government-controlled Raiffeisen society, but there are cases where both government controlled and these locals operate in the same village. Mr. Schwarz believes, as a rule, the noncontrolled locals are more successful, because "more flexible to local needs and conditions." He stated that selfish business and financial profit are not the only purposes of the organization. "Members strive not alone for their own good, but have a friendly interest in their neighbors who, through nus- fortune or incapability, may not be in so good financial circumstances as themselves." In a private conversation with one of the officials of The Deutsche Bank (a large private joint-stock bank) the statement was made that The Deutsche Bank often purchases large amounts of bonds issued by land mort- gage associations, and while purchases were made of the bonds of such associations as were organized by private capital as freely as of those that were under Government control, the former were not bought on as liberal a basis as the latter, the difference in the market rate usually being from one-half of 1 per cent to 1 per cent of the face of the bond. The Deutsche Bank purchases such bonds for the purpose, of reselling to investors, usually the small savings investor. Such bonds are considered of a very high grade on account of a system of land title, as well as the amortization feature of the mortgages behind such bonds, and they have no hesitancy in recommending them to the savings investor and for the investment of trust funds. Reference to a copy of a financial paper of June 19, 1913, quoting Government and provincial bonds, as well as bonds of Landschaften societies and joint-stock associations, taking into consideration the maturity of the different bonds as a general proposition, showed about the following ratio: Government and provincial bonds from 1 to 2 per cent higher than Government-controlled land mortgage associations, and bonds of the latter from one-half to 1 per cent higher than bonds of joint-stock mortgage banks. GEEMANY. 379 QUESTIONS.! Q. Is this the central bank of the Eaiffeisen system ? A. Yes. Q. How many unions belong to this bank ? A. There are 12 union banks, and 4,400 local credit societies go to make the 12 union banks. Q. What is the total membership of these 4,400 unions ? A. Eoughly spealdng, 450,000. Q. Are these associations or unions confined to Prussia, or are they general over the Empire ? A. All over the whole Empire. Q. What are the conditions of membership of this central society or bank ? A. First of aU it is necessary, in order to belong to the central bank, that you become a shareholder. This is a stock company. Secondly, they have to conform to the rules laid down by the Raiffeisen system. As shareholders only savings banks, small local savings banks, and "loan offices," as they call them, are admit- ted. These savings banks and loan offices we call local credit societies. Q. Are these unions federated with the central bank obhged to deposit their surplus funds in the central bank? A. These so-called unions are only branches of the Raiffeisen society in order to carry on the business. They are only intermediaries. Q. The only business relation they have is with this central bank ? A. Yes, certainly; but they do business with their own institutions. Q. Can they borrow money from any other institution than this central bank ? A. The principle, technically, is that these local credit societies must take their money and their funds from the central institution and also must deposit their funds' here. Occasionally, in practice, it does occur that this principle is not carried out. They have to bind themselves not to do so, but in practice it is not always done as it should be. Q. Are all of these credit societies dealing with these unions obhged to deal exclusively, in monetary affairs, with their unions ? A. These local credit societies are bound to take their money direct from the central office. The branch only acts as an intermediary. That is the great difference between its organization and the organization of other institutions Hke the Prussian Central Institute. This acts only as a branch of the central iostitute and only as an intermediary, whereas in other institutions these are independent banks and can not prevent the people from borrowing elsewhere. In consequence of this these local credit societies get their money direct from the central institute without addition of interest or cost, whereas in other institutions they have to pay a certain amount extra for the management of this business. Q. Who appoints the officers of the federated unions ? , A. The board of directors of the central bank appoints the officers of these branches and they stay under the supervision of the committee on management. Q. Do these branch banks have any right to accumulate reserves and hold it as individual capital ? A. No; they have not. It is all collected at the central. They have no capital of value and they make balance sheets. Q. Where does the money which pays for their administration come from ? A. They are paid by the central. Q. How is the territory of these local banks determined; is it by the central institute? A. Yes. It is determined by the central bank. Q. Do the credit associations and central banks take out shares in this great central bank ? A. The shares are held by the local credit associations. Q. How much is the par value of the shares that one of these local societies owns ? A. One thousand marks. They must have a minimum of one share, which is 1,000 marks, and tha central institute endeavors then to increase that to five shares or 5,000 marks, but that is not made a stipu- lation. Q. How many shares of stock has this central bank outstanding at the present time ? A. Ten million marks. Ten thousand shares of a par value of 1,000 marks each; we hope soon to raise it to 15,000,000 marks. Q. How much liability, if any, does the local association assume toward the liability of the central association for each thousand marks or one share? ' fids evidence i« based on an interview with Mr. Albert Ruchrucker, general secretary of the Eaiffeisen Union. 380 AGEICULTTJBAL COOPEEATION IN ETJEOPE. A. One thousand marks. The liability of the shareholder can not exceed, legally, the number and par value of the share. Q. Do they pay all of it in or only a part of it ? A. It sometimes happens that they do not pay the whole amount, but the balance is retained to their credit. A certain credit is granted them, but it is booked at 1,000 marks. Q. What do you ordinarily call for ? A. It is not a matter of much importance, because in about six months' time there are so many savings that these local credit societies can pay up the full amount of the share. Q. What is the least amount that one of these local societies can pay of the 1,000 marks and become a member ? A. They have credit up to the extent of the full 1,000 marks. Q. In a pamphlet we have it is stated: The funds required for the business of the bank are provided in the following way: By the issuing of debentures running for an indefinite period. We would like to know what security those debentures rest upon ? A. It has not taken place up to the present time. I forgot to say in the commencement that besides these 4,400 local credit societies which belong to the central institute there are about 1,000 other local societies which are called "working societies," such as milking plants and farm-produce societies. These societies are not shareholders in the central institution, but credit is granted them, and on the strength of this credit they have to undertake the security of these obligations and debentures which are issued. Q. Now, if these debentures are issued do they have any special security o ther than the assets of the bank ? A. No; these debentures to be issued can not be looked upon altogether as debentures in the ordinar\' financial sense of the word. They merely entitle their holders to participate in the central institute, but not as ordinary shareholders, because the possessor of the debenture has no vote in the management of the insti- tution. Q. A debenture as we understand the word means a security that is issued and sold in the market for the purpose of raising money, and it must rest on some form of security. Is that what you understand the word to mean? A. No. They are not sold on the market in order to raise money. They are sold to give these outside institutions credit. The outstanding societies take the security for the debentures. Q. How much of these debentures must any outstanding society take before it can participate in the business relationship ? A. There is no certain regulation about that. These thousand outstanding societies, or what they call the "working local unions," belonged formerly to what was called "Offenbacher Keichsverband," and the bank of this Offenbacher Reichsverband is at the present time being liquidated, and these thousand societies are placing part of the assets they had in this bank to the purchase of these debentures. Q. Coming back to the business of this bank. First, this central bank equahzes deposits and extends credit in an ordinary way to these small local credit societies and to each one of them I understand this central bank gives a certain credit. That would be called ordinary credit ? A. The central institute gives a certain amount of credit to the local. Q. Do they give them extraordinary credit ? A. Not as a rule. Q. Suppose there should be a loss of crops and these people could not pay their obhgations, and they have drawn up to their limit at the central institute, will the central then extend to them money more than they would in an ordinary year ? A. They call that emergency credit. Q. Then they do extend extraordinary credit ? A. Yes; but only once in a very long time. Q. Does this bank ever extend credit beyond the amount of capital or accumulated reserves and its deposits ? A. It does. Q. Where does it get these extra funds? A. This central institution stands in cormection with certain joint-stock banks, and it redeems the funds for extra credit from them. These local credit societies give bills of exchange for the extra amount of credit which they have obtained. Q. By bills of exchange you really mean promissory notes ? A. Yes; promissory notes. GEBMANT. 381 Q. Are these bills of exchange deposited with the central bank ? A. Yes, and the central bank gives then further to other institutions — rediscounts them. Q. The Raiffeisen society has a newspaper, does it not ? A. Yes; the Landwirtschaftliches Gennossenschaftsblatt. Then these small banks issue small pamphlets twice a month which are called Reisbobe. Q. Does each farmer who belongs to one of these local associations have to subscribe for the papers published by the general society? A. The local credit societies get three of the papers and pay for them and give them out. Q. Each local association takes three, but the members need not take them? A. No. Q. Does the farmer here have to pay to join these local associations ? Does he have to pay a fee ? A. Yes. It is called a subscription or a business share. Q. How much is that? A. One share of 10 marks. Q. Where a member takes one share of 10 marks is he also obligated in an unlimited liability for all the debts of this association? A. Yes, he assumes unlimited liability. Q. Where he pays the membership fee of 10 marks he still has the unlimited liability ? A. Yes. The Raiffeisen society was against this principle, but it has been legally established by law that this must be done. Q. Is this unlimited liability true with respect to the other societies, the dairies and agricultural socie- ties, etc. ? A. The so-called workuig societies have limited liability mostly in proportion to the way in which they make use of the local society — they have to buy shares — it is proportionate. Their shares are limited to 10 marks, but they have generally to take more — in proportion to the deposits they have. Q. Do these local associations loan money to individual members on mortgage security? A. They do give credit on mortgages on real estate, but the State opposed this very strongly. Q. What do they want, personal indorsement ? A. Yes, personal surety. That is the most frequent manner in which it is done. Q. Now, the only way that these local credit associations have of securing capital is through membership fee and by their profits is it not? A. Yes, membership fees and profits. Q. All money that they borrow then must come from this institution here ? A. Yes. Q. Are the Raiffeisen societies examined by the examiners appointed by the state? A. No; they are not examined by the state. Q. The central bank is not examined by the state? A. No; there is a law that certain inspectors should be appointed. ORGANIZATION OF THE PRUSSIAN LANDSCHAFTEN AND PUBLIC LIFE INSURANCE. Address by Dr. Kapp-Koniqsberg, General Director. Beklin. If the members of the American Commission of inquiry whom we have the honor to-day of welcoming in the capital of the Empire set themselves the task of becoming acquainted with the working of the system of or- ganized agricultural cooperative credit in Germany, this system of agricultural credit as followed in the Prus- sian Landschaften will be of the most wide-reaching interest to the members. It will be a matter of interest on account of the history of its origin, on account of its peculiarities, the public character of the system, the extensive privileges which have been accorded to it, and last but not least by reason of what it has effected. The Landschaften are mutual loan associations. The word Landschaft impUes a province or district, and arises from the fact that the landowners of a province or district are formed into a corporation which is called "Landschafthches Kreditinstitut" or more briefly "Landschaft." The Landschaften are specially Prussian institutions. The regulations for the management of the mortgage system in Prussia were laid down as far back as 1723. A short time after this the first plans for the creation of a mutual loan system in rural districts appeared. By an order dated 28th May, 1729, Frederick William I had laid down regulations for a land bank for the landed proprietors of east Prussia. The plan, however, fell to the ground. It was not until the reign 382 AGKIOULTUBAL COOPERATION IN EUEOPE. of Frederick the Great that a system of credit based on the security of landed property came into existence and the foundation was laid of the Landschaft loan system. The estabUshment of the Landschaft loan system is due to the- untiring efforts of Biiring/a Berlin mer- chant. In 1767 he propounded a plan to Frederick the Great in which the establishment of a loan system for the landowning aristocracy was laid down. The idea underlying Biking's project was to free for the future the land- owner from the necessity of adopting measures to enable him (in case of need) to raise money directly. An organization was to be created capable of undertaking this task for all the proprietors of a particular district in common. It is evident, therefore, that the fundamental idea of the .landschaft consists in replacing single mortgage (where creditor and debtor meet face to face) by a system that undertakes for all the part of intermediary be- tween property seeking credit and capital seeking investment. With this object the landschaften issue bonds to bearer in which they appear as debtors. By disposing of these bearer bonds in the money market, the funds are raised which the associated landowners are in need of. The loans made to the landowners as first charges on their estates are not given to them in cash, but in bonds to bearer, issued by the landschaften at par. These bearer bonds are called "Pfandbriefe. " They pass from hand to hand on the exchange. In order to reaUze the advance made to him the landowner must sell the bonds given to him. Possible losses on the exchange must be borne by the landowner. The owner of the estate is debtor to the landschaft, and responsible to it personally and with his property to the full extent of his bond debt. On its part the landschaft is creditor to the proprietor, and at the same time debtor to the holder of the bond. The latter has, however, only a personal claim against the landschaft. No more bonds can be issued than are covered by mortgage of Uke amount and bearing equal interest. The great guaranty then for the holder of a bond lies in this, that every bond is secured by a corresponding mortgage of the landschaft. The landschaft mortgages are absolutely secure, as they are only granted up to two-thirds of the value of the land, which is estimated with the utmost care after an exact valuation. It may in general be affirmed that the mortgage debt does not exceed haK the commercial value. Furthermore, the property of the landschaften which has come into existence in course of years is fiable for all claims. A further security for the holder of the bond is the fact that the debt is being continually paid off by the debtor at the rate of one-half of 1 per cent every year. The sinking fund which has thus arisen is very considerable, and offers the holder of a bond a further and substantial security. The most effective security, however, is presented by the general guaranty of the landschaft. In virtue of this the incorporated landowners are responsible with the whole amount of their properties for the liabiUties of the land- schaften in case the funds of the landschaft should be insufficient to satisfy the claims of the creditors both for capital and interest. The landschaft bonds are therefore absolutely secure and as reliable investments quite as popular as loans to the State. The landschaft bond has become a perfect type of secure investment. Through the activity which, (so far as credit in country districts is concerned), the landschaften create between the demand for, and offer of capital, the landowner within the limits of landschaft credit is freed from the necessity of raising money himself on mortgage. Every landowner who belongs to the landschaft is entitled to a reasonable amount of credit according to the decision of the landschaft. In return for this, he accepts the responsibilities entailed on him by being a member of the landschaft, especially the general guaranty. The landschaft bond (payable to the bearer) has this great advantage over a common mortgage, that it can be realized at any time. On account of the liability of the landschaft and the general guaranty of the combined credit of the landed proprietors, it offers an incomparably better security than the ordinary mortgage. This concentration of agricultural interests calls forth an offer of capital that enables the landschaft to lend to the proprietors at lower rates and under more favorable conditions than would be otherwise possible. The landschaft bond has this distinction at the outset that it bears a low rate of interest. In addition to this the debtor (who can at any time give notice) can not himself be called on as long as the land pledged as security is not deteriorated or wasted. In consequence, then, of his right of giving notice, the debtor has the advantage of a lower rate of interest, without being liable on the other hand to be compelled to pay a higher rate of interest, should the market rate rise. The loan must be regularly paid off at the rate of one-half of one per cent. The low interest, the nonexistence of a power of withdrawal, and the obligation of keeping up a sinking fund are characteristics of landschaft organized credit. As the landschaft can not give notice to the land- owner about his loan, in like manner is the holder of a landschaft bond debarred from a right of giving notice. Despite this condition the popularity of the bond has not duninished owing to its other advantages. If the holder wishes to realize his claim, he does so by simply selling his bond. The landschaft credit system as I have described it is the system now existing. Since its establishment in the time of Frederick the Great it has undergone no important changes, but has remained in substance the same. The most considerable alterations are in connection with the development of the Prussian system- of land tenures. To go into particulars would lead us too far, and could easily result in confusion. I shall confine GERMAHT. 383 myself to the observation, that at first landschaft credit benefited only the landed nobility. As, however, the Prussian land laws became developed, the remaining large estates, and then the possessions of the peasants underwent in like manner a landschaft organization. The landschaften regard it now as one of their highest duties to afford the benefits of organized advances (not liable to be recalled) at lowest rates of interest and repayable by a sinking fund, especially to small and medium-size holders of land. For this purpose special landschaften have been established for peasant proprietors in several provinces connected with the landschaft for great proprietors. In other provinces, for example East Prussia and Posen, advances on small and large properties are made at the same time by the same landschaft. In view of the fact that landschaft credit has already assisted 55,000 peasant farmers, it can not now be said that the system of landschaft credit is in an abnormally high degree at the call only of the great proprietors. At the same time the landschaften have not yet acquired the commanding position in the department of credit transactions with the peasants which they hold in the case of the great landowners, notwithstanding the important advance which has been made in this respect, especially in Silesia, Brandenburg, and East Prussia. Of the estates which exceed 100 hectares, 66.3 per cent have availed themselves of landschaft loans; the corresponding proportion in the case of peasant holdings is only 13.5 per cent. It is therefore, evident, that the landschaft credit among the peasants has not as yet approached the lowest point which according to political economy is desirable. The landschaften, therefore, justly regard the fostering of credit on peasant properties as their most important duty. The economic im- portance of the landschaft credit system will in future depend on how far it assists in bringing about the preva- lence of organized credit in the domain of peasant properties. In 1770, Frederick the Great created on the basis of this system of credit the first landschaft (the Silesian). The Kur and Neumarkische loan institutes for the nobility followed in 1777; in 1781 came the Pomeranian landschaft, in 1787 the West Prussian, and in 1788 the East Prussian landschaft. These five old landschaften are the source of the landschaft credit organization. Despite numerous variations in details, the old land- schaften have in essential matters the same constitution. During the second half of the nineteenth century the so-called new landschaften were established in the majority of the remaining Prussian provinces. These, (apa;rt from particular points) are especially marked off from the old landschaften in this respect, that they do not recognize the general guaranty of the incorporated landowners of the landschaft for which a special enact- ment is necessary. Landschaften existed in the Province of Hannover from olden times. With the exception of the Rhineland and Hesse-Nassau, where other credit institutions take the place of the landschaften, this organization is found in every part of the Kingdom of Prussia. When one, however, speaks of the Prussian landschaft credit organiza- tion, one only thinks of the organization of the five old landschaften. I have accordingly in my presentation of the landschaft credit system taken as my basis only the typical conditions existing in the five old landschaften. According to the above statement the landschaften appear as societies based on the self-government of the landowners incorporated in the landschaft. The landschaften do not carry on their business for gain. They are satisfied, on the contrary, with such a use of their energies as reimburses them for their own outlays. In this way they are essentially differentiated from all other loan firms, especially from mortgage banks. The interest which the incorporated land-owners have in getting loans on as easy terms as possible is the ruling force for the entire business activity of the landschaft. In issuing their bonds the landschaften are at constant pains to keep the interest as low as can be done consistently with the existing state of the money market. The landschaften are, on account of their origin and development, public corporations. They are under state supervision, which is regularly exercised, in the first instance, by a specially appointed royal commissioner; in the second, by the minister of agriculture. Crown lands, and forests. Within the limits prescribed by the State the landschaften are autonomous and manage their affairs on the principle of self-government. The organization of the different landschaften agrees only in general principle. At the head of the landschaften is the general landschaft board, whose chairman is the general landschaft director. The members of the general landschaft boards are public authorities; they form the executive; the government is vested in them. Various other committees, with definitely assigned duties, assist the general landschaft boards. The highest representative organ of the landschaft is the general landtag, which is composed of deputies chosen by the landowners incorporated in the landschaft. The royal commissioner presides in the general Landtag. The landschaften of Silesia, Brandenburg, Pomerania, and west Prussia have a decentralized constitution and are divided into departments, with special boards and representatives. In East Prussia the business of the general landschaft board is centralized. The employees of the landschaft have the standing of State em- ployees. The ordinary business is carried out by a body of special oflficials known as lawyers, who have had legal training and are qualified for the judicial oflace. They have, as far as landschaft business is concerned, public authority to attest documents. Only syndics chosen by the loan societies and lower employees are professional officials and receive salaries. All other employees of the landschaft, who, according to the con- 384 AGEIOXJLTTJRAL COOPERATION IN ETJEOPE. stitution, must be chosen by certain committees of the loan societies or by the general landtag from among the incorporated landed proprietors, are honorary and perform their duties without pay. Their property quali- fication as members of the landschaften is the ground of their eligibility. The payments of those employees holding honorary offices are accordingly meted out on a moderate scale and are regarded as compensation for loss of time and cost of representation. The higher officials chosen by the landschaft are confirmed in their office, sometimes by the King and sometimes by the royal commissioner. This associated loan organization, whi6h arose in the age of Frederick and was created by absolute power, has, during a long course of years, remained prosperous and risen superior to all economic crises, and particularly the injurious effects of French domination. When, after the peace of Tilsit, in a period most disastrous to Prussian finance, the heavy French war contribution had to be raised, Prussia, in 1808 and 1809 (the State credit not being sufficient), joined with its Crown lands and forests the East Prussian Landschaft and raised, by means of landschaft bonds, a part of the war contribution. This proves that mortgage credit (although the Landschaft organization was then only in its infancy) was fuUy equal to the credit of the State. The importance of the Prussian Landschaft from an agricultural point of view is seen most clearly from its results. Up to 1911-12 the Prussian Landschaften had issued mortgage loans to the total amoimt of 3,000,000,000 marks, and had issued bonds to the same amount. The amount of interest-bearing mort- gage loans and bonds is as follows: 420,000,000 marks at 3 per cent; 2,000,000,000 marks at 3i per cent; 500,000,000 marks at 4 per cent. The rate of interest on the bond changes with the state of the money market. The landschaften in accordance with their principles endeavor to grant their members credit at as low a rate as is possible according to the state of the money market. For this reason the rate of interest of the bond depends in very high degree on the rise and fall of the general rate, so that it affords a true picture of the general increase and decrease of interest. The amoimt of sinking fund collected up to 1911-12 reached a total of 192,000,000 marks, the remaining guaranty and reserve funds came to a round 50,000,000 marks. The landschaften possessed no capital of their own at the time that their development began, as they only acted as credit agents without the purpose of gain. In course of time they collected a capital of their own chiefly from savings in the cost of administration. These funds now amomit to approximately 56,000,000 marks. The Prussian landschaften may on account of these figures claim to hold the leading position in the department of rural credit. In their imselfish, public-spirited labors, free from every tendency to profit making, they render the most important services to the State by preserving a vigorous and healthy agriculture. The extensive privileges granted to them by the State correspond to the position of the landschaft in national organ- ization. They have thus, in the first place, in establishing their claims, the right of seizing mortgaged lands without adopting legal procedure. The claim of the landschaft is in this case a full proof of debt. The landschaft has a similar right of seizing movable property. This right is of great practical importance in accelerating the collection of overdue interest. A legal seizure can at once take place on documentary proof by the lawyers of the landschaft. The landschaft can also on its own authority administer pledged lands both for collection of overdue claims, and also for seizure when there are legal groimds. The landschaft is entitled to administer mortgaged lands, and can also on application of the courts administer lands which are not mortgaged. In the last place, as I have already mentioned, the quality of absolutely legal security is vested in the landschaft bond. The security of the bond is due to its substantial basis. As the real security of the bond depends in the first place on the quality of the mortgage issued by the landschaft, it is therefore of the utmost importance at what value the Landschaft assesses the incorporated estates, and to what proportion on this assessment they lend. The guaranty for correct assessment and cautious lending lies in the case of every landschaft in their adequate organization. The trustworthiness and soundness of the valuations determined by the landschaft are rigorously tested by the minister of agriculture, and must then be approved of by the King. Only then do they become operative. The valuation is in most cases determined by elected unsalaried officials called "Landschaftsrate," who are responsible for the correctness of the valuation in the same manner as the other local deputies appointed to value with them the larger properties. The valuations are then care- fully tested by committees specially appointed in accordance with the constitution of the landschaft. In doubtful cases the valuations are once more tested on the spot by higher officials of the Landschaft. It is clear that this kind of procedure offers the highest security for an accurate valuation. This security is, in the first place, materially augmented by taking account only of the average yield of the estates in a long course of years. This average is determined by a very careful and exact statement of the quality of the soil on which capital is to be lent. The amount of the loan corresponds to this statement. In particular points the regulations and the methods of valuing land are different with different landschaften. All, however, strive GERMANY. 385 to secure the highest possible guaranty for the trustworthiness of the valuation. The capital then advanced is only two-thirds of the estimated value. The system of landschaft valuation is the fixed basis on which landschaft credit rests. In their historical development in the course of several generations the Prussian landschaften have become accustomed to consider themselves as the real representatives of the landowners associated ia the landschaft and of their interests. The interest that the landschaften take in their associated members is not confined to the organization of landed credit. They also take measures for their personal credit by establishing special landschaft banks. This development reaches back as far as the forties of the previous century. The first inducement was that the mortgage debtors did not receive their loans in cash, but in bonds. In converting this paper into ready money the agriculturist found himself, disadvantageously placed on account of his inexperience in such transactions. In order to assist the associated members in converting their bonds in the most advantageous manner possible, some of the landschaften perceived the necessity of starting land banks of their own, in order by this means to finance the bonds. On this point the banks tmdertook the further task for the advantage both of the bond holder and also of the associated members by main- taining the rate as much as possible. They also render it easier for the agriculturist to acquire mortgage credit in cases where difficulties arise out of the land register and monetary conditions, by granting him advances and paying off private mortgages, and in this way further the development and utility of mortgage credit. The banks also act as agents for private mortgages (comiag after the bond loans), open deposit and current accounts, grant short time credit on bills of exchange and scrip, or mortgage deeds. They receive deposits as public deposit offices for keeping and administering of same, effect the purchase and sale of stocks, and discount biUs. In short, they carry on aU kinds of banking business, with the exception of purely specu- lative transactions. The land banks are independent. They are public establishments, founded with landschaft funds and possess corporate rights. They are managed by honorary officials and lawyers of the landschaft, assisted by a staff of trained bank officials. Their own property only is responsible to meet the liabilities of the land banks. It is only in Brandenburg that the landschaft as such is responsible for its bank. The landschaft banks are of great service' to the associated members (who are served by them on easy terms) on account of their solvency and good faith and because they are the true mean between a business undertaken in the interests of the public and one run on the commercial idea of profit. The profits (when not added to the reserve funds) become the property of the landschaft, and consequently benefit the whole body of associated members. There are now seven landschaft banks, namely, in Konigsberg, Danzig, Posen, Breslau, Stettin, Berlin, and Halle. In 1911-12 the total amount of capital invested in them came to approximately 23,500,000 marks, the reserve funds to 6,500,000 marks. The funds on hand amounted to over 200,000,000 marks, the turnover on both sides exceeded 6,000,000,000 marks. The total clear profit amounted to approximately 2,250,000 marks. As has been said the landschaft banks are institutions for personal credit and intended to support and supplement landschaft credit. So far they have accomplished this task in the most satisfactory way and afforded proof that banks organ- ized by the authorities can carry on business in a thoroughly sound manner and one suited to the requirements of trade. As an example of their useful effects in promoting the agricultural interests of their associated members, some landschaften in recent times grant advances for building good and suitable dwellings for rural laborers, also to carry out agricultural improvements, especially drainage. Mortgage credit must not be used in raising funds for this purpose. It is only if the improvements have been already carried out that they can be taken into account in determining the amount of the loan. Other funds must therefore be made use of to meet this expenditure. The surplus accruing from the business of the landschaft banks can render good service here. In this respect the landschaften are on the threshold of a new development. The progressively augment- ing scarcity of agricultural laborers which is becoming most painfuUy evident; the unspeakable importance to landed property of having a constant supply of capable laborers; the difficulties with which agriculture has to contend; and the necessity in the interests of the food supply of augmenting by every means the agricultural output, as well as the need that German farming should be capable of competing, force the landschaften in recent times to turn their attention to these new undertakings. Concurrently with a decrease in value there has been (since the seventies of the last century) an augmen- tation in the incumbrances on agricultural lands. For a considerable time both the Government and com- petent representative organs of German agriculture have striven to the utmost to keep off this process, which is serious and detrimental both from an economic and political standpoint. There was complete ignorance and an absence of clear views as to the means which ought to be adopted for attaining this object. There was 14174°— S. Doc. 214, 63-1 25 386 AGBICULTUEAL COOPEEATION IN EUROPE. agreement on this point only, that nonrecallable loans at a low rate, with a compulsory sinking ftmd at as high a rate as possible, afford the only means of diminishing the debt. On the 20th August, 1906, a law was passed in Prussia that on the appUcation of the landowner the regis- tration of the limit of encumbrance was freely allowed. This has the effect that, after the encumbrance is paid off, new mortgages in excess of the said limit can not be taken up. The law laid down no regulations as to the means of paying off the debt itself, but left that to suitable loan institutions and thought specially of the cooperation of the landschaft. The East Prussian landschaft is, however, the only one which has up to this time adopted measures under the law of 20th August, 1906, to free an estate from debt. For this purpose the East Prussian landschaft grants those landowners who register the encumbrance limit on their properties an augmented, nonwithdrawable landschaft loan, repayable by a heavy terminable annuity for the purpose of discharging private mortgages. It allows the sinking fund on the loan (registered to two-thirds of the estimated value) to be used for the purpose of extinguishing the subsequently registered private mortgage as far as it has not been paid off by the augmented loan. In all, about 50,000 Prussian farms belonging to 98 proprietors have come under the encumbrance limit. In these 98 cases private mortgages (not first charges), amounting in all to 3,160,386 marks, have been paid off and their places taken by landschaft loans. In 56 cases out of 98 every private mortgage could be cleared off by landschaft loans, while in the remaining 42 cases 1,608,131 marks of private mortgages remain. The extinction of the above on six estates will go on for more than 30 years, on 13 estates it will be accomplished within 10 years, in 15, within 20 years, and in the case of the last 8 estates the debt will be paid off in the course of 30 years. In these 98 cases, in which charges are being paid off, the annual outlay wiU rise from 426,703 marks to 445,666 marks, in all, a difference of 18,963 marks, which is on an average only 26 pfennigs per farm. The interest was reduced from 401,257 marks to 373,333 marks, but the sinking fund contribution rose from 25,446 maiiks to 72,333 marks. Properties of every size have participated in this unburdening process. The present high interest and price of land and the consequently augmented activity of the property market have an unfavorable effect on the unburdening process. So far, the example of East Prussia has not in this respect been followed by other landschaften. Another system of clearing off encumbrances adopted by the East Prussian landschaft, which applies life insurance as a means of clearing off mortgages on agricultural lands, has been more usually employed. Anyone who takes out a policy of life insurance acquires thereby a claim to a capital sum, whose payment to him or his heirs takes place at a definite time. The payment is absolutely certain, provided that the pre- miums have been regularly paid. The idea therefore presents itself of raising the capital sum to pay off the encumbrances on agricultural lands, not only by means of a sinking fund but also by means of life insurance. Every means has its advantages and drawbacks. The sinking fund is cheaper for those who live to witness its fuU effects. Life insurance is dearer, owing to the costs of carrying on the business and the risk undertaken in the event of death, but the capital sum is fixed independently of the number of years that the insured lives. This absolute security that a fixed sum is available if the debtor dies in a short time makes life insurance in every way superior to the sinking fund and renders it the most ideal means of paying off debt. In the vast majority of cases death is accompanied by increased indebtedness. The heir has then to load his property with new mortgages in order to meet the claims of his fellow heirs. As he is very often unable in his lifetime to pay them off, he in his turn leaves the land stiU more encumbered than it was when he received it from his predecessor. The increased debt would have been unnecessary if the previous owner had made provision for an early death by insuring his life. For the purpose of rendering life insurance of advantage to the associated members in reducmg their indebt- edness, the general landtag of the East Prussian landschaft resolved February, 1910, to create a life insurance establishment of its own; and to provide the requisite funds this establishment was approved of 21st September, 1910, by order in council and commenced business, its sphere being restricted to the Province of East Prussia. With the establishment of the East Prussian landschaft life insurance a public institution has for the first time in Germany taken the place of a private concern. The life insurance department, as well as the landschaft itself, labors without aiming at profit. It aims only at the public good, and specially the interests of the associated members. One who is desirous of paying off his mortgages wiU as a rule only be able to make use of the means at his disposal for doing so, if he has not to pay a considerably greater sum than formerly. This fact is taken account of by the public life insurance. Every mortgage debtor who receives loans of more than half the value of his land must pay every year one-haH per cent of the total loan into the sinking fund. If he is allowed to make use of this sinking-fund contribution in payment of his premiums, no increase in his annual outlay takes place. If he feels able to pay a higher sum he is at liberty to increase his insurance. Of couree he is not obliged to do so. A serious increase of the annual charge is, however, unavoidable if he takes out an ordinary life insurance policy concurrently with the sinking fund. The East Prussian landschaft has therefore GERMANY. 387 remitted the obligation of keeping up the sinking fund, and the associated member, instead of redeeming, uses the sum previously paid into the sinking fund to obtain a life insurance. This kind of insurance is called "Tilgungsversicherung." A very strong inducement to take out an insurance lies in the fact that the sinking-fund contribution may be used to pay the premiums on a life insurance. The public life insurance is accordingly more than any other organization fit and suitable to introduce life insurance among the rural popu- lation and to grant the farmer the benefit of its ethical and economic advantages. Previous experience has taught us that the "Tilgungsversicherung" helps in a high degree to prepare the way for the free insurance of the agriculturists. As the sinking fund forms an important part of the reserve funds of the landschaft (I have already alluded to this), it was impossible from the beginning to hand it over to a private life insurance com- pany on whose operations the landschaft had absolutely no influence. Such an abandonment could (consistently with the full preservation of the interests of the landschaft) only be granted to an institutioit dependent on the cooperation of the landschaft. The public constitution of life insurance is, from the point of view of releasing agricultural lands from their incumbrances, the very first condition for its application. Public life insurance can alone compensate the advantage which the landschaft sinking fund has in regard to the ease with which a capital sum is acquired, as it is worked at much lower cost than a private company. The justice of this view is shown by experience, and is traceable to the following reasons. Public life insurance has at hand the officials of other concerns who can issue insurance and collect contributions unofficially, and therefore considerably cheaper than a recently organized company. This connection with institutions already in existence, and the concentration of functions resulting therefrom produce a considerable saving in the cost of administration. It has likewise the effect of lowering the expenses of management. The cheaper life insurance is carried on, the greater is the advantage to the insured. Every life insurance company, even one privately organized, is of a beneficial character. It is not to be denied that in every economic development private initiative is the most potent factor. An economic private organization is usually the pioneer of those more perfect organizations that result in course of time. It may be imreservedly admitted that what private insurance has accompfished, especially in the department of life insurance, is magnificent. Public insurance, therefore, never combats private. But private insurance is not entitled to regard fife insurance as its own exclusive domain. Both can well exist side by side. I recognize in this concurrent working a genuine advantage, for in the competition of both kinds of business to bring about the best and most perfect results for the insured may be found a development of strength which in the end advances the economic and intellectual progress of our people. As, however, every company regards the other as its rival, we make the somewhat unpleasant observation that the unselfish character of fife insurance is perverted by the greed for gain of private undertakings. To what this leads we see in the state of things ruling in the department of agencies. In order to get as much business as possible, one company outbids the other by offering higher commissions. By such means the costs of administering are inordinately increased, and in a corresponding degree the benefits which the insured ought to receive are diminished. Pubhc life insurance grants independent insurance not only to agriculturists but also to all classes and callings; that is to say, to those whose insurance is not paid out of the sinking fund but from their own private means. The same considerations which in the case of agriculture afford ground for advancing capital through the medium of fife insurance justify in greater or less degree a similar course for other economic undertakings. The benefits of life insurance extend therefore in equal degree to town and country. They benefit th6 middle class as well as trade and industry. The work of the independent insurance of public life insurance, regarded from a technical point of view, is a great advantage, for the more extensive the economic base of the undertaking is the more intensely the element of risk is diminished, and, therefore, the greater the security for the commercial success of the undertaking. Life insurance poHcies are destined for all farmers, including the small and very small holders of land, as a means of paying off mortgages. The economic strengthening and developing of the old settlers among our rural population is of special importance to the common weal. The public Ufe insurance, as an estabUshment working unselfishly and without aiming at profit, recognizes in the care and development of life insurance in the case of the poor man in town and country (the so-called popular or industrial insurance) its appointed task — a task of special social and economic importance. Pubhc life insurance has accordingly of late included popular, or industrial insurance within the sphere of its duties. The work of a hfe insurance imdertaking is by no means confined to insurance. Its labors in investing the capital which comes to it in the form of premiums is not less important. Life insurance may from an economic standpoint be regarded as a particular kind of savings bank. With the one, as with the other, the reception of savings goes hand in hand with their employment as loans. The life insurance societies are therefore at the same time great loan institutions. The "Victoria " (the largest German joint-stock insurance company) has funds 388 AGEICULTUEAL OOOPEKATION IN EXJEOPE. to the amount of nearly a thousand milUon marks, of which more than 800,000,000 marks are lent out on mort- gages. It therefore holds the tMrd place among the great German loan institutions. The funds of the German life insurance companies amount to about 5,500,000,000 marks. Of this sima approximately 450,000,000 marks are lent out on mortgages, but only some 50,000,000 marks are lent on mortgages to landowners. On the other hand, approximately 4,450,000,000 marks have been lent in towns. Of these, Berhn, with its outljnng dis- tricts, alone has received 58 per cent, 18 large towns with populations exceeding 200,000 31 per cent, and only 11 per cent ia small towns. These figures show clearly the amount of business in loans which is being done by private iasurance. The sums added to the funds of the life insurance companies by the rural population do not return to the country but remain ia the large towns and industrial centers, and thus indirectly tend to increase the cause of the often-lamented migration from the country. The only way of hindering this is by the estab- lishment of pubhc organized hfe iasurance which pays attention to the general interests of the community. These interests are hable to be left out of account when capital is to be invested. In this I have not alone the interests of the landschaft ia view. I believe that the iaterests of the middle and iadustrial classes ia towns correspond with them, and that it is the duty of a pubHc organization to see that capital is invested in such a manner as to further these interests. In order to bring about a change and prevent the movement of capital which takes place through private insurance, pubhc life insurance acts on the principle that the sums paid for Hfe iasuraace by a proviace or district ought to be returned to them. In applyiag this priaciple the system of clearing off charges by means of the funds of pubhc life insurance can be substantially developed, as the loans must be continuously extin- guished at the rate of one-half of 1 per cent annually. In depositing the premium reserves (as far as they may be assigned to agricultm-e) the principle of regarding in the first place only properties of small and medium size is acted on. Only when the funds at disposal are correspondiagly iacreased may large properties be thought of. Pubhc hfe iasurance is founded on a federal and in the case of the greater federated states on a provincial basis. Only an estabhshment which is founded on the confidence of the people of the district and rooted in their economic life will have a successful career and be able to perform with satisfaction to all the duties of pubUc life insurance. A life insurance institution ought to have all the attributes of a pubhc corporation, but ought not under any circumstances to belong to the State. In this respect the organization derived from the East Prussian landschaft is fimdamentaUy marked off from former proposals which tended toward state ownership. The energy to be found in oxa well-tried system of self-government must also help and animate life insur- ance. A bureaucratic state-conducted business would completely accord with the claims of the pubhc; it would not, however, owing to want of flexibility, be in a position, from the point of view of commercial and insurance technique, to carry out its task with the same success as an undertaking based upon complete seK-government, which can at one and the same time work for the pubhc good and its own advantage. It may be doubted if an organization restricted to a particular locahty suffers from the too narrow foundation of its sphere of activity. The advantages of the so-called law of the greater number, that has played such a decisive part ia life iasurance, must of course be wanting in the case of an undertaking restricted to a particular district, as is the case with provincial institutions. It is only, however, at first sight that the above doubt appears justifiable. The way to dispose of it is to incorporate the different provincial hfe insurance institutions into a single body that has in the first place the duty of representing the general interests of pubhc life insurance, and above all by uniting in an economic sense the different estabhshments, to make each a partner for the purpose of dividing the risk by joint iasuraace. By this means all the iastitutions are united into a common, powerful, aad economic alli- ance through work in common carried out ia an energetic, efficacious manner. The secoad aad aot less important task of the union is the creation of a suitable system of \mderwriting. Modern insurance is only conceivable in conaection with the systematic and technical details of vmderwriting, which effects an extensive diminution in the risk. It is only possible, by dividiag the risk through underwrit- ing, for a newly established concern to undertake the largest insurances without endangeriag its existence and power of working. In public institutions, which rest upon a provincial basis and which are iacorporated iato a uaion, the competition of private busiaess does aot exist. They all work ia commou, the iaterest ia gaia falls into the back- groiuid, and the unselfish side of life insurance appears in the purest and clearest colors. This harmony of interests between the different iastitutioas assures a great advantage to public life insurance. It is worked under unusuaUy favorable economic conditions. It is therefore in a position to grant the insured greater benefits than a private iasurance. A great number of proviaces have followed the example of East Prussia, especially those in which the landschaft credit system has been extensively developed and brought to a high degree of perfection, and where GERMANY. 389 the need is felt (as in East Prussia) of affording the associated members of the landschaft a universally applica- ble means of cleaning off charges. Public life insurance has now six independent provincial establishments in the provinces of East Prussia, west Prussia, Silesia, Posen, Pomeraniea, and Brandenburg which have formed themselves into the German Union of PubMc Life Insurance Institutions. A few weeks ago a seventh institution for Nassau was deter- mined upon, for which the royal confirmation is immediately expected. In those provinces and districts where their own public life-insurance institutions have not yet been erected, the union is entitled (subject to the approval of the "home secretary") to carry on direct insurance. If it is desired to make use of this right in the non-Prussian federated states of the German Empire, the sanction of the respective governments must be obtained in advance. Up to this time the union has been empowered to carry on direct insurance in the city of Berlin, the provinces of Saxony, Hannover, Schleswig-Holstein, the Rhineland, and the district of Cassel, so that public life insurance is now in operation throughout the Kingdom of Prussia, with the exception of the Province of Westphalia. The right to carry on direct insurance in the last-named province is now being sought for, and permission to do so is expected in the near future. In addition to this the right has been granted to the union of carrying on direct insurance in several other federal states, among them being the Kingdom of Saxony, the Grand Duchy of Mecklenburg-Schwering and Strehtz, the Duchy of Brunswick, and the Hanse towns of Liibeck and Hamburg. Direct insurance is regarded by the union as the forerunner of the establishment of its own provincial and district institutions. Up to the 1st of June, 1913, 9,243 life insurance applications, amounting to a total sum of 83,283,416 marks, were received by the German Union of Public Life Insurance and its branches, although business was, with the exception of East Prussia, only conmienced at the end of 1911, and in part in the course of 1912, but by no means in every district where permission had been obtained. Of this sum 40,892,463 marks, or 49.1 per cent, fell on the Tilgungsversicherung of agriculturists, 20,031,614 marks, or 24 per cent, on persons not connected with agriculture, and 22,359,339 marks, or 26.9 per cent, on the free insurance of farmers. Applications for life insurance amounting to about 56,000,000 marks have been accepted up to the present time. Notwithstanding the short period during which it has been in existence, the union has already issued insurance policies to the amount of more than 50,000,000 marks. Judging from the experience of private insurance, its vitality and further progress may now be regarded as fully estabUshed. Such success in such a short time is unprecedented in the history of German life insurance. According to what has been said the duties and aims of public life insiu-ance may be summed up in the following sentences: The extension of life insurance, the application of its great ethical and economic advan- tages to the community, above all, the introduction of the idea of life insurance among the country people who had previously held aloof from insurance, private or otherwise. To attain these ends one must in the first instance take possession of a "new territory," and for this reason public fimctionaries who carry on their undertakings on the principle indeed of reasonable profit, but who are free from the lust of gain and only regard the pubHc weal, must be charged with the development of insurance. There must be no autocratic state undertakings, but on the contrary the free development of seK-govem- ment and of its life-giving forces through the agency of public functionaries who are animated by a feeling of duty and responsibility to the State, and who, being rooted in the economic life of the province, have the confidence of the people. The migration of the mass of savings resulting from life insurance to the large towns and industrial centers (as may be seen from the results of the working of private insurance) must be pre- vented, as it indirectly favors and augments the depopulation of the rural districts. The funds in question must be retained in and used for the economic development of those districts where they are collected. Home interests must be supported, land and industry in town and country must be freed from charges and rendered secure; the desire of the laborers, rural and urban, for self-reliance (which has slumbered under the influence of social political legislation) must be reanimated. Financial independence must be promoted. Self-respect and the feeling of personal responsibility, which are the best and strongest sources of political virtue and intelligence, must be fostered. For this purpose we must amend the law of the Empire as to compulsory life annuities by a system of insurance, resting on self-help alone, in the form of an imposingly constituted popular and industrial life insurance. Now, I have endeavored, as far as time allowed, to afford you a view of the system and workings of the Prus- sian landschaften. In carrying out the highly responsible tasks imposed on them, the landschaften will, as hitherto, only labor with complete success, if for all tune to come they consider themselves not as the one-sided representatives of a self-seeking and professional body, but as forming a portion of the great state organization. They must continue conscious of their responsibility to the entire commimity. Influenced only by the desire of promoting the general weal, they must labor in common to accomplish their public duties to the best of their ability. 390 AGEICULTTJEAL COOPEBATION IN EUKOPB. MORTGAGE AND OTHER COOPERATIVE BANKS. Address of Dr. M. Augsbin. Berlin. There is no doubt that in the United States the farmer of to-day is one of the most prosperous class of citi- zens in spite of the statistics of the last census, which show an increasing indebtedness of the American farmers. According to this Thirteenth Census the number of farms or farm homes operated or occupied by their owners which were free from mortgage increased much less rapidly during each of the last two decades than the number mortgaged. The proportion mortgaged was 28.2 per cent in 1890,31.1 percent in 1900, and 33.5 per cent in 1910. The total value of the land and buildings of the 1,006,511 farms shown for 1910 was $6,303,000,000, and the amount of debt was $1,726,000,000, or 27.3 per cent of the value. The corresponding proportion in 1890 was 35.5 per cent. Thus during the last 20 years there has been a marked diminution in the relative importance of mortgage debt. This decline in the ratio of debt to value is primarily due to the very rapid increase in the value of farm lands. The average amount of mortgage indebtedness per farm increased from $1,124 in 1890 to $1,715 in 1910, but the average owners' equity per farm increased from $2,220 to $4,574, or more than double. Besides this it must be borne in mind that the fact of mortgage indebtedness is not necessarily an indication of lack of prosperity. To be sure American farmers in general were more prosperous in 1910 than at the two preceding census decades, and yet in that year a large proportion of the farms were mortgaged, for it is very likely that increased confidence of lenders in the titles to land and in the ability of farmers to pay their debts has had great influence in this change. It may be said, "Well, the American farmers prosper in spite of the lack of credit facilities, and therefore there is no need to subsidize them." But that is a great mistake. The American farmer of to-day does not need any subsidy, nor would he accept it; but what he needs is a cheaply acquired credit on long-term mort- gages and with the right of amortization. These credit facilities provided to your farmers would secure to your country greater productivity at less cost from the farms now under cultivation, and, above all, give you more farms and more farmers. Mr. Kaumanns, the Imperial German agricultural expert, in a lecture in Chicago some years ago said: The complete absence of organized institutions of credit in the United States is to a large extent the cause of this constant shifting of holdings and general reckless use of the soil. The high rates of interest and the short terms of mortgages compel the farmer to cultivate his soil carelessly. Credit facilities will tie him to the soil, produce a strong class of farmers, and gradually from these men bred on the soil first-class farmers will be obtained. As President Taft said in his letter to the governors of the states: "The 6,000,000 farmers of the United States add each year to the national wealth about $8,400,000,000. They are doing this on a borrowed capital of $6,040,000,000. On this sum they pay annually interest rates of $510,000,000. Counting commission and renewal charges, the interest rate paid by the farmer of this country averages 8^ per cent, as compared to a rate of 4J or 3^ per cent paid by the farmer in Germany. The American farmer would save not less than about $250,000,000 interest rates annually if there were the same credit organizations as in Germany, and, moreover, in some years all the debts would be taken over by the cooperative credit societies, which would obtain the interest, and a big sum would remain over for agriculture." There is no doubt that in the United States changes are now taking place in agricultural conditions which require the organization of the agricultural credit systems. And it is possible, without doubt, now to organize these credit institutions in the United States on similar lines to the German methods, for the United States have reached that important turning point where all easily cultivable soils are settled, farm properties show a very rapid increase in value, all farm lands have a market value, and the confidence of the public in the titles of land has increased. Thus conditions are undoubtedly favorable. This seems to be the right place to sketch briefly the main principles of the German system of agricultural credit. One of the chief principles of the system is the appHcation of cooperative and mutual methods. The main principle underlying aU forms of cooperative credit is that if a group of persons combine to furnish a collective guarantee they can, on the security of that guaranty, obtain money at lower rates of interest than they would be able to obtain individually. The cooperative guaranty may be that of real property. A number of landowners may obtain capital on the security of a cooperative mortgage of their lands. This is the basis of the German landschaften. Or, again, the cooperative guaranty may have a personal character. A number of landowners may obtain capital by making themselves jointly responsible for its repayment. Such liability may be unlimited or limited. Unlimited liability is a fundamental part of the Raiflfeisen system. In the Schulze-Delitzsch system the liability of the members is usually limited. When the members are landowners, the collective personal guar- anty becomes indirectly a property guaranty. GERMANY. 391 Upon such guaranties capital may be obtained in different ways. The landschaft and other credit insti- tutions issue bonds, but the Kaiffeisen banks derive their working capital mainly from the deposits they are able to attract ; also the credit societies obtain capital from the larger banking institutions or from the investing public. Having obtained the capital the group of members must be able to lend it mutually at an interest rate only slightly in excess of the rate they pay collectively. This necessitates that the expenses of management shall be small in proportion to the business done and that the risk of loss shall be reduced to a minimum. This can be attained by a severe control, the payment of small dividends, as far as they are not prohibited, and by an almost gratuitous management. The other main principles in our agricultural credit system are mortgage loans on long time with the right of recall only by the borrower, with low interest rates and easy amortization. There are now in Germany a great many credit institutions which fulfill these conditions. It is not my task to lecture on all these German credit organizations. Others will lecture on some of the most important of them, as, for instance, the landschaften savings banks, Eaiffeisen organizations, etc. I will give only a short review of these credit institutes mentioned in the program, and will begin first with the German mortgage banks. GERMAN MORTGAGE BANKS. These mortgage banks in Germany are strictly private institutions, the purpose of which is the issue of mortgages on real estate. But these companies are not left entirely to their own management. Moreover, their foundation is dependent on the permission of the State, and in the conduct of their business they are limited by strict rules and regulations and are subject to the most continuous supervision. All these banks are ruled by the mortgage-bank law, enacted in Germany in 1899. The supervision of these banks is carried out by royal commissioners. These inspecting officials have the right of verifying the securities and cash on hand and of demanding information regarding each separate trans- action. They may also send a representative to general meetings of shareholders and to meetings of the board of directors, and take all measures they may deem fit to enforce the proper conduct of the business. These banks may grant mortgage loans on land subject to the usual legal restrictions. But for greater security, at least one-half of these mortgages on agricultural property must be repayable by amortization at a rate of not less than one-fourth of 1 per cent of the value of the mortgaged properties. Only first mortgages on real estate are allowed. The amount advanced by a mortgage bank on the security of such property shall not exceed three-fifths of the total value of the property. The authorities may permit loans to be made on agricultural properties to the extent of two- thirds of their value. The estimated value of the property on which money is lent on mortgage shall not exceed the estimated sale price arrived at after a careful valuation of the property. In the estimation of such value the permanent value of the property and the revenue therefrom shall alone be considered; that is to say, the income which the property should yield when properly managed by its owner. The borrowers have the right to redeem the mortgages after 10 years. On amortization mortgages the banks have no right of recall; the date when the amortization payments must begin has to be fixed within the first 10 years. The bank has many regulations to safeguard itself with regard to the borrower and to secure the amortiza- tion of the loan. For instance, if the bank takes over a property on which it has a mortgage, in order to prevent the loss of the said mortgage, it shaU only use this property as cover for mortgage bonds to the extent of one- half the price the bank paid when it purchased said property. Moreover, these mortgage banks are allowed to issue mortgage bonds, but only for a sum not exceeding fifteen times the amount of the paid-up capital and the reserve funds which shall be created solely for the pur- pose of covering deficits or for the security of the holders of such bonds. In Germany we now have 40 mortgage banks which have together loaned out on mortgages the amount of 10,000,000,000 marks. But only about 6 per cent of this large sum is lent out on rural property — the great majority of mortgages are given on land in towns. Two great banks, the Central Land Credit Joint-Stock Company and the Bavarian Mortgage Bank hold together 90 per cent of all these mortgages on agricultural property, so that all the other mortgage banks have no great importance for agricultural purposes. In the second place we must consider the district aid banks. These banks were founded about 50 years ago by the provinces at the suggestion of the Prussian Government. The object was to further, by means of these banks, all works of general utihty undertaken by the small communities and townships. The State distributed special subsidies among the provinces, having regard to the size, number of inhabit- ants, and direct taxes paid by the single administrative units. 392 AGKICtTLTUEAL COOPEBATION IN EUROPE. But the effect of this institution, with the exception of a few provinces, has been in most districts quite insignificant, because the stocks were too small. In general, these loans are mostly given to small communities and agricultural cooperative societies. It is only very seldom that private individuals can get money from these banks. In the few provinces of Silesia, East and West Prussia, and Posen, the Government adopted measures to extend the functions of these banks by the issue of bonds. In this way the capital was increased and, therefore, private farmers could also get loans on favorable conditions. These institutions developed splendidly and granted loans to landowners to the amount of many hundred miUions of marks. The loans granted must, in general, not exceed two-thirds or three-fourths of the estimated value of the property and, therefore, the loans of these banks also are on gilt-edge securities. ANNXTITT BANKS IN PRUSSIA. The Annuity Banks in Prussia were established by the law enacted in 1850, and during the following years other legal enactments enlarged their functions. These banks are governmental credit institutions for the purpose of faciUtating the redemption of old servitudes incumbering the lands of peasants from feudal times, so as to enable the peasant farmer to buy off the feudal dues incumbering his lands. These institutions provided the necessary capital by the issue of annuity bonds marketed on the exchange. The State guarantees the security of these bonds and, therefore; the pubHc has great confidence in them. The loans granted to the farmers are amortizable with one-half or 1 per cent, and are gradually repaid by small senaiannual payments. In this way the loans run on for 50 to 56 years. On these favorable conditions the small farmer willingly takes up loans from these banks, and in 1909 there were already issued annuity bonds for more than 500,000,000 marks. But I think this form of credit is of no interest to the American farmer, who only needs cheap amortizable credit on long-term mortgages to increase his productive powers, and organizations similar to the Raiffeisen or the German landschaften are of real importance to him. I will speak now of the provincial land improvement banks. As a result of the demands of the agricultural organizations in 1879, a law was passed regulating the founda- tion of provincial land improvement banks by the provinces. The Imperial Government intended by this law and by the foundation of these public credit institutions to fulfill the wishes of the German farmers for adequate and cheap amortizable credit not subject to recall. These loans should be used for farming purposes. To raise the capital, annuity bonds, known as provincial land improvement bonds, were issued, and the security of these bonds is guaranteed by the hability of the state or the province. After a careful assessment of the property, and after it has been ascertained that the value of the property will increase in proportion to the work done by the money, the loan will be granted to the farmer on the amortization plan. The bank has no right of recalling the mortgage. The banks, or in some states the government, decide about the security of the property. The conditions are, in general, 3 or 4 per cent interest rates and one-half or 1 per cent for amortiza- tion purposes. However, in the case of loans made for drainage purposes, the rate is fixed at 2 or 4 per cent. In three states only first mortgages on such real estate are allowed. In Prussia these securities are not required, but the loan must not exceed twenty-five times the net annual income from the estate as ascertained by the last official estimate, or 50 per cent of the assessed value of the farm. With the exception of Bavaria and Saxony, these banks have not been successful, especially in Prussia, for the loans granted were too low in proportion to the value of the property mortgaged; they were only granted for a few purposes, and it was difficult to give them the privilege over other mortgages, which the law requires. There are in Germany, as you have seen, a great many institutions and credit societies subject to the most different regulations; but all have the same basic principles — all these banks operate under strict government supervision, and all are allowed by law to issue debenture bonds with the power of guarantee and to market the guaranteed debenture bonds of State land mortgage banlis or cooperative societies. The loans are made at a cheap rate of interest on very long terms. If the interest rates are punctually paid the banks are not allowed to recall the loans. The loans are repayable by annual amortization at a rate of not less than one-half or 1 per cent, and are thus gradually repaid by small semiannual or quarterly pajrments. It is not my task to recommend to you one or other of these organizations. You must inquire thoroughly into this problem and find out the best way to extend to your farmers such credit facilities as will result in great benefits to the farmer and not to the farmer alone. The great need which prompts the organization of such credit institutions is not that of saving interest charges to the farmers, but that of hindering the rapidly advanc- ing increase in the cost of foodstuffs due to the inevitable increase in consumption, and the failure of a cor- responding increase in production. GEEMANY. 393 GERMAN PEASANT BANK OP WEST PRUSSIA AND THE MIDDLE CLASS BANK OF POSEN. Besides the banks already referred to, two institutes are to be mentioned, which occupy a special position among credit organizations in Prussia. I refer to the Deutsche Mittelstandskasse (German Middle Class Bank) and the Deutsche Bauernbank (German Peasant Bank). Both are public utility corporations and the net gain of the companies is limited by law to 4 per cent. These two institutions are founded under the law of 1909, enacted in West Prussia and in the Province of Posen. The State placed at the service of these two banks 225,000,000 marks for the purpose of regulating the farmers' debts, and at the same time to strengthen the position of the German farmers with respect to the Poles. The prime purpose of their organization is to regulate the debts of the farmers and to preserve German property in German hands. The institution works in the following way : The farmers who wish to regulate their debts and to strengthen their position as landowners have to make an application to these banks. This application must set forth all facts required by the regulations, and the bank then fulfills all requisite formalities. The valuation of the prop- erty is fixed by a careful valuation made with the assistance of a local cooperative or credit association, and in agreement with the farmer the extent of the loan is fixed; after these preliminaries the private mortgages are all recalled and repaid to the lender; for these private mortgages are mostly given at high interest rates, without amortization, and with the right of the lender to recall on short notice. All these formalities are generally com- plied with in a short time, so that the farmer is put to no disadvantage. On his side the farmer has to accept the following conditions : First. He must pay a perpetual rent charge of 1 mark yearly, redeemable only by an agreement come to by both parties. This rent charge of 1 mark gives the State the right to redeem this property together with all buildings. But this right of redemption shall only be exercised should the property be in danger of falling Into the hands of an unsuitable person or of one who is not a German at heart. The State also exercises this right if the owner fails to comply with his legal obligations. Secondly. The farmer must pay charges amounting to 4 or 4^ per cent inclusive of one-half or 1 per cent of the revenue value and 3 or 3^ per cent interest, so that within 64^ or 42 years the mortgage is repaid. The farmers have the right of recall, but the banks have not. These banks confer on the farmer the great benefit of saving him interest charges, of regulating all his debts, and of exchanging private mortgages for public mortgages at cheap interest rates and with the amortization feature. In exchange for these benefits the farmer has to keep the farm forever in German hands. Besides the mortgage rent charge the farm is generally charged with a second mortgage as security to the extent of one- fourth of its estimated value; this security mortgage precludes the obtaining of other mortgages on the farm, but does not hinder the owner from obtaining personal credit from the local credit associations. The results obtained by these banks are very satisfactory. Within 7 years not less than 7,587 peasant farms, and 164 big farms, representing a total area of 230,136 hectares have been dealt with in the two prov- inces of West Prussia and Posen. The farmers who have thus regulated their debts save not less than 11 to 21 per cent in interest rates as compared to what they formerly paid and the State has secured the farms forever to German landowners. I have now terminated my brief review of some of the numerous German credit institutions, and the main working principles upon which they are based. I know very well that other credit organizations, as for instance the landschaften, the Raiffeisen, and Schulze-Delitzsch cooperative societies are more important and more interesting for you than the above-mentioned institutions, with the exception perhaps of the mortgage banks. Without doubt, the time has come for action in the United States. Mr. Taft has said in his report concern- ing the introduction of agricultural credit institutions in the United States : The world-wide problem raised 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 land- owner; and the establishment of agricultural cooperative credit associations is largely a matter of State legis- lation and encouragement. It must be borne in mind that the true rural credit society is always a small group of farmers — the smaller the better — intimately known to each other and holding themselves collectively and severally liable for their combined obligations. This unlimited liability is the main thing. It compels the exercise of caution in the selection of members and inspires confidence in the public, so that loans may be ob- tained up to the full value of the collective security. But in introducing cooperative credit into any country or agricultural district where it has not yet been practiced, it is necessary to take the local social and economic conditions into account. The inquiry must be 394 AGEICULTUBAL COOPEEATION IN EUEOPE. made: Who are the persons for whom the credit facilities are intended? Are they large farmers or small culti- vators? Are they owners or tenants? Do they require the loans for long periods for making permanent im- provements or for short periods for use as working capital ? Are they accustomed to borrowing for productive purposes, or have they borrowed chiefly for stop-gap purposes ? Are they already heavily indebted ? Upon the answers to these questions will depend to a large extent the form of cooperative credit to be adopted. In short, there are a great many difficulties in the way of the organization of credit facilities on a sound basis, but without doubt the American Government and its representatives will find the right way and the best methods to carry out this work on such a scale as will benefit the farmer, the consumer, and the Nation at large. RAIFFEISEN BANK AT RAGON. Report op a Subcommittee. Berlin. This is a Raiffeisen loan and savings bank. Herr Schulz, the teacher of the two-room school of the village, and holder of several minor local offices, was the cashier. He appeared to be a man of influence, enjoying the respect of the village community. The office of the cashier was a small room about 10 by 14 feet, plainly furnished. The inquiry was held in a large room in another building, which served a;s the place of meeting of the semi- annual gatherings of the members of the society and the monthly meetings of its directors. In addition to the members of the subcommittee of the American Commission, there were 6 or 7 farmers and villagers and the directors of the bank present. HISTORY. Herr Schulz stated that the bank was established in 1899 with 16 members. It now has 100. All of the similar societies in the locality are, like it, of comparatively recent origin. Practically all of the people in the vicinity are engaged in agriculture and, previous to the founding of the bank, were entirely dependent for needed credit upon the city of Berlin, some 60 miles away, and upon the local merchants, who sold goods on credit at relatively very high prices. On the other hand, no safe medium for the reception of deposits existed nearer than Berlin. The people of the locality ordinarily receive the bulk of their income from the sale of farm products twice a year. Since the establishment of the bank these conditions, both in respect to loans and deposits, have been changed. Depositing has been made both easy and safe and the community has grown more independent, both economically and politically, by reason of the credit which the bank affords. MEMBERSHIP FEES AND DEPOSITS. A membership fee of 10 marks is charged on entrance. The sum of these fees is used to help defray the current expenses of the society. There are practically no restrictions on the membership. The sum of 25,541 marks was deposited during 1912. Deposits are received either from members or nonmembers. The total sum on deposit at December 31, 1912, was 86,614 marks. The rate of interest allowed on deposits has varied between 3J and 4 per cent. The bank carries cash on hand to the amount of about 2,000 marks. LOANS. Loans are made only to members of the society. No member can demand a loan as his right. The usual loan is from 100 to 300 marks, for a term usually approximating three years, but in no case exceeding 10 years. Loans are usually made on personal security, but in a few cases loans have been made on mortgages (subject to call, however), to persons in practically necessitous circumstances. The smallest loan made by the society is 50 marks; the largest loan ever made by the society was 20,000 marks. (The amount loaned during 1912 was 22,022 marks. The amount on loan December 31, 1912, was 93,267 marks.) The rates of interest charged for loans vary from 4^ to 5 per cent. In spite of the tension in the money markets of the world in the latter part of 1912, the society only increased its rate of interest during that time one-fourth of 1 per cent. GEKMANY. 395 PROFITS, DIVIDENDS, AND KESEKVE. The society does not seek to make profits, but to provide sufficient credit for its members, at a low and stable rate of interest. During the first year its operations resulted in a small loss, but since that time it has made a profit each year. Profits ranged from 136 marks in 1912 to 888 marks in some previous year. They aggregated 3,593 marks and average 299 marks per year. The society declares no dividends and in consequence its profits have all been carried to a reserve, which reserve is identical in amount with the aggre- gate of the annual profits. Expenses of carrying on the business during 1912 amounted to 1,200 marks (about 1.3 per cent of the total amount available for trading or loaning purposes). AFFILIATION AND INSPECTION. The society is affiliated with other societies under a provincial bank that acts as a clearing house for the interchange between the societies of surplus deposits on the one hand and of excessive demands for loans on the other. The various provincial banks in turn hold stock in or jointly own a central bank at Berlin, which serves as a final clearing house for the surplus funds and requirements of some 4,300 local Raiffeisen institutions. Supervision of the local societies is in the hands of the provincial banks and these in turn are supervised and inspected by the central bank. Neither the bank's premises, as such, nor its business, is taxed otherwise than through the medium of stamp duties. The land in the vicinity is mostly held by small proprietors, the average holding being 37 acres. Changes of ownership, either by sale or otherwise, are infrequent. Farm land in the vicinity have a value of approxi- mately 800 marks ($200) per acre. When funds for the purpose are available, the society makes use of idle deposits or of its surplus for the cooperative purchase and distribution of such agricultural commodities as commercial fertilizers, imple- ments, etc. RAIFFEISEN BANK AT BORNIM. Report of a Subcommittee. BoRNiM (near Berlin). EVIDENCE OF THE CASHIER. Q. What is your position in the bank? A. I am cashier, a member, and also a borrower. Q. What is the highest credit the bank has voted you ? A. Twenty thousand marks. Q. How long have you lived here ? A. I was born in the place. Q. When did you become a member of the bank ? A. I have been a member for five years. I became a member at the foundation of the bank. Q. Did you borrow the first year you joined ? A. Yes. Q. Did you ever pay back anything ? A. No; not yet. But on the contrary I borrowed more money. Q. What has been the average rate of interest you have paid on your loans to the bank ? A. The only rate I have ever had to pay was 5 per cent per annum, paying same quarterly. Q. Is this the customary rate at which the bank has loaned its funds ? A. Yes. Q. Do you make loans on real estate ? A. Yes, occasionally. Q. Would you mind describing to us one of the mortgage loans your bank now owns ? A. Here is the book entry, which shows the name Richard Lange at the top of the page. You will see here 18,000 marks was voted hijn by the directors. Q. What is the land worth that secures this mortgage ? A. One hundred and twenty-five thousand marks. 396 AGBIOULTUBAL OOOPEEATION IN BUEOPE. Q. Is this a first mortgage ? A. No; it is a second mortgage. Q. Wiiat is the amount of the first mortgage ? A. Thirty-eight thousand marks. It belongs to a pi'ivate corpcu-atioii. Q. Is the security farm property ? A. Yes. Q. How was its vahie for a loaning basis determined? A. It is assessed at 125,000 marks, which is the basis for determining values. We do not loan over 50 per cent of the assessed valuation. Q. What is the rate of interest you pay on deposits ? A. Three and one-half per cent. Q. What is your loaning rate on short-term loans? A. The rate of interest to both depositors and borrowers fluctuates with conditions. We aim to keep our loaning rate at from one-half to three-fourths per cent above the interest we pay on deposits. Q. For what length of time are your loans made ? A. We set no time for repayment, but the bank reserves the right to call for payment of the loan on three months' notice. Q. How many directors has the bank ? A. Three directors and a board of three supervisors. Q. Who elects the directors and supervisors ? A. The members at their annual meeting. Q. How do you elect your cashier ? A. He is elected tn fill the place until he resigns or his resignation is requested. Q. Do you elect new directors every year ? A. Yes. That is, we elect one new director each year. They are elected for a term of three years, one retiring each year. Q. Do you often reelect the same person for director? A. Yes; we try t) keep a director in the position as long as ]V!ssible. Q. What requirements do you make of a borrower? A. Ho must give us two indorsers who are good for the debt. Q. Suppose a borrower loses his property on account of bad crops or any other cause. Would you still loan him money ? A. Yes, if he gets the indorsers. Q. Would he have difficulty in doing this I A. Not if he wanted a limited amount. Q. Will you give us some information as to the present financial condition of your bank? A. Yes; I will be glad to. RESOURCES . Marks. Cash in safe 1, 565. 04 Interest in central society, Berlin 6, 500. 00 Loans 126, 174. 56 Value of safe 200. 00 Total 134,440.20 LrABILITIES. Membership tees paid 3, Oil. 20 Reserve fund 1, 408. 01 Accumulated earnings (1913) 719. 93 Deposits of members 28, 922. 28 Deposits of nonmembers 22, 685. 95 Due central society, Berlin 77, 692. 83 Total 134, 440. 20 Q. How many borrowers have you at the present time ? A. Thirty-seven. (This makes an average of 3,410 marks per borrower.) Q. How many members are now depositors ? A. Thirty-six. (This makes an average of a little over 800 marks per member.) Q. How many depositors who are not members ? A. One hundred and fifty. (This makes an average of about 150 marks per depositor not members.) GERMANY. 397 Q. Where is your banking room ? A. We have none. The business is done in ray private room where I live. Q. Where is the safe ? A. It is in my house. Q. Does your bank do charity work ? A. As a rule such a bank as this one is does. But we are too new and our funds too small to do such work. Q. What salary is paid the cashier ? A. From 100 to 350 marks per year, according to the turnover each year. Q. What was his salary last year ? A. Three hundred and fifty marks. Q. What was the total expense of running the bank last year ? A. Five hundred and fifty-four and eighty-four hundredths marks, including the cashier's salary of 350 marks. Q. Then the other expenses of your bank, including the taxes, only amounted to about 200 marks ? A. Yes. Q. Is the cashier ever called to the central society in Berlin on business ? A. Yes; and when he goes his expenses are limited to 3 marks. Q. What amount of taxes does your bank pay ? A. We are not large enough yet to pay any taxes and are not required to do so. Q. What was the net profit of your bank during 1912 ? A. Five hundred and eighty-seven and nine-hundredths marks. Q. What has your bank made this year up to date ? A. Seven hundred and nineteen and ninety-three hundredths marks net. EVIDENCE OF BAEON ZU PULITZ, PRESIDENT OF THE CENTRAL ASSOCIATION. Q. Baron, how many banks belong to your society ? A. The one we are going to see is one of 600. Q. Do these 600 banks own the central society ? A. Yes. Q. To whom do the small banks loan their money ? A. Principally to farmers, but also to mechanics, small tradesmen, and laborers. However, their loans are confined to their own territory. Q. Does the bank lend to anyone except its own members ? A. No. Q. Is the membership confined to farmers ? A. No; all are permitted to join. Q. What requirements do the small banks make as to membership ? A. The character of the applicant must be approved, and he must subscribe 200 marks, paying 20 marks in cash, and the remainder by installments as he can. Q. Is the limit of ownership to any one member 200 marks ? A. Yes. Q. Is the liability of the members of the small banks associated with your central society limited or unlimited ? A. Some limited and others unlimited. In the bank we are going to visit at Bornim-Potsdam the liability is unlimited. Q. What is the basis of ownership in the central society ? A. The ownership is held by the small banks in proportion to size. Q. How do the small banks receive financial assistance from the central society ? A. We take as a basis the aggregate assessed value of all the property of all the members, and the central society advances to each bank an amount equal to 10 per cent o/ such aggregate of its own membership. EVIDENCE OF A MEMBER (A BUTCHEE). Q. How long have you been a member of this association ? A. Since its existence, five years. Q. Did you borrow any money from the bank the first year ? A. No. 398 AGBICULTUBAL COOPERATION IN EUROPE. Q. Have you borrowed any since that time ? A. I made an application to borrow 10,000 marks, and the loan was granted. Q. To whom did you apply ? A. To the directors, through the cashier. Q. What rate did they charge you ? A. Five per cent. Q. What security did they require and accept ? A. Only the indorsement of my brother. Q. What is the population of your village ? A. Two thousand six hundred. Q. How much money would this bank lend you individually ? A. Ten per cent of my unencumbered property. Q. How does the cashier know what you are worth ? A. All property is registered, and he has only to examine this register to be absolutely sure. Q. Suppose you have need for more money ? A. Then I have to get another indorsement. Q. Suppose you need more money than this bank will lend you ? A. I think I can borrow it, as heretofore, in Berlin. Q. What is your business ? A. I am a butcher. Q. Wholesale or retail ? A. A local retailer. (The friend of the butcher, sitting by his side, ventured the following: "He is a very good man, but some one else besides his brother had to sign those papers, and that was his wife. That is the rule of the bank.") Q. Does the law require the wife to sign with her husband ? A. No. Q. When you borrowed the money, what did you give the bank, and what did the bank give to you ? A. The bank gave me a passbook with my credit written in it, and I gave the bank my note. Q. When the money went to your credit, did the bank begin then to allow you interest on same ? A. Yes; 4 per cent. Q. Has this bank paid a dividend ? A. No ; because it is a new bank, and dividends are paid from the net earnings ; but for the present about one half of the net earnings go to surplus reserve and the other half goes to pay for expenses, books, safe, etc. EVIDENCE OF A MEMBER (A FARMEE). Q. Was this bank organized to make dividends for the members ? A. It was organized, first, to give the farmers cheap money, and to pay expenses; then to pay 4 per cent dividend to members. Q. How much reserve have you at present ? A. Two thousand marks. Q. Are you a borrower ? A. Yes. Q. When your loan is due and you can not pay, what wiQ the bank do ? A. It will renew. Q. How many times will they renew ? A. As long as the interest is kept paid up and my security is kept good. Q. Do you know any farmers here who have refused to go into the bank ? A. No; some can not join because they can not pay. Q. Have you any tenants who are members of the bank? A. No. Q. What business are you engaged in ? A. I am a day farm laborer. Q. Can you tell me the pay of day laborers in this section ? A. A good man gets from 3^ to 4 marks a day; a woman, 1.60 to 2 marks; children over 12, 1 mark per day. Q. Do they also get their board ? A. No. QEBMANY. 399 Q. What is the pay per week or per month 1 A. A man draws 30 to 40 marks a month and a woman about half the amojmt, and they are also fed. Q. Where does the central society get the money to lend to you when it is out of funds ? A. Borrows it from the government bank. Q. Suppose the government bank is out ? A. It is never out, but we can go to the big private joint-stock banks. Q. What interest does the bank pay on deposits ? A. Four to four and three-fourths per cent, but it is paying 5i per cent now, for money is very high. Q. Would your stockholders be williag to sell this bank ? A. No; we are pleased with our bank. Q. What benefit has the bank been to the town and community generally ? A. It keeps all our money at home; gives us a credit to borrow more money; unites our community. Q. What does the poor man do for money when he can not join the bank? A. He does not want much money, and two or three of the members will borrow the money for him. Q. Has the bank improved the value of lands ? A. No ; they had aU the value before the bank was started. Q. Does the bank guarantee to continually renew your loan for you ? A. No; but it is the custom, and if you will do right the bank will not force you. ORGANIZATION OF AGRICULTURE IN GERMANY. Dr. Dade, Secretary General German Council of Agriculture. STATEMENT. Berlin. The German Empire is composed of 24 States, just as the United States are composed of 48 States. The largest of the German States is the Kingdom of Prussia, which is divided into 12 provinces. Each of these prov- inces is required by Prussian law to elect a chamber of agriculture, and so for the Kingdom of Prussia there are 12 chambers of agriculture. The same system prevails in the other German States; thus the Kingdom of Saxony, the Grand Duchy of Baden, and so forth, have their chambers of agriculture instituted under State law or by royal decree. Each of these chambers of agriculture, in each of the German States, sends one or two or more delegates, proportionate to its importance, to the German Council of Agriculture, which thus becomes the official council of agriculture for the whole German Empire, although it is not a body created by law. Thus its status is ofiicial, but not through legislative act. That is to say, it emanates from bodies created by law, without being itself created by law. QUESTIONS. Q. Has the Council of Agriculture the power of initiative ? A. The German Council of Agriculture acts as an official advisory board with right of criticism and initiative on all legislation on agricultural matters affecting the whole of the German Empire. For instance, supposing you had a Council of Agriculture for the United States sitting at Washington. A bill is introduced into Congress dealing with the agricultural interests. The Council of Agriculture would have the right to say that biU must be modified for such and such a reason. But it would not have the right to express an opinion in regard to a biU introduced into the legislature of Ohio affecting agriculture in Ohio. Q. Supposing you had no Council of Agriculture in Germany, and no chamber of agriculture, but only voluntary organizations, how would you stand ? , A. We had that condition in earlier times, when the only organizations were voluntary ones, mostly com- posed of large farmers. Forty years ago free associations of farmers began to form, such as the Westphalian Farmers' Union, the Rhineland Union, etc. The great drawback to this movement was the lack of solidarity between the various unions. There were then no legally constituted chambers of agriculture. The next step was the federation of these several isolated unions into one great agricultural league which brought together within its ranks the farmers of aU grades, both large and small, of the whole Empire. This league now has a membership of 300,000, of whom some 2,000 or 3,000 are large landowners, while the others are small or medium farmers. The finances of the league are mostly supplied by the large landowners, who make large subscriptions^ especially for the purpose of political campaigns at election times, while the smaU farmers are only called on for a small annual subscription. 400 AGBICULTITEAL COOPEEATION IN EUROPE. The prime purpose of this agricultural league is political; it voices the interests of the agrarian party, and it must necessarily be free and unofficial as it wants the right to watch and criticize, and, if necessary, fight the Government, in the protection of the interests it represents; whereas the chamber of agriculture, created under law, and the Council of Agriculture which they appoint from among their members, act as an advisory board to criticize and advise the Government on legislative measures concerning agriculture, but can not act in opposi- tion to the Government as the league can when it sees fit. You can see what power such a league can exercise if you wiU transfer it to the United States. Just imagine that in every State you had an organization count- ing some 20,000 members, and these were aU federated, and you had sitting in Washington the council elected by these farmers of all the States to watch over their interests in matters of legislation. Q. What would be the position of agriculture in Germany if you had no such organizations ? A. We could do nothing; we should have no influence either on home or foreign policy. And now let me ask you : Do you think you could have a Council of Agriculture in the United States ? Q. The logic of the situation is such that a Council of Agriculture for the United States has become an abso- lute necessity. The capital and the brains of the cities are organized. The labor of the cities is organized. The farmer may only remain unorganized at the peril of his existence. This is the situation which makes the Coun- cil of Agriculture an absolute necessity for the United States. I wish to ask if you attribute the success of Germany as an agricultural country to the Council of Agriculture ? A. Yes; the Council of Agriculture is one of the factors in this success. It has secured success from the legislative and political end. The other factor in securing success has been the Agricultural Society, which has watched over and promoted technical development and improvement. Q. How are the chambers of agriculture elected? A. In most of the provinces of Prussia the members of the chamber of agriculture are elected in numbers proportionate to the value of the farms included in the electoral district, and on a basis which insures representa- tion proportionate to the interests at stake. Q. How many members are appointed to the Council of Agriculture ? A. Seventy- five. Q. How many days is it in session ? A. The general assembly of the Council of Agriculture is in session for one week in February. Special com- mittees, consisting of 15 members at most, on credit, tariflF, and any other questions which may caU for special consideration, are appointed as occasion may arise. The Council of Agriculture has its permanent offices in Berlin, with a general secretary and his office staff to attend to current business. Q. Are the officials of the Council of Agriculture paid ? A. Yes; the chambers of agriculture subscribe 70,000 marks to meet regular working expenses, and besides this, each chamber of agriculture pays the expenses of its representatives who attend the general assembly or sit on special committees. The Council of Agriculture also publishes a daily and weekly price bulletin, giving the prices of the staples of agriculture on German markets; but the cost of this, amounting to 70,000 marks a year, is met by a separate budget. ORGANIZATION FOR CREDIT, DISTRIBUTION, SUPPLY, AND UNITED ACTION ON RAIFFEISEN PRINCIPLES. Address by Mr. A. Buchruckbr, General Secretary General Union of Rural Cooperative Societies of Germany. Credit. Berlin. There are two distinct functions which enter into the organization of credit on Raiffeisen lines, namely, (1) the organization of the rural population in local credit societies, often spoken of as "thrift and credit societies and (2) the organization of the societies so formed as a collective body federated into the Agricultural Central Loan Bank for Germany. 1. Local credit societies. — These are based upon the following principles, known as "EaifFeisen principles": (a) Their legal foundation is that of unlimited liability of all members for all liabilities of their particular society. (&) Their aim is to improve the condition, alike material and moral, of their members. (c) They admit only members from a distinct district, which is advisedly as narrowly circumscribed as is consistent with its being self-supporting; therefore there can be no persons members at once of more societies than one. M . GEKMANY. 401 (d) They collect no entrance fee. (c) So far as the law of the land permits, they issue no shares; wherever the law makes shares obligatory, they limit a member's holding to one share only, which must be small; and should dividend be declared on such share, such dividend must not in rate exceed the interest charged upon loans. (/) The only officer remunerated for his services is the "accountant" (the employee who keeps the accounts and actually handles the money) ; members of the managing committee and the council of inspection are ex- pected to discharge their duties without remuneration. (g) All profit resulting is conscientiously carried to an indivisible common fund belonging to the society as such. The task which credit societies set themselves is to provide the cash required for advances and credits to be accorded to members ; furthermore, to provide for the supply of goods required by members and to make any other arrangements for the promotion of the material welfare of their members which may appear desirable; and the aim which they pursue is rather to come to the aid of those who are materially weak and to further the intellectual and moral well-being of their members than to earn a profit. The foundation upon which they are buHt up is that of Christianity and loyalty; it is a standing rule that at society gatherings neither denomina- tional nor political subjects may be touched upon in discussion. These societies are not allowed to engage in any speculative business whatever. Advances and credits are permitted only to members,' on personal security, and for objects held to be economically legitimate, in the shape either of specific loans or else of current accounts. Adequate security must be provided for every loan or credit to be granted. And in respect of every loan the term for repayment is fixed in advance. The length of time and the amount of the installments for repayment are in every case proportioned to the object of the loan and the power of the borrower to repay within a given time. No loan is granted without consideration of the object for which it is asked and the capacity and title of the borrower to answer for a credit. Borrowers are, on then- side, entitled to repay at any time. In respect of certain contingencies the societies reserve to themselves the right of calling in the loan. 2. The Agricultural Central Bank for Germany. — The particular point to which greatest importance is attached in fixing a sphere for the operations of a society being that of the smallness of the district, the necessity of providing for collective action and a means of insuring that there should be money and a guaranty of per- manency very soon became manifest. Accordingly, after various unsuccessful other attempts, Kaiffeisen, in 1872, formed the Rhenish Agricultural Cooperative Bank at Neuwied, registered as a cooperative society. Similar banks having been formed in Hesse and in Westphalia, Raiffeisen, in 1874, in connection with the MutualLife Insurance Co., Arminia, formed, as apex to the three, the German Agricultural General Bank. This organization having proved unworkable on the ground of unforeseen difficulties, Raiffeisen in 1876 pro- ceeded to the formation, as a joint-stock company, of the Agricultural Central Loan Society for Germany at Neuwied. That institute exists to the present day, but was in 1909 removed to Berlin. The objects of this bank are — (1) To carry on banking and credit business, more particularly as a means of equalizing temporary shortness or oversupply of cash in local banks. (2) To provide for collective purchase of agricultural requirements, as well as for collective sale of agricul- tural produce. Such business has now been transferred to seven distinct organizations, each operating within its own particular district. The share capital raised for the purposes of the bank at the time of its formation stood at a quarter of a miUion marks. It is now 10,000,000 marks. The shares are for 1,000 marks each and are made out to the holder by name. They are accordingly unsalable in the market and not to be purchased on 'change. With the approval of the council of inspection of the bank they may be transferred. The power to acquire shares is limited — (a) To individuals being members of either the managing committee or else the council of inspection of the bank. (&) To local credit societies having adopted in their rules and regulations the Raiffeisen principles and also the directions for the conduct of business and bookkeeping issued by the General Union of Rural Cooperative Socie- ties for Germany, and submitting to inspection by the general union or one of its sections. The funds required for the business of the bank are provided in the following ways: (a) By the issue of shares. (&) By deposits received and loans raised. (c) By commissions charged and a margin of interest on business transacted. (d) By profits on the dealing in goods and by similar income. 14174°— S. Doc. 214, 63-1 26 402 AGRICULTUEAL COOPERATION IN EUROPE. (e) By the issue of debentures running for indefinite periods. The funds so raised are applied in the following ways: (a) In credits given in current account to local cooperative banks, societies, central banks formed for par- ticular countries or provinces, cooperative productive societies and central business organizations for cooperative societies. (6) For carrying on a business in goods. (c) For discounting acceptances and making advances on approved securities in conformity with the prac- tice of the Imperial Bank. {d) For any other purpose in harmony with the general objects of the institution. The net profits realized are applied : (a) To the accumulation of a reserve fund. (6) To the payment of a dividend on shares, which must not in any case exceed 4 per cent. Business with societies is carried on through the medium of the bank's branch offices. There are 12 such, situated at Berlin (the central office, acting under this aspect also for the district of Berlin), Brxmswick, Breslau, Dantzic, Erfurt, Frankfort-on-Main, Kassel, Koblenz, Konigsberg in Prussia, Ludwigshafen on the Rhine, Nuremberg and Strassburg in Alsace. To permit of the fixing of a hmit to the credit to which societies are entitled, they are called upon to hand in proof of their possession of property, giving the following particulars : (a) In coimtries in which a property tax is levied, a Ust of their members showing the total amoxmt of property tax to which they are assessed ; (fi) In other countries a list of members and estimates made by the managing committee and the coimcil of inspection of the society of the property possessed by each member. The maximum Hmit for credit for each society is fixed by the managing committee of the bank, and only in exceptional cases by the council of inspection. Generally speaking the hmit is this : (a) In societies returning assessments for property tax, 10 per cent of the property so returned; (6) In societies in countries where there is no property tax, 5 per cent of the valuation of property arrived at by the local committee of management. No society is entitled to claim a credit as a matter of right. The bank also reserves to itself the right to call in a credit granted at any time. The data required to estabhsh a maximum hmit of credit are to be handed in afresh every three years; in special cases at any time on demand. The business transactions as between the central bank and its branch office are as follows: Should the funds collected locally by the branch offices prove insufficient for their daily requirements, those offices are to apply to the central bank for the balance needed. Such amount is furnished either in cash out of the balance in hand, or else by means of a draft on the imperial bank. Surplus funds held by the branch offices are in the same way paid in to the central bank. Each branch office is required to send in to the central bank every week a return of its transactions and holdings in cash, and every month a full return showing the whole state of its business. By such means the central bank is enabled to exercise a steady and effective control over the branches. In addition each branch office is subjected once every year to a minute inspection carried out, in conjimction with the chief inspector of the union, by a committee nominated by the council of inspection of the central bank. In this manner the Agricultural Central Bank for Germany has, in spite of its formation as a joint-stock company, been enabled to retain its genuinely cooperative character, transacting business in its wider sphere practically on the same cooperative fines as the local credit societies do on a smaller scale. Its being registered as a joint-stock company facihtates its business with the money market and provides for it, through its share capital, a working fund which can not be affected by any changes occurring which inffuence local societies. Keep- ing the money transactions with societies in its own hands, it is in a position to charge lower rates than societies would be saddled with were the business to be carried on through the medium of independent provincial inter- mediate institutions; and by means of its branch offices it secures to itself all that information respecting the financial status of local societies which is imperatively needed for the appropriate apportionment of credit. It is, therefore, a central bank, based entirely upon self-help and self-government, and combining in itself all the advantages both of a centrafized and a decentrahzed clearing house for money. PUEOHASE AND SaLE OF GoODS. Inasmuch as Eaiffeisen societies, in addition to supplying members with credit, also practice for their benefit the deahng in goods, this second branch of business was found to call as urgently for organization as the first. Such organization comprises : GERMANY. 403 (a) The collective purchase of agricultural requisites such as fertilizers, feeding stuffs, machinery and the like; (5) The collective sale of agricultural produce such as grain, potatoes, and so on. It was to carry on such business that in 1881 Raiffeisen formed a trading society, "Eaiffeisen & Co." That society was dissolved in 1899 and its business was transferred to the Agricultural Central Bank. Since 1909 the dealing in goods in the districts of Berlin, Brunswick, Breslau, Dantzic, Erfurt, Kassel, and Koblenz has been intrusted to district provincial trading societies. For the districts of Frankfort-on-Main, Konigs- berg in Prussia, Ludwigshafen on the Rhine, Nuremberg and Strassburg in Alsace, the Agricultural Central Bank remains for the time the acting institution. Organization of the Raiffeisen Union. In 1877 Raiffeisen created, as an organization for supervision, advice, and promoting the formation of societies, the General Union of Rural Societies for Germany. That union embraces not merely credit societies, but also societies practicing other forms of cooperation — wine growers' societies, dairies, societies for the sale of live stock, etc., such as in Germany collectively pass by the name of business societies. The tasks set for the general union include the following: (ffl) Cooperative propaganda. To carry on such, the union issues twice a month its principal organ, viz, the Agricultural Cooperative Journal. Also once a year a "Raiffeisen Almanack;" moreover, many pamphlets and leaflets collectively composing the "Raiffeisen Library;" and furthermore, larger works, to form a collection of textbooks on rural cooperation. (6) Information on cooperative subjects to be given to inquirers from both Germany and abroad. (c) The collection and pubUcation of statistics referring to cooperative societies of theRaiffeisen organization. (d) Watching over the maintenance and observance of Raiffeisen principles in the Raiffeisen societies. (e) The training of efficient employees for Raiffeisen societies, more particularly of accountan.ts, by means of suitable institutions. (f) Imparting information and advice to the societies affiliated in all matters of cooperative or legal prac- tice. Under the former head the bank helps to draft rules, agenda for business, and directions to employees; it prepares model account books and directions for keeping accounts in the several branches of cooperation. Under the latter head it maintains a special department for legal consultation and advice. (g) Laying down uniform rules for the inspection of societies and enforcing their observance. Qi) Inspection of its sections (provincial subunions) and in some cases also of societies. (i) Provision for insurance. The union pays particular attention to this business and has standing agree- ments with quite a number of insurance companies, which allow substantial rebates to its members. As a general rule inspection of societies is carried out by the provincial sections of the general union, which have their several headquarters at Berlin, Brunswick, Breslau, Dantzic, Erfurt, Frankfort on the Main, Kassel, Koblenz, Konigsberg in Prussia, Ludwigshafen on the Rhine, Nuremberg, and Strassburg in Alsace. 404 aptBicultueal coopbeation in eueope. Table showing the gradual growth of the Agricultural Central Cooperative Bank. Year. Number of societie.s affiliated. Number of shares. Payments toward share capital. Divi- dend de- clared. Kate of interest. For deposits. For advances. Commission charged or allowed on the heavier side of the account. Business ' done. Total of balance sheet. Proiit. Beserve fund at the be- ginning of each year. 1876 1877, 1878, 1879 1880, 1881, 1882, 1883, 1884, 1885, 1886, 1887, 1888, 1889, 1890, 1891, 1892, 1893, 1894. 1895. (7 (7 1899 1900 1901, 1902, 1903, 1904, 1905. 1906. 1907. 1908. 1909. 1910. 1911. 1912. 53 77 85 91 105 120 138 148 161 183 290 484 710 1,293 1,850 2,366 2,679 2,872 3,023 3,095 3,160 3,461 3,675 3,898 4,016 4,147 4,272 4,399 4,463 4,468 4,626 244 248 258 308 398 503 510 515 736 800 910 1,000 ],oon 1,000 (?) 1,073 2,105 2,676 3,837 3,837 5,000 5,000 5,337 7,698 8,200 8,484 8,579 8,587 8,586 8,596 8,587 8,620 8,634 10,000 Marks. 24,400 24, 800 25,800 30,800 39,200 50,300 51,000 51,500 59,600 68, 600 77,350 80,000 91,000 100,000 100,000 239,300 586,100 622,350 1,121,860 1,316,250 1,504,050 1,715,800 2,036,450 4,920,050 5,326,750 6,329,700 7,672,000 8,175,000 8,454,000 8,546,250 8,553,250 8,656,000 8,656,000 8,581,000 8,613,000 8,618,500 9,577,000 Per cent. 4J per cent . do do do. do. 4peroent do do do 1.1-30.6, 4 per cent; 1.7- 31.12, 3} per cent. 3| per cent do 3J per cent do do do Up to 10,000 marks, 3§ per cent; beyond 10,000, 4 per cent. 3i per cent .do. 1.1-30.4, 3} per cent; 1.5- 31.12, 3J per cent. tip to 10,000 marks, 3i per cent; beyond 10,000, 3i per cent. 1.1-30.4, up to 10,000 marks, 3 J per cent; be- yond 10,000 marks, 3J per cent; 1.5-31.12, ^ per cent; 1.11-31.12, de- posit at 3 months' no- tice, 34 per cent. 1.1-30.11', 3J per cent; 1.12-31.12, 3} per cent. 3? per cent , do 4 per cent do 1.1-31.3, 35 per cent; 1.4- 31.12, 3J per cent. 3J per cent do 1.1-31.5, 3* per cent, 1.6- 31.12, 3.? per cent. 1.1-30.4, 3 J per cent; 1.5- 31.7,33-4 per cent; 1.8- 30.11, 4-41 per cent; 1.12-31.12, 4i-4i per cent. 1.1-30.4, 4}-4i per cent; 1.5-31.12, 4-4}per cent. 1.1-31.3, 4-4} per cent; 1.4-31.12 3^3} per cent. 3J-3| per cent 3J-3f-4 per cent 1.1-15.6,34-33-4 per cent; 16.6-31.10, 35-4 per cent; 1.11-31-12, 3i-4- 4} per cent. 5J per cent . do do do do 5 per cent . . do do ....do 4} per cent. ....do ....do 4J per cent. 4} per cent. do. do. Up to 10,000 marks, 4} per cent; bevond 10,000, 4J per cent. Up to 10,000 marks, 41 per cent; beyond 10,000, 4§ per cent. do Up to 10,000 marks, 3^ per cent; beyond 10,000, 41 per cent. 35 per cent J per cent . do do.... do.... do.... do.... do.... do.... t per cent. do do do do ,>j per cent . do do ....do .do. ..do.. ..do.. .do. .do. .do. 3 A per cent . 4} per cent 1.1-31.1, 4i per cent; 1.2- 31.8, 4i per cent; for branch office,? having a credit balance, from 1.9, 4J per cent. 4J per cent do 1.1-31.3, 4} per cent; 1.4- 31.12, 4 per cent. 4perc6nt do 1.1-31.5, 4 per cent; 1.6- 31.12, 4}per cent. 1.1-30.4, 41 per cent; 1.5- 31.7, 4J per cent; 1.8- 30.11, 4} per cent; 1.12- 31.12, .51 per cent. 1.1-30.4, 5}perceni; 1.5- 31.12, 4} per cent. 1.1-31.3, 4} per cent; 1.4- 31.12, 4} per cent. 4} per cent do 1.1-15.6, 41percent; 16.6- 31.10, 4* per cent; 1.11- 31.12, 4} per cent. .do. .do. .do. -do. .do. .do. .do. .do. .do. ...do. -do. .do. .do. .do. .do. Marks. ^] 522,905 557.596 1,124,677 2, 007, 148 2,716,361 2,842,678 3,362,785 3,189,297 3,994,177 3,967,915 4,964,119 7,671,087 9,912,812 11,978,867 15, 764, 495 21,636,711 27,862,316 63,158,871 134,279,124 92,267,679 117,413,362 151,692,298 178,000,000 230,000,000 260,000,000 307,000,000 347,000,000 388,000,000 359,000,000 373,000,000 2 758,000,000 787, 000, 000 900, 600, 000 1,182,600,000 1,239,427,000 Marks. 158, 496 164, 173 312,972 511,096 426, 772 656,672 732, 647 874,990 1,017,6,36 1,077,735 1,059,018 1,444,637 2,065,136 2,978,383 4,669,980 5, 408, 467 6,627,299 15,581,472 17,844,191 25,287,830 .31,820,024 38,581,996 41,181,989 44,151,829 .53,622,044 64,812,057 73,428,888 73,438,151 77,586,786 86, 982, 051 8i, 912, 865 92,381,285 101,827,.315 94,995,929 98, 920, 675 Marks. (?) (?) 1,873 2,684 2,363 3,910 5, 712 5,518 6,477 7,209 8,924 12,720 16,844 8,533 9,365 19,684 31,890 32,947 81,199 44, 98;l 51,349 74,230 71,033 143,950 262,004 281,426 311,227 300,935 1455,265 490,796 509,684 536, 935 425,871 376, 620 386, 549 421,269 435, 190 Marks. 1,934 3,216 6,066 10,803 16,320 62,450 57,082 64,623 75,444 90,147 96,452 103,404 120,095 154,104 166,889 196, .356 190,406 199,706 215,157 229, Si? 259,32s 301,82.5 358,538 420,783 480,970 25,715 123,874 225,791 333,178 418,352' 493,676 579,204 698,974 829,736 ' This loss has been covered out of the reserve fund^ 2 From 1908 forward only the total turnover eon be given. PRUSSIAN CENTRAL LAND CREDIT JOINT-STOCK COMPANY. Herr Wegener, Director. statement. Berlin. The circumstances that led to the foundation of, the Prussian Central Land Credit Joint-Stock Company go back to the heavy crisis of credit which broke in about the middle of the sixties of the last century in the whole of North Germany, especially in the eastern proviuces of Prussia, upon the agricultural landed property. This crisis had its cause in the great revolution which had taken place in consequence of the rising of tech- nical skill in all domains of economic life and which had not left untouched the agricultural landed property either. The rising rent for landed property had strongly driven up the value, and the landowner wanted much larger sums of money than hitherto for acquiring a piece of land as well as for the better management of his property. GEKMANY. 405 The mortgage credit associations (landschaften), with their exclusive character, which then were still Uttle accessible to innovations, offered no sufficient help. Neither could the few already existing Prussian joint- stock mortgage banks suffice to the heightened claims of credit, because according to the normative regulations issued by Government in 1863, they were not allowed to grant loans on independent valuation, but only in a certain proportion to the net yield of land for purposes of land tax or the net yield of buUdings for purposes of buildings tax, both of which paid little consideration to the particular circumstances. It would lead us too far to discuss now the large number of propositions and plans that had ripened by the crisis of credit of that time. It will be enough to mention that by many an effectual help was expected from the new establishment of a big central institution of credit, and that besides well-known theorists also eminent men of practical life maintained that the form of a joint-stock company should be given to such an institution. Among the most important plans then emerging was a petition, addressed to the Prussian Government on January 3, 1867, by the Diskonto-Gesellschaft in Berlin, as well as by the banking firms of M. A. v. Eoths- child & Sohne, in Frankfort a. M., S. Bleichroder, in Berlin, and Sal. Oppenheitn, jr., & Co., in Cologne, to approve of the foundation of a Prussian Central Mortgage-Credit Joint-Stock Bank, with its seat in Berlin. As for the principles of organization and management of this institution, they should be modeled after those of the Credit Foncier in Paris. The petition was at first refused, as favors should be granted to the projected bank which had not been guaranteed to the mortgage banks tiU now licensed. But the position of the landed property becoming worse, the Government returned, by the suggestion of Baron von Oppenheim, the head of the firm Sal. Oppenheim, jr., & Co., to the matter in 1869 and showed itself inclined to sanction the foundation of the projected enterprise. The matter was reported to the King and the prime minister, von Bismarck, and they came to the conclusion that the proposed central bank would render good services to the oppressed landowners. On March 21, 1870, the new institution received the sanction of the sovereign, under the name of Preussische Central Bodenkreditaktiengesellschaft, and the right of issuing bearer bills was at the same time conferred upon it. In 1873 the bank took possession of all the business of the First Prussian Joint Stock Mortgage Bank in Berlin, founded by David Hansemann in 1864, which had not developed in the desired manner under the pressure of the normative regulations. The Preussische Central Bodenkreditactiengesellschaft was not placed under these regulations. It was, according to its statutes, from the first entitled to undertake independent ascertainments of value without being bound to a particular proportion of the net yield for land tax or net yield of buildings for purposes of buUding tax ascertained by the State, a right only given to the other Prussian mortgage banks by the new normative regulations issued for them in 1893. The bank was further preferred to the other mortgage banks by receiving a particular royal commissioner appointed for its special control. The brilliant development enjoyed by the Preussische Central Bodenkreditaktiengesellschaft in the time that followed is a proof that its foundation answered a strong economical want. The bank, with its stock of loans of 1,021,727,553 marks, is to-day only surpassed in Germany by the Bayerische Hypotheken- und Wechsel Bank in Munich, which was founded in 1834. Some remarks on the present organization of the society are sure to interest you. The management and administration of the society is in the hands of the following personages: (1) the president and the directors, (2) the administrative council, (3) the revisers, (4) the general assembly of shareholders. The chief management of the business of the society lies in the hands of the president. At present three directors work with him. The president and the directors must be citizens of Prussia. They are elected by the administrative council, but must be ratified by the King. At present the president of the society is Herr Geheimer Regierungsrat Hans von KUtzing. The administration of the bank has its center in Berlin. Till now it has not made use of its acknowledged rights to establish branches. The communication with those who need the credit is brought about by nearly 300 agencies. Since January 1, 1900, the bank, like all other mortgage banks, is placed under the imperial mortgage-bank act of July 13, 1899; but this peculiarity of the institution continued, viz, that its control is exercised under the conduct of the minister of landed property, domains, and forests by a royal comanissioner, who at the same time is intrusted with the functions mentioned in the mortgage-bank act, and that the president and the directors must be confirmed by the King. The capital of the bank was originally fixed upon at 36,000,000 marks; it amounts to-day to 44,400,000 marks, fully paid up. The reserves to be seen from the balance amount to 18,000,000 marks, equal to 41 per cent of the joint-stock capital. The chief business of the bank is the mortgage business. At the foimdation of the enterprise it was intended to carry on also other banking affairs. In the first years of its existence the bank had therefore taken part in different banking businesses, including a rather big business for deposits. But it very soon dropped these by-affairs, so that it may really be termed a pure mortgage bank. AU speculative business is prohibited. 406 AGftlCULTUEAL COOPEftAIION IN EUEOPE. The communal loan business, which has reached a rather big extension, consists of granting loans to Prus- sian corporations of the public right. Till now, the bank has not made use of its right to grant loans for light railways and to issue on them light railway bonds. Besides its own means the central mortgage and communal bonds serve the bank as working capital for the business of mortgages and communal loans. These papers, which are current on the commercial exchanges, are payable to bearer and are generally issued in sums of 100, 300, 500, 1,000, 3,000, and 5,000 marks. They are unrecallable by the holder, but recallable by the bank. The reimbursement ensues, either after notice of whole series or some parts of them or after drawing of bonds on single pieces. The communal bonds enjoy in Prussia a privilege of being legal investments for trustees. Neither mortgage nor communal bond can be issued by the bank which is not covered before by a claim of loan of the bank answering to it. The royal commissioner has to certify the existence of this security on every mortgage bond and on every communal bond. To render the control of this easier, all the claims of loans destined to the remittance of mortgages and com- munal bonds are entered into a register of mortgages and communal loans. The disbursement of central mortgages and communal bonds by the society is limited in such a way that upon the original joint-stock capital of 36,000,000 marks central mortgage bonds can be issued up to twenty times the amount of the paid-up capital and communal bonds under addition of the circulating central mort- gage bonds up to twenty-four times, but upon the later increasing of the joint-stock capital, the amounts are reduced to, respectively, fifteen and eighteen times the amount of the later payments and the reserves. The disbursement of the mortgages and communal bonds of the bank not being possible without the co- operation of the royal commissioner, a transgression of the hcense of emission is absolutely impossible, so that there is no need whatever for any special prohibition for stopping the issue of the bonds, as for instance the measm-e prescribed by the American national banks of closing the banks in case of insufficient remittances. Among the mortgage affairs, the loans on rural property were up to the year 1888 predominant; since then the urban loan business came for a time more to the foregroimd, but particularly in these last years a strong increase of the loans on rural property is to be noticed. Thus the loans on rm-al property entered in the register of mortgages in 1912 have increased by 22,000,000 marks, the urban loans only about 10,000,000 marks. Of all the loans entered in the register at the end of 1912, 274,000,000 marks came on mortgages of rural property, 559,000,000 marks on urban mortgages, and 185,000,000 marks on communal loans. The bank sticks to that principle, that the mortgages it gives receive the first place in the land register. In former times it often lent money on rural property in the second place after claims of the mortgage credit associations (Landschaften). For many years past it has no longer agreed to requests for loans of this kind, because it is in the first place only protected as creditor against the decline of its security by unknown measures and delay of interests of the earlier creditors. The loans on landed property are without exception loans of amortization. The yearly aimulling rate usually amounts to one-half per cent, and the amortization leads by contract under the yearly reckoning up of the saved interests according to the height of the rate of interest in 50 or 60 years to the entire payment of the capital. The rate of interest of the loans is naturally dependent upon the rate of interest which the bank itself must pay for the mortgage bonds. At present the institution is working on the ground of the mortgage bonds at 4 per cent, and the rate of iaterest for loans of rural property amounts therefore usually to 4{ per cent. The aimuity of the debtor, including the rate of payment, amounts consequently to 4f per cent. The loans are, if interests are punctually paid, irredeemable, while a right to give notice belongs to the debtor after 10 years at the latest. The bank lends on pieces of rural property at the most as much as two-thirds of their value. The estima- tion of the value is usually done by valuation, effected by trained agricultural functionaries of the bank to- gether with local trustees. Without a special appraisal the value can be ascertained precisely by the direction if there exists a valuation of the landschaf t, a judicial one, or any other above suspicion. The valuation can also be omitted if the required loan amounts to at most two-thirds of the value which results from the aver- age of the last unchanged price of acquisition and the net yield of the land tax generally reahzed at 5 per cent, at least at 4 per cent, or from any other rent which has to be proved, or, finally, if the desired loan remains in the hmits of the twenty-two and one-half fold amount of the net yield of the land tax of the State. The ascertainment of the value of rural property by appraisal is done in this way: The value of the land is calculated by addiag the capitalized value per hectare according to the yield and quality of the crops, and from the resulting total value are deducted the drafts and charges converted into capitals. For the existing buildings an independent value is generally not added. Mortgages are only given on such pieces of ground as afford a permanent independent rent. GERMANY. 407 The landed property of the peasantry, strictly speaking, is taken into consideration above all things, for of the 9,010 loans to landowners lent out in Prussia at the end of 1912, 8,225, equal to 91 per cent, are apportioned to the property of peasants. The majority of the sums lent on rural property by the institution is distributed in the eastern provinces of the Prussian State. In judging the work of the bank for agriculture, it must be considered that also the loans granted in commimal loan business to improvement societies of all kinds are of advantage for agricultural piu-poses. If we add the loans granted to such societies to the mortgages on rural property of the bank, the result as total participation of the institution in the credit of rural property for the end of 1912 is the sum of 321,914,000 marks. Of the landschaften of Prussia only those of Silesia, East Prussia, and Posen have reached a higher amount of loans. The statistical review lying before you will enhghten you on the whole development of the society during its existence of 43 years. Statistical review of the development of the Prussian Central Land Credit Joint-Stock Co., Berlin, June, 1913. Year. 1870 1871 1872 1873 1874 1875 1876 1877 1878 1879 1880, 1881, 1882, 1883, 1884 1885 1886 1887 1888 1889 1890 1891 1892 1893 1894 1895 1896 1897 1898 1399, 1900, 1901. 1902. 1903. 1904. 1903. 1906. 1907. 1908. 1909. 1910. 1911. 1912. Loans. Made on- Buial Urban mortgages. Marks. 2,868, 24,020, 48,942,750 60,926,220 67,834,470 73,506,681 77,425,018 80, 427, 103 84,675,232 90,632,896 96,992,767 101,920,400 103,976,127 112,520,767 116,154,764 112,537,612 108,164,302 109,334,507 108,748,536 111,459,881 112,862,362 113,047,460 116,760,900 117,331,523 119,448,397 '122,525,600 129,935,300 141,448,100 145,256,000 146, 171, 450 162,375,886 160,339,650 162,849,974 169,082,345 173,413,919 178,002,242 179,531,610 188,005,262 200,472,971 216,978,319 238,187,067 263,080,142 275,835,053 Marks. 1,010 1,155 11,702,366 28,204,477 46,159,762 59,186,505 61,778,732 66,062,866 66,888,980 67,897,427 69,050,636 70,130,270 74,646,447 75,618,337 76,002,415 84,617,600 100,924,358 106,575,006 124,677,759 160,110,216 184,331,493 206,726,200 233,761,016 270,553,904 293,030,731 322,029,915 331,802,511 346,343,345 343,980,600 361,634,244 380,696,631 396, 107, 676 420,686,639 460,711,090 454,453,833 475,906,662 491, 712, 100 492,251,521 507,915,118 638,873,442 559,376,310 569,039,144 560,948,153 Communal loans. Total amount. Marks. 1,810,610 3,361,929 5,701,670 5,707,948 3,646,422 2,981,251 2,759,503 2,806,623 2,423,356 2,381,711 2,343,102 2,212,687 2,074,184 2,076,788 2,979,132 3,487,283 6,163,709 8, 145, 140 12,301,394 18, 624, 607 22, 932, 717 26,580,090 28, 874, 920 33,580,299 42,859,418 47,929,495 51,719,920 55,761,283 65,477,566 55,887,307 66,874,632 61,712,016 79,642,030 89,827,330 97,824,982 99,276,889 99,051,831 HI, 172, 796 131,937,773 146,679,425 166,459,201 178,362,999 184,944,347 Marks. 4,678,620 27,382,084 66,346,786 94,838,645 117,640,664 135,674,437 141,963,263 149,296,681 153,987,567 160,912,034 168,386,604 174,263,357 180,696,758 190,215,892 195, 136, 311 200,642,495 216,242,369 223,054,662 246,727,689 290,194,704 320,126,562 345,353,750 379,396,836 421,465,726 455,338,546 492,485,010 513,457,731 543,652,728 644, 714, 156 563,693,001 689, 947, 149 618,159,342 663, 178, 643 709,620,765 725,692,734 763,184,783 770,295,441 791,429,679 840,326,862 902,531,186 964,022,578 1,010,482,285 1,021,727,563 Bonds. Bonds on Marks. 2,004,600 19,049,250 67,598,700 88,703,860 111,120,750 129,264,400 131,958,500 137,672,050 140,098,550 151,249,450 157,512,400 161,736,260 170,342,060 180,179,560 184, 177, 100 192,578,950 200,751,450 211,366,900 226,218,600 267,989,400 289,342,700 316,300,100 342,056,950 372,346,360 397,774,160 420,700,150 460,276,260 465,955,550 467,892,160 487,738,050 502,063,650 632,323,650 653,770,750 600,519,950 612,115,350 608 047,250 626,506,460 644,506,660 681,038,450 724,008,460 765, 475, 150 787,885,850 802,877,650 Communal bonds. Marks. 2,000,000 2,576,800 3,257,000 3,436,600 7,273,500 10,339,300 13,394,700 21,450,000 23,262,600 26,778,500 29,370,700 36,064,800 44,138,900 46,293,900 47,794,400 49,533,800 60,330,000 60,388,700 60,118,600 75,210,900 79,392,800 90,034,200 96,430,500 95,829,900 107,975,800 128,568,900 144,348,300 169, 484, 600 174,272,800 179,497,100 Total amount. Marks. 2,004,600 19,049,250 67,598,700 88,703,860 111,120,750 129,264,400 131,958,600 137,672,050 140,098,550 151,249,460 157,512,400 161,736,260 170,342,050 182,179,550 186,753,900 195,835,960 204,187,950 218,640,400 235,657,900 273,384,100 310,792,700 339,552,700 367, 834, 460 401,717,050 433, 828, 950 464,839,050 496,570,160 513,749,950 517, 426, 960 638,068,060 552,452,360 692, 442, 160 628,981,650 679,912,750 702,149,650 704,477,750 722,336,350 752,482,350 809,607,350 868,366,750 914,969,750 962, 158, 650 982,374,760 Capital. Marks. 14,400,000 14,400,000 14,400,000 14,400,000 14,400,000 14,400,000 14, 400, 000 14,400,000 14,400,000 14,400,000 14,400,000 14,400,000 14,400,000 14,400,000 14,400,000 14,400,000 14,400,000 14,400,000 14,400,000 18,000,000 18,000,000 18,000,000 21,600,000 21, 600, 000 21, 600, 000 25,200,000 25,200,000 28,800,000 28,800,000 28,800,000 28,800,000 28,800,000 32,400,000 36,000,000 36,000,000 39,600,000 39,600,000 39,6t)0,000 39,600,000 39,600,000 44,400,000 44,400,000 44,400,000 Total reserves. Marks. 32,207 793,810 841,447 959,936 848,202 ■ 888,623 1,069,719 1,133,523 1,099,983 1,069,409 1,114,978 1,233,699 1,255,190 1,340,258 1,456,217 1,629,695 1,704,425 1,867,981 2,044,888 2,434,980 2,630,749 3,266,407 3,459,840 3,793,816 3,913,210 4,396,771 5,047,793 5,323,201 5,304,008 5,601,312 6,088,364 6,199,811 6,622,079 6,846,527 6,466,376 9,181,260 10,407,126 11,099,053 11,769,444 12,566,330 16,090,364 17,401,109 18,328,634 Cost of ad- ministration. Dividends. Marks. Per cent. 52,997.86 7.00 139,712.20 '9.50 217,522.04 9.50 288,470.71 9.50 284,508.62 9.60 301,788.69 9.50 276,632.90 9.50 284,745.63 9.50 291,801.21 9.60 298,548.29 9.60 300,652.06 8.60 307,825.25 8.75 299,202.38 8.75 300,405.18 8.76 299,084.89 8.75 310,367.19 8.75 349,330.24 8.75 338,132.66 8.75 361,159.38 9.60 406,284.40 10.00 416,674.89 10.00 391,864.59 9.60 476,367.00 9.60 526,330.51 9.60 573,668.48 9.60 768,840.99 9.00 690,304.82 9.00 708,215.61 9.00 741,421.26 9.00 726,609.48 9.00 736,407.38 9.00 765,575.01 9.00 892,562.69 9.00 848,881.88 9.00 fl07,975.26 9.00 888,527.80 9.00 894,842.88 9.00 1,001,012.08 9.00 1,024,545.89 9.00 1,287,909.83 9.00 1,260,267.46 9.60 1,291,527.69 9.50 1,345,949.78 9.50 QUESTIONS. Q. This is a joint-stock company formed by capitalists. The landschaften are banks formed by borrow- ers; therefore one would suppose that it is hard for you to compete with the landschaften. How are you able to secure business against the landschaften? Do you cover districts which they do not cover, or have you certain inducements which enable you to get the business in face of the landschaften ? A. We are more, liberal in making loans. Q. The gentleman said a short while ago that the landschaften issue bonds, but the mortgage banks issue cash. A. Bonds are practically the same as cash; they are readily sold. In general there is no difference, because they must be sold according to the current rate of interest, and the other institutions can not give more. Q. In other words, they charge the borrower with the discount ? A. Yes. 408 AGBICULTXIBAL COOPEBATION IN EUBOPE. Q. Does not one institution give more publicity to the fact that the man wants a loan than the other ? A. The publicity is the same in both banks, Q. Do the landschaften seek mortgages more eagerly by keeping in touch with the people, or how does it operate ? A. If they explained openly how they did it, they would find it more difficult to do business. Q. Do you pay much attention to securing deposits ? A. We gave up taking deposits in 1900. Accepting deposits by mortgage banks was prohibited by the German law of 1900. Q. Did you say that you gave up accepting deposits before this law was passed ? A. Yes. Being share banks, we like to have deposits, although the money for the mortgages is secured by the issuing of bonds. Joint-stock companies can always make a profit out of deposits, and therefore hke to have them. But there is, however, no necessity for deposits, because we can get money from the State, and then we have bonds which sell in the open market. As there is always a ready market for our bonds, there is no real need for conducting a deposit department. Q. Have you a ready market for these bonds ? A. Yes. Q. Do the bonds of these other companies sell about as freely and on as good a basis as the landschaften bonds ? A. Certainly they do. Generally the private bank bonds are a Httle lower than the bonds of the land- schaft; they sell a trifle lower; but there is only a small difference. Q. You say the landschaft has local trust funds, therefore they always pay better than the others; but the difference is not great, because people have confidence in them, as they are closely supervised by an inspector appointed by the State, and the pubhc therefore think them vevy secure. What dividend did you pay on your stock last year ? A. Nine and one-half per cent; the shares sold in the market at 81. Q. Do the bonds you sell have any date of maturity ? A. No fixed date. We must from time to time pay off the people who anticipate mortgages. We can not have more bonds out than we have mortgages to secure, but there is no fixed date of maturity. Q. If they are selling above par, do you go to the market and buy ? A. Formerly there was a system of drawings. Now we have to retire the bonds. They usually run for 10 years; of course we can buy them if lower than 100, if higher we will naturally call them in. Section 75 of the constitution regulates the action of bond-issuing companies. OPERATIONS PRUSSIAN CENTRAL LAND CREDIT COMPANY. Evidence of Herr Schwarz, Director. Berlin. Q. What territory does your bank make loans in ? A. The whole of Germany. Q. Explain to us in your own words just precisely what business you do in the way of loaning money on mortgages. A. We lend money on agricultural land and on urban homes by way of mortgages and then issue bonds on the strength of that. Q. Is this a joint stock bank? A. It is a joint stock bank. Q. What proportion of the value of the land do you loan on? If a farmer has land to the value of 10,000 marks, what wUl you loan on that ? A. Two-thirds — 66f per cent. Q. Do you mean two-thirds of the market value, or the value that it is appraised at for taxation ? A. On the appraisement. Q. Have you appraisers of your own, or do you accept the public appraisement ? A. We have our own appraisers. The public appraisers only appraise certain districts, whereas our apprais- ers appraise for the whole of Germany, and they therefore can form a concise idea of the value from their own appraisers' report. Q. Does the bank here, when it makes a loan, give the man the money, or does it give him the bonds ? A. We give him the money. GERMANY. ' 409 Q. If a man wants 100,000 marks, do you pay him the full 100,000 marks, or do you give him just what the bonds will sell for on the market ? A. The value of the bonds has notliing to do with the man who gets the money. The man gets the whole money, excepting the deductions that are needed for the making of the loan. Q. What are the average expenses ? A. The State takes one-half of 1 per cent and the rest goes into expense. The bank charges about one- half of 1 per cent and then about 1 to IJ goes to other expenses, so that it ranges from 2 to 2^ per cent. Q. What are they charging at the present moment to the farmer ? A. Four and one half per cent. Q. For what time are they loaning it at 4^ per cent ? A. According to the choice of the borrower. It is a matter of the time of the amortization. He can repay it at one-half of 1 per cent per year, so that the loan will extend about 50 years, or at 1 per cent, so that it will extend about 25 years, or according to his pleasure. Q. Is the 4i per cent the interest on the money or is it the interest plus the amortization ? A. It is the interest on the money. The one-half of 1 per cent is for amortization. The importance of the amortization is that during the time the loan can not be recalled and the rate of interest can not be increased. Q. Does the borrower have the right to repay his loan before it becomes due ? A. He is bound for 10 years, but after 10 years he can pay it back any time. Q. Without penalty ? A. Yes; without penalty. If he borrows 100,000 marks and pays back six thousand in 10 years by amor- tization there remains ninety-four; then he has only to pay the 94,000 marks and the loan is erased. Q. Does the bank loan its money on these mortgages or does it sell the bond to get the money it loans ? A. We are not allowed to sell more bonds on the Bourse than can be secured on mortgages. There is a representative of the State who supervises that. We sell bonds up to the amount of the mortgages. Q. As these bonds are being paid off constantly by amortization what system has the central bank wliich keeps the volume of the bonds equal to the amount of the mortgages ? A. We have a stock capital and reserve of 60,000,000 marks and we use 20,000,000 of this for operating the sales of these bonds, etc. Q. Do you draw your bonds in by notice and pay them off at par or do you go out on the market and buy them at market value in order to retire them ? A. We do both. Generally we are obliged to give notice for a certain amount of bonds. We paj- at par. Which bonds are to be paid is fixed by lottery. Q. What security do these bonds have other than the mortgages that they are secured by ? A. The other security is the 60,000,000 share capital — the assets of the bank. There is a State official here who controls this. We never give more than two-thirds of the value of the property and also we do not sell more bonds than we have mortgages in our possession. Q. Then the assets of the bank are security for the bonds ? A. Yes. Q. What rate of interest will the bonds bear that they issue against the 4^ per cent mortgages ? A. These bonds pay one-fourth to one-half per cent less than the mortgages. At the present time the interest on these bonds is 4 per cent. Q. What is the market value at the present moment of these 4 per cent mortgage bonds ? A. Ninety-six. Q. What preferences are given by law to the bonds emitted by this bank ? A. They can not be used for what they call trust funds, but they can be used for many other things. When an officer marries here, he has to deposit an amount in the State banks to guarantee that he can keep up his part. The position which he holds is good for that. The reason for the State not allowing trust moneys to be invested in them is that they wish these moneys to be invested in their debentures — it is not because they have no confidence in them, but because they do not wish competition. The mortgage banks have about 12,000,000,- 000 marks invested in bonds and the State has twenty billion, and the State prefers to have the trustee money invested in its own bonds. Q. When was this bank organized ? A. In 1870. Q. Does it do any other banking beyond this mortgage business ? A. It gives loans to municipalities, towns, parishes, church parishes, etc., without security because the security of these institutions rests in the taxpayers and it also issues what they call communal obligations, and these communal obligations can be used for the investment of trustee funds or moneys. 410 AGEICULTUBAL COOPERATION IN EUEOPE. Q. Does the bank accept deposits from the public ? A. Very few. They don't go into it for that. They carry their own obligations and bonds on deposit and superintend the lotteries which are carried on for the convenience of the purchasers, but otherwise they have very few deposits. Q. Do they make loans on current accounts to members ^ A. No. Q. How many bonds has this bank in circulation now? What is the volume of them ? A. About 800,000,000 marks of these bonds and about 200,000,000 marks of communal. Q. Of these amounts, about how much is loaned on rural real estate ? A. Two hundred eighty milUon marks on rural estate and the rest on urban. Q. Does the State limit the amount of bonds you can issue, when compared with the capital and assets of your bank ? A. That is contained in the by-laws of the bank. We can issue about 1,200,000,000 marks of bonds without permission of the State. If we desire to issue more than that we have to get State permission. Q. I have noticed in Germany that nearly all mortgage banks are limited to twenty times the capital and reserve. A. That is right. Since 1900 it was fifteen times, but nowit is twenty times, but reserves are also included, which bring it up again to twenty times. Q. What is the smallest loan that this bank will grant on rural property? A. One thousand marks. Q. What is the largest ? A. Six million marks. Q. Would you kindly state the rate of dividend which your bank pays ? A. Nine and one-half per cent on the share capital. Q. Have you any supervision as to the use to which the money is to be put ? A. No. All we ask is the security. Q. If the bank loans the money for 50 years, can it in any circumstance for any reason compel the repay- ment of the loan before the regular time — for instance, if the man is running the value of the property down or anything Uke that ? A. Yes. If he does not pay his interest or his fixe insurance we can do this, and if he neglects his estate to such an extent that the value no longer suffices to repay the loan it can be recalled. Q. In case a debtor fails to meet his obligation and the bank wishes to foreclose the loan in order to secure its money, what would be the procedure ? A. We give him three months and if he does not pay then legal steps are taken and his estate is sold. Q. How long after legal steps are taken before it can be sold at public auction ? A. Three months' notice. Three to six months for the legal case. If we think that the man is letting the estate run down we have the right to appoint an administrator. Q. Does this private mortgage bank have all the rights of law to foreclose that one of the State banks has? A. The landschaften can do it without legal steps, but we have to bring the matter before the courts. Q. Is the interest on the mortgages paid six months in advance ? A. It is paid afterwards. Quarterly and six months afterwards. In urban matters, quarterly after- wards, and on agricultural properties, six months afterwards. Q. The interest on the mortgages and the interest on the bonds are both paid afterwards, instead of in advance ? A. Yes; afterwards. Q. What reason is there for rising prices in Germany ? • A. The protective duties in regard to corn. Wages have risen so much, too, and the cost of agricultural land has risen so much. The man who bu3fs land has to charge more for his products in order to paj for his land, for which he has paid a higher price. Q. Is the volume of land-mortgage business on rural properties that is being done by the joint-stock banks here in Prussia increasing or decreasing ? A. It is on the increase. Q. They find that they can loan and keep up their business in competition with the landschaften banks? A. Perfectly. Q. What advantage have you to offer the landowner over the landschaften ? GEBMANY. 411 A. The first reason is that the landschaft gives the borrower the bond and the borrower has to get rid of his bonds, so that he runs the risk of losing money in this sale. The second reason is that the landschaft is confined to certain limits, whereas we have a much wider latitude. Q. What losses has your baak made on rural loans ? A. We never have losses. Q. In case your bonds are offered on the market by holders before they are due, does your bank buy its own bonds in order to protect their selling value ? A. To a limited extent. We regulate the business as far as possible, but, for instance, if 100,000,000 marks of bonds were offered on the market, of course we could not buy them all in, but we do buy them to a certain extent. Q. We are interested in finding out the practical market for bonds, ^yhat class of citizens do you sell your bonds to ? A. The small investor, because they are cheaper than Government paper. To the large capitalist, because they are absolutely reliable and he is able to make a profit out of them in reselling them. Q. What is the commercial rate of money in this city ? If a merchant were to go to a commercial bank and want to get money on an account current, what would it cost him here in Berlin ? A. At the present moment 8 per cent. Q. What is the prevailing rate that is paid on deposits by the commercial banks of the city ? A. About 4 per cent. If they are for a long time then they pay 4^ to 5 per cent. Q. Do the mortgage bonds emitted by your bank mature at any given time; and if so, what period of time are they issued for ? A. To about 40 to 60 years. Q. During the first 10 years of a mortgage loan can the borrower change the terms of the mortgage by which he is permitted to make a higher rate of amortization payment than that stipulated in the mortgage ? A. He has not the right to do so, because we are not obliged to change the terms, but we grant it mostly. MANORIAL LAND MORTGAGE BANK OF KUR AND NEUMARK. Herr von Schueman. statement. Berlin. When the estate or property mortgaged has been appraised credit is given in the form of bonds, which can be sold to the general public. If an estate is apiDraised at 100,000 marks only two-thirds of the value of that estate is given in bonds, not in cash. The borrower gets two-thirds of the value of his estate. The task of this bank here is to get rid of these bonds amongst the general public, and to make advances on the bonds if they can not be immediately disposed of. If these bonds stand badly in the market, owing to a depression or anything of that kind, so that a bond valued at 100 stands at only 95, they give the borrower the 95, and they also give him an extra 5, upon which they charge him a higher interest. The extra 5 is in cash. Another advantage that there'is in this institution is this: Suppose these bonds stand badly in the market, this bank buys them up as far as possible, and the difference between the low price and the price which they are bought for is credited and given to the debtor. A man can buy in these bonds at 96 and then settle his obligation with these low- price bonds. As you say, a man can pay for his debt with the bonds, and he usually uses these cheap bonds to do so when he can. If the bonds stand at 105, then the bank calls them in at par. The chief task of this bank is to sell these bonds for the borrower, and also, as at the present moment, when the bonds are very low, they keep them and make advances on them until they stand better — they endeavor to protect the market. They have at the present moment four to five million of these bonds for which they advance money, but the market being so bad they keep them. They also do a general banking business, accept deposits, etc. Owing to the connections that they form by this bond business, they manage to get general banking business from the same class. They also have to do with communal and municipal loans, and as experience has taught that these munici- pal loans of small towns and districts are very hard to get rid of, they unite all of these small loans and issue bonds on them. In order to help the depositors of these bonds, they keep them here at interest and attend to the business of collecting coupons, etc., for the holders. Another advantage is that they have 100,000,000, of bonds here that they exiercise a certain control over, and if a man comes and says he wants 100 marks they can get it for him without delay. The interest which accumulates is reinvested in the same bonds. 412 AGBICULTUBAL COOPERATION IN EUROPE. Another of their tasks is to regulate the rate of the bonds on the Bourse. They regulate the rate by pur- chasing and selling so that they do not sell for too much or too little. They watch the market and buy when it is necessary and sell when it is necessary, so as to regulate the rates as far as possible. In order to facilitate the disposal of these bonds in Paris and England they have them printed in English and in French, but the character of the paper is not known sufficiently abroad to make it marketable outside of Germany. These bonds are better than government bonds. The great security for these bonds is that there is something there — there is the land, which is substantial. One borrower is responsible more or less for the other, and also there is a joint liabihty. The administration fund remains here and also forms part of the security for the general bonds. In unhappy times — in times of war — they always have the administration fund to f aU back on to make matters good. During the unhappy times which Germany has passed through the Lanschaften have never failed to meet their liability. QUESTIONS. Q. Does your bank have the right to hold the administration fund for a longer time than six months ? A. The admiuistration fund is held in bonds until the whole of the debt is amortized. Q. When a borrower pays his interest he also pays a small amount for amortization, which goes to cancel part of the loan; what becomes of that amount that is credited to amortization? A. The money which is paid for amortization is reinvested in fresh bonds immediateij' and the money which is paid in for interest is paid out on the coupons. Through this manipulation of the amortization fund it is possible that a debt which is calculated to take 100 years to pay, can be paid off in 47 years. Q. If the amortization fund is at once invested in bonds for the purpose of cancellation, how would it be possible to accumulate these funds for the purpose you previously spoke of — for use in case of unhappy times? A. They use the amortization fund bonds to pay the interest. They have amortization bonds here and in case interest can not be paid they use these bonds to pay the interest. They always find a market for them. Q. Is 3'our bank a joint stock bank or is it a cooperative bank? A. Neither a joint stock bank nor a cooperative bank, but a pubUc institution. They do not want to earn money here; they only want to help. Q. Where did you get j-our foundation capital? A. It is over 100 years old. At first the various landowners joined together and collected about 3,000,000 marks and during the course of time it has grown larger. Q. The onty capital they have is this original 3,000,000 marks with the reserves that have been added to it? A. Yes; the 3,000,000 marks and the reserves. Q. In case this bank was liquidated, to whom would the assets belong ? A. In case this bank was liquidated the assets would be divided amongst the bondholders. Members of the landschaft must be mortgage holders. Q. The assets of this bank would go to the mortgage holders — to the members of the landschaften who are all mortgage holders ? A. Yes; their liability consists of their assets and their private fortunes. The idea is that the members who have to appraise each other's estate are very careful because they also have a certain liability. They are careful not only ia appraisement but in observing how the estate is managed when the money has been advanced. Q. This bank has the right to accept deposits — how many deposits can it accept? A. Unlimited. Q. What security have those depositors ? A. They have to conform to the regulations laid down by the state in reference to investments of such deposits. The safeness and security lies in the way in which the deposits are invested — ^what they call "gilt- edged security" or investments. Q. Is a person who borrows money of the landschaft and who gives a mortgage for security to the landschaft liable for the deposits of this particular bank ? A. Yes; the whole bankLog institution. Q. Does this liabilifcy extend to the full value of each man's private fortune ? A. Yes; all the landschaften are the same in this respect. Solidarity of liability is only to be foimd in this. In this respect they are liable for their whole fortunes — whatever they possess. In case of a new insti- tution of this kind it would be regulated by the miaister of finance; but this is an old institution and the old customs are adhered to. There is another difference. This is the only bank which can take unlimited deposits. The others can only take a certain percentage on their share capital. Q. I understand you to say that there are two kinds of landschaften — the old and the new — and that the old landschaften had this unlimited joint UabUity, but that the new landschaften do not have this unlim- ited joint liability. Am I right ? GERMANY. 413 A. Yes; so far as bonds are concerned. This is not the only one. Q. In regard to the bonds, I understand that there is one class of landschaften wherein all the members are responsible for the bonds and one class where all the members are not responsible for the bonds? A. Yes. Q. Can you tell us just exactly the difference between the liability of the new and the old? A. It is so complicated that it is practically impossible. Amongst the old landschaften, excepting a few deviations, it is practically the same. The chief difference is that in the old ones there is the unlimited lia- bility and in the new ones this unlimited liability does hot obtain. Q. Who appoints the officers of this bank ? A. The members of the landschaften come together, and then they elect a committee, and then this committee elects the chief officers. Q. We have understood that the same persons who have the power to elect officers of this bank are really members of the landschaf t ? A. Yes. Q. What rate of interest do the bonds that the landschaften now issue bear ? A. Four per cent, and stand at 93. Q. We want to know how long a time these bonds run — when do they mature after they are issued ? A. They have no fixed dates, but are paid off as they are called in. Q. Do we understand from this that the holder of a bond has no right to present it to the bank and get his money ? A. No. Q. Do they issue these bonds in series ? A. They run numerically; that is, the numbers run consecutively. Q. The bank goes out and buys these bonds when they are low and sells them again when they are high. They make a profit upon that transaction — to whom does that profit belong ? A. That goes to this banking institution; that is why they take the risk. Q. Tliis is a profit-sharing enterprise. That being true, to what amount would it be safe for their bank to accumulate reserves? A. They have no dividends to pay. The reserves flow into it. Q. We understand that this amortization fund is for the purpose of redeeming bonds and for no other purpose. Is that correct ? A. The reserve funds have nothing to do with the bonds; they are only used to cover eventual losses. If the bonds reach a certain height they go into anamortization fund which goes to the benefit of the borrowers. Q. Where is the point which decides this ? A. About 5,000,000 marks. The statutes fix the sum. Any sum above that is placed in the amortization fund, and the interest of the reserve bonds also goes to the amortization fund. Q. Is it possible for this amortization fiind to have any influence on the rate of interest that the borrower of the mortgage has to pay ? A. They pay a certain amount of interest and one-half per cent into the amortization fund. Q. What is your opinion as to the cause of rising prices in Germany ? A. There are three reasons. One is increased desire for luxuries on the part of the German people. The second is the increased duties, which lead indirectly to the third, the rise in the price of corn and various other things, which really is caused from the increased duties on corn. Q. As Germany is a very old country, and we find that the volume of money loaned on land is constantly increasing, we would like to know what is the principal use of this money. A. The improvement of property largely — buying machinery and other improvements. Q. That being true, what becomes of the profits of the farms ? A. The profits of the farm are also being used for the improvement of the farm. It is more expensive to improve and run a farm now than formerly. Q. Do you consider that the volume of land mortgage debt in Germany is a favorable or an unfavorable sign as far as the farmer is concerned ? A. There is always land coming in. Land that has previously been uncultivated. Q. Do you consider this increased debt to be a sign of improvement or a sign of increased obligations ? A. A sign of improvement. 414 AGEICULTURAL COOPEEATION. IN EUROPE. GERMAN AGRICULTURAL ASSOCUTION. Db. Thibl. statement. Berlin. This society is an agricultural organization entirely independent of the Government. We have now nearly 28,000 members, each of whom pays a fee of 20 marks a year. Our statutes forbid any poUtical activities. The membership fee is not suflScient, however, to pay for the printing of the association, as we issue frequent bulletins and a weekly paper. Most of our expenses are paid out of the small profits of the business — small, because the business is run for the benefit of our members. We conduct large transactions in buying and seUing artificial manures, seeds, coal, etc., for our members. We have also a large school of bookkeeping for the farmers. We give them good advice when they want to build houses, stables, etc. QUESTIONS. Q. Are the members individuals, or representatives of agricultural societies ? A. Individuals. Our statutes do not aUow communities, unions, or societies to become members, as the farmer would then lose his individual identity. Q. Is it a purely personal membership ? A. Yes. Q. Do the qualifications for membership require that the member must be engaged exclusively in agriculture ? A. No; not at all. Q. Do you sell agricultural products for them or merely buy for them ? A. We make contracts with large companies for products and sell them to the farmers on our own respon- sibility; and if the man does not pay, wc are obliged to pay for him. Q. Did the society conduct the Strassburg fair ? A. Yes; we hold fairs in dift'erent parts of the country. We have divided the area we cover into 12 dis- tricts, and every year we have a fair in one of the districts, making the round in 12 years. Q. Does the local community or province contribute anything to the expenses? A. We pay all expenses and take all risks; we do accept aid of the local societies, but they are not responsible. Q. They do contribute, however^ A. Yes; at Strassburg we had a loss; but we can stand it, as sometimes there are profits on a fair. Q. Does this society hold regular meetings? A. Every year we have two meetings — one In the fall and the other in the spring. These are for dis- cussion only; the general council decides all important matters. Q. We have been informed that you have built up quite a capital. What is the amount of your capital at the present time? A. Four million marks. A great part is invested in this building and in the adjoining building. Q. When was this society founded? A. In 1886. Q. I would like to know a little more about the commercial operations by which you have cleared this 4,000,000 marks. Do I understand you charge the regular market price for supplies ? A. We make contracts with manufacturers, companies, etc.; but when we want to buy only small lots, we make only a small profit. Q. You buy in large quantities from the factories ? A. Yes ; wherever we can give our members fertilizers much cheaper than the market price and still make a small profit for the society, we do so. Q. Do you buy anything but fertilizers ? A. Yes; we seU seeds to the farmers. We buy from the works and have the goods sent to the farmers and the bill sent to us. Q. I infer that the membership is composed mostly of large farmers? A. The greater part of the membership is composed of large farmers — proprietors of estates. Q. A great deal of cooperative distribution includes not only fertilizers, but other items needed on the farm, such as wearing apparel, etc. Are your operations as extensive as this ? A. No; we are restricted. GERMANY. 415 Q. How do the Prussian farmers buy their foodstuffs; through cooperative societies? A. They have cooperative societies, but are not. obliged to buy from them. Q. Have you a wholesale fertilizer association? A. Yes. PRUSSIAN CENTRAL COOPERATIVE BANK. Dr. Hartmann. ADDRESS. Berlin. The Prussian Central Bank for Cooperative Societies was established by the Prussian law of July 31, 1895, "for the purposes of personal credit, especially of cooperative personal credit." This task of the Preussenkasse (Prussian bank), as we call this institution for short, will be better con- ceived if you consider the difficult position in which the producing middle classes (small and medium agri- culturists, smaU artisans, and tradesmen) found themselves in the nineteenth century. The development of modern agriculture gradually became industrialized and created a demand for credit, which could not be satisfied in a suitable way for want of a proper organization for agriculturists. Small artisans and tradesmen were in a similar position. There was no check on the exploitation and arbi- trary treatment accorded these classes, especially the small farmers, by tradesmen and commercial institutions. As you have already studied cooperation in Germany, you know that this was the origin of coopera- tive societies for credit, which arose in Germany under the pressure of necessity, following the ideas of Raif- feisen and Schulze-Delitzsch. You know, too, that besides the credit societies farmers especially founded all kinds of cooperative soci- eties—supply societies, dairy societies, corn-selling societies, machine societies, etc. — in order to make them- selves independent of the local market and tradesmen and to procure for themselves all the advantages which the great firms and farmers enjoy. Neither the societies for credit nor the other cooperative societies, which we include together under the name of business societies were able to raise all the capital they needed to carry out this purpose. They were compelled to seek a source of credit. Even when the credit societies, especially the small village banks, organized on the Raiffeisen system, obtained enough deposits in their district to satisfy the credit demands of their members they could not exist without some support for meeting their requirements in times when deposits were withdrawn or for investing idle money at times when it was abundant and demand for credit insufficient to absorb the surplus. The general money market was closed to the cooperative societies, for commercial banking institutions were not familiar with the principles of cooperative credit, and the commercial and industrial credit organi- zations were quite as unsuitable for the cooperative societies as they were for the individual farmer and artisan. All these reasons combined to compel cooperative societies to create organizations of their own, which should serve as connecting links between the local societies and the money market. Such organizations were founded in the form of central banks. Until 1889 they could only be consti- tuted as joint-stock companies. The new cooperative law of 1889 allowed the cooperative societies to assume liability as members of a cooperative bank, which was itself constituted as a cooperative society. A great number of cooperative central banks were founded from 1889 to 1895. For the most part they confined their business to cooperative societies within single provinces or states. Only the central loan bank, founded by Raiffeisen in 1876, extended its operations over the whole of Germany. But none of these organizations created by the cooperative societies was able to attain a strong position or to open to the cooperative societies the way to the general money market. The surplus money which some cooperative societies could give the central banks was by no means sufficient to satisfy the need for credit required by the then existing cooperative societies. Much less were they able to extend and to advertise cooperation. It is evident that it was not possible for the cooperative societies to raise in the cooperative banks, whatever form these might assume, sufficient capital to form the basis for bank credit. The commercial banks could not undertake the complicated liability of a central bank established on cooperative principles. Consequently, in 1895 (the year of the foundation of the Prussian Bank) cooperative societies were far from meeting the general needs, in spite of the success of the Raiffeisen and Schulze-DeHtzsch banks, and of the tireless activity of the enthusiastic promoters of cooperative societies. These societies were not numerous 416 AGBIOULTUBAL COOPEEATION IN EUBOPE. in Prussia in 1895 — they numbered only 1,400 — -and the central organizations were not strong. Cooperation was deprived of its main essential — a productive capital sufficient to promote its development rapidly and extensively enough to save the middle classes from impending ruin. At this crisis the Prussian State intervened by creating the Prussian Central Cooperative Bank. In other German states the Government tried to satisfy the demand for capital in the cooperative organizations by granting direct loans to the cooperative central banks out of State funds. The Prussian State chose a dif- ferent and a better way. The ingenious secretary of finance, von Miguel, had perceived that it would not be sufficient to give merely money to the cooperative organizations. He knew the principal object ought to be that of opening up indirectly those sources of capital of which previously only commerce and industry availed themselves. That could be accomplished in any other way than by creating for the cooperative organizations, by State aid, a powerful financial institution with all ^he elasticity of a large bank, which would be able to regulate all the needs of the various central banks, and when necessary to obtain outside credit. OKGANIZATION OF THE PKTJSSIAN CENTRAL COOPERATIVE BANK. 1. The Prussian Bank was, as I told you before, organized in 1895 with a capital of 5,000,000 marks, which was successively increased in 1896 to 20,000,000 marks, in 1898 to 50,000,000 marks, and in 1909 to 75,000,000 marks. These 75,000,000 marks have been given exclusively by the Prussian State. The act allows cooperative central banks to participate in the capital of the bank; but the sum of these participations has scarcely reached 1,500,000 marks. A liberal portion of the net profits of the bank (at least one-fifth) is to be devoted in the first place to the formation of a reserve fund. From the remaining profits interest up to 3^ per cent is to be paid upon the capital. 2. Legal status and management. — The Prussian Bank is an independent institution with a distinct legal status. It has its own independent finances, for which the State undertakes no guaranty. Of course the capital granted by the State stands as security for bank losses in aU events. The administration is in the hands of a board, consisting of a president and four members (directors) . They are appointed for life by the Crown. President, directors, and all officials of the bank (more than 200) are civil servants. The board decides all financial questions, but is compelled to observe the regulations and in- structions of the secretary of finance. The budget of the bank is annually submitted to the Prussian Parlia- ment for approval, and its accounts are audited by the government audit office (oberrechnungskammer). By all these arrangements the character of public utility of the Prussian Bank is secured. Provision for an advisory committee of about 30 members, chosen largely from among leaders in cooperative enterprises, is made by the act creating the bank. Though this committee is unable to exert much influence upon the policy of the bank, it is important because it establishes a medium of communication between- the board and the principal customers of the bank. BUSINESS OF THE BANK. 1. As I have said, the object of the bank is the promotion of personal credit, especially of cooperative personal credit; it is not the business of the Prussian Bank to give mortgage Gong term) credit. Principally the Prussian Bank transacts business with — • 2. Cooperative organizations. — (a) Save in exceptional circumstances, the Prussian Bank enters into business only with the banks of unions of cooperative societies (central banks). Unlike other large banks, the Preussen- kasse has no branches, the Tillocation and supervision of the credits allowed being undertaken by the central societies. The Prussian Bank generally enters into business only with central banks organized within the boundary of Provinces or States. We call them provincial central banks. (b) The Prussian Bank grants loans to these central banks, accepts surplus money from them as deposits and on current account, and conducts for them all banking operations which extend beyond the borders of their Provinces. The Prussian Bank executes stock-exchange orders for them, gives advice, if they seek it, and may be termed the central bank of all provincial central banks. As every cooperative society affiliated with a central bank, dealing with the Prussian Bank, is obliged to cash checks drawn on it for the Prussian Bank, the Prussian Bank is able to do a very large check business. Checks drawn on the Prussian Bank are taken as payment by all public banks. 6BBMANY. 417 (c) Credit system: In its method of appraising the amount of credit that may be allowed to the cooperative societies, the bank takes for its standard the liability which these cooperative societies offer. But this liability is not taken summarily as the basis of the credit. The Prussian Bank acknowledges HabUity only to the extent which the credit capacity of the single cooperative society assuming the liabihty permits. This credit capacity is estimated by the liability assumed by the individual members of the cooperative societies. Individual liability is estimated in relation to the property of the individual members. (d) The credit determined in this way is granted partly (nearly 40 per cent) on current account; partly (nearly 60 per cent) by discounting bills. Besides this normal credit, which is generally limited to 5,000,000 marks for any central bank, further credit may be granted upon the deposit of special securities (stocks, mortgages, goods such as sugar, corn, etc.). The bank does not maintain any warehouses of its own. The articles pledged remain in the warehouses of the cooperative societies, controlled by an owner. Credit against special security is granted only by discount- ing bills. (e) The bills discounted by the Prussian Bank may be bills accepted by a customer of the local cooperative society, indorsed by the cooperative society and the central bank, or they may be biUs accepted by the coopera- tive society and indorsed by the discounting central bank. (/) The rate of interest for current account is actually 34 per cent; for discount credit one-half per cent less than the official rate of discount of the Imperial Bank. But these preferential rates and the full advantages offered by the Prussian Bank can only be obtained, provided the central bank gives — ig) A double declaration and exacts the same from its afiihated societies, by the first of which it under- takes to deposit all unemployed surplus funds with the Prussian Bank; and by the second, to seek credit only from the Prussian Bank. By these declarations, which have been voluntarily given by almost all cooperative central banks dealing with the Prussian Bank, cooperative societies are kept out of speculative investments. These declarations of exclusive dealing have sometimes caused critics of the Prussian Bank to say that the State wanted to subject cooperation to its influence. On the contrary, these declarations, as well as all meas- ures and regulations of the Prussian Bank, have no other purpose than to strengthen and consolidate the coop- erative organizations. ^ The credit of the Prussian Bank being, as you have seen, limited, cooperative banks and societies are pre- cisely, by this declaration of exclusive dealing, compelled to raise their own funds and reserves and to attract deposits out of their own district. On the other hand, as the Prussian Bank, unlike the large commercial banks, does not attract deposits from all sources; it accepts only the surplus funds of the central banks. Hence, cooperative societies and central banks are compelled, because of this declaration of exclusive deahng which precludes them from other forms of investment, to invest in their own district for the benefit of their members the money they get from their customers. Moreover, the Prussian Bank is able to help a cooperative bank which deals exclusively with it by special credits, etc., to an extent which no bank can offer to an ordinary customer. It is a fact that since the founding of the Prussian Bank the cooperative organizations have attained an extension and a prestige they never would have attained without the support of the Prussian Bank. Qi) On March 31, 1913, most of the cooperative central banks in Germany (52) had dealings with the Prussian Baiik. It should be mentioned that many of the non-Prussian central banks have also entered into business relations with the Prussian Bank. Of the 52 central banks, 21 were rural central banks with 10,292 cooperative societies and 1,090,000 individual aifihated members; 21 were urban central banks, with 622 coop- erative societies and 194,000 individual members. For the central banks a credit of 123,000,000 marks was extended in addition to the credit on merchandise. Cooperative banks owed on current account and against stocks, etc., 29,726,000 marks; through discounted bills, 39,564,000 marks. NONCOOPEEATIVE BUSINESS OF THE BANK. 4. Loan tanks of mortgage credit associations. — The act authorized the Prussian Bank to grant loans to loan banks or mortgage credit associations. The principal business of these loan banks is to support the work and the financial transactions of the mortgage credit associations. Most of them are designed to furnish the members of those associations, the majority of whom are big landowners, with nonmortgage and personal (short term) credit. The Prussian Bank has entered into business with eight loan banks or mortgage credit associations and six similar institutions estabhshed by the provincial authorities, granting them loans on current account and by discount, and accepting deposits from them. 14174°— S. Doc. 214, 63-1. ^27 418 AGKICULTUBAL COOPERATION IN EUKOPE. 5. Public savings bamks. — Tke third kind of business of the Prussian Bank is that transacted with public savings banks. The business which the Prussian Bank is authorized to transact by the act has developed most remarkably. Public savings banks are more important and more numerous in Germany than in any other country. Eighteen billion marks of deposits are at this moment deposited with them, mostly by the lower and middle classes of the population. These public institutions can not do business satisfactorily with private ba,nks, whose ultimate aims are concentrated on profits. Many of them are small and are not managed by professional bankers; previously they were not in touch with the regular money markets, hence their funds often lay idle to a considerable extent- The Prussian Bank accepts deposits from the savings banks on call and on notice. On th« other hand, when their deposits are withdrawn, the Prussian Bank helps them by giving them advances against bonds of the State and pubHc corporations; or, in case they need credit on short time through other circumstances, the Prus- sian Bank accommodates them. These advances had reached on the 31st of March, 1913, the amount of 23,565,000 marks. The deposits at the same date were 90,000,000 marks. The Prussian Bank also executes a large amount of stock-exchange orders for the pubhc savings banks. 6. In order to fulfill its principal functions the Prussian Bank, of course, has to transact all kinds of busi- ness which are in any way connected with pubhc banking. The bank operates in the money market in order to profit through all favorable fluctuations. The stock exchange is daily visited by its officials. The rela- tions between the Prussian Bank and the Imperial Bank are very important, for the Prussian Bank must be able to rediscount, in case of need, the bills of its customers at the Imperial Bank. Of course the Prussian Bank has relations with all larger banks in Berlin and has connections in all important foreign places. Upon the whole we may assert that the Prussian Bank fulfills the functions designed by its founders — that of serving as a bridge between the credit organizations and the middle classes — more especially the rooperative societies and the general money market. DEVELOPMENT OF THE BANK. In conclusion I want you to observe the development of the Prussian Bank by comparing statistics of two dates : 1895 1912 Marks. Profits ; 44, 000 Capital 1 5,000,000 Reserve fund 22, 000 Turnover 141, 000, 000 Marks. 3, 000, 000 76, 000, 000 8, 500, 000 17, 000, 000, 000 It is not possible for me to give in so short a time a detailed description of the Prussian Bank, but I hope that you have at least an idea of its task and its work. The task of saving the independent entities from the crushing power of combinations of large capital is general; it applies to all nations. It will help the great nations to understand each other. QUESTIONS. Q. What is exempted in your system of unlimited liability ? A. Nothing is exempted except personal wardrobe and bed. Q. In what respect do the checks of this bank serve as money ? A. Checks of central banks are paid by all cashiers of the State. Q. In what way are these checks accepted as money by Government or others ? A. They may circulate as currency. There is no limit to their use as currency. Q. There are 1,000,000 individual members and 10,000 cooperative societies, or an average of 100 members to each credit society. Is that the case ? A. It is. Q. This whole system is purely a banking system, as I understand ? A. Yes; we are only for credit — financial credit — not commercial. Q. What would be the position of German agriculture — Prussian agriculture — if this whole banking sys- tem fell to the ground ? GERMANY. 419 A. There would be no indepemdent faruoers; they would aU be dependent. The 19,000,000 marks loaned out shows the urgent need there is for such an institution. Q. Must we infer that this institution is the foundation of agricultural prosperity in this country? Without this system would it go to ruin ? A. Yes. Or perhaps I would put it this way: The farmers would be the slaves of the great banks. Q. We understand that there is a profit of approximately 300,000 marks. How is this profit divided ? A. One -fifth of the profits go to the reserve fund. Then there is the interest paid to the State — 3 per cent for one part of the capital and 3i per cent on another portion of it. The interest on this capital must be paid out of the profits. Q. Was the capital granted by the State in different funds ? A. Yes; it was given at different times. Q. Approximately what amount bears 3 per cent interest and what amount 3^ per cent. A. Fifty millions at 3 per cent and twenty-five millions at 3^ per cent. Q. Are four-fifths of the profits devoted entirely to paying the interest ? A. If there is any surplus over, it is devoted to the reserve fund. SAVINGS BANK OF THE TELTOW DISTRICT. Statement Submitted to the Commissions. establishment, name, seat, object. Berlin. The savings bank of the Teltow district was founded for Teltow in 1858, as a result of the regulations of December 12, 1838, concerning the organization of savings banks. The former district toAvn Teltow was the seat of the savings bank imtU 1871, and since that time it has had its seat in Berlin. The present statute was approved by the "oberprasident" (lord lieutenant of a Prussian Province) on December 28, 1909. The object of the savings bank is to afford an opportunity to those desirous of a secure investment of their savings against payment of interests. GUARANTY. The savings bank is a public institution for which the district Teltow is responsible. The management of the bank is in the hands of the district committee. The latter represents the savings bank in all business transactions of a legal or other nature. REVISIONS. The savings bank is subject to a monthly and to at least one extraordinary annual revision. FINANCIAL TEAR ^ACCOUNTS. The calendar year constitutes the financial year. At the end of the financial year the pay office closes the savings accounts and hands the annual account over to the district committee within four weeks. This annual account is examined by the committee and the diet of the district afterwards declares that the accounts have been found correct. The annual results are published afterwards and extracts from the books of the pay office are placed at the disposal of depositors. OFFICIALS. AU the inside work of the savings bank is done by officials whose duties are fixed by special regulations for their service. All employees of the savings bank are bound down to strict silence concerning affairs of the savings bank. DEPOSITS. Deposits of 1 mark to 6,000 marks are taken. Deposits above this sum are also accepted if the approval of the committee has been first obtained. SAVINGS BOOKS. The depositor receives a book when making the first deposit. This book contains the number of the account opened for the depositor at the savings bank. 420 AGEICULTUKAL COOPERATION IN EUROPE. When filling up the book the name, address, and occupation of the depositor are added. The savings book also contains an additional appendix, showing the Regulations of the savings bank and a scale of the interests yielded by deposits ranging from 1 mark to 6,000 marks in each of the following years according as the interest has been gradually added on. Each depositor receives one book only and has to show the same when making all subsequent payments, giving notice or when withdrawing the deposits from the savings bank. The date of each deposit or withdrawal is entered in the book. The interest yielded is also occasionally noted in the books in the course of the year. The depositor is at liberty to go during the hours of duty to the savings bank and convince himself that his account corresponds exactly with his book. The depositor can deposit the money and withdraw the same with the interest yielded without incurring any additional costs. The savings books and the accounts have their own special numbers under which they are kept. REPAYMENT. Deposits are repaid with the interests yielded in the following manner: (a) Sums amounting to 100 marks are repaid immediately without any previous notice. (6) Simis amounting to the next 100 marks are repaid in two weeks after due notice. (c) Sums amounting to the next 500 marks are repaid in three weeks after due notice. (d) Sums amounting to the next 1,000 marks are repaid in six weeks after due notice. (e) Sums amounting to the next 3,000 marks are repaid in three months after due notice. if) Sums amounting to the next 4,000 marks are repaid in four months after due notice. (g) Sums amoimting to the next 5,000 marks are repaid in five months after due notice. (h) Sums amounting to 6,000 marks and above this sum are repaid in six months after due notice. At the decision of the diet of the district these time limits can be altered. Such alterations are then gen- erally made known. The savings bank may also pay larger sums without any previous notice. Generally the savings bank pays larger amounts without previous notice. The savings bank is entitled to examine the right of the owner before paying the entire sum or part of it and if necessary to demand papers proving his identity. The savings bank is, however, not obliged to examine the right of the owner of a savings book, and is released from all further responsibility by paying him. Payment to the owner is not permitted if, when the case has been laid open, a reasonable protest has been made and entered in the books of the pay office. Books kept for money belonging to wards must be denoted as such both in the book and in the account. In such cases withdrawals can only be made, apart from collecting the interest, when fully approved by the trustee or by the court for the protection of wards. If the entire deposit be withdrawn, then the book must be returned and it wiU then be made invalid. TEMPORARY PROCURING OF SUFFICIENT MEANS OF REPAYMENT. In case that there should be an unusally strong demand for repayment of the money and it should not be possible to dispose of the bonds in possession of the savings bank at the prevailing rate of exchange without suffering a considerable loss, and if other means can not be procured in due time to meet such a demand, then the district authorities are entitled to raise a sufficient loan for the savings bank to meet the occasion. PAYING INTEREST ON THE DEPOSITS. Interest is granted per day. The usual rate is 3 per cent. This can be raised to 5 per cent. Any changes respecting the rate of interest are made known. At the end of the year the interest is added to the deposit and is calculated from that time on the total sum. LOCKING UP SAVINGS BOOKS. At the demand of the depositor or the possessor of the book, the savings book can be locked up for a defi- nite period of time, but not longer than 30 years. Then a special remark is entered in the book as an indication of this fact. Locking up the book has the effect that the savings bank may pay the deposit only in the manner then specially indicated in the book. GERMANY. 421 INSUBANOE OF THE RIGHTFUL OWNER. By a special remark, which will be entered in the book, the depositor can become insured against losses incurred by repaying the money to an unauthorized third party. Then the repayment is made only after a careful investigation and after the identity of the drawer has been shown. TRANSFER OF THE DEPOSITS. If desired, the savings bank transfers the deposits to another savings bank outside ihe district when the depositor is leaving the same and also accepts deposits from other savings banks for newly arrived depositors. This does not alter the rate of interest in any way. LOST BOOKS. If the depositor can clearly show that his savings book has been completely destroyed, another will be placed at his disposal without further consideration. However, should the book get lost or stolen another will be given to him only when the court has declared the lost book as void. FORFEITURE OF THE DEPOSITS. If a depositor fails to give tidings of himself during a period of 30 years, then after having duly informed him by official advertisement the savings bank will cease to pay the interest on his deposits. Five years after this time the district will have the right of disposing of his account for some charitable purpose, as the authorities may direct. INVESTMENT OF MONEYS. The money of the savings bank can be invested (1) In mortgages, in mortgages on land, (2) in securities, (3) in loans on bail, (4) in loans on pledge, (5) in loans to public lawful unions, (6) temporarily in public banks. MORTGAGES ON BUILDINGS OR LAND. The money can be invested in mortgages on buildings or land within the Teltow district and in the neigh- boring towns. In cases of land and forest areas, mortgages can take place up to and in cases of building sites up to the first half of the value as laid down in the estimate. In investing money special stress is put on the fact that the properties guarantee perfect safety and the receiver of the loan pledges himself to a redemption of the debt in accordance with a fixed plan. The manner of paying the debt must be settled by agreements with at least one-half of 1 per cent. The installments to be paid toward redeeming the debt are to be invested by means of savings books. The savings bank has the right of disposing of the payments that are made and the interest thereon to such a degree that it can at any time make use of the entire sum — capital and interest — for the purpose of entirely or only partly redeeming the mortgage debt. The savings bank has the right, but is not obliged, to repay these deposits for the purpose of improving the property, that is, erecting new buildings, enlarging the space by purchasing properties, etc. Toward the end of 1912 there were 1,084 mortgages with a value of 271,307.84 loaned out. Seven hundred and twenty-nine of the same to the amount of 3,296,676 marks were invested on municipal buildings, 955 to the amount of 2,834,109 marks 95 pfennigs were invested on rural sites. Redeemed were according to the plans 125 municipal mortgages of 2,230,676 marks, 870 rural mortgages for 19,566,359 marks 95 pfennigs. SECURITIES. At the end of the year 1912 the savings bank was in the possession of securities sufficiently safe for the investment of trust money to the amount of 37,170,550 marks. The law of December 23, 1912, concerning the investment of deposits has decreed that at least 25 per cent of the deposits are to be invested in bonds payable to bearer, which are sufficiently safe for investment of trust money, and at least three-fifths in securities of the German Empire or in Prussian State bonds. LOANS ON BAIL. Loans on bail are granted on notes of hand and drafts only to inhabitants or landed proprietors of the Teltow district when two persons who are known to be safe guarantee to be themselves liable for capital, interests, and costs. 422 AGRICULTUKAL COOPERATION IN EUBOPfi. LOANS ON PLEDttES. The savings bank can grant loans on promissory notes or drafts on the pledge of mortgages or documents (securities) when the pledge is suitable to be accepted by the savings bank according to th« prevailing regu- lations. Loans on seciu-ities must never be granted above five-sixths of the rate of exchange of the said securities. LOANS TO PUBLIC LAWFUL UNIONS. Loans up to 50 per cent of the total amount invested in the savings bank can be granted to provinces, districts, parishes, etc. At the end of 1912, 9,113,704 marks were out in such loans. Loans are granted to parishes for the purpose of erecting buildings and for institutions in the public welfare at moderate rates of interest. In this manner the depositor's money is used indirectly to the advantage of the inhabitants of the district. TEMPORAET INVESTMENT OF MONEY AT DISPOSAL. Money at disposal can also be invested in rehable banks, imperial banks, the Prussian Central Coopera- tive Bank, etc. LOANS TO MEMBERS OF THE DISTRICT COMMITTEE AND OFFICIALS OF THE PAY OFFICE. Loans are not granted to members of the district committee or to officials of the pay office of the savings bank, either on promissory notes or on drafts. Bail is also not accepted from these people. STORING THE MONEY AND SECURITIES. The money in cash, the securities, etc., must be kept under lock and key by at least three officials. The coupons are to be kept under lock and key, separately from the corresponding securities. CLOSE 0,F THE YEAR. At the end of the year, the account of each depositor is closed. A balajace sheet, arranged in the usual business manner, is drawn up. In this the stock-exchange securities are entered at the rate of exchange they have on the last day of the business year. RESERVE FUNDS. A reserve fund is formed from the surplus interest. The surplus can be used for public purposes to the general advantage of the district, viz : (a) Half of the surplus, if the security funds of the savings bank amount to 2 per cent or more, but is less than 5 per cent of the deposits. (6) Three-fourths if the security fimds amount to 5 per cent or more, but not to 8 per cent of the deposits. (c) The total annual surplus if the security funds amount to 8 per cent or more of the deposits. ARRANGEMENTS FOR THE PURPOSE OF INCREASING THE SAVINGS. Branch offices. — For the purpose of increasing the savings, branch offices of the savings bank have been established in 35 places of the Teltow district. These are for the most part in charge of capable shopkeepers. The branch offices accept deposits and also pay out withdrawals. The depositors give up their books to the branches and receive a temporary receipt. The book is returned to them later, on the presentation of the temporary receipt. The branch offices send the savings books to the savings bank every week, where the payments and with- drawals are verified, and afterwards the deposit books are retmned to the branches. In recent times the district has^ — ^according to the statute — conferred the power on several managers of branch offices, who have proved themselves efficient in their work — (a) To receive sums amounting to 300 marks, which they can receipt in the savings book on behalf of the bank. ■GERMANY. 423 (i) To pay out withdrawals, amounting to 100 marks, and to write the amount withdrawn in the deposit book. In such cases the branches return the deposit books to the depositors at once. The service of the branch offices is regulated by special regulations. The pubMcation Regulations with Regard to the Conducting of Branches and Branch Banks, gives all information on this subject. BKANOH BANKS. In the branch banks two officials conduct the business as in the head office. The two work together. Up to the present there are two branch banks existing, but more will be estabhshed shortly. SCHOOL SAVINGS BANKS. In order to train the young to be thrifty the school savings banks have been established. The manage- ment of these is fully described in the pubHcation The School Savings Banks in Friedenau. At the end of 1912 there were 34 of these banks, with a total deposit of 418,437 marks. Out of 20,441 children, 13,071 or 63.95 per cent made deposits. The object in view is to establish savings banks in all schools. BOXES FOE SAVING AT HOME. For the collection of still smaller amounts the so-called home savings boxes are provided. These are given locked to the savers and without key. They can only be opened by the savings bank, the branch bank, or the branch office. The amounts are then entered into the depositor's savings book, which must be handed in always with the box. At the end of 1912 there were 5,600 of these boxes in use. SAVINGS A'UTOMATS. The savings bank has also made a trial with the establishment of savings automats in the larger industrial centers. On putting 50 pfennigs in the slot one receives a card for that amount. When 10 of these cards are handed in the bank gives the depositor a savings book, or enters this sum to his previous account. The result of this experiment with the savings automats has not come up to expectation. PREMIUMS FOR SERVANTS. From the sxirplus interest each year a part, not exceeding 3 per cent, is used for the granting of premiums to be given to those depositors who belong to the servant class, and who can prove that they have served for 5 years in the same family, and during this time have deposited money in the bank of the Teltow district. In the year 1912, 548 of such depositors were awarded 7,705 marks,, in sums of 5 marks, 10 marks, 15 marks, 20 marks, and 25 marks. The savings bank has awarded altogether 109,037 marks to 7,189 persons. SAVING PREMIUltS TO SCHOLARS. In 1912 580 marks were given to children who had made deposits in the schools' banks, especially to those whose parents belonged to the poorer classes. LETTING OF LOCKERS. Since 1907 the bank has let safe lockers for the safe keeping of deposit books, etc., from fire or theft. The yearly rent amounts to 3 marks, 7 marks, 10 marks, 14 marks, and 20 marks, according to the size of the lockers. At the end of 1912, 3,505 of these lockers were in use. These lockers are mostly used by the poorer people, but among the holders of these lockers one finds also a great number of persons whose occupations compel them to spend much time away from their dwellings. A list of these holders, arranged according to their occupations, may be seen in the latest annual report of the savings bank. DEPOSITS BY MEANS OF POSTAL CHECK AND BY THE BANKERS. Deposits can not only be made in the savings banks, branch banks, or branch offices, but also in all post offices on the postal check account of the savings bank. 424 AGBICULTURAL OOOPEBATION IN EUEOPE. The cost of such arrangement is not borne by the depositors. Payments can also be made through the Imperial Bank, the Royal Shipping Company, the bank of the Prussian Cooperative Union, and the German Bank, free of any costs, and on the accounts of the savings bank established in the mentioned banks. KEEPING OF BOOKS AND ACCOUNTS. It is beyond the scope of this report to detail all the money and business transactions of the savings bank. We are just preparing a book in which all the business arrangements of the bank are to be demonstrated, and to which book the forms in use, duly filled in, will be annexed. Generally a double bookkeeping is used. In this way two officials at least are assigned a share in each booking and the booking is in this manner controlled by both. With regard to the deposits the so-called loose account sheets are kept in echelons, so that the scale of the capital and interest of each account may at once be seen after each change. The balancing of the accounts with the cash books is done every day by means of the Burroughs adding machine. With reference to the business results of the calendar year 1912, the last annual report contains the follow- ing statements : At the be- ginning of theyeao:— Number of deposi- tors. Deposits. 1882 1900 9,862 66, 847 114,063 125, 194 129, 292 133, 948 142, 324 151, 095 158, 702 165, 356 Marks. 2, 455, 900. 63 30, 760, 358. 46 67, 326, 083. 58 74, 912, 976. 23 76, 262, 885. 84 79,028,590.16 88, 833, 505. 26 97, 009, 597. 11 104, 784j 625. 55 110, 631, 641. 96 1906 1907. .- 1908 1909 1910. 1911 1912 . 1913 In the year— Gross surplus of interest. Cost of man- agement. Net surplus profits of interest. 1908 1909 1910 1911 1912 Marks. 676, 583. 30 780, 017. 28 891, 472. 77 993, 062. 05 1, 099, 953. 26 Marks. 139, 017. 03 147, 947. 53 164, 624. 91 174, 990. 14 207, 427. 23 Marks. 537, 566. 27 632, 069. 75 726, 847. 86 818, 071. 91 892, 526. 03 The reserve funds amounted to — Uarks, 1882 174,817.39 1896 1,015,657.43 1900 1,124,797.76 1905 3,083,956.66 1906 3,066,266.14 1907 2,553,106.13 Marks. 1908 3,351,322.33 1909 3,914,911.13 1910 4,567,867.65 1911 4,888,000.00 1912 4,808,000.00 The reserve funds would have amounted to 800,000 marks more if amounts of the round sum of three- fourths million marks had not had to be deducted on account of the great decrease of the securities payable to bearer, although they were first-class securities, sufficiently safe for investment of trust money. Charlottenburg, Berlin-Schoneberg, Neukolln, Berlin-Wilmersdorf, which are now forming municipal districts, formerly belonged to the Teltow district, and have now established savings banks of their own, as have also the two larger municipalities, Coepenick and Berlin-Steglitz. These savings banks now have more than 300,000 savings books and deposits of more than 160,000,000 marks. GERMANY. 425 WAREHOUSES AND CREDIT SOCIETY OF STETTIN. Rbpobt op a Subcommittee. Stettin. The committee visited some of the gigantic warehouses and flour mills belonging "to the association. The land on which they stand cost $87,500; one granary cost $75,000. The association does the largest grain business in Germany. The mUls are operated only when it is more profitable to grind the wheat than to sell the grain. Money is advanced to farmers on their grain, stored and insured in the society's warehouse, and is sold or ground as the owner desires. The committee found here hundreds of thousands of dollars invested in business by the farmers with no thought of income on the investment, simply for the purpose of establishing a better system of marketing their products. A EIIRAL CREDIT SOCIETY. The committee also visited the Kural Credit and Savings Bank at Ziegnort, a rural credit bank of limited liability. The liability is 10 times the amount of the shares. Only such thii^s as are necessary for making a living — such as instruments of production — are exempt. The board meets annually in executive session and determines the amount of open account which each member can have. The member can borrow to the extent of that open account without an indorser. If the member wants to borrow more than that the board has to pass upon whether or not he can get it. The cashier is a local school teacher and serves for a small salary. AGRICULTURE IN SAXONY. Herr Otto Stbigbr Lbtjtbwitz. ADDRESS. Dresden. The Kingdom of Saxony has an area of 14,993 square kilometers, of which 10,281 square kilometers are under cultivation and about 3,845 square kilometers are forest land. Thus, 1,028,144 hectares are utilized for farming and 384,500 hectares for forestry. There is probably not another country in which every available inch of land is so utilized for farming or forestry purposes, as in the Kingdom of Saxony, and there is hardly .a square meter, excepting, of course, that used for building or military purposes, which is not productive. There are practically no plots of unproductive land in this country. There are, in the Kingdom of Saxony, 175,428 agricultural holdings, and these may be classified according to their size as follows •. Per cent. Under 2 hectares, 100,517 holdings 57. 3 2 and under 5 hectares, 26,904 holdings 15. 3 35 and under 20 hectares, 37,690 holdings 21. 5 420 and under 100 hectares, 9,573 holdings ' 5.5 100 hectares and over, 744 holdings 4 If the farmed land be taken as a basis then the areas of the land under cultivation of the difiFerent size holdings are as follows: Per cent. On holdings under 2 hectares, 49,924 hectares 5-2 On holdings 2 and under 5 hectares, 88,768 hectares 9.1 On holdings 5 and under 20 hectares, 404,106 hectares 41. 4 On holdings 20 and under 100 hectares, 296,796 hectares 30. 5 • On holdings 100 hectares and over, 134,983 hectares 13. 8 From this you will see that in the Kingdom of Saxony the small and medium holdings (under 100 hectares) are in first place, for they include 86.2 per cent of the total cultivated area. The lai^er estates, generally called " Kittei^iiter " (manors) , He scattered about between the smaller holdings. These manor farms are very often worked by the owner himself; in many cases, however, they are leased. Agrictdture is carried on in the most intensive maimer on all estates whether large or small, as far as this is not prevented by a shortage of labor. There is a great'rivalry between aU the farmers, great and small, as to 426 AGfilOULTURAL COOPERATION IN EUE0P15. who can utilize the land to the best advantage. In particular, I ehoukl like to emphasize that we have a most industrious and intelligent class of small farmers. A large part of the land lying near the towns is used for market-gardening purposes. The market-garden industry is in a very high state of development. SOIL AND CLIMATE. The soil conditions are exceptionally varied in the Kingdom of Saxony; in most cases, however, they are good. In one part, the so-called "Lommatzscher Pfiege," between Dresden-Meissen-Lommatzsch-Dobeln, they rank with the best in the whole of Germany. The quality of the soil becomes a little inferior as it rises toward the mountains. In the lower lying parts of the country the climate may be described as very favorable, and practically all sorts of fruits may be grown there. Corn does not ripen, nor grapes, except in the best and warmest years. In the mountains and higher lying parts of the land, however, the climate is less favorable. With respect to the different sorts of cultivation there are, of the whole area used for agricultural purposes, 78.2 per cent arable land; 3.8 per cent gardens, 17.1 per cent meadows, 0.8 per cent pasture land, 0.1 per cent vineyards. The arable land and that devoted to gardens is utilized as follows: 60 per cent for grain and leguminous crops, 20 per cent for root crops, 14 per cent for feeding crops, 0.3 per cent for market vegetables, 0.7 per cent for pasturage, and 5 per cent for house and fruit gardens. The following grain crops are grown: Wheat, rye, oats, barley, and peas. Root crops: Potato, sugar-beet, and mangel- wxu-zel. Clover grows very well, and the meadows and pastures are in good condition. Lately the people have taken to growing flax as was formerly the case, especially in the mountains. Almost everywhere the roads are planted with fruit trees, and on many of the farms there are also fairly large orchards. Cherries, apples, pears, and plums are raised, as well as several small fruits and berries. CATTLE BREEDING. According to the latest statistics there are in the Kingdom of Saxony 702,049 cows and oxen, 655,300 swine, 55,395 sheep, 132,073 goats, and 175,192 horses. According to this, therefore, there are 1.2 head of cattle to each hectare of agriculturally utilized land, if one takes 10 swine or 10 sh^ep or 10 goats as being equal to one head of larger cattle. This makes a stock of cattle probably larger than any to be found in any other land. Of the different breeds of cattle we have Oldenburger, Ostfrisiau, and Holstein for the low-lying land, while in the higher lying districts the mountain breeds (Simmenthaler, Allgauer, and Voigtlander) are more common. The greater part of the cattle are used for the production of milk; the mountain cattle, however, are used for the breeding of very good draft oxen. The hogs are of various breeds — Yorkshire, Berkshire, and the greater part of the "Meissner" breed. A great number of young are bred and sold. The number of the sheep has declined very much, as is the case all over Germany. Most of our sheep are merinos; there are, however, various English breeds and crosses. Excellent breeds of merinos have existed in Saxony for over 100 years. Indeed, Saxony originated the breed of merino sheep, which have spread over the whole world. Breeds of EngUsh sheep have been introduced within the last 10 years. Goat breeding has also greatly increased in the last few years, and the greatest care is devoted to the improvement of breeds. Great efforts are being made to raise the standard of cattle breeding and the quality of the cattle. Milk control societies, breeding societies for Meissner pigs, and a foal-rearing society have been founded. A cattle- breeding law to regulate the breeding of cattle has been enacted. The law provides that only those bulls may be used for breeding purposes which have been approved by a commission. Our cattle-plague laws prescribe the most complete measures for combating cattle epidemics. Voluntary institutions among cattle owners and breeders for stamping out tuberculosis among cattle have already obtained a remarkable measure of success. For the promotion of the standard of health among all kinds of cattle, the institution of pasturing is of great importance. Whereas formerly cows were almost without exception kept in stalls the year round, the yoimger cattle are now sent to pasture in the summer. The great losses connected with the inspection of all animals slaughtered are rendered milder in the Kingdom of Saxony by a State (;attle insurance, to which the State contributes liberally. The State gives valuable assistance to the breeding of horses, for all stajhons are purchased and kept by the State at the stations in different parts of the Kingdom and are placed at the disposal of breeders. GEBMANY. 427 A middle-weight working korse, similar to the Oldenburg horse, is set up as the breeding standard in the Kingdom of Saxony, although in some districts very heavy working horses — the so-called "Kaltbltiter"^ — are bred, such as Belgians, Ardennes, Shires, etc. The great number of cattle in Saxony is responsible for tlie large production of manure by which the state of cultivation of the fields is extraordinarily raised; but in addition to this great quantities of artificial manure, with phosphoric acid, nitrogen, and potash, are used. An estimated expenditure of 40 marks per hectare of agricultural land for artificial manuring would hardly be too high. Agricultural products are well utilized in Saxony. As a result of the very dense population (320.6 inhab- itants per square kilometer) and the good wages of the workmen, products find a quick market. Grain, of course,' meets severe competition in the enormous quantity of grain imported. Potatoes, vegetables, other garden products, animal products, meat, milk, etc., find a quick market, generally at satisfactory prices. Milk is generally now handled by cooperative dairies. There are four sugar factories in Saxony, but sugar-beet growing in the Kingdom of Saxony is compara- tively unimportant. There are numerous potato-spirit stills, but only on the larger estates. For preservation of potatoes, there have now been erected large drying plants, generally worked on a cooperative plan. Fruit finds a ready market, but often at prices which do not pay. The American and Austrahan competition is very keenly felt here. Labor conditions in the Kingdom of Saxony are the worst imaginable, except in a few small districts. The magnificently developed industry takes away almost all the labor from the agricultural districts and forces up the scale of wages. Saxon agriculture is therefore forced to rely upon foreign farm laborers, men and women, consequently machines are used wherever possible. Moreover, Saxon agriculture is burdened with great charges and expenses. Contributions to sick insurance, old-age insurance, and insurance against accidents have risen enormously, and now amount to approximately 8 to 10 marks per hectare of cultivated land. The taxation of agricultural property is by no means favorable, and taxes have risen from year to year. The cost of production of agricultural products is therefore very high, and the greatest efforts and the appUca- tion of the highest business intelhgence are necessary to make agricultural undertakings profitable. Our highly respected colleagues from America will therefore not take.it ill when we insist upon a certain degree of protective tariff when we are concluding commercial treaties, for without it an intensive agriculture could hardly be maintained in Germany in face of the high cost of production. The interest of the whole Ger- man population in a large production of foodstuffs in Germany itself, in consequence of our geographical posi- tion, is so great that to renounce our protective tariff policy would portend disaster for agriculture and for the whole population. In order to raise the quahty of agriculture in Saxony, the Royal Government has promptly given the necessary support. Agriculture itself makes every effort to raise its efficiency in all directions. The represent- ative of agriculture to the Royal Government and standing for the promotion of the general agricultural interests is the Provisional Improvement Council (the same as the Chamber of Agriculture in Prussia) . Assist- ing this are four agricultural district associations, with which about 1,000 agricultural societies are connected, totaling about 76,000 merribers. The experiment stations in Mockern and Pommritz are at the disposal of farmers, as well as the agricultural and horticultural departments of the botanical garden in Dresden, with their experimental fields and seed-control stations. Care has been taken to provide for necessary agricultural colleges. There^re (1) the agricultural depart.- ment of the University of Leipzig and (2) the Veterinary High School in Dresden. Further, for the training of managers of medium and smaller agricultural holdings, there are 11 agricultural schools distributed through- out the Kingdom, which have been of extraordinarily great benefit in the last few years. The domestic science schools in Freiberg and Dahlen, erected for the training of farm women by the district societies, have fully justified themselves. Agricultural experts employed by the State help the farmers in the erection of drainage plants and all other technical improvements. With regard to forests, the total forest area may be divided as follows : " ' Per cent of total forests. State forests, 173,860 hectares 45. 2 Common forests, 23,100 hectares 6.0 Endowed iforaats, 1Q,092 hectares 2.6 Society forests, 645 hectares 0.2 Private forests, 176,843 hectares 46. The greater part of the forest area consists of coniferous trees — firs, pines, spruce — and the smaller part of foliage trees, such as oak, ash, beech, birch, maple. 428 AGRICULTURAL COOPERATION IN EUROPE. ^ Forestry, especially that of the State, is of a very high order and is of very great importance, now that prices of forest products are so high. A State forest academy for training forest oflBcials is located in Tharandt, which is much frequented by foreigners. QUESTIONS. Q. Do you export wool ? A. No, we import. Q. What percentage of the raw material required for the woolen industries of Saxony is suppHed by home production ? A. About 5 per cent. The sheep in Saxony are bred more for meat than for wool. Q. Then you consider sheep more valuable for meat than for wool ? A. Yes; throughout Germany sheep are raised more especially for meat. The cost of land is too high to make it profitable to breed exclusively for wool. Q. Are sheep raised on smaU farms or on ranches in Germany? A. Sheep in Germany are not raised on small farms ; only on big estates along with other kinds of hve stock. Q. Am I correct in understanding you to say that 46 per cent of the forest lands of Saxony are in private hands ? A. Yes; between 40 and 46 per cent. Q. Is this pecuUar to Saxony? A. Yes. Q. What is the price of forest land ? A. The price differs greatly. It would average about 800 marks per hectare (about $80 an acre). Q. How long after planting coniferous trees before they are available for the market ? A. In from 80 to 100 years. Q. Are they often sold earher than that ? A. It is customary to thin out a certain number of the younger trees. Q. Are these used for fuel? / A. No ; for wood pulp ; only dead trees are used for fuel. Q. Are the forests seen from the train coming from Berhn fair specimens of the forests of Saxony ? A. No; they are the poorest. The best are in the mountains of Saxony. Q. Is any government control exercised over private forests? A. There is no legal provision for such control, but through the Chambers of Agriculture there is unofficial inspection by state foresters. Q. Does the Government of Saxony encourage forestry by granting exemption from taxation to forest lands ? A. No; encouragement is given by supplying saplings and the services of expert foresters. Q. The forest lands are not exempted from taxation ? A. No; taxes are lower on forest than on ordinary farm lands because the soil is poorer. Q. Is proper provision made by law to prevent forest fires ? A. Forest fires are rare in Saxony and when they do occur they are usually caused by sparks from railway locomotives. The law requires a clearing of a certain width to be made on each side of the railway as a pre- cautionary measure. If a forest fire is caused by a train the State railways have to compensate the owner. Q. Are the forests patroled as a protection against fire ? A. No. Q. What protection is afforded to private forests against trespass ? A. They are protected by the rural police. In the case of the larger forests watchmen are employed. Q. If forest land is worth 800 marks per hectare, and it takes 80 to 100 years before the trees are ready for lumber, what is the profit from such an investment ? A. The income obtained from State forest lands is from 30 to 50 marks per annum. Q. Whence is this income derived ? A. From the total output of the forests; from the sale of young trees for wood pulp, dead trees for fuel, and the felling of grown trees for lumber. The owner of a forest does not think of his investment in terms of years, but of centuries. Q. How does the net income from forest lands compare with that of farm lands ? A. Farm lands rent from 40 to 150 marks per hectare, according to quality, and the farmer nets from 10 to 15 marks per hectare above what he pays in rent. Q. What is the selling value of a hectare of farm land ? A. It varies from 800 to 5,000 marks per hectare. GERMANY. 429 Q. What is the yield per hectare of wheat and barley ? A. The best land yields as much as 4,000 kilograms of wheat per hectare and from 3,000 to 3,500 kilograms of barley. Q. What is the average yield ? A. About 2,500 kUograms of wheat and 2,000 kilograms of barley per hectare. The yield of rye is about the same as that of barley. The cost of production is so high that only a high yield can make farming profitable. AGRICULTURAL COOPERATION IN THE KINGDOM OF SAXONY. Statement Submitted to the Commissions. Dresden. The tendency of the agricultural population to unite in cooperative societies for obtaining economic advan- tages was begun in Saxony as early as the middle of the last century. At first the object was to promote the development of credit on mortgages only, and this led to the founding of the Mortgage Credit Union for Nobility and Gentry in 1844 and of the Land Mortgage Credit Union for the Kingdom of Saxony, in 1866. With respect to personal credit, it is well known that two men, Kaiffeisen and Schulze-Delitzsch, were the first in Germany who endeavored to place it on a nation-wide sound basis by the establishment of cooperative societies. Schulze founded his credit unions in the Prussian Province of Saxony, on the borders of the Kingdom of Saxony; the near neighborhood as well as the sound principles of his teaching gave the people of the Kingdom of Saxony, who had always been distinguished for great thrift and industry, the incentive to follow his example. In the year 1865 we find 54 such societies, and in 1874 the number amounted to 147. The majority were found in the country towns. The members were chiefiy landowners who badly felt the need of personal credit because the rapidly increasing population brought greater demands for food on the farmer. All these societies did a good business, and the period from the Prussian-Danish War until after the Franco- German War was a continuous chain of economic successes. The enterprising spirit grew enormously — far beyond the limits of conscientious business principles — until a crash came in 1873 and swept away the credit unions with it; many were bankrupt, others forced to go into hquidation. The loss was all the greater because all the credit unions had adopted the system of unlimited liability, which at that time was demanded by law. After such an experience, it is to be understood that nobody cared to become a member of a society with unlimited liability. Consequently, the life of such societies practically ceased in Saxony for the next 20 years or so. In 1889 came the great German imperial law concerning the Industrial and Provident Cooperative Societies, which is to be thanked for the splendid revival of cooperative societies in Germany. Two of the chief points enacted by this law are permission to found societies with limited or unlimited liability and the provision that all such societies are to be revised at least every two years by an expert. The reviser is nominated by the district court if the society does not belong to a federation which according to its statutes and by its manner of doing business proves that it is competent to undertake its own revision. With the enactment of this imperial law the interest in cooperative societies was again awakened in our Kingdom of Saxony, credit societies received a new impetus through the Land Mortgage Credit Society, which, on the proposal of its president. Dr. Mehnert, gave the sum of 30,000 marks for furthering and developinc,' agricultural cooperative work. With the help of these funds it was possible, by sending printed circulars and giving lectures, to explain to the landowners and tenant farmers the great importance, object, and advantages of cooperation. This finally led to the federation of the agricultural societies in the Kingdom of Saxony on May 21, 1891, with 10 branch societies, which at the present day have increased to 486. Table I shows the development of the federation with respect to the number and kind of the branch societies as well as the number of their members. This table gives the statistics up to the end of June, 1911, as the records of 1912 are not yet fully worked out. It may be asserted that in the recent past the federation has made good progress, although agriculture has suffered greatly during the last two years on account of the abnormal weather conditions — the great heat and consequent drought in 1911 and the superfluous rain and damp of 1912 — with the result that the credit societies have had great demands made on them. Since the middle of the year 1911 until to-day we have 430 AfiRICULTUBAL COOPERATION IN EUEOPE. founded 43 cooperative societies, while, on the other hand, five other societies have been broken lop, so that the federation now comprises, as already stated, 486 cooperative societies. These societies have altogether 32,000 members, and although many of them belong to various societies (but never to two societies with unlimited liabOity, which is strictly forbidden by our regulations), it may be said that half of our landowners who possess estates worthy of the name are cooperatively organized. Table II shows the progress of the business transactions and their economic value. The most important cooperative agricultural societies are the credit and supply societies; therefore they are by far the most numerous. But these societies would satisfy the demands of their members only in a very minor degree if they worked for themselves alone. In money transactions as well as in goods that society would prosper most which had the largest capital at its disposal. For this reason it is necessary to create central cooperative societies which are able to do business on a large scale. The central cooperative society for our credit societies is the Landesgenossenschaftskasse (Central Coop- erative Bank) and for the supply societies the Landwirtschaftliche Zentralgenossensch*ft (Central Cooperative Supply Society). These two centers of cooperation were founded in 1897 by the Federation of Cooperative Societies and have experienced from that time a period of unbroken prosperitj-. Tables III and IV give a clear view of the income and standing of these two institutions. In conclusion, a peculiarity of Saxon cooperative work may be mentioned. In Table III is a column headed "Loans out of Government funds." The circumstances of these loans are as follows: The majority of th* naembers of the cooperative societies belong to the medium, and small farmers who can muster only a comparatively small working capital, therefore the cooperative societies would have attained their object very slowly and imperfectly had not the Government supported them. This has been done in different ways. In Prussia, for instance, the State dedicated 75,000,000 marks, little by little, to the funds of the Prussian Central Cooperative Bank. ■ In Saxony Parliament granted at first 2,000,000 marks, at the expiration of some years a further 1,000,000 marks, and during the course of the present year another milUon, making a total of 4,000,000 marks. The funds were given for the purpose of issuing loans to cooperative societies through the medium and on the liability of the Central Cooperative Bank. For this service the Central Bank receives 1 per cent commission; i. e., it was obliged to pay the State an interest of H per cent, while the interest on the loans was fixed at 2^^ per cent. In consequence of the dear- ness of money the above rates have lately been raised to 2 per cent and 3 per cent, respectively. Ijoans from this fund up to the amount of 6,000 marks are to be granted to newly founded societies in order to increase their working capital, and these loans must be repaitl within six years. Money may also be lent to erect business plants — for example, dairies, barns, granaries, waterworks, etc. In this case the loans are to be repaid at the latest in 29 years. On this basis a considerable amount is repaid which can be reloaned. From the above-mentioned fund of 4,000,000 marks loans to the amount of 600,000 marks have been made. The great advantage of this system is that the cooperative societies receive loans at a very low rate of interest, which promotes prosperity, and that the Central Bank can depend on a certain income, which enables it to cover all its expenses. Table I. — The federation of agricultural cooperative societies in the Kingdom of Saxony. Year. Central societies. Credit societies. Saving, credit, and supply societies. Supply societies. Dairies. Mills. Pastures. Water- works. Thrasli- ing sodieffes. Elec- tEleity societies and others. Total of societies. Total ol memtors. 5 13 15 18 3S 34 46 47 64 62 61 63 68 72 73 76 76 77 78 79 79 2 2 2 3 3 18 20 23 26 32 40 45 59 80 99 114 124 133 163 176 189 3 S 7 8 8 10 15 15 18 22 21 21 20 21 20 21 21 21 21 21 19 10 26 32 39 56 66 91 97 120 148 166 184 213 252 286 316 346 373 410 432 448 993 5 8 9 8 3 7 8 14 20 26 34 44 52 62 70 75 83 85 83 85 1,463 1,988 1 1 1 2 2 2 2 2 2 2 2 2 2 2 2 2 3 2 2,197 1 2,650 2,980 1 2 3 5 7 7 7 10 10 12 12 12 19 16 15 4,198 5,164 1899 1 2 3 5 5 6 10 12 12 16 21 24 24' 2 3 6 7 8 9 10 10 8 8 9 9 8 6,063 jgQQ 7,662 ''^ 9,286 10,032 1904 ■ • 13,080 H'SSS 1906 17,760 J9Q7 16 21 21 21 21 19,970 21,872 xgo9 i 2 6 24,430 1910 26,689 29,031 1911 GERMANY. Table II. — Returns of the- business' IransacPions oj the Saxon agricultural cooperative societies. 431 Amount of turnover. Turnover per member. Gain. Own working capital. Assets. Debts. Year. Shares. Funds. Loans. 1 Account current. OiitBtaird- ingin baaks. ^ovosiis. Amount Borrowed from banks. Govern- ment funds. 1891 Marks. 5,015,668 6,460,092 7,666,611 8,697,852 9,467,961 13,721,627 23,993,203 41,687,272 50,476,970 66,991,3B'4 83,.943,240 107,554,3* 134,776,802 168,892,937 192,820,090 237,601,535 303,123,.029' 344,931,877 413,492,098 418,143,804 510,133,8411 Marks. 5,0,51 4,409 3,866 3,969 3,713 4 60S 5,770 8,073 8,326 8,871 9', 941 11,5^2 12,217 12, 148 , 12,434 13,378 15,194 15,771 16,926 15,667 17,572 Marks. 21,422 19,291 17,108 42,637 IfMh 67,747 73,098 781978 117^2^1' 129,801 121,504 160,275 208,533 264,690 253; S64 360,026 381, 964 389, 984 384,981 697.500 Marks. 148,197 174,588 200,038 247,367 268,989 J(J8?16 460,462 5S0 227 610,617 ' 90S, 645 973,,032 1,03^,878 1,136,197 1,265,902 1,515,112 1,663,600 1,836,889 2,230;643 2,463,409 2,796,312 Marks. 92,796 m,m 95,686 106,623 8»,134 117 037 169,760 179,969 216,966 413, S22 517,855 596,5^0 653,371 724,049 859, 102 864,038 1,005,764 1,230,419 1,478,380 1,663,073 1,969,528 Marks. 362,867 46q>812! 615,782 742,865 931,310 1', 303, 808 1,572,087 1', 849 616 2,407,438 2,696,278 2,914,667 3,474,711 4,124,313 4,786,246 6,750,309 6,876,315 7,910,179 9,138,161 10,568,499 12,253,236 16,463,466 Marks. 225,312 386,950 506,404 480,033 510,286 563,422 445,990 1,004,307 1,396,259 1,915,925 , 2,164,856 2,321,826 2,694,646 3, 156, 193 4,522,720 4,107.056 5,052,187 6,236,681 10,698,637 11,508,497 ,14,907,720 Marks. 60,144 73,066 115,486 89,809 236,332 367,568 472,039 566, ?14 486,888 696,087 1,458,680 1,981,688 2,203,695 2,902,401 3,068,961 3,693,966 3,704,331 1,980,296 6,153,617 6,830,567 6,468,906 Marks. 487,842 670,788 900,997 1,055,932 1,084,667 1,120,692 2,050,438 2,639,329 2, 980, .560 3,429,246 4,438,183 5,?74,086 6,770,027 8,093,629 9,344,440 11,442,391 13,263,687 16,057,967 19,196,287 22,392,778 26,404,539' Marks. 159,190 190,322 222,914 129,333 187,312 212,364 167,761 326,432 627,697 820,610 1,160,838 1,259,137 1,636,894 1,912,407 2,771,647 2,663,118 3,091,465 3,933,262 4,902,248 6,475,087 6,327,412 Marks. 27,366 85,464 109,113 138,165 153,409 197,544 218,068 397.966 667,552 685,344 464,960 422,330 502,387 602.337 1,080,619 889,185 747,264 806,603 1,884,574 1,995,830 3,002,494 Marks. 1892..... 1893 1894 1895 1896 1897 . 195,200 822,000 1,164,465 1,708,500 1,892,792 2,091,644 2,098,981 2,329,472 2,612,944 2,614,555 2,851,122 2,787,036 2,644,566 2,762,896 2,788,364 1898 1899 . 1900 1901 ... 1902 1903 . . 1904 1905 1906 1907 1908 1909 1910 . 1911 ' Exclusive of those of the Central Bank. Table llL-^Returns of the Cooperative Central ^ani. Members. Amount of turnover. Own working capital. Amount of liability. Borrowed working capital. Cash. Bonds. Loans in account cnrrent. Loans on long terms. Loans out of Govern- ment funds. Year. Shares. Funds. Detjosits in account current. Govern- ment funds. 1897 76 96 120 148 162 178 212 254 287 320 347 37.5 406 426 442 473 Marks. 5,163,233 9,750,935 12,738,230 15,596,883 17,782,052 29,052.682 36,712,387 37,487,406 43,795,440 52,942,023 66,881,937 68,916,922 96,166.275 93,517,845 116,045,996 123,840,706 Marks. 13,420 59', 160 81,670- 125,510 139,300 154,100 177,400 201.900 226,800 247,900 276, 100 291.000 310,700 .325,800 343,500 373,500 Marks. 20 250 2,363 5i500 14,530 24,140 32,940 44,920 53,580 64,640 68,958 82,610 107,340 124,890 142,160 130,340 Marks. 272,000 1,186,000 1,638,000 2,612,000 2,786,000 3,082,000 3,648,000 4,038,000 4,530,000 4,968,000 6,502,000 5,820,000 6,214,000 6,616,000 6,870,000 7,470,000 Marks. 375,696 462,748 686,588 737,423 1,381,326 1,822,625 2,142,619 2,777,225 2,9.'!8.215 3,524.911 4,293,472 4,768,833 6,366,966 6,438,806 6,089,941 6,763,967 Marks. 316,684 787,200 1,273,900 1,946,900 2,067,400 2,164,400 2,266,900 2,445,900 2,544,900 2,802,900 2.&52.300 2, 886. .300 2.902,600 2,900,000 2,899,000 2,895,600 Marks. Marks. Marks. 398,161 474,696 767,830 910,011 1,030,621 904,296 1,040,032 1,082,755 1.441.993 1,729,347 1,885,064 2,437.250 2,997,713 2,761,313 3,581,072 3,894,362 Marks. Marks. 316,354 787, 200 1898 40,760 20,760 20,760 70, 750 70,260 329, 728 358,181 376,861 780,616 758,691 788,422 736,505 902,938 809,918 831,844 1899 1,260,750 1,893,785 1,959,666 1,999,065 2,036,808 2,234,657 2,347,810 2,696,152 1900 2.993 556, 743 1,191,271 1,220,173 1,801,010 1,607,762 1.405,897 2.038.688 2,154,792 3,140,014 3,348,103 3,252,527 3,087,720 1901. 1902 4,436 1,649 763 1,085 2,892 4,244. 3.028 5,834 3,350 2,036 2,969 1903 1904 1905 1906 1907 2, 603, 580 1908 .... 2, 477, 532 1909 2, 609. 050 1910 2,580,410 2,652,616 2,681,762 1911. 1912 Table IV. — Returns of the Central Cooperative Supply Society. Year. Members. Asaets. Debts. Amount of turnover. Own working capital. Amount of liability. Goods. Goods purchased in hundred- weights. Grain transactions Shares. Funds. Purchase. Sale. in hundred- weights. 1897 37 53 71 97 114 127 147 183 213 229 243 264 290 312 326 356 Marks. 874 55,540 112,740 160,820 177,219 245,356 286, 148 372,638 479,340 617,367 1,054,794 1,160,877 1,420,698 1,353,268 2,285,911 2,335,238 Marks. 756 54,870 109,681 162,958 169,813 238,070 278,681 356, 167 471,057 604,910 1,015,099 1,121,345 1,395,799 1,328,160 2,133,338 2,228,193 Marks. 236, 932 2.209,642 3,. 580, 720 6,996,528 11,192,493 11,480,313 14,710,882 19,339,816 24,101.278 31,941,535 46,446,159 54,506,150 61,717,726 61,162,084 81,376,826 96,994,608 Marks. 745 10.600 14,200 19,400 24,200 26,800 33,000 40,200 46,200 49,600 52,600 70,800 76,600 80,400 91,000 104,800 Marks. 10 3,666 4,100 6,400 13,170 19,172 24,940 30.860 44,400 58,600 64,760 74,980 81,260 86,490 91,690 126,020 Marks. 74,000 106,000 142,000 194,000 242,000 270,000 330,000 402,000 462,000 494,000 1,044,000 1,416,000 1,616,000 1,604.000 1,812,000 2.068,000 Marks. 168,049 278,115 812,927 1,004, .527 1,277,881 1,432.162 1,844,640 2,405,946 2,993,600 4,099,716 6,099,234 7,247,695 8,371,227 8,193,294 11,048.714 12,907,749 Marks. 168,887 276,962 769,016 1,032,070 1,296,490 1,481,581 1,854,152 2,498,231 2,987,426 4,220,126 6,086,986 7,366,466 8,350,339 8,409,767 11,297,066 13,167,013 37,608 80,990 194,334 249,037 344,867 412, 843 626,459 756,333 880,202 1,032,826 1,355,049 1,575.862 1.792,714 1.873,916 2.328,092 2,608,084 1898 1899 1900 1901 1902 1903 1904 1905.. . 7.400 1906 83,734 1907 126,609 1908 187,623 1909 210,266 1910 221,872 1911 264,926 1912 301,826 432 AGRICULTUKAL COOPERATION IN EUROPE. AGRICULTURAL CREDIT AND COOPERATION IN SAXONY. Address by Geh. Hofhat Bach, Dresden. We distinguish between two kinds of credit — ^real and personal credit. As long as agriculture was carried on with the help of natural means alone, mortgage credit was the only means by which farmers could raise the necessary funds to carry on their operations profitably. MORTGAGE CREDIT. But mortgage credit to-day is quite different from mortgage credit of even a hundred years ago. At that time joint-stock mortgage banks, whose task it is to satisfy the requirements of mortgage credit, did not exist. On the contrary, the borrower had much trouble to find a moneylender, and he was frequently obliged to submit to very exorbitant terms, such as enormous interest and very short time of recall; often there was great danger of finding no lender whatever. Under such circumstances the establishment of the landschaften in Prussia by Frederick the Great was an inestimable blessing to agricultiu-e. The peculiarities of these landschaften have already been explained to you at Berlin and elsewhere. You know that the landschaften are associations of borrowers, in contrast to joint-stock mortgage banks which are associations of lenders. They have been copied in other parts of Germany, for instance, in Saxony, by three institutions, the Mortgage Credit Union for Nobility and Gentry in Leipzig, the Provincial Bank in Bautzen, and the Land Mortgage Credit Union in Dresden. I beg to call your attention to the fact that the loans granted by these associations are not subject to recall as long as the interest is regularly paid, which is as moderate as possible and can not be raised. Costs arising in connection with valuations and other preHminary expenses are kept as low as possible. Proper con- sideration of loan applications is assured by the fact that these organizations are thoroughly conversant with agricultural conditions and are in a position to appraise the value of estates and the business capacity of owners through their local representatives, who are themselves agriculturists and members. The total loans of these three associations at the end of last year amounted to 337,778,575 marks. This sum seems to be comparatively small, for it is asserted that in the whole Empire of Germany the total of the out- standing loans granted on landed properties by all the institutions which lend money on mortgage approaches the sum of 8,000,000,000 marks. Saxony covers an area of about 15,000 square kilometers — that is, one thirty-sixth of Germany. On the basis of area the proportion of mortgage loans in Saxony should amount to 225,000,000 marks. Apparently Saxony has exceeded her proportion by 50 per cent. It is evident that the land in Saxony is comparatively heavily burdened, and this is not all, for in addition to these institutions the joint-stock mortgage banks, the savings banks, and private individuals lend money on land mortgage to a considerable amount. At the end of 1910, according to the official statistics, we had in Saxony 361 savings banks operating in 357 communities, most of them villages (for Saxony numbers only 143 towns). These savings banks had at that time aggregate deposits to the amount of 1,716,000,000 marks; 1,437,000,000 were lent mostly on town mortgages, the rest consisted of cash and bonds of various kinds. The statistical office calculates the sum loaned by the savings banks in mortgages on agricultm'al land at 800,000,000 marks. If one still takes in con- sideration the considerable sum lent on agricultural land by joint-stock mortgage banks and private loans, we may safely say that the agricultural land in Saxony is burdened with a mortgage indebtedness of 1 ,258,000,000 marks. This sum, compared with the amount for the w:hole Empire of Germany, as has already been said, is compar- atively high, but it proves that the soil is particularly well cultivated and, furthermore, that mortgage credit has done agriculture very good service, especially through our three agricultural mortgage credit banks in Saxony. So much for mortgage credit. PERSONAL CREDIT. Now, with respect to personal credit. The necessity for this sort of credit grew more urgent as the rapid increase in the population and the rise of wages made continually greater demands on the land, demands which could be met only by a most careful attention to agriculture. No farmer can operate his farm successfully to-day without a certain minimum of capital, and hardly a farmer exists who is not obliged to resort to credit, at least at times. The dates of the returns and expenses hardly ever coincide. The chief returns are in the autumn and winter, when the harvests are disposed of; in the meantime expenses of breeding cattle arise, taxes fall due and have to be met, and wages can not be left unpaid. Machinery and implements often must be GEfiMAWY. 433 pl-ovided when funds are at their lowest, before the harvest. Then the farmer must either buy on credit or fail to make the necessary purchases, both very unprofitable courses. A good farmer will become a member of a cooperative society in order to provide himself with the necessary funds to pay cash for the goods to buy at the proper time, and thus insure his getting all the profits possible* The credit societies are not only lending societies, but also savings banks. They take charge of the surplus cash of the whole rural population in order to invest it in such a way that it shall again benefit agriculture. The bank offers the opportunity of placing this money in interest-bearing investments, and at the same time gives the owner the privilege of withdrawing at any time should the necessity arise. The depositor enjoys the highest rate of interest, far higher than that given by ordinary banks; for it is a well-known fact that, for capital invested on such terms, commercial banks offer a very low rate of mterest. The credit societies are really the banks of the country. Therefore, this kind of cooperative society is the most numerous. In the imperial federation they number 50 per cent, with us in Saxony 63 per cent of aU; for it has always been our endeavor to foster personal credit by means of the credit society. You have heard in Munich, Frankfurt, and Berlin that there are many credit societies which engage in the purchase and sale of agricultural implements in the interest of their members. This is also the case with us, but according to article 'A of the imperial law of 1888, which prescribes that a cooperative society must designate in its title the objects of its organization, such societies are registeied as saving, credit, and supply societies, so that the character of such societies is perfectly clear to the outside public. Our credit societies do banking business only. After the credit societies the cooperative supply societies are the most important. We call them supply and disposal cooperative societies. In Saxony they comprise one-sixth of the cooperative societies of our federation, while in the imperial federation they are only one-tenth. These societies confine themselves almost exclusively to supplying their members Avith fertilizers, feeding stuffs, seeds, agricultural implements and machinery, coal and other miscellaneous articles, and it must be said that considerable benefits have accrued to German farmers through cooperation in this direction. In the first place, the guaranty of good quality is assured to the members of such cooperative societies. Manures, feeding stuffs, or seeds sold by dealers are not usually guaranteed to contain the constituents in that proportion which makes them valuable for their purpose. Even in such cases where a guaranty is furnished the purchasers, especially the purchasers of small quantities, can not be sure that the dealer's guaranty is worth anything. For instance, a small holder buying manure to the value of 100 marks from a dealer can hardly afford to expend 6 to 10 marks to have it analyzed at a testing station. But the members of a supply society, be they large owners or small tenant farmers, are equally protected against the manifold deceits to which the trade in manures is subject. Low prices is the second great advantage afforded to the farmers by the supply societies. By purchasing in large quantities, a society is in a far better position to obtain favorable prices than the individual farmer, both with regard to the commodity and the cost of freight. Neither the credit societies nor the supply societies would be able to fuUy satisfy the requirements of their members, if they had to depend on themselves alone. Both kinds can fulfill their purposes only by affihating with a central cooperative society, which by means of its capital and expert business management is able to assume and maintain its position among financial institutions. Therefore, it has always been one of the chief objects of the federation to create central societies for the money and goods business. The connection with the central society is especially necessary for the credit societies, because very often, especially at first, their capital is not sufficient to meet the credit requirements of thek members. The societies are therefore often obhged to borrow money. This they can best do from the central cooperative bank, which, in its position as a wholesale banking house, is able to take advantage of the most favorable periods on the money market. The same is true of the supply societies, producers of many very important agricultural requisites, who combine to maintain prices, either by limiting production or by other means, wholesale merchants, by similar agreements, levying a further undue profit, and finally retail dealers combine to secure their margin of profits. Therefore, the single farmer or the single supply society, unless it be of considerable magnitude, is powerless to influence prices. With respect to the central cooperative bank, I beg to call your attention to the Government funds, which promote agricultural prosperity in a very great degree. The necessity of a central supply society is shown by the fact that from 1882 until 1907, in the German Empire, the dealers increased 146.1 per cent, while the population only increased 36.6 per cent. This propor- tion involuntarily raised the prices and lowered the quahty. Against this the farmers can protect themselves only by central cooperative societies, which are able to compete with the largest buyers in the market. 14174°— S. Doc. 214, 63-1 ^28 434 AGRICTJLTXJEAL COOPERATION IN EUKOPE. It may also be mentioned that the central societies exercise a considerable educational influence. With respect to the credit societies, they teach them how to carry on banlring business in the right manner; and with respect to the supply societies they have done much to promote the knowledge and use of suitable manures, seeds, feeding stuffs, implements, etc. The habit of inquiring about the quahty is fostered and the necessity of quality is brought home to their minds. The widespread practice of requiring orders in advance, together with the insistence upon cash or short-term payments, exercises an influence in the direction of improving busi- ness habits among the rural population. If we have done our best to foster the credit and supply societies, we have on the other hand not neglected the other kinds of cooperative societies, which further in a high degree the welfare of agriculture. Take, for example, the dairies. Our milk supply station in Dresden is perhaps the best equipped on the whole continent. Our potato-drying societies are among the best in existence. The water supply, pasturage, and threshing societies are all well managed and fulfill very well the expectations entertained. It is evident that cooperative enterprises have done much good for the farmers of Saxony, not merely in obtaining greater profits, but also in furthering the welfare of those concerned. Trust monsters and comer makers find no place in German cooperation. In America the trusts entirely control production, even the production of foodstuffs. They fix prices without paying any heed to supply and demand. These trusts are merely associations of capital, while our German cooperative societies are associations of both capital and persons. Their capital is efficiently employed, but it depends on the free will of a majority of the members. This is the peculiar and at the same time the essential feature of our German cooperative societies. The aim of our federation in Saxony has always been to guide societies according to paragraph 1 of the imperial law, namely: To promote the business and industry of all their members. Therefore, we do our best to instruct the administrative bodies in every direction, especially with respect to a knowledge of the law, book- keeping, and methods of business. The affairs of the societies are most carefully revised by competent experts. In order to influence the members of the society we often attend the general meetings, and in the winter special meetings are occasionally held. They are always well attended; more than 400 persons have sometimes been present. We estabhsh societies only when asked to do so by a large number of landowners and farmers, and when there are men available who are competent to fulfill conscientiously the duties which devolve upon the members of such an organization. In the case of credit societies we demand unlimited liabiMty; this can never become a danger, if the terms of paragraph 49 of the German imperial law be observed. According to this, the general assembly is obMged to define the extent of the business, the limits of which the association may not exceed. We also advise the societies to fix the share capital as high as possible. LONG-TERM CREDIT SOCIETY FOR MANORS IN HEREDITARY LANDS OF SAXONY. Statement Submitted to the Commissions. Dresden. The Hereditary Estates Credit Society is a bank founded in the year 1844 for the purpose of issuing mortgage loans on landed property. It was originally destined only for estates, manors, and those peasant famis on which a tax of at least 2,400 assessable imits was imposed. Later this limit was lowered, and at the present time it is possible to issue a mortgage on farms or estates of any size. The loans are granted in the form of land mortgage bonds at nominal value. The mortgagors can, how- ever, make over their bonds to the bank at an agreed rate of exchange and receive the value of the bonds accord- ing to this exchange in cash. The loan is always entered in the register of landed property at par value. The loans are divided into series or classes. Each series forms an independent class by itself. It bears the same rate of interest and rate of repayment, it receives its own amortization and reserve funds, and effects the gradual redemption of its mortgage bonds in proportion to the redemption of the loans themselves. All loss arising within a series must be borne by the series alone. It must also make good all loss caused thereby to other series or to the owners of property which are mortgaged for the benefit of the bank. The repayment of every series begins with its closure. As a rule the series is kept open four years in order to collect a sufficient number of mortgagors. Besides the interest on the loan, which is the same as that on the mortgage bonds, an aimual additional payment of one-third, one-half, and 1 per cent is charged on the current series. Until the closing of the series thi charge flows into the funds of the bank, but only to the amount of one-half per cent of the debt. From then on it serves chiefly for the repayment of the debt. If necessary it can also be used to defray the cost of administration. GEEMANT. 435 Since 1878 it has been possible to defray the costs of administration out of the profits on the funds of the bank. Since then the debtors have not been burdened with any costs of administration. The bank accumulates capital equal to 1 per cent of the amount of the outstanding mortgages and the anticipated necessary funds to cover costs of administration for the coming year and no more. Should the profits of the bank exceed the amount necessary for increasing the working capital the surplus is used to help repay the loans. The debtors (mortgagors) not only have to pay no costs of administration, but also enjoy a part payment of their debt out of the profits of the capital of the bank. The repayment of the loans takes place as follows : For series at 3 per cent interest and one-half per cent additional annual charge, 66 years; for series at 3 J per cent interest and one-third per cent additional annual charge, 71 years; for series at 3 J per cent interest and one-half per cent additional annual charge, 60^ years; for series at 3^ per cent interest and 1 per cent additional annual charge, 44 years; for series at 3f per cent interest and one-third per cent additional annual charge, 69 years; for series at 4 per cent interest and one-half per cent additional annual charge, 56 years. Series I' and II, the amortization of which began in the year 1849, were fully paid off on July 1, 1911. JRetums. 1 2 3 4 5 6 Series. Rate of interest. Surplus charge. Issued loans until close of series. End of 1912 still in hand after deduc- tion of repayments. Amounts re- paid by the end of July, 1912, through drawing of mortgage bonds from the balances given in column 5. I II III IV V VI VII VIII IX X XI XII XIII XIV XV XVI XVII XVIIa XVIII XVIIIa XIX XX XXa XXI XXII XXIIa Per cent. ^ 3S 3| 34 3i ^ ^ 3J 34 34 34 34 34 34 34 34 34 4 34 34 4 Per cent. 4 4 4 4 4 4 4 4 4 4 4 4 4 4 I 4 4 4 1 4 4 Marks. 3, 000, 150 446, 325 1, 832, 325 1, 972, 050 5,476,350 4, 801, 425 6, 827, 625 •4, 146, 000 5, 698, 050 4, 286, 550 5, 272, 700 7, 313, 000 6, 120, 800 8, 369, 900 7, 549, 000 8, 573, 700 3, 775, 600 3, 082, 800 5, 233, 300 2, 390, 900 4, 201, 100 2, 846, 700 4,654,400 1 320, 000 » 321, 700 ' 1, 683, 800 Marks. Marks. 841, 500 893, 850 2, 610, 825 2, 544, 600 4, 257, 900 2, 312, 625 3, 727, 125 2, 712, 100 3, 388, 100 5, 700, 400 4, 467, 300 6, 641, 200 5, 977, 500 6, 806, 200 3, 031, 200 2, 611, 100 4, 593, 000 • 2, 253, 700 3, 815, 100 2, 846, 700 4, 578, 600 320, 000 321, 700 1, 683, 800 366, 750 503, 925 1, 271, 325 986, 175 1, 260, 225 430, 500 1, 244, 850 802, 400 583, 800 917, 600 577, 500 959,400 679, 900 506, 500 164, 300 138, 300 150, 800 74, 900 67, 300 9,400 15,300 h 110, 196, 250 78, 936, 125 11, 711, 150 1 Series still open. ' The amortization begins with the closing of the series. AGRICULTURAL CREDIT ASSOCIATION OF SAXONY AT DRESDEN. Statement Submitted to the Commissions. Dresden. About the middle of the nineteenth century two institutions, the Hereditary Estates Credit Society of Saxony at Leipzig and the Provincial Bank of the Margraviate of Ober-Lausitz at Bautzen, were founded in 436 AGRIOULTUEAL COOPEBATION IN EUROPE. the Kingdom of Saxony, on the principle of the Prussian provincial banks, for the purpose of granting credit on easy terms to agricultural landed proprietors. The former at that time advanced money only on manors and larger peasant farms; the latter was at first according to its constitution especially a credit bank for the landed property of district of Ober-Lausitz. Therefore the need of credit of the medium and smaller estates in the Sachsische Erblande (Saxon hereditary lands) was not remedied by these institutions. To fill up tiiis gap the Agricultural Credit Association of Saxony at Dresden was called into being in the year 1865 on a cooperative basis by agricultural estate owners. Its statutes were confirmed on April 27, 1866, by a royal decree. The society was endowed with particular privileges by the royal Saxon government, which at the outset had placed a capital of 250,000 thalers at its disposal to meet the first financial needs. It also gave the society the right to issue mortgage bonds and credit bonds payable to bearer, which were declared to be authorized investments for trust money, based on the mortgages and loans to communities which it had granted. The documents drawn up by it in a constitutional form were equivalent to public documents. Its mortgages were entered in the register of landed property in mortgage bonds — that is, at a variable value according to the exchange value and not at a fixed definite amount in cash as otherwise required by law. When the new German Civil Code came into force in the year 1900 the society was recognized by the Government as a provincial credit bank, whereby the continuation of its privileges and therewith its further undisturbed development in the former well-proved way was secured. The Agricultural Credit Association in the Kingdom of Saxony is a cooperative society founded according to the old Saxon law. The society is under the control of the royal Saxon government, the fimctions of which are entrusted to two commissioners. The society grants loans in accordance with its statutes against mortgages on land suitable for agricultural purposes up to six-tenths of its value. It further grants loans to communities and imited communities on the security of the same. The area of its mortgage operations extends at present over the Kingdom of Saxony and the principality of Reuss elder Line, and the loans to commimities over the royal Prus- sian provinces of Saxony, Brandenburg, and Silesia, the State of Thuringia, and the Duchy of Anhalt. Based on the mortgages obtained, the society issues mortgage bonds payable to bearer, and on the loans to conimunities similar credit bonds. The total amount of the mortgage bonds may never exceed the total amount of the mortgages at the time due to the bank, and the total amount of the credit bonds may never exceed that of the loans to communities. The owners of landed property as well as commimities can, in the interest of a stable business, be served with a loan only, which can not again be withdrawn by the creditor, and by which they are secured from raising, the rate of interest, if the terms of the agreement on which the debt has been contracted are punctually fulfilled. On the other hand, the option must be given them to discharge their debt at any time. The society concedes these privileges to its loan debtors in that the loans be called in for repayment; it renounces the right of calling in the loans as long as the debtors fulfill the conditions imposed on them by the statutes and the loan contract (documents relating to the debt), while on the other hand it allows them any convenient payment or part payment of the debt at any and every time and in contrast to its own restriction leaves the debtor the greatest liberty. The gradual amortization of the loans taken up gives the landed proprietor as well as the commimity a necessary economic measure. Therefore the bank grants the loans as a rule on universal compulsory amortiza- tion. In order to help effect the amortization the debtors have to pay the bank an amortization sum in addition to the interest on the loan. This is fixed so low that it is possible for the landowners of small means to pay it. The amortization appears at first very low ; however, it has become by its continuous growth an important and beneficial factor in raising the financial position of Saxon agriculture. The rate of amortization for the communities is defined by the controlling authorities according to the capability of the community and the object of the loan. The chief principle of the business transactions of the society bank has always been its unlimited disinter- estedness. Comparatively speaking, the society only works as intermediary between borrower and lender, between supply and demand for capital. It therefore apportions them the proceeds of the mortgage and credit bonds put on the market, issued on the basis of the advanced loan as little diminished as possible. The society in particular demands no brokerage; it requires only an adequate reimbursement to cover the expenses incurred by the making out and stamping of the bonds and through their sale. The annual payinents which the debtors (borrowers of the loans) have to make exceed by a fixed amount the interest which they have to pay on the issued bonds. This serves for amortization of the loan, to defray the costs of administration and other neces- sary expenses. The society fixes the rate of interest on the mortgage and credit bonds and on the loans which it grants as low as the money market conditions at the time in question allows. At the present time the society is obliged GEEMANY. 437 to issue bonds at 4 per cent, but it has for the most part been able to fix the rate of interest of its bonds at 3 J per cent and for a part even at 3 per cent. The selling price of the bonds of the society maintains a favorable standard on account of the safe invest- ment which they offer and in general has not been behind Government bonds, a condition which means a great advantage to the borrowers who receive them in lieu of the cash value of the loans. The society has fulfilled its chief task, that of helping medium and small farmers to thrive on the credit afforded. About one-third of the hypothecary loans granted by it hstve been to farms up to 10 hectares in size, another third to farms up to 20 hectares. Besides this the loans on the smaller properties are comparatively higher per hectare than on larger estates. The society has issued a preponderating amount of its loans in small sums — loans up to 10,000 marks amount to two-thirds of all the hypothecary loans granted by the society, which speaks strongly for the steady adherence to the purpose of aiding the real farmer. The development of the business of the Landwirtschaf tliche Kreditverein is shown beldw. The society was checked at the outset of its career through the wars of 1866, 1870-71 and their consequences and by an excessive number of industrial undertakings and their demands on the money market. But later it began to thrive in a very unusual manner. At the time of its foundation 1,120 members had joined the society. This number had increased to 16,270 at the end of 1912 and comprised a considerable number of the Saxon landowners. The society has issued the following loans: At the end of the first business year, 1866, 1,280,000 marks; at the end of the fifth business year, 1870, 3,620,000 marks; at the end of the tenth business year, 1875, 20,730,000 marks; at the end of the twentieth business year, 1885, 66,500,000 marks; at the end of the thirtieth business year, 1895, 96,990,000 marks; at the end of the fortieth business year, 1905, 321,220,000 marks. At the end of the year 1912 the total amount of the loans granted by the bank was 411,030,000 marks. The rate of interest on the amortization loans after the deduction of an annual extra percentage for amor- tization purposes, corresponding to the rate of interest on the mortgage and credit bonds issued against the loans granted, amoimts to : Mortgage bond loans: 3 per cent, 14,200,000 marks; 3^ per cent, 132,240,000 marks; 4 per cent, 38,090,000 marks. Credit bond loans: 3 per cent, 11,600,000 marks; 3 J per cent, 116,650,000 marks; 4 per cent, 91,590,000 marks. The amortization loans granted to owners of property amount to a total of 16,004 and are divided, according to their size, as follows: 561 loans up to and including 1,000 marks; 5,118 loans over 1,000 marks up to and " including 5,000 marks; 4,603 loans over 5,000 marks up to and including 10,000 marks; 3,860 loans over 10,000 marks up to and including 20,000 marks; 1,569 loans over 20,000 marks up to and including 50,000 marks; 215 loans over 50,000 marks up to and including 100,000 marks; 78 loans over 100,000 marks. The amounts in the amortization funds at the end of the year 1912 reached a sum of 51,340,000 marks. PROVINCIAL BANK OF THE ROYAL SAXON MARGRAVIATE OBERLAUSITZ. Statement Submitted to the Commissions. Dresden. This bank is an undertaking of this province foimded in the year 1844. The real estate of the entire province must, in case of necessity, be responsible for the requirements of the bank. It has been recognized by the State as a provincial agricultural credit institution according to article 167 of the Tariff regulation in in the Code of Civil law for the Empire of Germany. The headquarters of the bank is in Bautzen. It has a branch in Dresden. The object of the bank is to assist agriculturists in the Kingdom of Saxony, especially in the Ober- Lausitz, by granting loans on land at a low* rate on easy terms and to provide communities, united com- munities, and societies with the means necessary for their development by granting them loans on easy terms. Besides this it gives everyone the opportimity of increasing his fortune in a perfectly safe manner, by accepting bonds, shares, etc., for safe-keeping and administration, by investing savings at interest, opening current accounts for customers, buying and selling shares and bonds, granting loans and mortgages on securi- ties, collecting moneys, issuing letters of credit for traveling, exchanging money, trading in checks, etc. The capital for its loans to owners of property and to communities the bank raises chiefly by issuing bonds, promissory notes. Mortgage bonds and credit bonds can not be put in a lottery and have been declared suitable investments for trust funds. The loans are advanced and repaid in cash, not in mortgage or credit bonds. 438 AGRIOULTUEAL COOPEEATION IN EUROPE. Loans are made to communities in accordance with the value of their taxes. Loans to owners of property must be on hypothecary security. The loan can be advanced on the land in question up to two-thirds of its value after having been valued by the bank experts. These loans are at present issued at a rate of 4 per cent, either to be called in (redeemed) on installments or as amortization installment loans. The discharge of these installment loans is accomplished by an annual payment of 4 per cent interest, four- tenths of 1 per cent repayment (amortization), one- tenth of 1 per cent costs of administration, or 4.5 per cent on the amount of loan payable in 61.13 years. Four per cent interest, nine-tenths of 1 per cent repay- ment, one- tenth of 1 per cent costs of administration, or 5 per cent on the amount of loan payable in 43.2 years. The rate of interest in the case of such redeemable loans paid by installment is always unchanged. The rate of interest on loans which can be called in depends on the general money market. DRESDEN COOPERATIVE MILK PURVEYING CO.; DRESDEN MUNICIPAL SLAUGHTERHOUSE. Report of a Subcommitteb. Dresden. The Dresden Cooperative Milk Purveying Co. dairy is a well-equipped plant, occupying a valuable site within the city limits. It handles the product of 350 farmers, who constitute the society and who furnish daily 30,000 liters of milk. The product is sold chiefly as whole milk, though a small part of it is converted into butter and cheese. The chief customers of the dairy are hotels, restaurants, and private consumers, who purchase directly from the dairy and to whom the supplies are delivered by milk wagons. There is no obligation upon the farmer to sell his entire output through the dairy, though most of the members use the dairy exclusively for selling. The entire price received for the milk or butter or cheese when sold to customers is paid to the farmer, less expenses of handling. The milk is received and paid for on its general quality by weight or measure and not by butter-fat test, though the management is now considering the plan of purchasing by test. The statement was made that present prices are better than the prices for milk and butter sold by the individual farmer direct to the trade or to the consumer, because the product of the dairy is subject to careful inspection and sanitary treatment, which enable it to be sold at a premium in the market. The dairy must meet severe competition with private undertakings and spends $2,500 a year in adver- tising its business. This dairy makes a specialty of nursery milk for children, prepared in a special laboratory on prescriptions of physicians. It supplies, also, a medicated sour milk product, which is much demanded by persons suffering with indigestion or other stomach troubles. LIVE-STOCK SLATJGHTEEHOUSE. The Dresden municipal live-stock market and slaughtering establishment is an elaborate plant, constructed according to the best methods of modern sanitation. The plant was erected by the city at a cost of about $4,000,000. The commissions on sales of live stock and the charges for slaughtering and storage are sufficient to more than pay interest on the investment, so that the enterprise yields a net profit to the city. The sew- age and waste from the plant are chemically treated and the impurities removed to such a degree that the entire waste fluid is permitted to flow into the river below the city without serious contamination of the water. This process is well worth investigation by slaughtering establishments and packing houses in the United States, where such establishments are now giving great concern to communities on account of contamination of streams into which their sewage is discharged. The mimicipal authorities of Dresden generously offered to give detailed information concerning the process of purification, and any person interested may obtain information by addressing the burgomaster of Dresden and referring to the visit of the commissions. The best grade of fat cattle sold in this market on this date at a little more than 9 cents a pound live weight, and the best grade of hogs at about 10 cents a pound in weight. GERMAN FINANCIAL METHODS. Statement Submitted by Mr. Robert P. Skinner, United States Consul General at Hamburg. Hambtjbg. Hundreds of more or less voluminous reports have been published within the last 20 years deacsriptive of German methods of loaning money on a basis of mutual support to farmers and borrowers in sniaJl amounts generally. An American commission is in Europe at the present time for the purpose of studying the several GERMANY. 439 systems in operation, and no doubt American legislation on the subject will be introduced and perhaps enacted within the next few years. It would require a large volume to explain in detail the working plans of the German societies, companies, or banks, and yet the essence of the three prevailing systems may be set forth fairly com- prehensibly in a few lines. Before passing to the special financial systems now attracting so much attention it should be explained that the keystone of the German financial arch is credit; that is to say, a conviction upon which general prac- tice is based that there is no better form of financial security than a good signature. The central bank of this country, the Imperial Bank, issues not money, but a currency guaranteed except as to the limited gold reserve by bUls of exchange and other commercial paper, each paper accepted by the Imperial Bank bearing a number of good signatures. The policy of the Imperial Bank is to accept commercial paper from private persons and banks, and to issue currency in the amount of the paper accepted, a policy which enables banks in Germany, and other financial institutions also to carry on their work with a reasonable assurance that properly accepted paper can be rediscounted at any time. A currency system of this character can break down only in the unthinkable contingency of a collapse of the whole commercial structure of the Empire. This theory of mutual support, that is to say, support through indorsements in the field of large commercial transactions, has been extended to money-lending operations generally and especially to those in which small farmers and landowners appear as borrowers. The farmer as a borrower has always presented an especially interesting problem. The farmer, after planting his crops, must await the harvest before he can realize upon his work and during a long part of the year, unless provided with sufiicient accumulated capital must borrow where best he can until the results of his labor are thrown upon the market. No other borrowing class is subjected in the same degree to limita- tions established by nature. To meet the needs of the agricultural classes particularly and the requirements of urban borrowers in small amounts, three general groups of money-lending institutions have grown up in Germany, these groups having in each case a central organization, so that the tiniest unit in the system is thus brought into con- tact with the whole fuianeial structure of the Empire. The units in each group are not always exactly alike; various circles of thought exist in respect to administrative questions, but the general policy and results in , all of these enterprises are much the same. LANDSOHAFTEN ORGANIZATIONS. Landschaften organizations properly belong in the first group of money-lending enterprises, as they were the first to fix themselves in the economic system of Germany. These organizations comprise landowners of a fairly responsible class, limited as to credit individually, and who, without their organizations, could borrow only in their own neighborhood and by paying fairly high rates of interest. The members of these organiza- tions submit their land to appraisal and mortgage their property to the organization, so that the organization disposes of the combined credit of the entire membership. When a member desires to borrow money he obtains bonds from his landschaft organization, these bonds representing the value of his own mortgaged property. The bonds which he receives are not secured by specific mortgages, but by aU the assets of the society, and they are payable to bearer. The borrower asks for a bond upon which his association pays 3, 3i, or 4 per cent interest. He seUs his bond at market rates, usually under par, and keeps the proceeds. Thereafter he pays interest and sinking-fund installments into the treasury of the landschaft organization upon the nom- inal value of the bonds which he has sold. These bonds, which are mortgages under another name, are recognized throughout Germany as commercial paper of an excellent class and always in demand. Loans obtained by members of the landschaften organizations run in amounts from $750 to $5,000. GBNOSSENSOHAFTEN. The second group of borrowing institutions are known generically as the Genossenschaften (cooperative societies), and may be subdivided into the Eaiffeisen and Schulze-Delitzsch banks, the former dealing princi- pally with small landowners and the latter with both rural and urban borrowers. Both sets of banks are composed of individuals whose security for their borrowings consists only of their general reputations for integrity. These banks, to put the matter in a word or two, merely provide a method by which members indorse each other's borrowings to the full extent of their own assets. Members are brought .together who reside in a small defined area, the total population of which is seldom less than 400 or more than 2,000, the expectation being that each member will be acquainted with his associates and that notoriously improvident and irresponsible persons will be excluded. The banks, or associations, pay interest on deposits and, having a weU-established reputation, obtain deposits from which loans are made, generally in very small amoimts. The loan having been made to a member, all the other members of his bank are jointly responsible for repay- ment of the amount borrowed. The local societies have regional banks and the regional associations have 440 AGEICTJLTUKAL COOPERATION IN EUEOPE. central institutions, so that the tiny streams of personal credit are brought together. On January 1, 1910, there were 14,993 EaifiFeisen banks, with a total membership of 1,447,766, which had outstanding loans of $452,749,961. Among the essential administrative features of these banks are unlimited liability of members; loans only to members, and then for productive or provident purposes only; determination annually of the maximum credit that may be held by individual members at one time; absence of profit seeking; dividends limited to rate of interest paid by borrowers for their loans; officeholders, except the secretary, serving gra- tuitously. In the Schulze-Delitzsch system of banks the average number of members was 94 in 1910, and, as far as could be ascertained, the interest for loans ran from 4 to 5 per cent. These banks paid interest on deposits, which usually was from one-quarter to one-half of 1 per cent more than the interest paid by ordi- nary savings banks. The security enjoyed by depositors in these banks was based upon unlimited personal responsibility in the case of 92 per cent of all the institutions; common knowledge of the standing of the members; supervision of each society by its own board of supervisors; audits by outside accountants working under the direction of the combined group of institutions. LAND-CREDIT BANKS. The third group of money-lending associations are banks of a commercial character, organized for profit, but making loans only upon real estate security. These banks may be found in many small centers of popu- lation. They obtain deposits which provide them with funds for making loans, and if they are short of depos- its for this purpose they obtain the necessary capital from their own central mortgage bank. The land-credit banks loan money on mortgages made out in their own names, or upon mortgages issued to bearer, and if the mortgage is so indorsed the rate of interest charged is somewhat higher, probably one-half of 1 per cent, than current market rates. One of the very great aids to borrowing by landowners in this country is the simplification of the docu- ments necessary in these transactions and the facilities which exist for issuing mortgages to bearer rather than to individuals. AGRICULTURAL ORGANIZATION OF HANOVER. Address by Herr Bussen, General Secretary Union of Hanover Agricultural Assoeiations. Hanover. The system of agricultural associations in the Province of Hanover is represented by the Union of the Han- over Agricultural Associations, a registered society, at Hanover. It was founded at the same time the imperial law concerning industrial and agricultural associations came into force, so that the union can now look back on a period of activity extending over 24 years. The growth of the union is shown by the following table: Cooperative societies affiliated. Year. Central associa- tions. Credit. Dairy. Supply. Others. Total. 1889 24 106 260 337 447 492 502 13 136 201 264 307 310 311 15 51 98 137 180 208 215 1 8 27 88 329 398 429 53 1894 4 4 3 3 3 3 305 1899 590 1904 829 1909 1,266 1912 1,411 1913 1,460 SAVINGS AND LOAN ASSOCIATIONS. The development of the savings and loan banks, which in number occupy the first position among the associations, Jias been extraordinarily uniform. In the year 1893 only 4 savings and loan banks were founded; in the following year the number rose to 18, and reached its highest point with 46 in the year 1895; the follow- ing year compared very favorably, with 43 foundations. The foundations in the following years were: 1897, 20; 1898, 25; 1899, 20; 1900, 32; 1901, 15. Several large bank failures in the Proviijce of Hanover and the bankruptcy of a savings and loan bank connected with the union caused extreme mistrust of savings and loan banks with unlimited liabiKty by the peasantry of the province. Consequently only 9 savings and loan banks were founded in the year 1902. 1903, GERMANY. 441 13; 1904, 18; 1905, 17. The year 1906 showed that confidence had been reestablished among the Hanover farmers; in this year again 28 savings and loan banks were established. The succeeding years show the follow- ing developments: 1907, 23; 1908, 31; 1909, 22; 1910, 14; 1911, 17; 1912, 20 foundations of savmgs and loan banks. The savings and loan banks, which, as their name implies, were formed principally to advance economic activities by taking deposits from members and nonmembers and to satisfy the need for cheap credit in an adequate manner, have been able to form themselves into regular village banks by employing the modern money- exchange faciUties. By initiating the current account, check, and transfer business, discounting bills, acting as agents in buying and selling paper securities, the savings and loan banks have enabled their members to carry on their cash dealings in a businesslike manner. The commercial development of the savings and loan banks is illustrated by the following table : Savings deposits. Total turn- over. Turnover in current account. Paid out during year. Paid back during year. Year. Deposited in the course of the year. Amount at the end of the year. 1889 Marks. 1, Oil, 073 4, 529, 859 Marls. 6, 513, 000 20, 700, 000 Marhs. 6, 700, 000 Marls. 2, 281, 000 Marhs. 685, 000 Marls. 343, 000 1895 1897 4, 520, 000 9, 200, 000 15, 730, 000 369, 300, 000 25, 949, 000 46, 055, 000 63, 078, 000 150, 800, 000 4, 260, 000 6, 106, 000 7, 913, 000 19, 085, 000 2, 155, 000 1900 12, 423, 706 1, 783, 019 30, 950, 205 32,414,425 30, 740, 615 52,350,297 96, 417, 031 107, 251, 832 3, 650, 000 1905 3, 897, 000 1910 10, 184, 000 1911 ; The continuous development of the business activities reflects itself in the business transaction of the Central Credit Bank (Ltd.) at Hanover, the clearing house for the savings and loan banks connected with the union. The total turnover of the Central Bank in the following years amounted to : Marks. 1890 2, 890, 000 1897 23, 840, 000 1900 49, 800, 000 1905 '. 113, 320, 000 1910 339, 600, 000 1912 444, 000, 000 The Bank had, on December 31, 1912, 1,235,229 marks of undivided profits and total liabilities of 15,630,000 marks. The dairy associations show a slower development. The relatively large number of societies founded in the years 1890 to 1894 (25 dairy associations yearly) decreased after 1895 and showed an average of 12 per year for the following 12 years. Further, there were founded in 1908, 10; 1909, 12; 1910, 9; 1911, 7; 1912, 6. The low numbers in the last few years must not be atti'ibuted to a falfing off in the interest of the Hanover farmers in cooperative enterprises, but in the circumstance that the Province of Hanover has gradually become covered with a fairly dense network of dairy associations and private dairies. New dairy associations mean in many cases a splitting up of existing large and capable associations, and are therefore not always to be regarded as strengthening the agricultural association system. The union considers it to be its duty to warn farmers against dairy establishments which will not correspond to the permanent interests of the farmers who are members. The following figures are authentic data of the business done: Year. Quantity of nulk received. Quantity of butter sold. 1889 1897 1900 1905 1910 Liters. 16, 000, 000 231,000,000 340,000,000 346, 000, 000 466,000,000 Kilograms. 497,300 7,409,760 9,563,000 9,434,000 15, 631, 000 442 AGEICULTURAL COOPERATION IN EUROPE. OOOPERATIVE DISTRIBUTION. The fact that the farmers benefit greatly by obtaining their agricultural necessities from the societies is fortunately becoming more and more widely recognized. This is shown not only by the formation of new supply associations, but also by the greatly increased turnover of the individual associations. The increase in the trade in manure and foodstuffs is shown by the following table: Year. Manure. Foodstuffs. 1889 1897 1900 1905 1910 Centners. 33, 000 550, 000 668,000 1, 117, 000 2,097,000 Centners. 18, 000 173, 000 294, 000 458, 974 937, 000 The total of the goods supphed by the agricultural supply associations had a value in the following years of: Marks. 1889 167, 000 1897 1, 496, 000 1900 3,994,000 1905 7,119,000 1910 9, 529, 000 At the present moment two central and 193 local supply associations belong to the Hanover Supply Association. About 18,000 members are joined in these associations, with a total turnover in goods of 36,000,000 marks. In addition to the supply associations there are also 120 savings and loan banks and a large number of dairy associations engaged in supplying agricultural necessities. If the turnover of these asso- ciations is added, the value of the goods supplied annually by the associations belonging to the union reaches a height of 40,000,000 marks. The central supply depots for the united associations are the Principal Association (Ltd.) at Hanover and the Central Association (Ltd.) of the Agricultural Consumers' Society at Osnabruck. The turnover of the Principal Association is shown by the following table: 1901 1903 1910 1912 Manure Foodstuffs Com Grain Seed Hay Potatoes Coal Copper Straw Agricultural machinery department. Electric department , Marks. 1, 204, 096. 57 589, 726. 08 305, 551. 70 339, 908. 00 64, 856. 96 Marks. 2, 767, 542. 83 1, 280, 500. 41 286, 711. 95 1, 788, 474. 10 94,432.58 589. 00 11, 242. 16 37, 804. 15 19, 920. 11 1, 502. 65 6, 294. 47 8, 131. 20 143, 113. 79 Marks. 3, 784, 767. 27 5, 509, 958. 11 162, 568. 80 5, 326, 556. 47 167, 523. 60 794. 96 12, 294. 65 49, 229. 32 29, 765. 60 Marks. 4, 298, 228. 25 6,652,400.27 4,436,730.31 94, 179. 62 697, 973. 65 20, 284. 20 42, 808. 42 16, 863. 71 179. 95 260, 200. 86 272, 055. 48 Total. 2, 523, 767. 69 6, 426, 631. 12 15,741,432.43 16,093,931.07 The Central Association of the Osnabruck Agricultural Consumers' Society, as its name imphes, includes the government district of Osnabruck only; the Principal Association extends to the remaining government districts. The Central Association at Osnabruck shows the following sale figures: Year. Manure. Foodstuffs. Total sales. 1891-92 1901 1905 1910 1912 Marks. 135, 087. 25 387, 922. 96 714,012.21 1, 105, 924. 00 1, 205, 160. 00 Marks. 134, 115. 53 560, 574. 90 864, 148. 83 1, 098, 117. 00 2, 157, 940. 00 Marks. 269, 202. 78 948, 497. 86 1,578,161.04 2,204,041.00 3, 363, 100. 00 GBBMANT. 443 LIVE-STOCK ASSOCIATIONS. The cattle-marketing associations form a large division of the Hanover agricultural associations; the aims and purposes of these associations are: 1. To uphold the German market for German agriculture. 2. To influence the fixing of prices for live stock. 3. To regulate the supply accordiag to the demands. The failure on the part of members to comply with the statutory obligation to deUver all their fat cattle to the association caused the dissolution of a number of the cattle associations in the years 1905 and 1906, as members sold their good cattle at a high price to the dealers and retailers and the inferior cattle to the associations. Since then all the associations have introduced the principle of compulsory sale of all cattle to them, with excellent results, and in this way they have induced an iaterest in the formation of new associations. At the end of 1905, only 35 cattle-marketing associations were in existence; in 1906, there were 37; 1907,53; 1908,63; 1909,66; 1910,71; 1911,87; and in 1912, 88 associations. The turnover of the associa- tions has risen from year to year; last year was especially favorable, as the following comparison with the year 1911 shows: Year. Members. Cattle. Calves. Sheep. Hogs. Gelding swine and pigs. Proceeds. 1911.... 1912.... 21, 521 21, 947 3,485 3,665 23, 673 21, 927 1,989 1,877 348, 078 ~ 340, 051 45, 711 47, 072 Maries. 35, 597, 795. 81 44, 648, 114. 10 1912.... +426 +180 -1, 746 -112 -8, 027 +1, 361 +9, 050, 318. 29 POULTRY AND KGG SOCIETIES. Poultry and egg associations as weU as cattle marketing associations exist in Hanover. Their aim is to dispose of the eggs delivered by members at the highest possible price and to take suitable measures for the advancement of poultry farming. The sale of eggs and the advancement of poultry farming by the associations stand in such close connection that the sale of eggs can not be considered its sole aim. In 1900 six egg associations existed. In 1903, 12; 1904, 15; 1905, 25; 1906, 41; 1907, 47; 1908, 57; 1909, 62; 1910, 62; 1912, 65. The extent of the egg sales by the associations has increased from year to year. In 1905, 22,000,000 eggs were sold by the associations; in the year 1910, 28,000,000 eggs, and in 1912 over 30,000,000 eggs. In 1910 the associations were able to pay their members 1,633,808 marks for eggs delivered, and in 1912 over 1,800,000 marks. MACHINERY ASSOCIATIONS. The fact that many middle class and all smaller farmers can not afford the machines necessary for modern farming operations has led to the founding of numerous machine associations. Nearlj'^ all machine associ- ations use one or several steam threshing machines in common; besides this, most of the associations have introduced feed grinders and sawmills. In some cases wagons, mowing machines, manure spreaders, seeders, sorting machines and oU-cake breakers are used in common. In the year 1900 seven agricultural machine associations belonged to the union, in 1904, 8; 1907, 15; 1908, 25; 1909, 31; 1912, 31. COOPERATIVE ELECTRIC PLANTS. Electricity is being employed more and more in Hanoverian agriculture. Usually the parishes bear the cost of constructing the necessary plant for the supply of electric power. Where it is not possible to induce the parish to do this, some form of cooperative association is chosen by those interested. At present 123 electricity associations exist in the Province of Hanover, 9 of which possess their own electric plants or are about to build them. The remaining associations obtain their electricity from outside power plants and erect mutually only the local plant and the connections. Thirty-five water-supply associations also have come into being because the parishes refused to lay water mains, thus obliging the more sensible persons who were interested to take steps to supply water by means of cooperative associations. 444 AGKICULTXTEAL COOPERATION IN EUROPE. AFFILIATED SOCIETIES. Various other associations have affiliated themselves with these principal groups of agricultural associ- ations. At the present moment 3 milling associations, 1 vegetable-marketing association, principally for the manufacture of sauer kraut; 4 fruit-handUng associations which, however, are not occupied in the manu- facture of wine, marmalade, sirups, or jams, but devote themselves exclusively to the sale of fresh fruit; 2 vegetable-canning factories, 3 brickyard associations, 8 potato-drying associations, 1 turf-strewing association, 1 straw-chopping association, 1 straw-husk manufacturing association, 1 bakery association, 1 meat-products factory. The associations for the advancement of cattle breeding are divided into 2 fat cattle and breeding associations, 1 goat-breeding association, 2 horse-breeding associations, 1 poultry breeding and fattening insti- tute, 1 cattle market-hall association, and 13 pasture associations. A great future is assured for the last- named associations. Their purpose is to prepare and preserve great pasture areas, where the young cattle can be brought up in a natural way. These pastures are largely developed in the Province of Hanover by the cultivation of waste tracts. The interest in the cultivation of waste lands has become remarkably keen of late and great zeal has been shown in enclosing huge tracts of moor land and making them fit for cultiva- tion. This shows itself in the foundation of particular cultivating associations, 4 of which already belong to the union. If great tracts are in the possession of individual farmers who possess the necessary capital for culti- vating them, of course they undertake the work of cultivation themselves. If, however, it is a question of a large tract suitable for cultivation which belongs in small lots to a number of farmers it is in the interest of all to obtain a systematic and uniform handling of the tract. Hence, it is essential that those interested should join in an association in order to imdertake mutually what would be impossible for single individuals to do. MISCELLANEOtrS COOPERATIVE ASSOCIATIONS. It is worthy of note that the automobile is being introduced in a greater degree through the associations as a means of transport in country districts. Nine motor transport associations have already been formed and have joined the union. These associations have worked to the satisfaction of the districts in which they operate, and have been financially sucessful. Finally, the union includes 1 building association, 1 association for procuring the utensils used in dairies, 3 associations which have constructed gasworks and provide their members with gas for lighting and heating, 1 weighbridge association, 4 private high schools formed by the associations, 1 hospital and nursing association, 1 colonization association, and 1 ship-transport association. Though the purposes of the numerous associations are so different, all of them work with the same aim, the advancement of the industrial and agricultural interests of the rural population. All have the same equally valid foundation; all have the same association motto, "one for all and all for one" ; and all bear witness to the truth of the old saying: "United we stand, divided we fall." The agricultural associations have not only economic but also ethical tasks to fulfill- The outlay for agricultural utilization, and charitable purposes by the Hanover agricultural associations during the last two years reached the sum of 57,892.94 marks, divided as follows: Marit. Agricultural purposes 11, 652. 00 Educational purposes for children 9, 056. 40 Church purposes 10, 942. 40 Improvement of roads 6, 825. 00 Nursing of sick 4, 772. 47 Those who have suffered from floods 6, 417. 67 Support of associations in need of help 1, 365. 50 The Wilhelm Haas Institution 5, 431. 50 Different purposes (particularly for fire brigades) 1, 430. 00 The above citations are presented only by way of illustration to give a broad idea of the concentrated many-sided work which has been carried out in the Province of Hanover by associated effort. GEBMAKY. 445 GERMAN SAVINGS AND LOAN BANKS. Statement by Mr. A. Fkicke. Hanover. About 30 years ago the first savings and loan bank was erected. But it is remarkable that our country people found it unnecessary. Strangely enough some said they had too much money to need such banks, others too little money to use them. Some said, "We are poor fellows; we have no money to deposit." Others said, "We have plenty of money and do not need to borrow." The principal reasons for erectmg these banks are: 1. Everybody can use the savings banks. It is important to develop a nation of saving people. The encouragement of saving is essential for national wealth as well as for the happiness of every family. It is most important that everyone save a "Notgroschen" (needed grote) in his youth. Therefore we are trying to encourage the young to become savers by collecting their pennies through the "home-money box" (heimsparkassen). A man who saves his money is usually a happy and contented man, so when we erect savings banks all over the country we think it is a great patriotic work. But there is another important thing. We call it "circulation of money." We must remember that coins first came into use in Germany about a thousand years ago; Charlemagne first stamped coins. Since that time everybody in the country, farmers included, have treated money like commodities, such as corn and hay. It was and is stored in the household. There was no possibility of treating it in any other way. An enormous sum lies useless in our farmhouses. We have in Germany about 10,000,000 independent men, and it is said that on the average each of them has a hundred marks lying unused the whole year. Half that sum equals 500,000,000 marks, a sum quite sufl&cient to prevent the Imperial Bank from increasing the rate of interest That is the reason we teach the country people to put their money into the savings banks. Every member of such a bank has a current account. Interest is reckoned from the day the money is deposited. It can be drawn any day. More than this, every member of this bank also gets credit in the current account, so he is not compelled to sell corn or live stock to procure money. He can buy and pay cash. He is no longer in danger of being robbed by the usurer. It has been proved that a number of villages were able to pass the crisis of the moneyless year of 1907-8 without any help from the "Zentralbank" (central bank). Savings banks in the country will make the people independent of the great international banks. 2. The other problem is to forward the principle of paper exchange — that is, to buy and pay without ready money. It is a great mistake to take money out of the banks and to send it out of the neighborhood far over the country. The German post, it is said, carries in the pockets of the postman about 20,000,000 to 30,000,000 marks every day. Only 25,000,000 a day would make 9,000,000,000 in the year. Some other way of circulating this money must be found, and this way is to assign the money from one bank and one account to another. Our savings bank has difficult work to do in the country. For hundreds of years people were accus- tomed always to pay and be paid in cash. It is well known that a peasant always prefers coins, even silver coins, to notes or checks. It is a problem of education, and it wOl take years and years before we have a money- less commerce in the country. The German farmers can learn a great deal from American farmers on this subject. German farmers in America who visit their fatherland teach our farmers much by showing their check books and telling them how money is handled. We expect the savings banks to be the banks of the future for aU the agricultural associations. Dairy members wiU assign the money for their milk to their current accounts. The farmer who buys manure wiJl pay for it through his savings bank. We are just beginning our pioneer work. It is a great thing to free our farmers from old customs and prejudices. During the next 25 years we may make more progress. Certainly while we are working our undertaking is growing. CENTRAL BANK OF THE NATIONAL ASSOCIATIONS. Address by Mr. H. Steigek, Counsellor of Economy. Hanover. The establishment of savings and loan banks in the Province of Hanover began in the year 1880. Nat- urally, the unfederated banks soon felt the necessity of investing their surplus funds at interest and of receiving money from other sources in case of need. Most of these banks joined themselves to the central bank, the clearing house of the Westphalian savings and loan banks, which was established as a limited company in the year 1884 at Munster. The establishment of a central bank of their own was soon projected. The matter was first 446 AGEICULTTJEAL COOPERATION IN EUROPE. brought before the Royal Agricultural Society on the 25th and 26th of April, 1887. A commission formed that year showed that the establishment of a central bank had become an absolute necessity for the savings and loan banks. On November 25 the Royal Agricultural Society requested the provincial admiaistration to grant a cash subsidy of 3,000 marks, a yearly subsidy for the period of five years of 2,000 marks, and to open up a line of credit under the least irksome conditions. The provincial admiaistration granted a cash subsidy of 4,000 marks toward the first cost of installation and prepared to grant a line of credit up to 50,000 marks without deposit of securities, and a further line of credit of 100,000 marks with deposit of securities. On January 4, 1890, the establishment of the Provincial Cooperative Bank was initiated by the commission of the Royal Agricultural Society and concluded on January 22 with 26 afiUiated savings and loan banks. ORGANIZATION OF THE PROVINCIAL COOPERATIVE BANK. The Provincial Cooperative Bank is a central association for carrying on a banking busiaess. This bank has the following chief functions: 1. To grant credit to the members. 2. To take their surplus money on deposit and to pay interest on it. Only such associations as have joined the Union of Hanover Agricultural Associations can become mem- bers of this bank; further, individual members who have been chosen members of the board of directors or board of control of the Landesgenossenschaftskasse; in addition, all individuals; and finally, all public bodies or bodies of public utility, institutes and societies, as far as they exclusively or principally serve the' iaterests of agriculture or the agricultural population. The increase in the membership is as follows: Year. Number of asBocia- tione. Single members. Bodies. Total. 1890 1895 1900 1905 1909 1912 54 135 295 357 476 529 5 9 23 25 23 19 59 144 319 386 503 554 1 4 4 6 The endeavors of the administrative bodies of the Landesgenossenschaftskasse to maintain its character as a central association bank are of particular interest. For this reason individual members are as a rule no longer accepted unless they belong to the boards of direction and control. At the close of the year 1912, 485 savings and loan banks, 19 supply associations, 10 dairies, and 15 other associations were members. The bodies which have obtained membership in the Landesgenossenschaftskasse are the Board of Agriculture, the Union of Hanover Agricultural Associations, the Manorial Credit Society, the United Agricultural Fire Insurance Office at Hanover, the Hanover Local Savings Bank, and the Land and Forest Agricultural Principal Society for the Government District of Hanover. These are in part purely agricultural bodies whose accounts are handled through the Landesgenossenschaftskasse; in part they are credit establishments which occasionally have financial business with the Landesgenossenschaftskasse. ORGANIZATION. The administrative bodies of the association are a board of directors, a board of control, and the general meeting. The board of directors consists of five members, one of whom must be versed in banking. The sit- tings of the board of directors are held at least once every month, according to requirements. The resolutions are passed by a majority vote. The board of control consists of eight members. They meet when neces- sary, but at least three times yearly. The regular general meeting takes place every year. Extraordinary general meetings have been called but twice. The price of shares was originally 100 marks, but it was increased in 1905 to 500 marks. The highest number of shares which a member may hold is 60. The liability of shareholders aggregated originally 100,000 marks, but it was increased to 200,000 marks in 1892 and to 600,000 marks in 1897. A credit of 10,000 marks per share is granted if the responsibility of the shareholder has been fully proved. This credit is partly blank (personal) credit, partly bill credit. Associations which take advantage of the credit offered by the Landesgenossenschaftskasse must undergo a yearly revision by the Union of Hanover Agricultural Associations. For the associations with unlimited liability and unlimited call obligation, the amoimt of credit extended is measured by the aggregate property of the members of the association. A credit up to two-thirds of their liability GEEMANY. 447 can be granted to associations with limited liability, provided the association can show possessions to warrant the liability limit. Individual members and societies must guarantee their credit by depositing securities — a life- insurance policy, a mortgage, or a warehouse receipt from public grain storehouses. The credit figures may be altered or withdrawn at any time. The difficulty of obtaining credit by associations with limited liabihty has led associations which take advantage of a considerable line of credit to prefer the form of unlimited liability. Of the 528 associations which were members at the close of 1912, 498 had unlimited liability, one had imlimited call obligations, and only 29 had limited liability. Of the 29 last mentioned, only 14 were credit associations. The 499 unlimited liability associations had 52,427 members at the close of 1912; the 29 limited liability associations had 5,137 — a total of 57,564 members, with an average membership of 109. The highest number of members in one association was 911, the lowest 8. Four hundred and eighty-nine unlimited liability asso- ciations, with 51,119 members, are located in the Province of Hanover. Of these 36,298 paid no supplementary tax, while the remaining 1,481 members were taxed on a valuation of 793,800,000 marks. In all, 2,605 shares were held by the 554 members at the close of the year 1912. The credit business amounted to 1,087,600 marks on a total Uability of 15,630,000 marks. The total credit granted was 26,050,000 marks. LANDESGENOSSENSCHAFTSKASSE AS A CLEARING HOUSE. The next endeavor of the Landesgenossenschaftskasse was to attract the business of all savings and loan banks. For this purpose the difference between the interest on deposits and on loans was made as low as pos- sible. A rate of 3.3 per cent was granted on deposits and 3.6 per cent was charged for. credit. The end of the first half year showed this to be insufl&cient to cover business expenses. During the last half year the loan rate was made 3.8 per cent; nevertheless, the first year closed with a deficit of 943.93 marks. The Koyal Agricultural Society granted a subsidy of 374 marks to partly meet this deficit. During the first year, securities were bought with the deposit funds in order to take advantage of a line of credit voted by the provincial administration against a deposit of securities. In the year 1891 the harvest turned out badly; the credit demands on the Landesgenos- senschaftskasse were large. Members placed their securities at the disposal of the Landesgenossenschaftskasse in order to obtain a deposit credit. Toward the close of the year, the legal liability was increased from 1,000 to 2,000 marks per share and the interest rate was also increased. The business year closed with a profit of 1,037 marks. The following year the savings and loan banks were advised to limit their demands for money. To obtain credit, the same methods were employed as in the preceding year; the Royal Agricultural Society also put a sum at the disposal of the bank. The harvest of 1893 was good. A large quantity of money flowed into the Landesgenossenschaftskasse and securities were bought, a number of which, however, could be sold the following year. In the year 1895 the stock of securities was still further reduced. At the close of the year there were only 142,792.75 marks on hand. In 1895, the Prussian Central Association Bank was established, but its effect on the Landesgenossenschaftskasse was very small at first. The liability per share was increased the following year from 2,000 to 6,000 marks, while in the meantime the credit granted by the Prussian bank was shghtly raised. In 1897 it amounted to 495,000 marks, plus the further sum of 200,000 marks from the provincial administration; this, however, did not nearly suffice to meet the demands for money. Again, money was raised on securities, until the amount had increased to 840,000 marks. An abundant flow of money in the year 1897 caused the stock of securities to be further increased. At the close of the year the funds had reached 1,697,662.65 marks. In the year 1898 the Prussian Central Association Bank first entered into close financial relations with the Landesgenossenschaftskasse through new regulations for judging the borrowing strength of the associations. For associations with unlimited liabihty, the land tax had hitherto been taken as a basis for this purpose. The Prussian Central Association Bank now requires the Landesgenossenschaftskasse to give proof of the assess- ment for property tax of the members of the saving and loan banks through the government ofloices concerned. Every three years a new assessment is made according to law. In the year 1899 the provincial administration withdrew the credit which it had granted, the Prussian Cen- tral Association Bank having taken over the loan. The provincial administration was certainly of great service to the credit organization during the first 10 years. The reorganization of the Landesgenossenschaftskasse took place in 1899. A banking expert was placed on the board of directors and the activity of the Landesgenossen- schaftskasse was further extended. We will foUow its operations as a clearing house. Until the year 1906 the deposits were higher than the loans or withdrawals in the months of January, February, May, July, August, October, and November, while in the months of March, April, June, September, and December deposits were more important. This is ex- plained by the fact that the members of the savings and loan banks regularly require larger sums on the quarter days for the renewal of mortgages, payment of interest, etc. In the first place, the nature of agriculture itself 448 AGElCtJLTUBAL COOPEftATlON iN ETJEOPfi. influences the depositing and withdrawal movement. It is, however, undeniable that the condition of trade and industry often causes changes, a fact that is easier to understand since a considerable number of members of savings and loan banks are not farmers. This circumstance was very conspicuous from the year 1906 on- wards, when the money crisis was general. Although the rate of discount of the German Imperial Bank had risen to 6 per cent in the years 1905 to 1906, the savings and loan banks had to pay only 4 per cent to the Landesgenossenschaftskasse for loans. The increase necessary in the year 1907 was solely attributable to the fact that a number of associations took advantage of the favorable rate of interest of the Landesgenossen- schaftskasse to borrow from it and to deposit again in other banks at a higher rate of interest. For five years the deposits have been greater than withdrawals only in February and November. More credit has been extended by reason of the development of the money market and the intensification of agricul- ture on the one hand, and by the augmentation of nonagriculturists in the savings and loan banks on the other. In the year 1903 the Landesgenossenschaftskasse entered into an exclusive agreement with the Prussian Centra] Association Bank whereby its surplus money must be placed with the Landesgenossenschaftskasse, and credit may be taken from it only. It gives 3 per cent for deposit, has voted a preference credit of 1,500,000 marks at 3^ per cent, and loans up to 5,000,000 marks in exchange for bills, the interest on which depends on the private rate of discount or the German Imperial Bank rate. This connection with the State institute has great advantages. It enables the Landesgenossenschaftskasse to respond to all the demands of its members. The maximum credit of 5,000,000 marks has, it is true, not suf- ficed during the last two years. Hence the Prussian bank has increased it to 7,000,000 or 8,000,000 marks, so that the demands can be met even in the most urgent times. Naturally this connection with the Prussian Central Association Bank has a fundamental influence on the interest rate of the Landesgenossenschaftskasse. The Landesgenossenschaftskasse understands that the sav- ings and loan banks are distinctively agricultural in their character, and that the proceeds of agriculture are smaller than of trade and industry. Hence the endeavor of the Landesgenossenschaftskasse is to fix the rate of interest as low as possible. On the other hand it grants the highest possible interest on deposits. The savings and loan banks are open to the competition of the public banks and find themselves obliged to maintain as nearly as possible the same rate of interest. Further competition exists with the branch agencies for deposits, established even in small places by numerous banks. . On this account interest rates vary among the savings and loan banks associated with the Landesgenossenschaftskasse. Those banks which are obliged to take ad- vantage of the credit of the Landesgenossenschaftskasse regularly wish the rate of interest to be as low as pos- sible, and those banks which almost always have money on deposit with the Landesgenossenschaftskasse are naturally eager to have the highest possible rate of interest on their deposits. For several years the difference in the rates has been only one-half of 1 per cent. At present 4^ per cent is granted for deposits, 4| per cent is charged for loans, with one-fourth of 1 per cent more for loans over 50,000 marks. The annual turnover in current accounts in the following five-year periods was: Marks. 1890 to 1894 2, 620, 000 1895 to 1899 12, 290, 000 1900 to 1904 28, 330, 000 1905 to 1909 72, 260, 000 1910 to 1912 124, 520, 000 Thus from small beginnings the Landesgenossenschaftskasse has developed into an important institution of credit. LANDESGENOSSENSCHAFTSKASSE AS BANK. In the year 1899 the reorganization of the Landesgenossenschaftskasse took place, and this year also marks its installation as a regular bank. It was necessary to introduce modern methods of banking and credit. By .means of pamphlets and . circulars prepared by the banking experts of the Landesgenossenschaftskasse, the system, employment, and booking of checks and biUs and the system of exchange were made plain to the asso- ciations. Later on further explanations were made by means of special circulars. The check system was introduced in the first place to facilitate the monetary dealings with the Landes- genossenschaftskasse. This arrangement was called the large-check system. The check system was also intro- duced between the savings and loan banks and their members. This was limited to the business district of the savings and loan banks and was called the small-check system by the Landesgenossenschaftskasse. Checks from the small-check (or local-check) system were, however, also presented to the Landesgenossenschaftskasse for payment. Ten years after the introduction of this check system the number of local checks had mounted to 2,846 for a sum of 1,300,000 marlis. The introduction of the check system was attended with particularly great difficulties. In general, promissory notes were looked upon as dangerous instruments. Naturally it could GBEMANY. 449 not be the business of the Landegenossenschaftskasse to favor a general introduction of these notes into the country districts, since they serve only those for whom the necessity exists. Experience shows that the neces- sity is an increasing one. The development of the check and bill system is shown by the following table: Year. Checks presented for payment. Bills (promissory notes) discounted. Year. Checks presented tor payment. Bills (promissory _ notes) discounted. 1900 1901 1902 1903 1904 1905 1906 470 912 846 1,032 1,306 1,571 2,150 330 1,526 1,188 1,268 1,764 2,358 3,243 1907 1908...... 1909 1910 1911 1912 2,656 2,983 2,576 1,979 1,958 2,217 2,452 3,605 4,001 4,025 4,796 5,229 The modern transfer business is greatly facilitated by the help of the Imperial Bank. The associations belonging to the Landesgenossenschaftskasse transfer their cash by means of circulation accounts; so that even moorland villages, widely removed from the business centers, are brought into business contact with the Imperial Bank, which hitherto has served only the trades and industries. All transactions with the Prussian bank are carried out by means of the transfer system. The turnover at the Imperial Bank amounted in 1905 to 25,700,000 marks; 1910, 51,000,000 marks; 1912, 70,100,000 marks. Fuially, the Provincial Cooperative Bank has taken up the stock brokerage business. It is necessary that savings and loan banks take up this matter, because naturally in disposing of paper securities a banker's only consideration is to sell those securities which bring in the largest returns. On the other hand persons interested must give prominence to safety as well as to proceeds. Our credit organization, as far as possible, gives preference to the paper securities of our provincial land credit institutes. Naturally the Landesgenossenschafts- kasse tries to add to its profits the modest commissions from this business. In order to give a view of the development of the Landesgenossenschaftskasse in few figures we adjoin here (in mOions of marks) the turnover of its principal activities. Year. Current account. Exchange. Paper securities. Other turnover. Total turnover. 1890.... 1895.... 1900.... 1905.... 1909.... 1912.... 1.5 6.57 19.27 46.31 102. 02 151. 57 0.20 .10 2.95 6.58 30.53 7.55 1.19 3.63 27.34 54.83 185. 24 256.4 2.89 10.30 49.80 113. 32 •336. 83 444 0.25 5.60 7.04 26.4 The utilization of the money market by farmers increases steadily. Production becomes greater and with it the money turnover rises. The associated credit organizations are becoming a general necessity; experience has taught. that they completely meet the demands on them. During the trade boom and in the crisis which followed in the years 1905 to 1908, the great problem in trade and industry was to maintain an unimpaired line of credit. The Landesgenossenschaftskasse was able not only to meet all demands, but also to keep the rate of interest on cash loans far under the discount rate of the Imperial Bank. In consequence of the drought and the foot-and-mouth disease in the year 191 1, the scarcity of money for agricultural purposes was particularly great. In a short time the credit demands of the members of the Landesgenossenschaftskasse rose to an extraordinary degree. By its connection with the Prussian Central Association Bank, it was made possible to satisfy all claims promptly. When last autumn a general fear arose as to the safety of deposits in banks and in public treasuries, because of the war scare and heavy withdrawals of deposits, the deposit business of the Landesgenossenschaftskasse increased because the farmers of the lowlands had absolute confidence in the savmgs and loan banks. In short the credit organization has proved itself worthy in every respect. 14174°— S. Doc. 214, 63-1 29 450 AGEICULTUEAL COOPERATION IN EUEOPE. AGRICULTURAL ORGANIZATION IN GERMANY. Evidence of Dr. Johannsen, Director Hanoverian Chamber of Agriculture, and Prof. Vieth, Director Dairy Institute of Hameln. Hanover. Q. Are there any trusts in Germany ? A. There are coal trusts, iron trusts, etc., but no agricultural trusts. Q. Why are there no agricultural trusts in Germany ? A. Because the development of agriculture in Germany has not been in that direction. Q. In what direction has your agriculture developed ? A. In the direction of direct dealings between producer and consumer — in the direction of cooperation. Q. For instance, in the United States eggs are purchased by private corporations (trusts) which store them until their price rises on the market. Is this done in Germany ? A. No; it is not done. Our farmers wish to dispose of their eggs as soon as possible because they know that they get the best price for fresh eggs. The fanners can do this in a profitable manner because they are joined together in cooperative associations. Q. Have you cooperative credit banks ? A. Yes; a great many. Q. Do these banks furnish the farmers with money at a low rate of interest ? A. Yes. Q. Is this beneficial to the farmers in assisting them in their cooperative distribution 1 A. Yes; certainly. Q. Does the Chamber of Agriculture assist the farmers in disposing of their products direct to the con- sumer ? , A. The Chamber of Agriculture only acts as an advisory board in such matters. It never actually engages in business. The farmers may apply to the Landwirtschaftskammer stating that they have products to dispose of and the Landwirtschaftskammer wiU assist them with advice in finding a market for such goods; this is done in Hanover to some extent in the case of fruits. Q. In what other way does the Landwirtschaftskammer assist agriculture in Hanover ? A. The Landwirtschaftskammer is known as the mother of aU cooperative associations. It supports agriculture in every possible way. AU the encouragement which the State gives to agriculture in its various branches is given through the Landwirtschaftskammer. But it must be remembered that its fimctions are limited to those of an advisory board. Q. Does this apply to Hanover only or to the German Empire ? A. In the first instance to all the provinces of the Kingdom of Prussia. But in aU the other German States there exist similar chambers of agriculture. Q. In your opinion, could Hanover prosper as well without the cooperative systems for agricultural credit and distribution ? A. That could not be expected. Q. What is the total population of Hanover, and what is the rural population? A. The total population of Hanover is 3,000,000, of which 60 per cent is employed in agriculture. Q. Is agriculture carried on largely by peasants who operate the land with their families, or is there some imported labor? A. Eighty per cent of the ground occupied for agricultural purposes is owned by farmers, not necessarily small holders who do the work with their own families, but men who own up to 100 hectares of land. A man owning a farm of that area could not farm the land himself; he must import foreign labor; the small farmer cultivates his ground with the labor he has at his disposal. Q. How many laborers do you import? A. Fourteen thousand laborers have to be imported every year. Q. What per cent of the land is cultivated by tenants, and what per cent by landowners ? A. The majority of the people own their own land, and tenancy is very little in evidence. Q. By peasantry do you mean owners as well as tenants? A. Yes; tenants would be included in that class, but they are exceptional. Tenancy occurs only on large estates; where the smaller holdings are no trace of tenancy exists. Q. Are the imported laborers housed and fed ? A. The importers of laborers have to take care of them, both housing and feeding them. Some get board, lodging, and money, while others get lodging and wages without board. GEEMANY. 451 Q. Do the farmers live together in sm'all villages ? A. The village system prevails in marshy districts. Q. What are the chief agricultural products of Hanover ? A. The principal products, especially in the south, are wheat, sugar beets, rye, and potatoes; much atten- tion is given to animal husbandry, especially hog raising. Q. Do6s Hanover export any meat to other provinces ? A. Yes; 3,000,000 hogs are exported every year to southern Germany and other provinces. Q. Is there a live-stock slaughtering association here ? A. Yes., Q. Is meat exported, or live stock ? A. Only live stock. Q. What is the prevailing price of first-class stock to-day? For best fat cattle and best fat hogs? A. Cattle (fat steers) would bring 55 to 57 marks per 50 kilos of live weight, but these are exceptionally high prices. This is not the average price, but it is the price at present. Swine sell for 52 marks per 50 kUos of live weight. The price of meat if the animals have been killed is somewhat higher, about 72 marks. Pigs would sell on city markets for 55 marks, whereas the peasant would only get about 62 marks in the country. Q. That means 3 marks for the expense of selling? A. Yes. EDUCATION. Q. What is the system of public education in Hanover? A. Hanover has the same system as all Prussian provinces — that is, compulsory education, beginning at the age of 6 years. Q. But with particular reference to rural education ? A. There is no difference between city and rural education on this point. It extends from 6 years to 14 years. Extension schools have lately been introduced in the country, which is a new feature. Q. We have been told of four private schools formed by the association. It is not clear whether these are established by these associations and paid for by the patrons ? A. In certain country districts the farmers want to get education which is somewhat above the elemental standard of the State schools, so they form private associations for school purposes. They establish a school as a cooperative association, and send the children to it. Q. Is this because the public schools do not meet the needs of the farmers? A. The public schools leave out certaia subjects the farmers want taught. Q. How do you adjust the hours of the children's labor on the farm with the hours in the school ? A. The conditions are these: The school comes first. Whenever a conflict occurs between child labor and school, the school comes first, but the school hours have been made elastic. A certaia number of school hours have been prescribed and must be absolutely observed, but in distributing the hours the schools take account of the needs of the parents at home. Vacations are arranged so that they coincide with the periods of greatest agricultural activity. For this province a special vacation has been arranged known as the sugar-beet vacation, so that the parents may have the children to harvest the crop. Q. Then school hours are fixed in the afternoon, evening, or morning, according to the needs of the farm ? A. Yes. DISTEIBUTION. Q. How are the farmers' eggs delivered to the egg association, how are they handled by the association, and how do they reach the consumer? A. The first principle is rapid delivery of the eggs from the individual producer to the association; this is either done by the farmer's own means or by carts which drive around to collect them. Q. How frequently are eggs delivered? A. Twice a week, as a rule. Q. Are eggs gathered by the association put in cold storage? A. The eggs are first tested. Then they are immediately put into cases and sent out for consumption; they are not put into cold storage. Q. Is the object of the association to promote quick sales and get the highest price for the eggs? A. The aim is to sell fresh eggs to the consumer and do away with the middleman. Q. Where is the testing done ? A. The egg association is remarkable for the fact that it has no plant of its own, but uses some building convenient to the station where packing is done. 452 AGBICULTUBAL COOPEBATION IN EUROPE. Q. In this province are eggs placed in cold storage by private corporations ? A. The prevailing opinion in Germany is that a cold-storage egg is not a fresh egg; that is why cold storage of eggs does not exist. Cities store eggs, but we do not recognize them as fresh eggs. The storage system for eggs in Germany is exclusively for export eggs. Tests have shown that eggs after being preserved for three mouths lose their nutritive value; so there is a law prohibiting the storage of eggs for more than three months. Q. Does the average small egg association sell its eggs to the retail dealers or direct to consumers ? A. The business is principally carried on with egg dealers, hotels, and restaurants. LABOB. Q. How long has this province been importing laborers? A. From the middle of the eighties; but there was interprovincial importation of labor before that. Q. What are the present wages of labor? A. Wages are rising tremendously year by year. Wages for men are quoted at 3 marks a day and women a little less. Q. Does the laborer house and feed himself out of that ? A. The prevailing price of foreign labor at present, including housing and part board, such as potatoes, beans, peas, and milk would be about 4 marks. The problem of wages in Germany does not rest chiefly with the imported laborer, but with the native laborer. The wage problem in this province is the native problem. Wages are very high, ranging from 4 to 6 marks per day for farm labor. Q. How many hours constitute a day's work on the farm? A. Ten hours, on the average; from 6 to 6 with two hours rest at noon. Q. May we assume that the development of industry and the demand for laborers in the cities and in mills account for the fact that it is hard to get farm laborers ? A. Industry does attract the young men of the rural districts and intensifies this problem of farm labor. Q. Have you also a great social problem, how to arrest the movement from the country to the city ? A. Yes; and it is very much in evidence here, too. Q. Is Hanover doing anything to stem the movement? A. Although there has been no systematic movement started, there has been a general tendency through- out the province to keep the farmer on the soil by securing better housing for him and to make the rural dis- tricts attractive to him by founding clubs and entertainments, and bestowing on laborers who have worked for 20 or 25 years on a farm some distinction, to bring out the merits of their work to the country. Q. We observe very small areas of farm land all over Germany. Ai"e these small holdings due to division of land among heirs ? Does the law limit the subdivision of farming land ? A. The right of the private owner of land to cut up his property is unlimited. There are a few noted large farms owned by landlords, as well as big farms owned by farmers representing a collective title, and there are certain prescriptions or rules by which the property is left undivided to the heir; there is a tendency not to divide such property. PEODUCTION. Q. Will you tell us something about the pasturing associations ? A. The system is this: A number of farmers associate to buy a piece of land and have it prepared (if not already in shape) so that it affords a good pasture. After which each member is entitled to graze a certain number of animals on this pasture. It is stipulated that for a certain number of animals a certain fee is to be paid. Q. Are there no common lands ? A. No. Q. You have mentioned fruit associations. Please mention the successive hands through which fruit passes from the producer to the dioner table. A. There are comparatively few fruit growers' associations in this province, but they do exist, and the answer applies to this province. The fruit in this province is collected from the trees either by the producer or members of the association ; then it is brought to the headquarters of the association, which may sometimes be a private house or barn, and there the chief business of the association consists in sorting and picking over the fruit; then it is sold by the association direct to the consumer. The middleman is eliminated almost entirely. Q. Does the producer of the fruit make any effort to organize the consumer also ? A. No. GERMANY. 453 Q. Then what method do you adopt to obtain a market for your fruit ? A. There are no special features to be observed in this province. The selling is done by the association direct to the private consumer, and if there is any surplus of fruit, application is made to the Landwirtschafts- kammer; there is a special bureau of the chamber which arranges to sell the fruit. Q. The statement was made that difl&culty was had in organizing cattle-raisers' associations because some of the raisers did not want to deliver their live stock to the association. Why this attitude ? A. The first principle is that the spirit of independence of the single individual would prevent him from ever joining any association whatever. It is the fundamental principle of opposition in some individuals that would prevent them from joining any association.- The second consideration is that he considers himself more capable in disposing of his cattle than the association. He is convinced that his business management is better than that of the association, and from sheer obstinacy he stays out. Another consideration is that he is more or less frightened by the system of liability, either limited or unlimited; he is not going to undertake any liability which would result in his being liable up to a certain sum. Another consideration is that some farmers owe sums to tradesmen or dealers. For instance, a man owes a thousand marks for two cows; the cattle dealer, being antagonistic to the association, would not allow credit to any man who is going to join a hostile organiza- tion, and the fear of having his credit cut off would prevent this farmer from joining any association. In special cases two or three organizations have failed on account of bad management, and consequently the peasant has acquired a distrust of them. Q. What type of men or men from what professions have been chosen by these cooperative societies and put at the head of the organizations ? A. The leading principle is that agricultural cooperative societies shall be managed by men well versed in agriculture. All professions and walks of life have provided men. The first requirement is a sympathetic heart — a love for every man in the community. For financial cooperative societies a man acquainted with banking methods must be called in. Q. Do cooperative societies frequently undertake other activities than the one thing for which organized ? A. It seems to be customary for certain associations not to limit themselves to special objects, but to undertake similar objects; for instance, dairy associations take up the egg business or cooperate with othei* dairies in the buying of animals or farm implements, etc. ASSOCIATION FOR MILK CONTROL AT OLDENBURG. Report of a Subcommittee. Oldenbueg. The object of the Association for Milk Control is not to control the distribution of the milk, but to increase its production. From 12 to 18 farmers form an association or society and an officer of the Government, trained in a government school for milk control, regularly visits one of the members of the association each day; so if there are 12 members he will make his round in 12 days. This officer of the Government measures the quan- tity of milk produced by each member and takes a sample, which he sends to the government experiment sta- tion for test. At the same time this officer investigates the fodder fed the cows, as well as the weight of the cows. Each member keeps a record of the officer's observations. The animals of the various members of the associ- ation are registered by proper names in a special herdbook, so that confusion of the various cows is prevented. The local control associations are united in unions of six associations, which appoint a chief control officer who inspects the local associations at any time. There is no fixed time for his inspection, which is an additional guaranty that fair and thorough inspection will be made throughout the whole region subject to the control associations. The milk production of the farmers united in these associations has increased from year to year The result has been to encourage the breeding of cows with special records in milk production. EGG SOCIETIES IN OLDENBURG. Report of a Subcommittee. Oldenbueg . The committee visited a small warehouse of a cooperative egg association of 500 members. The eggs are obtained from the various farmers, who furnish them to the association by weight; the association disposes of the eggs to middlemen in the industrial districts. There are 35 cooperative egg-selling associations in Oldenburg. Each egg is stamped with the date, name of the cooperative association, and number of the member. If an egg is found to be bad, the person who packed it is fined 3 marks. The result is that all eggs are first-class and sell 454 AGRICULTURAL COOPERATION IN EUROPE. for better prices because they can be absolutely relied on. Eggs are sold for 8 pfennigs (about 2 cents) each, one- half pfennig of which is to cover cost of handling. The manager of the establishment is paid according to the turnover of the association; his salary amounts to about 1,000 marks a year. The manager has to seek custom- ers. There is one central organization with 25 subsidiary associations. The price of eggs is regulated by the local organizations. Each association markets its own products. As a result of buying the eggs from the farmers by weight, the weight of eggs has been increased from 48 to 56 grams per dozen. AGRICULTURE IN THE PROVINCE OF OLDENBURG. Report of a Subcommittee. Oldenburg. Behind the state forest of WUdenloh, which comprises 205 hectares, and south of the road from Oldenburg to Edewecht lie the state settlements of New Friedrichsfehn, founded 1900; Friedrichsfehn, founded 1862; and Klein Scharrel, founded 1905. On both sides of the road lies the old settlement of Wildenlohsmoor, founded 1862; and joining this on the north is the new settlement made in 1907. This marshy soil, situated in the communities of Edewecht and Zwischenahn embraces 131 farms aggregating 1,460 hectares, which have been mostly disposed of. In the settlement 11.5 kilometers of roads have been laid out recently. The roads are covered with sand one-half meter deep and from 3J to 4 meters wide. About 58,000 meters of drainage and draining ditches have been completed at a cost of from 15 to 25 pfennigs per meter for excavation. In all, up to this present moment, about 50,000 marks have been laid out in permanent improvements. The foretide plants are so regulated that the marshysoil, which is from 2 to 4 meters deep, is drained to the sandy underground, so that the lower black marshy soil, 1 to 2 meters deep (which produces very good peat for fuel), can be com- pletely removed. The upper layer of this marshy soU is readily cultivated. In preparing the land for agri- culture, the water level is sunk to 80 centimeters, or 1 meter below the surface through draining ditches which are 1 meter deep and placed 10 to 12 meters from each other. In the case of pasture land, the level is lowered by means of ditches which are only 50 centimeters deep and 20 meters apart. This is sufficient, as the digging of draining ditches has its disadvantages; a good many of the settlers have adopted a system of tile drainage which has proved better. The size of the farms varies from 8 to 12 hectares, but the conditions are such that the acreage can be increased. The farms become the property of the settler at once without purchase money ; after the expiration of 10 years the colonists are required to pay rent for the first time; this annual rent varies according to the quality and situation of the land, from 15 to 30 marks per hectare. For each square meter of soil from which the peat has been removed (with the exception of the drainage ditches) a fee of 6 pfennigs must be paid. Within a term of 3 years the settlers must buUd a dwelUng house. So far 44 houses have been constructed. The average cost of these houses is about 6,000 marks. From May to October cattle can be turned out to graze on the pastures, which belong to the State and which are 12^ hectares in area, at a rate of 50 marks a head. For cattle below the age of 2 years the rate is 40 marks per head. Cattle belonging to settlers are grazed at reduced rates. Generally from 2 to 3 head of cattle, accord- ing to age, are grazed on 1 hectare. The grazing lands were put in shape by convicts in the spring of 1911, and in spite of the very dry summer 30 head of cattle were grazing there in the fall of that year. The cost for fencing, watering, and buUding shelters amounted to 700 marks per hectare, including the tile drainage, which in itself amounts to 180 marks. As the settlers do their own work the cost of cultivating their land is generally cut down to half of the above- stated price. The settlement of Petersfehn and Kaihousermoor, founded in 1847, includes 135 farms situated along three main roads. The size of these farms is about 6 hectares. In addition to farming, the peat iadustry flourishes here on account of the city demand. On the average from 150 to 200 wagonloads of black peat are cut (each of 4 cubic meters capacity) ; the price paid for a wagonload varies from 12 to 15 marks. Very few of the old farmhouses still exist. Since the former mode of farmhouse construction has become antiquated, and since the settlers, through the peat industry, have attained a higher standard of living, the old farmhouses piave for the most part been replaced by new, more modern, and solid structures. Almost all the land of these farms is under cultivation, except for a small part used for peat-cutting purposes; oftentimes the farmers have a second farm for grazing and haymaking. The average price paid for a farm of 6 hectares, including improvements, is 10,000 marks. GEEMANY. 455 STATE CREDIT INSTITUTION OF THE DUCHY OF OLDENBURG. Statement by the Director. Oldenburg. The main purpose for which the State Credit Institution was originally organized is the promotion of agi-i- culture and the granting of credit on country property, although it also takes mortgages on city property and extends credit to communities. Out of the outstanding 12,000 loans, amounting to about 72,000,000 marks ($18,000,000), 8,000 of them, to the value of 37,000,000 marks ($9,250,000), have been made for the benefit and extension of the country's farming interests. The bank was founded in 1883. Its administration is vested in a board of government officials under supervision of the ministry, and its territory is limited to the Duchy of Oldenburg proper, the grand duchy being formed of the princedoms of Oldenburg, Birkenfeld, and Eutin. The Duchy of Oldenburg has an area of 2,478 square miles and, according to the census of 1907, it had a population of 360,335, of which 144,715 follow rural occupations. To the rural population the bank gives its best attention and assistance. It does not lend money to the farmer for his daily needs to be paid back when he gathers his crop. This is done by the rural savings and loan associations. But the State Credit Institution loans money in adequate amounts to farmers for the purpose of buying land, to pay off old debts, in case of inheritance to satisfy other heirs, to improve old buildings or erect new ones, etc. These loans the farmers have to pay ofif in installments, and the rules of the bank are as follows : The debtor must pay an annual interest on his loan and a small additional amount for amortization. In 1913, when money was scarce, the rate of interest was 4^ per cent and the first amortization installment 1 per cent, or together 5^ per cent — being annually 550 marks on a loan of 10,000 marks. This amount the farmer has to pay until the whole debt has been extinguished, which will take 39 years. In the meantime, as -long as the debtor promptly fulfills his obligations, the bank can not recall the loan. The bank can undertake this because it can borrow money throughout the empire on its mortgage bonds, which are considered a very safe investment and much sought after, since they are guaranteed by the Govern- ment, with the whole wealth of the population behind them. The value of the loan which the bank grants on a single piece of property is Hmited to 50 per cent of the combined value of land and buildings. The value is appraised by prominent and competent persons under oath, each piece of land, as well as each building, is appraised separately with all possible explanation as to their findings. The annual income obtained therefrom has to be stated. This document has to be testified to by the head of the community, as well as by the government ofiicial for the respective district. The two latter persons have also to testify as to the apphcant's ability as a farmer and his reliabiUty in meeting his debts. The amount thus granted is recorded against the property as a first mortgage; should there be a prior indebtedness the loan is reduced by that amount. Owing to these precautions the bank had suffered no loss whatever up to 1913. In two directions, however, the bank deviates from the above-named rules, namely, first in the assistance of settlers on government land. The commission will have occasion to visit one of these colonies, which the Provincial Improvement Institute intends to show to the commission. This land is under the supervision of government officials especially appointed for its administration. The bank grants to the colonist a loan of about 4,500 marks (about $1,125), which is enough to build a decent house. The State bank also grants him a small amount in cash for buying fertilizers. As security the property is pledged to the bank, but it does not go into details as to its value as in the case of regular mortgages, being satisfied with a statement from the officials that the bank has sufficient security for the money loaned. In this way the State bank has granted during the last five years about 400 loans for the erection of houses and 200 loans for cultivation and similar purposes, amounting in all to 2,000,000 marks. The bank also loans up to three-fourths of their value on small homesteads, owned mostly by farm hands, who make their living on large farms and ranches. The State assists these people, as well as colonists in case of need, to an amount not exceeding 1 per cent of the interest annually due, out of state funds appropriated and set aside for that purpose. In 1912 about 13,000 marks were required for this purpose. The bank's debtors, who are members of savings and loan associations, can make payments of semi-annual interest, installments, or other debts to the bank through these institutions. Formerly aU money transactions had to be performed in cash at the bank's offices; but, by using the savings associations, the inconvenience of carrying cash to and fro is obviated. It is, of course, the duty of the country banks to satisfy themselves that their customers have the necessary security available for the purpose. The bank also makes remittances to its cHents through this medium if so requested. 456 AGEICULTTJEAX, COOPERATION IN EUEOPE. Tor these reasons it is apparent that the State Credit Bank is a source of benefit to the rural population. They can follow their vocation without anxiety as to the permanency of their mortgages, and they can plan new extensions in buying land or the latest machines, knowing where they can find financial assistance on rea- sonable terms. Oldenburg farmers of late years are striving to secure the best, and the bank feels confident that its endeavors will in course of time also reap their harvest for the Duchy of Oldenburg. COOPERATIVE MOVEMENT IN OLDENBURG. Statement by Mr. Brenning, General Secretary Oldenburg Agricultural Society. Oldenburg. The first cooperative societies were established in Oldenburg at the suggestion of the Oldenburg Agricul- tural Society in 1881. The suggestion was made to the agricultural council through its general secretary, Mr. von Mendel-Steinfels, and the first societies were organized in that year. The first to be organized were societies for the purpose of the cooperative purchase of agricultural necessities, such as feeding stuffs, fertilizers, and seeds. There were 17 of this kind of societies organized at that time, and these societies were united into the "Association of Oldenburg Purchasing Societies" in the fall of 1881, the purpose of which was the cooperative purchase of supplies. The next in order of organization were the cooperative dairies in the years 1884 and 1885. Very difficult conditions of marketing was the cause of bringing these cooperative dairies into a central organization in 1897 under the name of the "Association of Oldenburg Cooperative Dairies." To-day this association is called the "Northwest German Cooperative Dairies for the Sale of Products." In the year 1890 the Oldenburg purchasing association disbanded, but in its place there arose the "Central Oldenburg Cooperative Purchasing Societies," which still exists and in a commercial cooperative manner procures the required supplies for the societies connected with it. The imperial law of May 1, 1889, which related to the industrial and domestic cooperative societies, had permitted the organization of such central cooperative" societies; that is, of associations which united to itself as members not individual persons, but cooperative societies. The same law also introduced the legal review; that is, the right to make an examination every second year, through an impartial expert reviewer, of aU divi- sions of the administration and business management of the associations. Thereupon they reorganized them- selves for the purpose of carrying out the revision in an orderly way and for the administration of all existing cooperative interests of the "associations subject to revision"; that is, the regularly registered societies of aU cooperative associations of a definite district. As the district limits of these associations there were established the political limits of a Province or of a single State. So, then, there was also organized in 1890 in Oldenburg a revision association of the Association of Old- enburg Agricultural Cooperative Societies, with its headquarters at the city of Oldenburg. At the beguining these associations had as members only purchasing societies and dairies, but from the year 1897 efforts were made to organize and incorporate savings and loan banks. The individual banks limited their efforts to a particular body of farmers or to a particular place. They all organized on the unlimited liability basis— that is, every member was responsible for the debts of the society by the pledge of all his possessions. The proportionate division of ownership relations is held to be more to the purpose by the majority of the agricultural population. The savings and loan banks connected themselves into a central bank, the Oldenburg Agricultural Bank, which was organized in 1897. This independent institution, operating along banking lines, not only furnished the money requirements of the societies connected with it but also of the savings and loan banks. It also undertook the banking business of cooperative societies on the outside. In the southern part of the duchy there are 26 savings and loan banks, which from their organization have connected themselves with the coop- erative association of the Prussiail Province of Westphalia. Still other cooperative societies were organized besides those named. There were the egg-selling societies, the breeding societies for the cooperative production of stallions or buUs, and a whole list of other societies which were devoted to many different purposes — for example, cattle-improvement societies, fruit-selling soci- eties, cooperative milling, commercial, Uluminating, and tUe-making plants, etc. To-day the whole duchy is Governed with a network of various cooperative societies, which have been adapted to the changing needs of the region. To the number of the united cooperative societies of the narrower limits of their districts within which they operate there should be added the Oldenburg association, one of the oldest and most comprehensive in proportion to its size of any in Germany. This association embraces GEEMANY. ' 457 to-day some 263 societies, as follows: Three central societies, 77 savings and loan banks, 87 purchasing and maiketing societies, 38 cooperative dairies, 25 egg-selling societies, 7 stallion-keeping societies, 15 bull-keeping societies, 3 cattle-improvement societies, and 8 other cooperative societies. Of these 263 cooperative societies, 208 exist under the form of unlimited liability and only 55 with limited liability of the members. The amount of business, or turnover, of the individual societies, particularly those of the central places, has increased in a remarkable manner from year to year in so far as Germany is concerned. In regard to the purchase of artificial fertilizers, Oldenburg stands to-day at the head of all German countries if one takes into consideration the extent of the area under cultivation. The energetic and extending work of cultivating the great moors gives rise especially to this abundant use of fertilizers. The central cooperative society in 1882, the first year that it was in business, purchased only 11,267 zentners of fertilizers; whereas, in comparison therewith, in the year 1912 the total purchases of fertilizers amounted to 1,096,880 zentners. The total pur- chases of feeding stuffs, fertilizers, and seeds in 1882 amounted to 18,757 zentners; in 1912 the total amount of these supplies purchased by the central society was 1,845,440 zentners. The central banking institution developed in a similar manner. This is shown by the fact that, in 1898, the total business transactions amounted to 849,447 marks; but in 1910 it was about 76,000,000 marks, in 1911 about 98,000,000 marks, and in 1912 it was no less than 142,852,632 marks. In Oldenburg there are to-day a great number of savings and loan banks in the association whose annual business is between 3,000,000 and 4,000,000 marks, and a single bank estabhshed in 1912 did a business of over 8,000,000 marks. COOPEEATIVE DAIRY AT STRUCKHAUSEN. Report of a Subcommittee. Stetjckhausen (near Oldenburg). The cooperative dairj^^ at Striickhausen, to which a visit was paid, is connected with the greatest dairy industry of Germany. At present it receives and handles about 42,000 kilograms of milk daily, from which some 3,000 pounds of butter are manufactured. The whey and the buttermilk are returned to the farmer because it is indispensable to them for the nourishment of calves and pigs. This cooperative society was established in 1884 by five farmers, and it is, therefore, the oldest society of its kind in the duchy. On the first day after it was opened for business, 21 farmers delivered 1,455 kilograms of milk. According to the last annual report, of 1912, some 800 farmers had delivered 9,415,464 kilograms of milk. The price paid was 8.85 pfennigs per kilogram of milk as compared with 8.77 pfennigs for the pre- ceding year. For the production of 1 pound of butter 14.12 kilograms of milk were used; the net butter cost, therefore, may be reckoned at 14.12X8.85 = 124.9 pfennigs. Besides, there was a considerable quantity of poor milk and buttermilk not estimated or reckoned which was sent back to the members of the society. For the butter sold, the average price received was 1.-37 marks; to the members of the society the average amount paid for the year was 1.32 marks. The average determined fat content of the milk was 3.13 per cent as compared with 3.04 per cent in the preceding year. To the milk- delivering members of the society there was paid during the year a total of 835,132.74 ^arks. Of this amount possibly a third part of it was deposited with the various savings and loan banks. The expenses amounted to a total of 89,127 marks; consequently for 1 kilogram not wholly 1 pfennig as in the preceding years. This expense account is made up as follows: Marks. Salaries and wages 16, 950 President council of inspection and milk inspection 800 Traveling expenses 682 Postage, ledgers, printing, telephone 4, 000 Fire, accident, and burglar insurance; also sickness account 750 Interest, taxes, machinery and boiler testing 3, 000 Tubs, boxes, cardboard, packing thread, paper 5, 000 Freight on butter 3, 300 Coal, oil, pure cultures, salt, soap, etc 7, 700 Freight (1 kilogram about 0.44 pfg.) : 41,000 Making copies 3, 845 Maintenance of buildings and machinery 1, 300 Value of stock 80Q Total 89,127 458 AGRICULTURAL COOPEBATION IN EUROPE. The total sales of the year amounted to 4,072,055.92 marks, of which there was in the cash account a debit of 728,90&.45 marks and a credit of 728,191.94 marks^ in the bank account a debit of 1,192,622.33 marks and a credit of 1,221,124.30 marks. The building begun in 1911 for the convenience of the business was completed in 1912. For the cost of building must be added 7,000 marks, which should be added to the building account. For supplying new apparatus and tools, the sum of 25,000 marks must be added. SWITZERLAND. 459 SWITZERLAND.^ LEGISLATIVE FOUNDATIONS OF THE SWISS CREDIT SYSTEM. Address by Dr. Laur, of Brugg. ZuKICH. Switzerland has only had a national civil code since January 1, 1912. Before that date each Canton had a code of its own. Even to-day a good many regulations concerning the enactment of the laws have to be left to cantonal sovereignty. The new code introduced the land-register system. Every plot of land is allotted a page in this register, and only such concerns as are entered in the register have the privilege of legal protection against any claim of a third party. The register must be based on the work of public surveyors. It will take a good many years, however, until each district has its land register. In the meantime some cantons, e. g., the Canton of Aargau, have the register leaves made only for such lands as are concerned in some proceedings which have to be legally decided and entered. The new civil code allows three kinds of mortgaging real estate, (a) by mortgage, (6) by bond or debenture, (c) by rent-roll mortgage. (a) The mortgage only serves to safeguard a debt. Its amount need not agree with the amount of the debt. It only means an entry in the land register, not a transfer of any real security. It is used to safeguard a wife's private property, unpaid balances of the price of landed property, account current credits, etc. Moreover, it is a safe means of guaranteeing agricultural working fund credits. (&) The bond or debenture is used ta safeguard a claim by hypothecation. The amount of ihe bond agrees with the amount of the debt. The debtor, moreover, is liable with the whole amount of his property. The bond is especially used for buying landed property on credit. (c) The rent-roll mortgage ("Giilt") is used to safeguard a claim for which only a piece of land is liable, without any personal liability of its owner being implied. In rural districts the amount must not exceed two- thirds of the value of crops, plus half the value of premises built on the land in question. The cantonal govern- ments are bound to provide for reasonable and careful appraising of mortgaged lands. The note of hand is meant to assist a farmer, especially in purchasing landed property on credit. fispecial notice is due to sections 820 and 821 of the Civil Code, according to which a farmer, when meliorat ing grounds, may mortgage them for expenses of melioration, such mortgage to have the precedence of any other liability. The chattel mortgage in Switzerland is used for mortgaging cattle. The creditor, however, can not lay hold on such mortgage. The chattel mortgage may only be used by such banking institutions and associations as are specially licensed by government; evil practices of private parties are to be discountenanced and dis- couraged as much as possible. This sort of credit is used especially for buying cattle and covering working expenses. It would, no doubt, prove ruinous if extended to the buying of landed property. Agricultural produce can only be mortgaged in Switzerland if such produce be handed over to the creditor or deposited in a public storehouse. This way of procuring money is rarely made use of. In the case of cheese and wine it can not be denied that there is a need for some way to mortgage goods while in the owner's keeping, as can be done in France by "warrants agricoles." Such practice is not legal in Switzerland. Bail credit, however, is often resorted to, in many cases as an addition to mortgage credit. Very often the farmers offer bail when buying working materials and when borrowing funds from the agricultural credit associations. Bank notes in Switzerland can only be issued by the Central National Bank. As up to the year 1912 each canton had its own civil legislation, the organization of the credit system was bound to develop on cantonal Hnes. The cantonal banks, all of which are state banks, have taken the lead in granting credit on mortgage. The Cantonal Bank of Bern is the first as to age, whereas the Cantonal Bank of Zurich may be said to be the best organized. Among the numerous private banking establishments granting credit on mortgage, Messrs. Leu & Co., of Zurich, ranks first. Plenty of savings banks were started in the nineteenth century, not a few even ' Information and evidence in Switzerland was secured by a subcommittee. 461 462 AGEICTTLTUEAL COOPEEATION IN EUROPE. before that date. Most of them were beneficial enterprises at the outset. In due time it was seen that the interests of the depositors ought to bo safeguarded more strongly. There was reason to fear that these banks, most of which had no means of their own beside the reserve fund, might be sadly shaken by runs in critical days. Many of them then began to issue shares with participation in dividends, and some were transformed into shareholders' companies. As a rule, these district savings banks, owing to the local and personal knowledge of their promoters, were more competent to deal with the needs of the agricultural population than cantonal banks and big private banks. Still they were not able to satisfy the growing demands of the farmers. Until quite recently the Swiss farmers were sadly handicapped by the lack of working capital. They went on borrowing from friends and neighbors. Though it never led to a catastrophe the old system gave rise to many complaints. It may be expected that the associations and unions for the purchase of agricultural articles which have been started recently will place farming on a better footing. These associations, by means of their joint liability, can easily obtain credit from the banks and, in their turn, supply those of their members who can not pay cash. But even this organization can not cope with the difficulty of buying cattle on credit. In some districts of Switzerland, such as Thurgau, "cattle loan banks" have been started to meet the demand. The spread of volun- tary and compulsory cattle insurance has done much to alleviate the grievances arising from the lack of a satis- factory organization of the credit system. Still there remains a great deal to be done in this respect. It is but recently that the Raiffeisen credit system, which is so well known in Germany, has taken root in Switzerland. We are pleased to see that it is spreading apace. CANTON BANKS. Evidence of Pkok. Dtitterwiller, Director Canton Bank of Zurich. Zurich. The canton banks are government institutions, which have been established in at least haK of the can- tons. At present there are 23 such banks in Switzerland. These banks have been furnished with capital by the cantons, which capital has either been drawn from the government treasury or has been secured by the cantons by the issue of bonds. The debtors for these bonds are the cantons, but the interest is paid through the canton banks. The Zurich Canton Bank was established in 1870 with a capital of 6,000,000 francs, this sum having been received from the canton treasury. In the course of years this paid-up capital was increased through the issue of bonds by the canton; it now amounts to 30,000,000 francs. The interest which the bank has to pay to the Canton as well as to bondholders does not exceed on the average 4 per cent. The means by which the Zurich Canton Bank supplies itself with capital are as follows: (a) The issue of bonds ; (b) savings bank deposits, on which interest is paid to depositors ; (c) acceptance of funds against evidences of deposit or in current accounts (also designated as "credit accounts"); (d) increase of the reserve fund. It is of special importance to note the following: (1) The bonds were to run from three to six years, with subsequent notice of recall (six months for the creditor and three months for the bank). Interest-bearing bonds are at present issued at 4^ per cent. The bond capital of the Zurich Canton Bank was at the end of 1912 in round numbers 255,000,000 francs; the average interest has been 4.028 per cent. , (2) The savings bank permits the withdrawal of deposits to the amount of 300 francs without previous notice on the part of the depositor and on presentation of his pass book, but for greater amoimts a month's previous notice is required. The bank, moreover, is entitled, for its protection in times of crises, to four months' pre- vious notice of the withdrawal of any amount of money. The interest paid on savings deposits has been 4 per cent since January 1, 1913; before that the rate was 31 per cent. The condition of the savuigs bank at the end of 1912 showed in round numbers deposits to the amount of 86,000,000 francs. The savings banks of simi- lar canton banks show that deposits are on hand of more than 320,000,000 francs. (3) Deposits in current account and against receipts of deposits can be withdrawn at any time without previous notice; for the withdrawal of very large sums, however, a previous notice can be required. The rate of interest ranges from 3 to 3^ per cent, a commission practically of one-half to 1 per cent on transactions. At the end of 1912 the capital in credit accounts and deposit accounts was in round numbers about 30,000,000 francs. SWITZERLAND. 463 (4) The reserve fund is built up from the profits, which are apportioned as follows : Fifty per cent is added to the reserve fund; 40 per cent goes into the canton treasury; 10 per cent is sub- scribed toward a public cantonal relief fund. The reserve fund at the end of 1912 amounted to 13,797,500 francs. Concerning the business transactions of the Zurich Canton Bank, the following may be said: 1. The bank makes loans upon real estate and also upon dwelling houses with a building lot and garden up to two-thirds of their value, on land alone up to three-fourths of its value, and on factories up to one-third of their value. The estimate of values on city properties and on factories is made by experts. The valuation of farm property and real estate is made by professional appraisers of the bank who live in the country districts or it is made by the bank's branch offices or expert appraisers. Requests for loans by landowners are made directly to the bank in communications which set forth an abstract of title from the land records concerning the property, and especially as to those things which they are willing to offer as a guaranty for the credit requested. Should the credit be granted, then the borrower by his attorney draws up a paper in favor of the bank, in which paper both the indebtedness and the delivery of the guaranty are acknowledged. The recall or payment of the indebtedness requires a six months' notice on the part of both parties to the contract. But the bank does not recall the loan if the interest is promptly paid and the pledge property is kept in good condition. Amortization loans — that is, loans which through annual payments are gradually reduced — are only granted by the Zurich Canton Bank under exceptional cir- cumstances. Such loans, however, are readily granted by the Aargau Canton Bank and by the State Mort- gage Bank of the Canton of Berne. The amortization of these loans, in addition to the regular interest, ranges from one-fourth to 1 per cent or more, according to agreement. The interest, for example, being 4^ per cent, plus one-half per cent amortization, gives 5 per cent as the amount of the annuity. This 5 per cent must be paid yearly until the capital has been extinguished. By this method the amortization increases each year, while the requisite interest gradually decreases through the progressive payment of the principal. Notes can be drawn either by name or to bearer, and they can be transferred or pledged as security by the creditor without the consent of the debtor. The acquirer of a note has to give the debtor notice of his acquisi- tion of the paper. The Zurich Canton Bank held notes at the end of 1912 amounting in roimd numbers to 296,000,000 francs, and the average rate of interest at the time was 4.404 per cent, while the interest rate on investment moneys was 4.1 per cent. At present the rate of interest on loans on indorsed paper range from 4j to 4f per cent without counting commission. 2. The bank makes loans to communities and societies for the purpose of building churches, schoolhouses, streets, bridges, irrigation and water works, electric works, etc. The interest rate for these loans, which must be paid on the amortization plan within 25 years at the utmost, is 4^ per cent. The value of these accounts at the end of 1912 was in round numbers 16,000,000 francs. 3. The bank makes loans on personal notes secured either by deposits of commercial papers of value or by accepted indorsements. Money which the bank can invest for a short space of time is lent out on bills of exchange or on negotiable commercial paper. These transactions are attended to by the commercial branch of the bank. The Zurich Canton Bank has 11 branches and 15 agencies. The former carry on the same kind of business transactions as the bank itself with the exception of loans on real estate. This latter function is vested in the bank itself. The Canton Bank of Zurich is governed by a board of directors composed of 13 members who are appointed by the canton government. Besides the canton banks there are also private, joint-stock, and cooperative banks, which conduct the same kind of business as the canton banks. The rates of interest on credit granted by the last-named class of banks are lower than those of the private banks. The efforts made by the latter to secure profits are greater, because they have to pay dividends to their stockholders, whereas the canton banks have only to pay the customary rates of interest on their endowed capital to the cantons themselves as the holders of their bonds. The private mortgage banks pay dividends as high as 6 per cent, as, for example, the Aargau Mortgage Bank. Even though the credit of private banks is furnished at somewhat higher rates, there is still business enough for this class of banks, for the reason that the funds at the disposal of the State banks are not sufficient to supply all the demands for credit. In Switzerland there are no postal savings banks, but the proper authorities are interesting themselves in the question of their introduction. The canton banks have declared themselves against the introduction of postal savings banks, because they fear that fewer savings deposits would come to them than formerly, and that the postal savings banks would invest the money in different ways than would the canton banks, so that the latter would not be able to supply credit needs as they formerly did. 464 AGMOULTURAL COOPERATION IN EUROPE. If the aim in America is to make use of a part of the money of the postal savings banks for the purpose of making loans to cooperative societies, there is nothing against such a project, according to our point of view, if cooperative loan banks are established and are managed on right principles. Farmers banks as they exist in Italy are unknown in Switzerland. SAVINGS BANES. Mr. HoPEn, Director Mortgage Bank of the Canton of Aargau. STATEMENT. Zurich. The Mortgage Bank of the Canton of Aargau is a limited liability company and the earnings go to the stockholders. The development of savings banks without losses has resulted in the establishment of these banks. There are various kinds of savings banks which are organized both by the cantons and by private individuals. Most of these savings banks are organized and run as corporations with regular issues of shares. The Mortgage Bank of Aargau was formerly a corporation at Brugg, and was later on transposed into a share company. The deposited money is mostly used for mortgages. Money is loaned only on property and houses for one-half the value of such property. The value is fixed by the canton or the municipality. The banks are under no obligations; they can deal just as they like. There is no limit as to the amount they can loan upon the property, and no law limiting them to one-half; that is just their own rule. Where there is not a compulsory amortization, the person who borrows the money, if he wishes to repay it, can do so by giving from three to six months' notice. Mortgage loans are made on an average for from 8 to 10 years — without amortization. There are two kinds of mortgages, one where the whole amount is to be paid off at once and the other where it is paid off in annual installments. Debtors usually pay back two or three thousand francs and then request the bank to extend the loan indefinitely and let them pay the interest on it. Loans for two or three years can only be made by undertaking to pay back on three to six months' notice. Most of these loans remain in the bank without being paid back — they let the man who borrowed the money just pay the interest. The total of savings bank deposits amounts at the present time to 1,500,000,000 francs. As the savings bank deposits can be withdrawn at any moment, the interest on them is not as firm as it is in other countries. On first mortgages the rate is 4J to 5 per cent. They have a capital of 4,000,000 francs and a reserve of 1,000,000 francs. There was last year a net profit of 300,000 francs. Of the profits, 50,000 francs go to the reserve fund and the shareholders receive 5 per cent, but they divide the net profits paid so that there is always some that goes to charitable purposes. They have spent 4,000 francs right here for charitable purposes in this Canton. There is some difference between the banks in the different cantons. Some get their money mostly from deposits and from the sale of short-time bonds. These run up to three years and then have to be paid back. Of course notice can be given of foreclosure after three years, if the bank needs the money or decides that a financial crisis for the country is involved. There are banks in Switzerland where one-third of the bonds issued have to be paid at the end of the three years and new bonds issued. If there is any kind of financial depression or crisis in the country, or the bank feels unsteady, of course the one-third of the mort- gages or bonds which have been called in will not be renewed — because the bank wiU need the money. The consequence is that the bank has to give notice to the borrower to give the money back. This is supposed to be the weakest point of the system in Switzerland. In Germany they have some kind of a pledge. It is a kind of a bond on which notice can not be given. In Switzerland they have reorganized the credit system to improve the condition in case of a crisis. The necessary provisions were included in the national civil law on June 4. QUESTIONS. Q. Is the Swiss system the same as, or similar to, the Italian ? A. This is a modification of the Raiffeisen system. Q. Do the farmers have to organize a little local association or do they go to the big bank and do their business with the big bank ? A. As a rule the farmer goes to the bank directly to get the money. Q. He goes directly to the cantonal bank ? A. Yes. Q. So they don't have any mortgage banks in Switzerland ? A. None, except the Raiffeisen bank. SWITZEBLAND. 465 Q. The Raiffeisen system only loans money on notesj and not on land ? A. There are agricultural societies, dairy business, and other kinds of agricultural associations that borrow money and use it to make improvements and to buy machinery. Q. Of what advantage is the Raififeisen system to the man who owns land ? A. The advantages are many. First of all, the big banks are few in number. Now, if a farmer in a little village wants to take up a loan he has to deposit his papers, as the bank, of course^ does not know him or the value of his security. He can put the paper here with the hig bank and come back ia a week and perhaps he will get the loan and perhaps he wiU not, whereas with the Raiffeisen system he can go to the bank and present his application with the satisfactory papers and he gets the money right away without waiting. Q. What is it that gives the people confidence to put their money in these new institutions ? A. You know all the members are liable or responsible to the bank, and if the bank should need the money or suffer loss it has the total capacity of all its members to fall back upon. In Switzerland at the present time the amount in savings banks is 100,000,000 francs. Q. If a httle local bank fails, are the other banks that are federated responsible or held liable — is the whole union responsible for the failure of a local bank ?' A. In this union the other banks are not liable; only the members of the local bank are liable. Q. Have any of the Raiffeisen banks failed? A. Not in Switzerland. Q. The capital is founded by the deposits of the neighborhood ? A. Yes. Q. Suppose the demand for money is greater than the deposits, has the local bank any way of getting more capital 1 A. If the demand is larger than the deposits, then the security that the bank has on hand or holds is siiffi- cient to get more money. Q. What rate of interest is paid to depositors ? A. Four and one-fourth per cent on deposits and 4^ per cent is paid on mortgages. The bank has another source of income; that is, on current accounts. Banks allow on current accounts 4i per cent to the creditor, but to the debtor they charge 4f per cent. Of course, those who borrow money from the bank on indorsements have to pay the bank 4| per cent. Q. What relationship does the church bear to the Raiffeisen system here in Switzerland ? A. The founder was a Christian man. When he first started to introduce his system, he appUed to the church, just because it was difficult to get other business. Q. What is the longest hmit of time allowed on loans in the Raiffeisen system ? A. On personal indorsements the highest is 10 years. On real estate it is sometimes longer. Q. Are these payments in installments ? What have they to insure that they will be paid at the end of the 10 years ? A. Take the example of embroidery machines; if the man works at home, he makes more money than if he goes to the factory, so he is able to pay back 200 francs a year. Q. Who passes on the application for loans ? A. The board of directors of the bank' pass on the apphcations, and of course the directors are appointed out of the membera of the bank. The president is appointed as a member of the board of directors and has just the same Habifity as the other members. Q. Are these Raiffeisen banks under governmental supervision in any way ? A. They are absolutely free now — no governmental supervision. They wUl perhaps be under governmental supervision in a short time. Q. At whose instance were the local people's banks initiated 1 Was it at the instance of those in the hum- blest or the highest walks of hfe ? A. The Raiffeisen system was introduced in Switzerland by the Rev. Father Traber. The members are mostly farmers and worMngmen living in the community. Q. Turning now to the other banking systems what is the relationship of the State to the bank ? A. The Cantonal Bank of Zurich was formed with capital furnished by the Canton of Zurich. Q. It was formed by private citizens ? A. It was formed by private citizens of the Canton with the capital they received from the Canton. Q. Then the private citizens formed the bank for the purpose of making profit for themselves out of it 1 A. No. There are no shareholders except the State. The State gets the interest on the capital that it fwnished. 14174°— g. Doc. 214, 63-1 30 466 AGEIOULTUBAL COOPEEATION IN EXJBOPE. Q. It was not organized for the purpose of private profit ? A. No. Q. The State furnished a capital of $6,000,000. How did the State raise that $6,000,000 ? A. Six million francs were furnished by the State itself. Q. Taken out of the State treasury ? A. Yes; and for the remainder of the 30,000,000 francs, the State issued bonds. Q. What interest do these State bonds bear ? A. The average interest is not quite 4 per cent. Q. So that practically the State makes no profit on that reserve. It pays 4 per cent interest on the bonds and loans them at 4^ per cent ? A. You know, the profit the State makes is by loaning money to the people at 4| to 4f per cent; it does not pay quite 4 per cent and gets from 4J to 4J per cent. Q. The State gets that profit ? A. One half of the clear profits goes to the reserve fund and the other haK to the State. Q. How is it that private banks manage to compete with this ? A. The cantonal banks can not satisfy all the demand or aU the requests they have from the people who want to borrow money, and so the other banks do just as weU as the cantonal banks. Q. Do the State banks accept deposits from the public ; and if so, what rate of interest do they pay ? A. They pay 4 per cent for savings deposits. The amount of savings deposited at the present time is 86,000,000 francs. Q. What are the deposits in the private banks — the savings deposits outside of the State banks ? A. One biUion six hundred million francs; there are 3,000,000,000 francs in deposits in all Switzerland. Q. So really the State banks only have about 5 per cent of all the deposits, 95 per cent being in private banks ? A. Four hundred and twenty-three mUlion are the total deposits in all the cantonal banks of Switzerland. Q. The figures given for the private banks were all the private banks ? A. In the first figures the cantonal banks were also figured. Q. That makes this difference — 20 per cent in the cantonal banks and 80 per cent in the private banks — that is, deposits ? A. Not quite 20 per cent, but approximately that. Q. Do these cantonal banks make loans on farm property ? A. Yes. Q. And they deal directly with the individual farmer ? A. Yes. Q. Do they make loans on the amortization plan ? A. Only very Httle. It depends on the locahty. The Cantonal Bank of Zurich has very Httle of this busi- ness, whereas in the Cantonal Bank of Berne much of this business is done. Q. Can a resident of this canton get a loan from the Cantonal Bank of Berne on the amortization plan, or can the bank of Berne restrict its own loans to the people of that community ? A. Yes; he could do that. You know the result of this is that in case there is some kind of a depression in the Canton of Berne, those who have taken loans outside of the canton are the first ones who have to pay back their money. They are given notice before the people of the canton. Of course the bank gives the people of the canton the preference. Q. Is the Cantonal Bank of Berne the only bank in Switzerland that applies the amortization feature ? A. The only important one. There are a few more, but they just do this business on a small scale. Q. What is the maximum Hmit of time that the Cantonal Bank of Berne will make loans for on the amorti- zation plan? A. That depends again on the rate of interest, which varies from 4 to 4^ per cent. Q. The borrower could have 59 years to pay off his loan ? A. Borrowers have the privilege of getting money on the amortization plan, payable in installments at the rate of one-half per cent or more a year. This makes the loan run a period of about 50 years. Q. Then in Switzerland you do not have the kind of farmers' societies that exist in Italy, where a group of farmers organize a society and get amortization loans on all their land as a unit ? A. No. Q. There are no such organizations in Switzerland — the bank deals with each farmer directly ? A. The Italian system of collective borrowing by a farmers' society on their collective land does not prevail in Switzerland, the system here being one where the bank deals directly with the individual farmer, SWITZEBLAND. 467 DEVELOPMENT OF AGRICULTURAL COOPERATIVE SOCIETIES. Statement of Prof. Moos. Zurich. We have at present in the little country of Switzerland about 6,500 agricultural and cooperative societies. Without counting the 223 Alpiue cooperative societies, which date their existence from ancient tunes, almost all have begun since the commencement of the nineteenth century, and the greater part during the second haK. According to the end and purpose of the society, we have to distinguish the agricultural societies from the cooperative societies. The first are of older date and make it their purpose to promote agriculture quite generally and simultaneously in all its aspects, especially the technical side of agriculture. The cooperative societies in the proper sense, known to cooperative legislation of most countries are com- mercial and economic; they are marked by their efforts as economic enterprises on some particular ground of agriculture. Of the first kind, which are not cooperative in the proper sense, we have about 850 va. Switzerland. With regard to language, they are united in main groups, such as the Swiss Agricultural Union in German Switzerland, the Federation of Agricultural Societies in Romansch Switzerland, and the Agricultural Union of Ticino in Italian Switzerland. Finally, the whole of Switzerland is included in the Swiss Alpine Society. Besides the feder;ations of societies, there are some societies with direct membership, comprising larger parts or even the whole of Switzerland. Thus the Society of Swiss Farmers, the Society of Agriculture of Romansch Switzerland, and the Teachers' Union of Agricultural Schools ; lastly there are some special societies as the ornithological and bee-management societies, etc. The cooperative societies mainly pursue economical interests of their members, mostly on some special ground; for example, cooperative dairies, productive societies, associations for thrashing, etc. The cooperative system in this sense has lately attained a special meaning in Switzerland. As every experienced cooperator is aware, the cooperative system in its development never follows hard and fast rules. In every country the special economical conditions determined its commencement and promoted its career. In Germany the greater number of the first agricultural cooperative societies were Raiffeisen loan banks. In France the first agricultural cooperative societies took for an example the productive societies of industrial workmen, which had been attempted since the forties of the last century. In agricultural Denmark, with its foreign export, cooperative societies for dairying, for slaughtering hogs and curing bacon, for collecting, grad- ing, and exporting eggs, etc., were first to spring up. In Switzerland the purchasers and consumers' cooperative societies came first. There are still 600 of them. It is important to distinguish those which confine their trade to special agricultural working stock and farm requisites (chemical manure, feeds, seeds, etc.), from those which deal in all kinds of necessary things (household requisites, etc.). The several local purchasing societies are grouped into unions. These attempt concentrated purchase for the separate cooperative societie?, just as the latter desire to concentrate purchase for their members. They also insure for cooperative interests a more effective and imposing representation in the outside world. There are several of these unions: The Union of Eastern Swiss Agricultural Cooperative Societies, the Union of Agricultural Societies of Berne and Adjoining Cantons, the Union of Agricultural Cooperative Societies of Central Switzerland, the Federation of the Syndicates of the Canton of Fribourg, the Agricultural Cooperative Union of Ticino, etc. Altogether there are 10 such federations of local cooperative societies in Switzerland. The best understanding exists between them, making it possible to take care of their common interests. The greatest number of societies, companies, and cooperative societies are occupied in the dairy industry, and there are also societies, mostly of long standing, engaged in making gruyere or Emmenthaler cheese. They number about 3,000. Breeders' associations exist to the number of 1,400. There are about 160 cooperative credit societies with about 10,000 members. All other forms of agri- cultural groups are quite in the bacl^round as compared with those mentioned. There are also some fruit and vineyard societies (about 140), associations for thrashing, and lately, especially in the west of Switzerland, milling and baking cooperative societies have shown a remarkable activity. 468 AQEECULTUBAL COOPERATION IN EUROPE. RAIFFEISEN BANES. statement by Rev. T. Thabbr, Founder of the Raiffeisen System in Switzerland. Zurich. The capital for the Kaiffeisen banks is secured by deposits of the members and their immediate neighbors, who are usually peasants, servants, small village traders, etc. The association is cooperative, with unlimited habihty on the part of every member. These banks have done much to encourage thrift and industry among the village members and their neigh- bors and have been of great assistance to the small peasant farmers and the village traders by furnishing them with credit on long terms of payment and at the lowest rate of interest, thus saving them from the clutches of loan sharks. One village, for example, with a population of 1,500, numbers 750 depositors in the village Raiffeisen bank. Interest is paid depositors at the rate of|4i per cent. Interest is charged borrowers at the rate of from 4^ to 4f per cent. Loans made on personal indorsed notes are for a period not to exceed 10 years. Payments are made in aimual installments. Loans on realty are made practically for an indefinite period, so long as the interest is paid. The security required is real estate or indorsed personal notes. The unremunerated board of directors pass on all loans. Since these loans are strictly confined to members, who are also the immediate neighbors of the directors and whose character and history are thoroughly known, the risk in the matter of bad accounts is made almost nil; more especially since the directors, in common with all other members, are personally hable for aU Uabihties. The Raiflfeisen banks, numbering 157, are federated and have central bureaus which act as clearing houses. These banks are conducted without any State supervision, though such supervision is now being urged. The church does not bear any official relation to these banks, though many priests in their private capacities take a personal interest in encouraging and. helping to conduct these banks in the interest of and for the common welfare. WHOLESALE AND PROVISION SUPPLY SOCIETIES. Statement by Mit. Scithamli, Busineaa Director East Swiss Association. Zurich. The supply associations have been established more or less as commercial organizations and to further the commercial interests of agriculture. Formerly there were smaller societies which did the agricultural com- mercial business — that was before these corporations or cooperative associations were organized. The very first important question was whether they should have limited or unlimited Habihty. Of course the security is much greater with these cooperative agricultiiral societies than with any organi- zation in the cities, where the members live in the town to-day and outside of the town or country the next day, and perhaps will not be found again. Every farmer, on the other hand, owns his own estate and will always remain there, so that in case of failxire he can always be reached or his estate can be taken. The union of agricultural associations for eastern Switzerland includes 180 associations, which are divided among nine cantons. The Ima Canton Union is the most important in the nine cantons. There are other such associations in other cantons, but they consist as a i-ule of the members only of one canton. These canton societies generally do business in fertilizers, seeds, and agricultural implements. Besides this business these associations in eastern Switzerland make a specialty of supplying the farmers with the neces- sary produce for family use or consumption. The Union of Eastern Switzerland has found out that the farmer spends an amount equal to 75 per cent of his income on necessities, whereas he only spends 25 per cent for the equipment of the farm. That is, the farmer is a greater buyer on the market for food suppUes than for the material that he needs for exercising his profession. These unions run against a great deal of trouble from the commercial people because they furnish the farmer his supplies directly; whereas in former times the farmers had to deal with different dealers and had to pay higher prices. The farmers with their products were forced to join in the world market and had to regu- late their prices more or less with the world market, and that of course means that they must sell their produce at the best possible rate in order to compete in the world's market with other farmers. There are now 280 permanent shops where the farmer gets his supplies at very reasonable prices, and they are under the control of the Eastern Switzerland societies. The union of Eastern Switzerland has existed for 75 SWITZEELAND. 469 years. It holds property amounting to 1,600,000 francs. The value of the stock in warehouses amounts to 1,800,000 francs. Last year's turnover business amounted to not quite 10,000,000 francs; 1,500,000 francs was paid to customers as rebate on purchases in 25 years, 1,620,000 was repaid on the turnover last year — this is only the rebate to the individual societies of which the union is composed. This 10,000,000 turnover is only for wholesale between the union and the society. The society charges a little higher to the individual, and last year's rebate paid to the individual societies amounted almost to 500,b00 francs. Of course you have to count an addition of 20 per cent on the price for the goods sold to the individual members to the society, so that the total will amount to twelve or thirteen millions. The society buys from the union only. All these societies have to have a uniform American bookkeeping system. They have permanent inspectors who visit ■ at least once a year all the societies belonging to the union. The union turns over the profits to the societies, but 30 per cent of it has to go to a reserve fund, but the balance of the profits is returned to purchasers in rebates.* MELK AND CHEESE ASSOCIATIONS. Statement by Pkof. Laur. Zurich. Milk production is the most important item in the agricultural industry in Switzerland. The value of ' the annual milk production in Switzerland amounts to approximately 400,000,000 francs. Of this milk a great deal is used for the manufacture of Emmenthaler cheese, of which there is continually increasing ex- portation to the United States. Besides that th«y manufacture condensed mUk, and, further, a portion goes directly to the consumption of the people in the country. Cheapness of production and distribution with nulk, condensed milk, and butter is mostly due to the associations. There are three kinds of associations. The first only seUs the milk. The second rents to the cheese maker and furnishes him with the milk and he uses the building to make the cheese in. The third is acting in the interest of the manufacturer; that is, he is interested in the manufacture and sale of the cheese. These associa- tions have been formed into a union in order to regulate the price of milk. To go against these unions the dealers have organized, and for that purpose they have organized or founded cheese export companies. At the present time very hard fighting is going on between these two parties. The exporting companies export a considerable amount of cheese to the United States. In the United States there are a number of national cheese dealers to whom the cheese is sold by cable.^ Recently all the mUk and cheese buyers have organized into an association. The leading member in this association is the condensed mUk factory at Cham. In case the farmers do not supply the cooperative societies with mUk, the condensed-mUk factories wUl supply these cooperative societies. In the neighborhood of these condensed-mUk factories they are buUding cheese factories so that they can use the milk for the manu- facture of cheese instead of condensed mUk. They are fightiag just at the present time and the result is not known yet. The future of the whole Swiss industry depends on the result of this struggle. The point is to organize the farmers into associations and if possible to concentrate the business into the hands of the farmer associations, and if they can do that it wUl be successful, for there is no place in the world where they produce better cheese than they do in Switzerland. ' TJie cooperative wholesale association not only imports large quantities of different kinds of goods, butalso serves as a market for many things produced by its members. For example, the wine cellar is equipped at a cost of $50,000 with huge tanks for the storage of wine. The wine is purchased from the members, carefully filtered, and stored until prices are right. In the same way dried fruits, grains, and articles of clothing are bought from members of the association. The society has been a tremenduous boon to the farmers of the eastern Cantons. To take a striking illustration, the prices of com- mercial fertilizers have been reduced 56 per cent. There have also been marked reductions in the prices of all kinds of goods handled by the association. The benefit to all the small farmers has been even greater than these figures would indicate. Upon inquiry it was brought out that the cooperative stores have become the price makers of the eastern Cantons. Instead of gauging their prices by those prevailing in other stores, they go ahead and independently set their own prices. Other stores are forced to adjust their prices aiccordingly. Thus, not only he members of the associations, but every farmer in the region is the better off for the existence of the cooperative stores. ^ Farmers in the neighborhood of Gassan interviewed by members of the subcommittee were getting 18 francs per 100 kilograms for their milk, and were well satisfied with the way in which the creamery was managed. In this case the association owned the factory and adjoining pigpens, for which they were paid a regular rental by the cheese makers, who bought milk outright. 470 AQBICULTT7EAL COOPERATION IN EUROPE. SWISS FARMER ASSOCIATIONS. The Swiss Farmers' Union includes all the associatioris and societies that have been mentioned or named in this conference. The aim of the farmers' union is political and economic. The farmers' union has the follow- ing administrative organization for this purpose: First, the farmers' secretary. Further it has a special book- keeping department for the keeping of the records. There are permanently 300 farmers who keep a record. The union has an ofl&cial for prices and at least one confidential man in each community. In any initiative, referendum, or other vote these confidential men take an active part. They keep informed on customs tariffs and the control of food supplies. They have the addresses of all agricultural societies in Switzerland so that they can inform them how to take an active part in voting. The union took an active part in the establish- ment of the new civil code, in the revision of the military law, and in the law for accident and sickness insur- ance. It was due to the farmers' union that the last-named law was passed. For scientific work the farmers' union receives an annual support of 40,000 francs. The other income of the union consists in free contributions by the members. The influence of the farmers' union is especially due to the democracy. Every law has to have the signatures of 30,000 voters before it can be passed; that is, before any law can be referred 30,000 people must sign the petition. For voting the union has taken but a very small active part. The main reason is because the union contains or embraces the tendency of the Swiss people and, further, because the voting is usually done in each canton separate from the other cantons. AGRICULTURAL EDUCATION. Report of a Sttbcommittbe. Zurich. It is estimated that from 90 to 95 per cent of the Swiss farmers own the land they cultivate. Somewhat more than half of these landowners five in rural villages, while the others dwell in separate farm homes sur- rounded by their holdings. The homes are of the pecuHar combination type found also in southern Germany; that is, animals, feeding stuffs, implements, and machinery are usually found under the same roof as the dwelling. The homes, while not very pretentious, are quite neat and comfortable. While the average wealth is not great, there is little or no poverty. Societies for music, dancing, and athletics thrive alongside of the numerous agricultural and educational associations. For all such associations Sunday is the day of assembly. This does not mean that the church is neglected. Service is held in the morning, and the members consider themselves free for recreation and social intercourse the rest of the day. They gather together for musical practice, athletic contests, or lectures on agricultural and other subjects. The educational system, properly speaking, may be treated under four headings: (1) The common-school system, (2) popular lecture courses on agriculture, (3) the middle-school system, and (4) the agricultural branch of the National Polytechnical High School at Zurich. COMMON-SCHOOL SYSTEM. Agricultvire as a separate subject is not taught in the elementary schools of Switzerland. The Swiss edu- cators, in common with most European teachers, insist that it is better to give all children the fundamentals of an education before undertaking any instruction on technical or vocational subjects. Considerable atten- tion is given to nature study and the encouragement of country hfe. Groups of children, for instance, are conducted through the fields and are allowed to attend the Sunday afternoon agricultural lectures and many other gatherings for agricultural instruction. POPULAR LECTURE COURSES ON AGRICULTURE. The agricultural societies and educational institutions give much instruction to the farming population through extension lectures and schools which sometimes last over a period of several days. As a rule, the farmers' organizations make the local plans and invite experts to visit the commimities and give lectures on the subjects of greatest local interest. MIDDLE-SCHOOL SYSTEM. For agricultural purposes the middle schools are divided into two classes: (a) Regular two-year agricultural schools. — There are five of these schools in Switzerland with an aggregate attendance of about 250 young men, who are either preparing to enter the Polytechnical High School of Zuricli or to return to practical farm life. The students in these schools must be at least 17 years of age. The author- ities of the Polytechnical High School claim that the graduates of these agricultural middle schools have much SWITZEBLAND. 471 better preparation for college work in agriculture than do tlie graduates of the regular classical high school, although the length of their schooUng is about two years less. (b) Winter agricultural schools. — These schools are worthy of special attention, because they are organized to reach the needs of the sons of ordinary farmers who can not afford to send their boys away during the actual farming season. The instruction covers 2 five-month winter courses. There are 15 of these schools in Switzerland with an aggregate attendance of 1,200 students. For the most part the graduates of these schools return to the farm and become agricultural leaders in their respective communities. Agricultural branch of the National Polytechnical High School of Zurich. — ^This is a branch of the one edu- cational institution in Switzerland supported by the National Government. Its work in agriculture corre- sponds very closely to the work of American agricultural colleges. Its faculty is made up of 5 special agricultural professors and 15 other teachers who teach allied subjects or assist in extension work. This insti- tution is thoroughly equipped with an agricultural museum and modern laboratories, and in connection with the middle agricultural schools conducts an experimental and demonstration farm of 125 acres. At present about 60 students are in attendance. These students come from the middle agricultural schools and the gymnasium or standard high schools. As a general rule, the graduates of this school become teachers of agriculture, government experts, or expert managers of large estates. AlUed with this institution are two or three experiment stations and several schools and experimental farms conducted in the interest of special phases of agriculture, such as fruit growing and cattle breeding. CONCLUSIONS. Agricultural education in Switzerland suggests the following conclusions when compared to similar work in the United States : (1) The elementary schools look outward and take great interest in what is going on in the fields and forests about them. (2) The winter schools supply scientific training for a class of young men who can not secure training in the regularly organized high schools. (3) The class-room work in the middle or agricultural high schools is supplemented by actual work on- the farm. (4) The schools, both middle and college grade, get maximum results at minimum expense. One middle school, where about 60 boys are given instruction the entire year and where 140 boys receive expert instruction in the winter, was being conducted at a total expense to the State of five or six thousand dollars. BOVINE BREED OF SWITZERLAND.' Zurich. The Helvetians, a people the first spoken of in history as inhabiting that country now called Switzerland, were a race of pastors. Throughout the whole of the history of these people and their development raising cattle and trading in same have occupied a prominent place. For many centuries Swiss cattle have been well known and appreciated, but since the last decades they have obtained universal fame. The conformation of the soil and the climatic condition of the country greatly contribute to success in cattle raising. The beautiful rich meadows of the valleys, the alpine pasture lands with their limpid springs, the pure air, timely rains, and the climatic, topographic, and geologic character of the country, all tend to its development. Switzerland is moimtainous, covering a surface of about 41,000 square kilometers. Two chains of mountains, the Alps and the Jura, cross the coimtry more or less in the direction from south- west to northeast; in the space between these mountains, from the Lake of Geneva to that of Constance, spreads a most fertile region of beautiful hiEs and mountains of minor altitude, the Swiss tableland, also called "Mittel- land." Here the country is about 400 to 600 meters above the level of the sea, stiU excepting numerous hiUs and mountains of an altitude of about 1,000 meters and more. A temperate climate and frequent rains greatly favor the production of forage, wherefore nearly the whole of the lands suitable for cultivation in the regions of the Alps and the Jura and a greater part of those situated in the mittelland have been converted into meadows. The breeding grounds and pasture lands constitute more or less 70 per cent of the soil devoted to agriculture. In the tablelands (the mittelland) there are a great number of artificial prairies (clover of about 3 to 6 years' duration), besides which there are natural pasture lands; this is the center of the cheese and condensed- milk industries. ' Special report issued by the Swiss LMons of Cattle Breeders. 472 AGEICULTURAL COOPERATION IN" EUROPE. Cattle raisiiig finds its ehief sustenance in the pasture lands which in the Alpine regions lise to 2,000 meters aDove the sea level. In this region the cattle "remain the whole summer in the open air; in spring and autumn they are in the 'valleys and meadows of lesser altitude; in summer they are high up in the alpine pastures. In the mittelland the cattle are sent to the pasture grounds in autumn only; but they are beginning to send them there also in spring. In some districts of the mittelland, especially in those regions where the Schwyz cattle are bred, the cattle are in the open air aU the summer, and the establishments where this system is in force increase yearly in number. It has become a clear conviction that by using every advantage of all the favorable influences of the pasture grounds satisfactory results may be obtained in cattle raising. There is nearly always substantial and wholesome fodder to be found in the grazing grounds as well as flowing water. The life in the pure, cool, open air, and the exercise necessitated by the obligation to seek their own food, have a salutary influence on their development, the proper functioning of their organs and their strength of resistance. The health, the strength of resistance, and the fecimdity of the cattle win a great deal by this system, which also contributes to an increase in the power of transmission of the Swiss stock, bred with method since many genera- tions, whether in the raising of the genuine race or in the crossing with foreign breeds. Since the remotest times two breeds have been kept very pure — that of Schwyz and that of the Simental, the latter comprehending the real Simental (which breeds have red and white spots) and those of Friburg (with black spots) . The raising of the Simental breed has its center in the northwest part of Switzerland and that of the Schwyz breed in the southeast of the same. The regions occupied by these two principal breeds touch each other, separated by a line which extends from the Lake of Constance to Zurich and from there to Brienz and to the Matterhorn (Cervin) . The first census of the cattle took place in the year 1886, the last took place in 1906. The results of these two years are as follows: Bovine cattle in general. 1886 1906 Increase. Cows. 1886 1906 Zurich Berne Lucerne Uri Schwyz Obwalden Nidwalden Glaris Zug Fribourg Soleure Basel (city) Basel (country).. Schaffhausen Appenzell A.-Rh Appenzell l.-Rh. St. Gall Grison Argoyie Thurgovie Tessin Vaud Valais Neuchatel Geneva Swiss tQtal, 70, 199 195, 327 65, 349 11, 107 23, 473 8,988 6,026 9,208 7,226 59, 821 28, 315 1,644 14, 043 8,901 14, 963 6,748 69, 598 81, 960 62, 938 34, 719 45, 020 77, 646 62, 617 19, 105 7,954 112, 240 327, 399 114, 472 13, 129 36, 283 14, 234 9,466 12, 307 13,582 106, 373 44, 444 1,717 24, 370 12, 577 22, 332 10, 255 111, 258 83, 358 94, 417 63, 439 43, 626 115, 545 75, 547 26, 445 9,089 Per cent. 59.89 67.62 75.27 18.20 54.57 58.36 57.09 33.60 87.96 77.82 56.96 4.44 73.54 41.30 49.25 51.97 59.86 1.71 50.02 82.72 3.10 48.81 20.65 38.42 14.27 42, 983 111, 657 35, 282 5,969 11, 135 5,297 3,893 6,014 5,234 28, 741 16, 439 1,435 9,522 5,227 10, 604 4,649 41, 068 32, 988 34, 787 20, 735 20, 394 44, 821 35, 719 11, 589 6,245 59, 138 169, 044 68, 993 5,916 15, 215 6,644 5,207 6,604 9,402 50, 950 23, 764 1,372 14, 364 6,418 13, 541 5,649 62,494 30, 517 47, 216 38, 064 23, 145 62, 776 38, 351 14, 136 6,667 992, 895 1, 497, 904 50.86 552, 427 785,577 In this census the different breeds are not classified ; yet it is generally admitted that the breeds of Schwyz and of Simental proper comprehend about 650,000 heads of cattle, while the breed of Fribourg, the raising of which is limited to the Canton of this name and to an association of the Canton of Neuchatel, must count about 50,000 heads of cattle. In the Canton of Valais a breed of small cattle of a brown color is found, called the Eringer breed, named after the valley of Eringen. The Schwyz breed is, as far as we know, the oldest in Switzerland and traces of the race are met with, as far back as the epoch of the lake dwellers. The Simental breed seems to have come down from a breed introduced into Switzerland by the Burgun- dians, who came as immigrants from the north about the fifth century. For several generations the breeds of Schwyz, of the Simental and of Fribourg have been kept very pure. SWITZEKLAWB. 473 There are many ends for which the Swiss cattle are bred. The first object in all cattle breeding is the product of milk and of meat, but the animals can also be used for work. In general that which is most wanted is to obtain an average live weight, this weight being a little higher and subject to less variation in the Simental breed than in the Schwyz. The heights and inclinations of more or less importance, the diversity in the com- position and the fertility of the soil, and in the management and care given to the cattle, influence a great deal the live weight and size of the cattle coming from different regions and establishments. Thus ni some districts they prefer raising cattle of an avei age weight or of great weight, whUe in other regions only cattle of l^hter weight are bred. In the regions where the Schwyz ca,ttle are bred, there is a greater difference on account of the great number of different methods in the way of raising and managing the cattle. Yet the ends aimed at are the same in the two breeds with one difference only; that those animals which are of lighter weight and less well managed have much less meat and precocity. In every case what is most striven after is to obtain healthy and strong cattle. In summer the greater part of the cattle breeders of the mittelland send their cattle up to the Alpine pasturages, and moreover there is a great deal of exchanging between the cattle breeders of the Alps and those of the plains. In the region where the industries of cheese making and of condensed mUk are carried on, many calves are sold to these Alpine establishments, and reared there under good conditions. When they have attained a proper age, they are sent back to the plains from where they came. On account of this exchang- ing of cattle, which is carried on very actively as we have already said, the difference which formerly existed between the cattle coming from different districts is disappearing little by little. SOHWYZ BREED. The raising of the Schwyz breed has its principal center in the region of the Alps and their ramifications. These regions comprehend the totality of the cantons of Schwyz, St. Gall, Grlson, GJaris, Unterwalden, Appen- zell, Zug, Uri, and Tessin and a part of the cantons of Thurgovie, Zurich, Argovie, Beme (the valley of the Hasll), and Valals. The Canton of Schwyz has been known for a long time as haviag the best cattle of this breed. Conscious of this, the cattle raisers of the other regions bought there not only the bulls and oxen they wanted but also many cows and heifers. In this manner and by the bartering carried on between the establishments of the plainb and those of the mountainous regions the different types formerly existing have disappeared in such a manner that tho type once belonging to the Canton of Schwyz alone is now found everywhere where the Schwyz breed is reared. For this reason every other denomination has been abandoned and at present only the Schwyz breed is heard of. The lighter animals of this breed are mostly found in the high mountains, with their steep slopes, where the forage is less abundant. Therefore we find the type of the lighter cattle in the region of the Gotthard, especially in the higher districts of the c$,ntons of Uri, Valais, Glaris, and Tessin. But from this you must not deduce that there are no heavy cattle in the Alpine regions, as well as light cattle in the valleys. As far as the quality of the animals is concerned it is the same. The Canton Schwyz holds the first place, followed very closely by that of St. Gall. Yet in other cantons you meet whole herds of cattle and some animals here and there that are worth as much as the best of these first mentioned. The color of the animals of this race goes from dark brown and dark gray (the color of coffee and of chestnuts) to light brown and light gray. The opposite colors are mostly found among the animals of minor we^ht. At the present time the gray color prevails in all the different tints from light to dark. The color varies according to the situation. The gray color (rat gray) and chestnut color are the coiors in which these changes are least visible. According to the different parts of the body the color is more or less pronounced. All the animals have a muzzle of the color of lead with a l^hter rim all round. The under Up, the interior of the ears, the interior part of the limbs, especially the forelimbs, the udder, and the shield are also lighter than the rest of the body. Generally these cattle have a stripe more or less light or broad on their backs going from the withers to the tail, but this line is sometimes broken. In former times the descriptions of the cattle show that then white spots In the hair were rather frequently met with. Till about the middle of the last century the animals with a spot in the middle of the forehead were not excluded from the cattle shows, but since then they have depreciated in value, and at the present time they are not admitted at the competitions, as no animal obtains a prize with spots unless these are found on the inferior part of the belly. Those cows that have a spot higher up than the belly or on any other part of the body are excluded. Cattle having reddish colored hair are not readily received. Yet it must be remarked that the animals which are exposed to bad weather in the Alpine districts get a dirty reddish color, which, however, disappears on changing the animal's way of living. With regard to the form of the body of those animals which are reared and cared for rationally, they show an elegance and purity of form which gives at the same time a high opinion of the health and strength of resistance of the animal and of Its faculties. The head Is nearly aiways small and refined. Long noses are often met with; broad foreheads, small turned-up horns, and a large mouth 474 AGEICXJLTURAL COOPEBATION IN EUROPE. are the general signs. The neck is of an average length, well covered with hair and having small rumples. You sometimes meet with animals having very narrow chests, which is a consequence of bad management, but generally that part of the body is well built. The back is long and rather broad and well developed; the whole trunk in all its development in length shows the good qualities of a milk cow. The limbs are generally well made and strong, seldom coarse. Most of these animals have strong thighs with good muscles, having short shins; the knees, pasterns, and hoofs are very strong. The cows reared on the declivities of the mountains have sometimes a tendency to throw their bodies backward, but this tendency is remedied with age. Generally speaking the cattle of the Schwyz breed are not high on their legs, which gives them an appear- ance of strength; the bones are generally stronger than any other breed having the same qualities for producing milk, which shows that the cattle breeder tries to do all he can to keep up and to increase the vigor and strength of resistance of his cattle. In order to qualify the animals they often take to measuring the different parts of the body. Here are the average measurements taken at the National Exhibition of Frauenfeld in the year 1903: Length of head Length of trunk Length of chest Depth of chest Breadth of chest Breadth of back Length of pel-vis Breadth of hips Space between the articulations of hips Height of withers Height of sacrum bone Bulls (reproductors) from 2 to 3 years of age. Centi- meters. 54.0 170.5 79.7 74.0 54.1 42.0 57.6 55.0 54.2 141.0 146.0 Per cent. 31.8 100.0 47.0 43.5 31.8 24.7 34.0 32.4 31.8 82.9 85.9 Bulls (reproductors) of more than 3 years of age. Centi- meters. 57.0 179.0 85.8 78.3 58.7 44.0 60.5 59.1 57.6 146.8 149.0 Per cent. 32.0 100.0 48.0 44.0 82.6 24.7 34.0 33.1 32.5 82.6 83.7 Heifers from 2 to 3 years of age. Centi- meters. 50.5 159.0 73.4 69.8 47.8 41.4 52.7 54.2 51.0 134.1 140.2 Per cent. 32.0 100.0 46.2 44.0 30.4 25.9 33.5 34.2 32.2 84.8 88.6 Cows. Centi- meters. 52.2 165.0 79.9 72.6 49.2 42.2 54.3 57.3 52.6 135.9 140.9 Per cent. 31.5 100.0 46.0 44.2 29.7 25.5 32.7 34.5 32.1 82.4 85.4 With regard to the animal's faculty to work, it must be said that since the culture of wheat has these last 25 or 30 years greatly diminished in the plains as well as in the alpine regions very few oxen of the Schwyz breed are seen. Instead of these they use cows and heifers for agricultural work. On the confines of the two regions where these cattle are reared we sometimes meet with oxen of the Simental breed, which are very pre- cocious and which become very heavy. This does not hinder the Schwyz breed furnishing animals apt to labor. Their black, strong, and hard hoofs, their quick temperament, greatly help them in their work, even along the smooth roads. Their tendency to fatten is good and the quality of their meat excellent. The live weight of these animals of the heavy type is satisfactory and might be higher in some districts if accoimt was kept of their faculty of fattening. The average weight of the full-grown cows of the heavy type is from 600 to 650 kilos ; that of the bulls from 850 to 950 kUos. Very often the cows come up to a live weight of 750 to 800 kilos and the bulls from 1,000 to 1,100 kilos. We here give the average limits of Uve weight of the cattle exhibited at the agricultm-al exhibition in Frauenfeld of the year 1903 and at the international exhibition of Milan in the year 1906: Frauenfeld, 1903. Average weight. Maxi- mum. Milan, 1906. Average weight. Maxi- mum. Bulls (reproductors^ from 18 to 22 months of age Bulls ^reproductors) from 2 to 3 years of age Bulls (reproductors) of more than 3 years of age . Heifers from 18 to 22 months of age Heifers from 2 to 3 years of age Heifers of more than 3 years of age Cows 595 772 941 438 613 658 674 689 888 1,145 493 732 727 868 606 '874 404 '603 721 680 '940 415 '735 865 ' For the greater part animals from 2 to 3 years of age. SWITZEELAND. 475 The yield in milk is very good, as well for the quantity as for the quality. The Schwyz breed has since a long time the reputation of being an excellent milk-producing cattle. If it is true, with regards to quantity, that this race is surpassed by the cattle of the lower lands, it is not less certain that the milk of the Schwyz breed is richer and that the strength of resistance of this breed is greater. Here are the results of some observations made upon the production of milk : 1. F. ROSLI-FREY, WAETENSEE-SEMPACH. In summer the cattle are fed with green forage only; in winter they receive dry forage and, according to the quality, from 1^ to 2 kUos of flour of sesame. In spring and in autumn they go to the fields for about three to five weeks. The strength of the herd is from 16 to 21 head of cattle. Year. Average quantity. Per day. Contents in fat. 1897 1898 1899 1900 1901 1902 1903 1904 Liters. 3,515.4 3,707.9 3,688.4 4, 068. 2 3, 625. 3, 534. 3,825.0 3, 635. 6 Liters. 9.6 10.1 10.1 11.1 9.5 9.7 10.5 9.8 Per cent. 3.90 3.80 3.55 3.75 3.60 3.80 3.85 3.75 2. THE ESTABLISHMENT OF MAGGI, KEMPTTHAL (ZURICH). Ail the animals which are now to be found in the establishment were reared there. The rearing is done in the following manner : Calves are given their drink in a paU. Every day for the first fortnight they receive 6 to 7 liters of milk a day, given in two times. From the third till the tenth week the females receive 8 liters and the males 10 liters 1 day. After this period they begin to give them oats in quantities of three-fourths to 1 kilo, according to the sex and the destination for which they are to be used. The oats, after having been ground to coarse fiour and boiled, are mixed with mUk. At the age of 16 to 18 weeks for the females and at the age of 26 weeks for the males they give up giving them milk, but they give them raw smashed oats till the age of 9 months. When the weather permits, they are carried to the camp, and at the age of 1 year they are transferred to the moun- tain. In January or February the heifers are put with the buUs, but they may not be covered before the age of 2 years. The cows go to the camp in spring and in autumn for about six to eight weeks. In summer they exclu- sively receive green forage. In winter, in addition to the dry forage of the best quality, they give them one- half Idlo of maize, one-fourth Idlo of beans, and three-fourths kilo of beer dregs. The maize is smashed and given with the beans and dregs together. A herd is composed of about 250 to 300 head of cattle, of which 100 are cows. Eighty or ninety of these are put together in the same stables. Head of cattle. Production of milk per year per cow in liters. Average percentage of the richness in fat. Year. Maximum. Average. Per day of mainte- nance. Minimum. Maximum. Average. Minimum. Remarks. 1900-1901 1901-2 72 68 69 71 65 5.309 5,266 5,380 5,207 5, 311 3,875 3, 202 4,003 4, 071- 4,178 10.61 8.77 11.21 11.15 11.36 2,267 2,194 2,379 2,416 2.628 Per cent. 4.78 4,65 4.90 4.96 4.79 Per cent. 4.01 3.95 4.02 4.00 4.01 Per cent. 2.98 3.00 3.20 3.15 3.05 Putrid fever. 1902-3 1903^ 1904-5.. 476 AQBICULTUBAL COOPEBATION IN BT7K0PE. 3. DETAILS GATHEBED BY THE UNION OF THE ASSOCIATIONS OF THE SCHWYZ CATTLE BREEDEES. This union has itself made investigations as to production of milk in the different establishments. Here are some of the chief results : Heads of cattle. Duration of the period of lactation. Duration of the interme- diate period between the calvings. Average production per period of lactation. Average j in 365 )roduction Kstablishmenls. Milk total. Fat. Dry sub- stances. Average content. days. Fat. Dry sub- stances. Total. Per day. Cantonal aaylum of Wil (St. Gall): 1903 10 8 4 3 Days. 331 386 377 381 Days. 419 397 490 457 Kilos. 3, 674. 3 5, 005. 2 4,578.7 4, 996. 1 Kilos. 136. 66 193. 28 173. 70 189. 70 Kilos. 470. 75 650.72 583. 37 653. 68 Per cent. 3.72 3.86 3.79 3.77 Per cent. 12.81 13.00 12.74 13.08 Kihs. 3, 263. 1 3, 609. 8 3, 838. 6 3, 985. 8 Kilos. 8.94 1904 9.89 1905 10.64 1906 10.92 Total and average quantities 25 369 441 4, 563. 7 173. 33 589. 63 3.78 12.91 3,673.2 10.97 Home for the poor of Kappel a. A. (Zurich): 1903 3 4 4 2 459 425 356 633 500 495 442 705 5, 890. 8 5,452.7 4, 984. 3 7, 100. 1 241.08 201.84 209. 76 301. 92 787. 37 681. 17 653. 69 974. 23 4.09 3.70 4.21 4.25 13.37 12.49 13.13 13.72 4,299.7 4, 278. 7 4, 124. 5 3, 675. 5 11 78 1904 11.04 1905 11 30 1906 10.07 Total and average quantities 13 543 535 5, 956. 9 238. 25 774. 11 4.06 13.18 4, 094. 6 11.05 H. Bryner, manager at Riesbach (Zurich): 1903 3 4 5 2 339 400 465 591 392 431 501 633 4, 385. 4, 957. 8 5,508.4 5,795.2 169. 60 177. 77 209. 60 216. 74 580. 75 636. 99 717. 45 762. 23 3.87 3.58 3.85 3.76 13.23 12.85 13.02 13.22 4, 376. 3 4, 114. 7 3, 595. 6 3,321.5 11.99 1904 11 27 1905 9.43 1906 9 10 Total and average quantities 14 449 489 5, 152. 7 193. 43 674. 35 3.79 13.08 3, 851. 8 10.45 House of correction, Bizi (St. Gall): 1903 2 2 445 357 484 463 3,884.4 3, 645. 4 160. 24 162. 90 531. 49 504. 88 4.12 4.47 13.68 13.65 2, 952. 8 2, 967. 5 8 09 1904 8 13 Total and average quantities 4 401 473 3, 764. 9 161. 57 518. 18 4.29 13.76 2, 960. 1 8.11 J. Ziehlmann, at Man- nenbach, near Schupf- heim (Lucerne): 1903 2 1 331 282 389 332 5, 223. 1 4, 554. 4 195.40 174. 07 677. 13 585. 46 3.74 3.82 12.96 12.85 4,894.6 5, 146. 5 13 41 1904 14.10 Total and average quantities 3 306 360 4, 888. 7 184. 73 631.49 3.78 12.90 5, 020. 5 13.70 Farm of the Convent of Einsiedeln (Schwyz), 1903 8 5 343 345 378 395 3, 879. 5 3, 447. 1 153. 69 139.21 516. 98 461. 20 3.96 4.04 13.32 13.38 3,741.2 3, 479. 5 10.25 House of education of the Linth, at Ziegelbrucke fGlaris), 1904 10.08 Total and average of the whole 72 419 480 4,985.8 196. 10 658. 15 3.88 13.08 3,806.2 10.44 4. PRODUCTION OF MILK OF THE SCHWYZ CATTLE IN OTHER COUNTRIES. In the farm attached to the agricultural academy in Bonn-Poppelsdorf, Germany, many trials have been made since the year 1896, with a view to determine the milk-producing faculties of the different breeds of the bovine cattle, subjugating them to a very abundant alimentation. With this in view, in autumn of 1900, they bought 14 cows of the Schwyz race in the Cantons of Schwyz and St. Gall. The production of mUk during 21 whole periods of lactation has given the following results: SWITZERLAND. 477 Annual production per cow Idloerams.. Annual production per 1,000 kilos live weigM do Contents in fat of the milk per cent. . Contents ini dry substances of the milk do Yield in fat per year and cow kilograms.. Yield in fat per 1,000 kilos live weight do Live weight of the animals. do Average. 5. 150. 01 9, 107. 46 3. 599 12. 759 185.3 327.6 567 Minimum. 3, 838 6,733 3.130 12. 092 144.4 240.7 451 Maximum. 7.315 13, 062 3.892 13. 371 269.4 481.0 657 We note hereafter the four periods of lactation of the cows submitted to test, and which have givien the best results : Breeder.' Quantity of milk per period of lactation. - Quantity of milk calcu- lated' per 365 days-. ' Average of the richness in fat. 1 2 3 4 Kilograms. 9,308 7,595 7,979 7,983 Kihgvams. 6.585 7. 315 6,223 7, 055 ■ Per cent. 3.81 3.68 3.50 3.65 ' jr. Biirgi-Gretener in Arth (Schwyz). The cattle of Schwyz have long enjoyed a well-established reputation In other lands. A great number of milk cows have been exported to Italy and Spain and even Germany, where very good milk-giving breeds already exist. France also made purchases in Switzerland before taking those measures at the frontiers which are equivalent to a prohibition. The bulls for reproduction have their principal market in Italy and Germany, but are also found in trans-Atlantic countries, as in Mexico, the United States of America, Brazil, Japan, and others. Everywhere the results obtained have been very satisfactory as far as the exhibition of their faculties and the services they render in general are concerned, as well as their strength of resistance. CATTLE OF THE SIMENTAL. The cattle of this breed are generally met with in the northwest of Switzerland. In the Cantons of Berne (excepting the valley of Oberhash), Soleure, Basel, SchaflPhausen, Vaud, Neuchatel, and Geneva they rear exclusively this breed of cattle; in the Cantons of Thurgovie, Zurich, Argovie, Lucerne, and Valais they rear as many of the Sunental breed as of the Schwyz race. In the Canton of Fribourg they rear Simental cattle and a breed spotted with black of the name of Fribourg race. The limits of the regions where cattle rearing is carried on are well marked in general as well as in the Cantons, and everywhere the different breeds remain pure without mixing together. In the regions given up to the rearing of the Simental cattle, which breed has red, yellow, and yellowish spots, there existed in former times several different types which have been disappearing since the last decades. For many centuries the valley of the Simental, in the Canton of Berne, with its magnificent pasturages, has occupied a preponderant place in the rearing of the cattle of this breed; from there were sent without inter- ruption the reproductors bought by the cattle raisers of the other regions. The impulsion given by these animals to the raising of cattle in general has been so great and its influence so beneficial that at present the whole breed is called by the name of its vaUey. The color of the cattle of this breed is red mixed with white. The tints of these red spots go from yellow to a dark red (cherry red) . The head, the lower part of the feet, the belly, and the udder are generally white, but you sometimes meet with animals with spots on these parts of the body. Quite white cattle or with a few spots are not generally liked. The horns, the mtizzle, and the hoofs are of a light color and go in general from a yellowish white to straw color. The animals with dark spots have sometimes the tips of their horns of a reddish color, the hoofs streaked and dark spots" on the miizzle which is not considered as an indication of impurity in the breed. Generally these red and white spots are ;Well and nea,tly defined. It happens sometimes that they blend together by means of a streak of about 2 or 3 centimeters formed by the white and yellow hair. Spots of a mulberry color, or black ones on any part of tlie animal's body are sure indications of the impurity of the breed and must be ascribed tb the crossing with other breeds. When such spots exist, they are chiefly fonnd in the ears, the mouth (the lower lipj), the horns, the throat, the limbs, especially on the hoofs and the brush of the tail. 478 AGRICULTURAL COOPERATION IN EUROPE. In the cattle of the Shnental the form of the body and the characteristic signs are all a faithful expression of a breed created with combined aims in view. The whole has an aspect of great strength, without being coarse or brutal, as these types of the mountains were before being refined. The head is of an average size (often small) and dry; the forehead, the jaws, and the mouth are well developed; the throat is of an average length, strong and well attached to the head and shoulders. The chest is long, broad, and deep. The sides are normally developed, the shoulders are broad and well attached to the withers and chest; the back is strong and broad; the croup long and broad and well muscled. Sometimes you see animals with a high croup and the tail placed too high. This defect was frequently found many years ago, but has been eliminated, little by little, by rational rearing. The limbs are strong without being coarse, with good muscles; broad and dry in the articulations; the thighs broad and dry; the hoofs well rounded and closed. The hide is of an average thickness; at the same time elastic and mobile. The shield has a normal development. The hind legs are well fixed and sometimes turned a little outward. The animals with a broad low trunk and with limbs of an average length, strong, with good muscles, are those which answer best to that type of animal destined for several ends. The animals with high legs, narrow and badly developed trunk, are generally not very apt at work. The animals exhibited in the national agricultural exhibition which was opened in Frauenfeld in the year 1903 had, on an average, the following measurements: 24 bulls of the average age of 4 years. 85 cows of the average age of 5 years and 4 months. 42 heifers of the average age of 2 years and 8 months. Length of trunk Length of head Length of nose Length of chest Depth of chest Breadth of chest Breadth of back Length of pelvis Length of hips Space between the articulations of hips Height of withers Height of sacrum bone Height of hinder knees Height of knuckle Circumference of chest Centimeters. 188.3 56.5 28.1 86.5 86.3 62.1 46.1 65.6 63.0 61.4 156.0 156.9 39,3 55.6 238.0 Per cent. 30. 14. 45. 45. 33. 24. 34. 33. 32. 82, 0. 20. 29. Centimeters. 169.9 52.1 26.8 74.5 76.5 52.7 42.0 55.3 58.1 54.2 147.0 151.9 40.2 53.5 211.1 Per cent. 30.8 15.9 44.1 45.3 31.2 24.9 32.7 34.4 32.1 87.0 4.9 23.8 31.7 Centimeters. 160.7 50.2 25.7 71.8 73.6 50.6 41.4 52.9 55.3 52.6 143.9 150.0 40.7 54.5 201.5 Per cent. 3L2 16.0 44.7 45.8 3L5 25.8 32.9 34.4 32.7 89.5 6.1 25.3 33.9 At the time of their birth the calves weigh about 40 to 45 kilos. With the customary rational rearing they reach at the age of 6 months an average weight of 180 to 225 kilos; at the age of 12 months the weight is from 280 to 325 kilos; at 2 years, about 500 kilos; and at 3 years, an age at which cows generally calve for the first time, the weight is from 600 to 750 kilos. Full-grown cows of the type of half-heavy ones, not pregnant, have a weight of 600 to 650 kilos. Those of the heavy type, from 675 to 750 kUos, and exceptionally to 850 kilos. The augmentation of weight with the males is quicker and the final weight much higher. At the age of 1 year the bulls reach a weight of 400 kilos; at 2 years, a weight of 750 kilos; and 3 years old, an age at which they have finished growing, they weigh from 900 to 1,000 and more. At 4 years the full-grown bulls of a normal development have a weight from 1,000 to 1,200 kilos. The oxen arrive at their full growth at the age of 4 or 5 years and reach a live weight from 900 to 1,000 kilos. The animals exhibited at the agricultural exhibition of Frauenfeld of the year 1903 and at the International Exhibition of Milan in 1906 had, on an average, the following live weights: Bulls ^reproductors) from 18 to 22 months of age Bulls (reproductors^ from 2 to 3 years of age Bulls (reproductors) of more than 3 years of age. Heifers from 18 to 22 months of age Heifers from 2 to 3 years 6f age Heifers of more than 3 years of age Cows Frauenfeld, 1903— Average. KiloB. 665 878 ,045 482 662 739 750 Maximum. Kilos. 784 1,099 1,198 691 788 828 930 Milan, 1906— Average. Kilos. 695 1-972 '755 792 Maximum. Kilos. 745 > 1, 195 ■852 ' For the greater part animals of 3 years of age. SWITZEELAND; 479 The bulls, apt for reproduction, brought to the fairs and exhibitions organized by the union of the asso- ciations of cattle raisers of the Simental which took place at Ostermundigen, near Berne, in 1901 and 1903 were also weighed and the results are here given: Age. 1901 1903 Live weight. Live weight. Number of animals. Number of animals. Average. Maximum. Average. Maximum. Months. Kilos. Kilos. Kilos. Kilos. 7- 8 16 289 347 20 291 350 8- 9 53 331 458 51 324 393 9-10 70 353 440 53 347 454 10-11 31 394 465 22 376 485 11-12 5 395 475 10 412 489 13-14 5 -458 524 15-16 8 477 620 13 494 554 16-17 12 525 593 14 543 649 17-18 16 549 650 17 556 657 18-19 22 583 695 32 577 687 19-20 49 589 743 45 600 695 20-21 76 604 745 69 622 745 21-22 49 648 777 45 650 810 22-23 13 686 838 14 615 740 23-24 7 738 785 28-29 5 751 843 ... 31-32 8 845 956 ... 32-33 8 821 859 3 883 941 33-34 8 833 925 '5 905 978 ?) 4 976 1,000 7 1,017 1,060 ' From 34 to 35 months of age. ' Over 3 years. In the case of rational fattening the Simental breed gives very good results, as well in the quantity as in the quahty of the meat. We find proofs of this at the markets of animals for slaughter in this country as well as in other lands where this breed of cattle is appreciated. The flesh is firm, with fine fibers and well provided with fat. The best results are obtained with the oxen, the heifers, and young cows; but even the milk cows from 8 to 10 years of age give, in general, good results. The yield in milk of the Simental breed is good and is on the increase in a notable way since the last decades. Taking into account its richness in fat and in dry substances, one may afiirm that the yield in mUk is not inferior to that of the best milk breeds known. The Riitti, an agricultural school near Berne, which is a State establishment of the Canton Berne, has kept since 1873 an exact account of the production of milk, obtaining the following results: Average of the Year Number of production in milk. Maximum Minimum (average of the annual of the annual term). Per cow and year. Per day of maintenance. production. production. Kilos. Kilos. Kilos. Kilos. 1873-1877 20-26 2,970 8.13 4,288 1,661 1878-1882 19-22 2,951 8.08 4,091 1,550 1883-1887 20-25 3,106 8.50 4,363 2,166 1894-1895 37-38 3,504 9.60 1896-1900 35-37 3,792 10.38 5,484 2,263 1901 39 4,020 ILOl 5,277 2,020 1902 39 3,928 10.76 5,657 2,067 1903 43 4,062 11.13 5,825 2,585 1904 40 3,933 10.75 5,160 2,718 1905 44 3,700 10.14 5,656 2,414 The richness in fat was of 3.76 per cent in 1901, of 3.83 per cent in 1902, of 3.75 per cent in 1903, of 3.76 per cent in 1904, and of 3.80 per cent in the year 1905. The average live weight of the cows mentioned varied from 650 to 700 Idlos. 480 AGBIOXJLTTJEAL OOOPERAOION IN EUBOPE. The herd of the agricultural school of Rutti has a strength of between 90 and 100 animals of the Simental breed, of which 36 to 46 cows were of the age of 3 to 14 years. The cows leaving the establishment are generally replaced by animals reared in the same establishment. The blood is renewed by buying from time to time reproductors from the best establishments in the country. When the cows calve for the first time they are generally at an age of 2 years and 9 months to 3 years and 3 months, and have a live weight of 600 to 800 kUos, with an average of 650 to 700 kUos. The greater number of the cows calve from the month of April to October. The females designed for rearing receive milk for the first five or six months. They give it them Httle by little, arriving at a quantity of eight to nine liters a day, which quantity they receive during the space of five to eight weeks and which is slowly diminished from the tenth or twelfth week till they are completely weaned. They are accustomed early to being fed on dry pasturage, and from the seventh or tenth week they give them oats, bruised wheat, and bran. In the first summer they are kept on the farm, and in the two following years they go to the mountains. During the summer months the cows are fed exclusively with green forage (lucerne) ; in autumn they go to the grass for about four or six weeks, and in the winter they are given dry forage, together with from five to seven kilos of beet roots and an average of two kilos of strong forage (that is to say, one kilo of sesame cake and one kilo of bruised corn and dried dregs) to each animal every day. Since the year 1897 the cows go to the grass in spring for the space of two to three weeks. The production of milk has been calculated by dividing the total production of the year by the totahty of the days of maintenance and by multiplying the result by 365 or 366. The yield given by each cow is deter- mined by means of tests made twice a month. In 1903 the union of the association of cattle raisers of the Simental made investigations on a great scale concerning the yield of milk of this breed, many cattle breeders and associations of cattle breeders taking part. We here give the results obtained in the year 1 903-1 904 : Number of cows. Average of live weight. Duration of the pe- riod of lactation. Duration of the in- termedi- ate period between the calv- ings. Average of milk produc- tion per period of lactation. Milk (average of production in a year of 365 days). Fat. Dry sub- stances. Average of richness. Establishments. Total. Per day. Per 100 kilos live weight. In fat. In dry sub- stances. 1. Hofer's heirs, Rothaus. . . . 2. Lunatic asylum, Bellelay. 3. Chr. Grossniklaus, Thun. . 4. House of education, Son- 6 6 4 9 8 6 14 8 Kilos. 677 650 725 651 675 760 707 662 Days. 336 322 382 313 343 361 349 301 Days. 384 373 435 385 406 413 400 363 KUos. 3, 728 3,519 4.762 3,303 4,811 4,311 4,618 3,751 Kilos. 3,518 3,396 4,003 3,077 4,338 3,801 4,208 3,772 Kilos. 9.64 9.30 10.97 8.67 11. 88 10.41 11.52 10.34 Kilos. 520 522 552 473 643 500 595 570 Kilos. 139.6 127.9 154.9 118.6 163.9 156.8 158.0 146.4 Kilos. 457.6 443.8 509.8 394.6 554.1 506.4 545.3 493.1 Per ceTU. 3.97 3.77 3,87 3.86 3.78 4.13 3.75 3.89 Per cent. 13.01 13.07 12.73 12.83 5. Association of breeders, Buttisholz 12.77 6. Asylum of Konigsfelden.. . 7. Asylum of Oery, near Lausanne 13.32 12,96 8. Association of breeders, I'Isle 13.07 Total and average 61 687 336 393 4,119 3,798 10.41 553 146.3 492.6 3.85 12,97 SWITZEKLAND. 481 The greatest annual production was 5,849 kilos. The richness in fat varied from 3.35 per cent to 4.43 per cent and the dry substances from 12.15 per cent to 14.40 per cent. The results for the year 1904-5 were as follows: Number of cows. Average of live weight. Duration of the pe- riod of lactation. Duration of the in- termedi- ate period between the calv- ings. Average of milk produc- tion per period of lactation. Uilk (average of production In a year of 365 days). Fat. Dry sub- stances. ' Average of richness. Establishments. Total. Per day. Per 100 Mlos live weight. In fat. In dry sub- stances. 1. Hofer's heirs, Rotliaus. .. 2. Lunatic asylum, Bellelay. 3. House of education, Son- vilier 4. Association of breeders, Buttisholz 8 6 13 9 4 14 5 8 16 Kilos. 6.54 725 634 671 680 732 649 72.T 737 681 Days. 394 358 297 366 317 406 320 370 306 393 Days. 447 404 367 446 372 477 374 401 357 446 Kilos. 4, 087 3,816 3,080 4,699 4,247 5,315 3,997 4,301 3,539 3,798 Kilos. 3,312 3,441 3,079 3,862 4, 157 4,094 3,907 3,995 3,728 3.268 Kilos. 9.16 9.43 8.44 10.58 11.39 11.22 10.70 10.94 10.21 8.95 Kilos. 510 475 486 575 611 559 602 551 506 480 Kilos. 131.3 129.4 116.5 155.8 170.2 159.2 152.6 155.8 144.1 126.0 Kilos. 441.2 451.2 397.4 507.8 560. 7 540.6 514.0 53L8 477.6 422.3 Per cent. 3,99 3,72 3.79 4.02 4.10 3.94 3.91 4.05 4.00 3.88 Per cent. 13.29 12.97 12.92 13.25 13.49 13 13 13.16 13.33 13.24 12.46 5. Asylum of Konigsfelden 6. Asylum of Cery, near Lausanne 7 . Association of breeders of risle 8. House of Pestalozzi of the town of Zurich. . . . 9. Agricultural institute of Grangeneuve 10. Agricultural school of Cornier Total and average 88 687 359 418 4,123 3,608 9.89 525 140, 5 462,1 3.93 13.04 The greatest annual production was 6,006 kilos, the richness in fat varied from 3.99 per cent to 4.59 per cent, and the yield of dry substances was from 11.26 to 14.06 per cent. The agricultural establishments attached to the school of Sonvilier and to the hospital for lunatics in Bellelay are situated in the Bernese Jura, at a respective height of 860 and 950 meters above the sea level. The climate is rather rough and winter very long. In both establishments the animals go to the field in sum- mer. The other establishments are met with in better places, where the management of the animals is normal. The conditions of living and the management are more or less the same as at the agricultural school of Rutti; the daily allowance of food, though, is a little less in winter. In other countries we have the results and notes of the tests taken by the farm of Bonn-Poppelsdorf (Germany), to which several milk breeds were submitted with an abundant maintenance. The 12 cows which were submitted to these tests were purchased in the Simental (Canton of Berne) in the month of September 1901 . The yield of milk during 12 complete periods of lactation was the following:. Annual production per cow kilos. Annual production per 1,000 kilos live weight do. . . Richness in fat of the milk per cent. Richness in dry substances of the milk ; do. . . Yield in fat per year and per cow kilos. Yield in fat per 1,000 kilos live weight do. . . Live weight of the cows kilos. Average. 5, 565. 22 8, 476. 99 4,050 13. 265 225.4 343.4 659 Minimum. 4,866 7,206 3.807 12. 912 198.6 285.3 590 Maximum . 6,712 10, 302 4.427 13. 732 270.8 405.8 737 Hereafter are given the notes taken after the four periods of lactation of the cows submitted to the tests and which have given the best results : Breeder. Quantity of milk per period of lactation. Quantity of milk calcu- lated per 365 days. Average of the richness in fat. 1. Rebmann, deputy at the National Council, at Erlenbach 2. Zumwald, John, at Erlenbach 3. Mtlller, Christ., at ZWeisimmen 4. Kting, J. W., Styg, Diemtigen Kilos. 10, 591 8,014 6,914 6,310 Kilos. 6,078 6,094 6,712 6,109 Per cent. 3,94 4.13 4.04 3,81 14174°— S. Doc. 214, 63-1- -81 482 AGKICULTUKAL COOPEKATION IN EUROPE. The structure, the constitution, and temperament of the cattle of the Simentftl breed render them to a high degree apt for work. Strong bones, well-developed muscles of all the parts of the body, especially the back, the pelvis, the shoulders, and the limbs, a strong and elastic skin, a great facility in the movements of the articulations, a quick temperament, good nature, health, and strength of resistance, intelHgent eyes, and docility are the special quahties of the Simental cattle, and all this renders them apt for labor. In Switzerland, especially in establishments of less importance, the greater part and nearly the totaUty of the labor in the fields is done with the animals of this breed. They are employed and appreciated in this labor on account of their muscular force; on the smooth roads for their strong hoofs and in the use of agri- cultural implements for their loyal and sincere character, their docihty and tractableness. On account of the decrease in the culture of corn and of agriculture ii^ general in the last 20 to 30 years the cattle of the Simental are much less used for labor than in former times. There are many establishments, and especially the largest, where they have entirely given up putting the cattle in harness. It is for this rea- son they can pay more attention to the production of milk and meat as well as to the development of the re- spective faculties which have already nearly reached perfection. For about 100 years animals of the Simental breed have been exported to other countries, and in the last 50 years these animals have been greatly in request. In other countries the animals are used as well in the pure breeding as in the crossing of the breeds. Their chief market is in the south of Germany, particTilarly in Baden, Wurttemberg, and Bavaria, but they are also met with in central Germany and even in the north. They are exported in increasing numbers to Austria-Hungary, France, Italy, Russia, and to other European cOimtries as well as to trans-Atlantic countries, as Mexico, Brazil, Japan, and others. Everywhere the results obtained are satisfactory. The Simental cattle soon get accustomed to other chmates and without the least difficulty. Yet the cattle do not lend themselves very well to pure breeding in arid regions and with too Uttle forage. But even in this case they have succeeded in the crossing of breeds and have greatly increased the productive faculties of the mixed breed. Their great power of transmission was especially remarked in the crossing with animals of backward races. For such cases the Simental cattle have special value because they arrive in a relatively short time and may be pretty well depended on for good results. In this point the Simental cattle leave the other breeds far behind. FRIBXIRG BREED. Formerly this breed was pretty well diffused throughout Switzerland, but at present it is reared pure nearly exclusively in the Canton of Friburg, where the Government, the cattle rearers, and the associations of cattle rearers make great efforts in its favor. The color of the hair is black and white in spots. You frequently meet with animals which have the head and limbs white and the rest of the body black; other animals are quite white or quite black. Yet the animals of this type are not much thought of, and for rearing purposes they prefer animals with black and white spots well distributed about the body. The muzzle, the horns, and the hoofs are black or of a hght-yellow color according to the color of the neighboring parts of the body. Red or gray hairs are an indication of the impurity of the breed. The same as with the Simental breed, the rearing of the Friburg cattle has several ends. The animals of this breed are distinguished by their great weight, their robust constitution, and their strength of resistance, as well as by their yield in milk, their facility to fatten, and aptitude for labor. In good establishments with rational management they obtain an average production of milk of 3,500 kilos or more a year. The milk is rich in fat, and its average percentage is like the Simental and Schwyz breeds, of 4 per cent. The facihty to fatten and the quaUty of the meat are good, thanks to their muscles. Their constitution, their good health, and docihty render the animals apt for labor in a high degree. The cows exhibited at the seventh exhibition of agriculture at Frauenfeld had a live weight, on an average, of 771 kilos, with fluctuations from 695 to 838 kilos. The form of the body does not differ essentially from that of the cattle of Simental. The heavy animals have a broad and deep appearance; the trunk is of a regular length, the limbs strong, well built, and well pro- vided with muscles. The chest and pelvis are generally well developed. The back is broad and fleshy. The cattle of Friburg is sold as well at the markets at home as at those of foreign coimtries. It gets as well accustomed to the low countries as to the high mountains. In the high region it is appreciated especially for its great strength of resistance. We meet animals of this type in France, Austria-Hungary, Italy, northern Germany, and Russia, but you rarely find them united in pure breeds. The cattle of Friburg are as well dis- posed for pure breeding as for the crossing with other breeds. Some black breeds of the lower countries have been crossed with the breed of Friburg with a view to better their constitution and structure, especially of the hinder parts. SWITZERLAND. 483 The federation of the syndicates for the rearing of the Friburg breed, founded in 1898, actually counts 27 syndicates with 374 members, owners of 81 bulls and 2,200 cows, notified in the genealogical registers. With a view to improve and to render the basis uniform in the genealogical registers, every year the federa- tion makes an inspection of the administrative books of the syndicates. In order to push on the sale of the productions of the rearing establishments, the federation organizes besides, every year, an exhibition fair of bulls, which takes place on the occasion of the well-known feast of St. Denis (in the third week of September) . The number of bulls exhibited varies from 150 to 200. A sum of 2,000 francs is divided into prizes among the best reproductors. COMMON MEASURES FOB THE ENCOURAGEMENT OF THE REARING OF BOVINE CATTLE IN SWITZERLAND. The Confederation, the Cantons, and private individuals contribute, each in their sphere, to the encour- agement in the rearing of the bovine cattle, giving each other reciprocal aid. In the budget of the Confedera- tion is a heading of 500,000 francs, which are to be employed in the interest of the rearing of the bovine cattle, and especially in prizes for bulls, cows, and heifers, as well as for the encouragement of the associations for breeding. The distribution of these subsidies is made by the intervention of the Cantons, which can not get their amount if they do not themselves give an equal sum for the same object and if they do not conform them- selves to certain conditions. According to the Federal prescriptions a cow may not be premiumed in the course of one year with more than 100 francs, a bull with less than this sum. The premiums granted to the bulls are not paid out before the lapse of nine months, the bull having remained in the same owner's possession; and the premiums are not granted to the young cows till after their first calving and the birth of a hving calf, descendant of a prize bull. With the help of the Confederation and the Cantons many associations of cattle raisers of the bovine race have been created in the last 20 years. The object of these associations is to favor the rearing of cattle not only in large establishments, but also in those of less importance and even in the small ones, which are those that dominate in Switzerland. To arrive at this end they use the following means: The purchase and employ of the best reproductors, which are coupled with the best cows and heifers of the corresponding breed, the latter being marked and noted down in the herdbook (genealogical register) as basis for breeding; the rational rearing of calves; by purchasing or by hiring to this effect, if necessary, alpine pasture lands; the creation of a herd- book and instructions about the best way to keep it; certificates of origin worthy of confidence; information and debates upon all the questions relative to the maintenance of the cattle and for the encouragement of its sale. There are actually in Switzerland about 500 associations of cattle raisers. Only those cattle raisers who have a herdbook as prescribed ha\e a right to the subsidies. In the different territories of the cattle raisers the associations have constituted themselves into unions of cattle breeders. In the year 1890 the Union of the Associations of Cattle Raisers of the Simental Race was founded with a strength of 10 associations On the 1st of January, 1906, the union counted 166 associations with 4,678 mem- bers having 443 bulls, and 11,099 cows and heifers registered in the herdbook. These associations are dis- tributed as follows in the different cantons: Berne 42, Lucerne 10, Friburg 26, Soleure 3, Basel (coimtry) 7, Argovie 11, Vaud 67. Every year the union organizes an exhibition fair at Ostermundigen for prize reproductors in the last week of August and the first week of September. In the last years about 600 to 750 bulls have been brought to this market. The union works with great ardor at the keeping of the books of the associations forming part of it and especially surveys the keeping of the herdbook. Siace the year 1901 periodical inspec- tions of the genealogic books (herdbooks) kept by the associations take place. The union of the raisers of the Simental cattle (type of the mountain) and for the encouragement of the alpine establishments (Verband fiir Simmeutaler Alpfleckviehzucht und Alpwirtschaft) reckoned on the 1st of January, 1900, 19 municipal associations and 579 cattle raisers. The union comprehends the district of Saanen, Obersimmental, Untersimmental, Frutigen, and Interlaken in the Canton of Berne. Every year in autumn at the beginning of September, great fairs take place in this region for the reproductive animals and those for general use. The most famous fairs are those of Saanen, Zweisimmen, Erlenbach, Reichenbach, and Frutigen. The union of the associations of Simental cattle of eastern Switzerland reckoned on January 1, 1906, 33 associations with 1,560 members and 2,460 animals for rearing registered in the herdbook. The associations are distributed between the Cantons of Zurich, Thurgovie, and Schaffhausen. Each year in the first fortnight of August the union organizes in Winterthur a market for bulls ; this market has at the same time the character of an exhibition. Generally 150 to 200 buUs are brought to this market. In the year 1897, 82 associations founded the Union of the Associations of Cattle Raisers of the Schwyz Race. On the 1st of January, 1906, this union was composed of 145 associations with 4,738 members and 13,711 484 AGBICULTUKAL COOPEBATION IN EUROPE. animals for breeding registered in the herdbook. This union behaves in the same way as that of the cattle raisers of Simental It organizes at Zug every year an exhibition fair of bulls, to which they brought these last years from 700 to 900 bulls This exhibition is a place of meeting as well for the inland breeders as for foreigners interested in cattle, who find there the best opportunity of making their purchases. Since the year 1898 the union, moreover, proceeds in the periodical inspection of the genealogic books (herdbooks) kept by the asso- ciations which make part of the union. For 20 years the Confederation, the Cantons, and the associations have paid particular attention to the institution of genuine certificates of origin. In the exhibitions and shows great importance is given to these certificates, and they attribute to the owners of such certificates special premiums. Since the year 1891 the Confederation grants, through the intervention of the Cantons, certificates of covering to the owners of bulls having obtained high rewards The owners of these animals in their turn give certificates to the owners of cows and heifers brought to the bull and which were declared apt by the com- petent authorities of the cantons and marked conformably. The calves descending from these parents have a mark on the ear. Besides the Federal certificates there are also those of the cantons, especially of the canton of Berne, which are of great importance The Federal certificate, with the corresponding mark on the ear, is more in use in the territory of the Schwyz breed than in that of the Simental race. The genealogic books or herdbooks of the associations are kept by special agents. They have as basis the informations of the competent authorities as well as those of the owners of the bidls and the commimications of the members made on a special, form. PURCHASES. Those who wish to study the Swiss bovine breeds and their way of living shoiild visit the following agricul- tural schools, which have each a farm attached to them: Rutti, near Berne; Strickhof, near Zurich; Plantahof, near Landquart (Grison); and Grangeneuve-Hauterivc, near Friburg; and finish this visit by an excursion in the Alps and their pasturages In autunm, especially m the months of September and October, competitions or shows of the bovine race take place in aU the regions, which offer the best opportunities for purchasing the best animals for breeding The secretaries of the different unions of cattle breeders are always at the disposal of those interested in cattle raising, either to help them in the studj' of the Swiss breeds or in the purchasing of the cattle. The market is open all the yenv round, but the principal transactions are made in the autunm months (August to N(irember). However, in certain regions many transactions are made, particularly where bulls are concerned, in spring also (JIarcli and April). At the epochs mentioned large fairs, to which sometimes from 2,000 to 3,000 animals arc brought, are held in the different parts of the country. Yet a great part of the transactions are made in the establishments of the breeders, especially when there is a question of animals of a high price. Prices vary a great deal, according to the quality and origin of the animals. For heifers of the breed and for young cows from 800 to 3,000 francs are paid and for the bulls from 800 to 5,000 francs. Sometimes even higher prices are paid, but tliis is an exception. For information with a view to make purchases, those interested in cattle rearing are advised to address themselves to the unions of the cattle raisers, which are: The Union of the Associations of the Cattle Raisers of the Schwyz race. Secretary, Mr. Abt, at Bunzen (Argovie) . The Union of the Associations of Cattle Raisers of the Simental breed. Secretary, J. Kappeli, Esq., Riitti, near ZoUikofen (Berne). The Union of the Raisers of the Simental Cattle (mountain type) and for the Favoring of the Alpine Estab- lishments Secretary, Manfred AeUen, Esq , Gstaad, near Saanen (Berne). The Union of the Associations of Cattle Raisers of the Simental Race in East Switzerland. Secretary, "iV. Schiirer, Esq , Horstetten (Thurgovie). The Union of the Associations of the Cattle Raisers of the Friburg Race. Secretary B. Collaud, Esq., Friburg. BY-LAWS SWISS BROWN-CATTLE COOPERATIVE BREEDING ASSOCIATION. 1. FOUNDATION AND PURPOSE. Zurich. Section 1. The cattle-breeding societies of the Swiss brown-cattle region do hereby form themselves for an indefinite time, in con- formity with Chapter XXVII of the Constitutional Law, under the name of "The Swiss Brown-Cattle Cooperative Breeding ABSOciation." The purpose of this association is to guard the interests of members at home and abroad, to improve their cattle, and to promote th» cooperative movement. HWITZBELAND. 485 The idea of profit.making is not the end in view of the association. Sec. 2. The cooperative association shall have its legal residence at the dwelling place of the president, and it shall be duly and legally registered in the commercial register. II. MEMBERSHIP. Sec. 3. Should one of the legally and commercially registered brown-cattle breeding societies wish to join the association, then it must present a copy of its statutes, the registered name of the society desiring membership, and a statement concerning the number of the registered breeding stock. Sec. 4. Membership may be withdrawn by written declaration to that effect, with this understanding, that a three months' notice of withdrawal be given at the close of the calendar year. Any society which does not act in conformity with the objects of the association, which does not live up to its statutes, or which does not submit to the decisions of the general assembly and its standing resolutions can be expelled by decision of the general assembly. For this purpose a majority of votes only is necessary. Sec. 5. For the obligations of the association the capital of the association is pledged. Individual and joint responsibility of mem- bers shall prevail. With the withdrawal or expulsion of a society from membership in the association every claim on the capital of the association shall cease. III. OEOANIZATION. Sec. 6. The officials of the association are (1) the general assembly, (2) the president, and (3) the business manager. Sec. 7. Every one of the cattle-breed/ng societies which is a member of the association is entitled to representation in the general assembly as follows: Up to 75 registered breeding cattle, one representative; from 76 to 150 cattle, two representatives; from 151 to 2.50 cattle, three representatives; from 251 cattle and upward, four representatives. Each representative is entitled to one vote. To the general assembly alone belongs the right: (1) To choose the president and the other members of the board of directors; (2) to select the auditor; (3) tosanctionthebusinessreport and financial statement; (4) to admit and exclude societies; (5) to formulate guiding principles for the benefit of the board of directors, especially within the meaning of section 1; (6) to determine the annual contributions of the societies to the association, to grant credit for requisite expenditures, and to fix the remuneration of the members of the board of directors; (7) to decide concerning the interpretation and modification of the statutes and also concerning the dissolution of the association. As a general rule the selection and voting shall be open — that is, by yeas and nays. But the proposal that it be by ballot shall be permissible in every individual case, both as regards the choosing of officials and in the case of general balloting. Yet the determination as to whether it shall be by ballot shall only be when a majority of the members desire it. Sec. 8. The board of directors shall consist of from five to nine members, as follows: A president, vice president, and three to seven other members. The signature of the president is binding for the board of directors; as an impediment thereto, the signatures of the business manager and of a member of the board of directors. The term of office shall be for two years. The business manager, in case he is not a member of the board of directors, has the right to take part in the meetings of the board and to give advice thereto. The functions of the board of directors are: (1) To convoke the general assembly. This may be called together when one-tenth of the societies belonging to the association express a desire for it in writing or when the board of directors may deem it to be advisable. Both assemblies shall be presided over by the president of the board of directors or by a substitute appointed by him. The minutes shall be signed by the chairman and by the secretary. (2) To carry out the resolutions of the general assembly. (3) To supervise the business of the association, especially the maintenance of closer relations to the respective Cantons under Swiss authority and to the cantonal exhibition committees in behalf of a more unified promotion of the cattle-breeding industry. (4) To arrange the duties of its own mem- bers. (5) To choose special committees and experts. (6) To choose the business manager. To this end there has been established a special regulation. (7) To publish the notices and the reports of the transactions of the association in an appropriate form. IV. ARBITRATION. Sec. 9. All differences between societies or between societies and the association shall be considered by an arbitration board of three members, of whom one each shall be chosen by the complainant and the defendant and the third member by the presiding justice at the place where the association has its headquarters. This arbitration board shall decide the matter lawfully with unbiased judgment. The parties in dispute shall not be represented by attorneys, nor shall attorneys be chosen to serve on the arbitration board. V. ALTERATION OP THE STATUTES AND DISSOLUTION OF THE ASSOCIATION. Sec. 10. The alteration of the statutes and the dissolution of the association can only be accomplished by two-thirds of the votes of the societies. Should it be that the necessary representation of members is not present, then a second extraordinary assembly must be called together within four weeks, when the association may be dissolved providing two-thirds of the votes present are so cast. VI. CONCLUSION. Sec. 11. These statutes were adopted at the general assembly of March 9, 1913, in place of the original statutes of February 7, 1897, by more than two-thirds of the societies present and of the votes there cast. Wadenswyl, March 9, 1913. APPLICATION FOE MEMBERSHIP. The undersigned hereby declare that the name of the cooperative cattle-breeding .society which seeks admission to the Swiss Brown- Cattle Cooperative Breeding Association is , 191 President. Sea'etary. BELGIUM. 487 BELGIUM.' COOPERATIVE CREDIT, PRODUCTION, AND PURCHASE SOCIETIES. Statement by Mr. Louis Pien, Department of Agriculture Brussels. We have two forms of credit societies — the Raifleisen banks and the agricultural mortgage banks. We find the Raiffeisen society also in Italy, Germany, and France. Ours is nearly the same. The Raiffeisen banks are federated to form a central credit bank. The central credit bank receives deposits from the Raiffeisen banks and in turn loans to those in need of funds. The credit extended to the individual members of the rural banks (caisses) is given to them, not because they are proprietors or have big fortunes, but because of their personal integrity. The credit is not only personal but is given to augment the production of the farm. The money is loaned for the purpose of buying supplies and not at all for the acquisition of land. When the central savings bank has not enough funds it can call on the general savings bank, a State institution. The central bank, which makes application for the loan, guarantees it. The Federal savings bank is purely official and in no sense is it a cooperative institution. It corresponds to the postal savings bank of some countries. In this country it has no share capital. The officers are paid out of the deposits and the excess profits are divided among the depositors. This bank -has offices in the post office and in other banks. COMPTOmS AGEICOLES (MORTGAGE BANKS). Most lands in Belgium are mortgaged, and these mortgages are redeemable in a certain number of years. These banks have been created to facilitate the paying off of mortgages and to supply farmers with cash to buy land. The agricultural mortgage bank does not loan its own funds, but guarantees for a small commission the loan of the individual borrower to the general savings bank which furnishes the money. It gives to the general savings bank, in addition to its own guaranty, the security furnished by the individual borrower. The individual borrower pays 4J per cent, the mortgage running commonly for 30 years on the amortization plan. The borrower can pay in full any time without notice and without having to pay any commission. Bonds are issued on the mortgages to the same amount, commonly in denominations of 100 francs. These bonds bear 3.6 per cent interest. They are not listed in the public market but sell readily at about par, according to the money market, being taken up mainly by agricultural organizations. The farmer pays 4^ per cent, the bonds sell for 3.6 per cent, and the general savings bank gets the difference as its profit. The farmer can get the money on his mortgage as soon as it is drawn up, as the bank has bonds on hand and is selling them at all times. There are 538 Raiffeisen banks in Belgium and 15 agricultural mortgage banks. The rural banks loaned 4,000,000 francs in 1910, and had at the close of that year total outstanding loans aggregating 11,000,000 francs. The agricidtural mortgage banks loaned, in 1910, 2,900,000 francs and had at the close of that year 13,000,000 francs of outstanding loans. There are no recorded losses in the administration of the rural banks in Belgium. I have never heard of any losses by individual guarantors. Should there be any, however, the guarantor would have his remedy in the courts. The borrower has no exemption in Belgium, but there is no imprisonment for debt. There is no government inspection of these banks, but there is an inspection by the central bank of the rural banks. SCHULZE-DELITZSCH BANKS. There are three Schulze-Delitzsch banks in Belgium, and these have only limited liabihty. ' Information and evidence in Belgium was secured by a subcommittee. 489 490 AGRICULTUBAL COOPEBATION IN EUKOPE. COOPERATIVE PRODTJOTION. In Belgium there are few cooperative associations for production, the chief societies being the cooper- ative dairies. In 1910 there were 556 of these mth 57,000 members, owning 163,000 cows. The value of the products for 1910 was 40,000,000 francs. Most of the products of the dairies are sold to the consumer direct. The surplus butter is sold at auction in the butter market in Brussels. There is no export trade. Belgium imports butter. The selling organizations are not strictly cooperative, but the dairies generally hold stock in them. The cooperative dairies manufacture only the product of their members, which is paid for fortnightly according to quantity and quality by butter-fat tests. ' Dairies are federated and inspected and suggestions for improvement given. The capital for the creamery is furnished partly by shares subscribed by the farmers and the balance they borrow from the rural bank. The average cost of a creamery for 300 cows is $2,000. The average annual production of 500 cows is 80,000 kUos. The farmer delivers his own milk and takes back the skim milk- Skimming stations are also provided as branches of the large steam dairies. The by-laws may provide for "one share, one vote," regardless of the number of shares held or any other form of representation. There has been no particular change in the price of butter through cooperation, but a decided improvement in quality. The smaU farmer has been put on a cash basis, where formerly he had to take the price of his butter in trade. No milk is taken from nonmembers. The large farmer makes his own butter. COOPEKATIVE PUKCHASING ASSOCIATIONS. Small farmers bulk their purchases or orders, then turn-them ia to be filled by a cooperative purchasing organization. This has a tendency to dispense with the middleman, getting better goods at lower prices. The cooperative purchasing associations deal mainly in seeds, fertilizers, farm machinery, and foodstuffs, the latter item being by far the largest. In 1910 the total purchases of these associations were 18,000,000 francs, of which 11,000,000 were for foodstuffs, mainly imported. There were in 1910, 1,237 cooperative purchasing associations with 74,000 members.^ AGRICULTURAL EDUCATION. statement by Mr. Wauteks, Department of Agriculture. Brussels. Belgium provides three grades of agricultural education — primary, secondary, and high schools. The higher education includes two main schools — the agricultural State school of Gembloux and the agricultural school of Louvain. The Gembloux school is a State school and the latter a private school. There is only one secondary State school; it is located at Huy and is for the sons of farmers. Aside from the State schools there are 10 private schools, mainly Catholic. There are no country district schools except religious schools. In all primary and secondary schools teachers are required to give lectures on agriculture. There are schools for domestic science and vocational traiaing for girls. There are no coeducational schools in Belgium. Further, Belgium provides what are called itinerant schools, usually for girls. These are established in every province of Belgium. The courses extend over four months and include mainly domestic economy and other subjects useful for farmers' wives and daughters. Twenty-seven agricultural engineers, representing as many different districts, go about at government expense among the farmers delivering lectures during the winter. On market days they are in attendance at the markets and at the service of the farmers. They are the graduates of agricultural schools, most of them having the doctor's degree, and are appointed by the minister of agriculture They do not have assistants. ' Afternoon, June 9, 1913; The Minister of Agriculture gave a brief address in wbicb he stated that the countryman goes to the cityto improve his condition both financially and socially. The great problem is to increase production and to make life more satisfactory through larger cooperation. There are two kinds of credit associations, the Raiffeisen and the great associations of the towns; but for the country- men the Raiffeisen is the only good credit system. There are also associations for production and for distribution. Associations for production are easily formed but not cooperative associations for distribution. The members lack confidence in each other. The Belgian laws are still not as they should be; they should be changed for the benefit of the countryman. BELGIUM. 491 TERBANCK RAIFFEISEN BANK. Report op a Subcommittee. LouvAiisr. The Terbanck Raiffeisen Bank is a religious cooperative institution having a membership of 150, organized 15 years ago. At the present time it has outstanding- loans to the extent of 350,000 francs. It accepts deposits, and now has on deposit 1,500,000 francs. The bank is cooperative and, in general, deals with Catholic members. The cashier of the bank is a priest. It is worthy of note that some effort is being made to eliminate the priests from the cashierships. The priests give their services gratuitously. The civilians demand a higher salary than the bank administration is willing to pay. In passing it may be said that one-half of the cashiers of local Raiffeisen banks are priests at the present time. The Catholics are responsible for the organization and success of most of these banks. They are organized by the church and supervised until they grow strong enough to stand alone. The theory is that after the banks have been nurtured for some time, the civilian members may continue the work. Loans. — This local bank, like other country banks, makes loans chiefly for productive purposes. The length of the ordinary loan is not over 10 years. These loans for productive purposes are made on the personal security of the member. The signature of both husband and wife and of one surety is required. The rate of interest is about 3^ per cent. Loans are made to members only and are usually for small amounts. Long loans. — The rural Raiffeisen banks make some loans on land, taking mortgages as security. These loans run for 29 years, the interest being payable annually or monthly. It appears that the method of payment is not uniform, but is really a matter of contract between the borrower and the lender. Deposits. — Deposits are received from both members and nonmembers. The rate of interest on savings deposits is 3 per cent. In this bank the deposits made by children amount to $5,000. Losses. — There have been no losses to banks or sureties since the establishment of the bank. Members. — The members are farmers or market gardeners, and over half of them own their own land. The average farm is between 7 and 8 acres. The qualifications for membership are residence in the community, sobriety, and honesty. Each member must take out two shares of 1 franc each and pay 1 franc as an admission fee. These shares are required under the law of 1874, authorizing the establishment of Raiffeisen banks. Other activities. — The bank has a department which has assisted the farmers to become owners of live stock. A farmer wishing to buy cattle receives his loan from the bank and offers as security the usual signatures and a mortgage on the live stock purchased. The bank takes out an insurance upon the cattle, making them a safe security for the loan. The members of the bank also buy their supplies through its aid. They meet the first Simday of every month and give orders to the cashier of the bank for such supplies as foodstuffs, fertilizers, seeds, etc. This branch of the bank is known as the association of cultivators. The members of the association are the members of the bank. They pay no shares or dues into the association of cultivators with the exception of a small amount to cover the cost of printing the order blanks. The association purchases its goods from the central office or Raiffeisen federation, which in turn purchases the goods from manufacturers and ships them direct to the local association. The farmer pays regular market prices for supplies ordered, but he gets the advantage of buying directly from the manufacturer and also of obtaining unadulterated materials and fuH weight. The profits of the undertaking go to the central organization. The association of cultivators of the Terbanck Bank purchases supplies to the amount of $2,000 each month. No household supplies are purchased; only foodstuffs, fertilizers, etc. ORGANIZATION OF A RURAL BANK ON RAIFFEISEN SYSTEM IN BELGIUM.^ Ghent. Chapter 1. — The establishment of a rural credit and savings bank on the Raiffeisen system. Q. Does the establishment of a rural bank present many difficulties « A. Sufficiently serious difl&culties may present themselves to persons who are not properly prepared to establish such an institution. When one has previously studied the question for a little time; when one knows how to point out to the inhabitants of a village that such a bank is absolutely necessary for them and to put ' This pamphlet (in form of question and answer) by Rev. J. F. Mellaerts, General Secretary Belgium League of Peasants, which has been translated from the French for the Commissions, is of great interest as showing the intimate connection between the Roman Catholic Church aiid cooperative institutions in Belgium. 492 AGKICULTXTBAL COOPEBATION IN BtTBOPE. before their eyes in a precise and clear manner the advantages which they may get from such an institution, after that it is very easy indeed to establish these banks. But if in these conditions it is easy to establish a Raiffeisen bank, on the other hand it is very much more difficult to direct it — that is to say, to administer it in such a manner as to procure for all its members all the benefits which they have a right to expect from it. Q. Whence do these difficulties come ? A. They come from the fact that the committee of directors must allow themselves to be guided in aU their actions by true Christian charity, the spirit by which their founder (Eaiifeisen) was inspired, and also from the fact that extreme accuracy in bookkeeping is necessary. Q. What then are the points to take into consideration before establishing a savings and credit bank in a community ? A. Before deciding on the creation of such a bank we must be quite certain that we are in a position to intrust the functions of president and of cashier to persons who have those qualities which are quite indis- pensable — that is t.0 say, we must discover if there are to be foimd in the community two people who present aU the qualities which are desirable for the fulfillment of these two important functions. Q. What axe the qualities to seek for in the people to whom we are anxious to intrust the fimctions of president and cashier ? A. The president and cashier must enjoy the entire confidence of their fefiow-citizens and must have proved by their previous performances that they do not live entirely for themselves but are ■\\alling to consecrate a certain part of their time to their neighbors. I\Iore than this, they must have intelligence, and they must k'low through and through, in a practical manner, the habits and the needs of the rural classes; a good ele- mentary education is therefore evidently necessary. The cashier must give some security in order to insiu'e that he will carry out his business properly. As far as is possible the president and cashier ought not to live too far apart from one another. Q. What is one to do if one does not find people having the right qualities to act as president and cashier in a community ? A. In this case our advice, given verj- emphatically, is to postpone the establishment of a rural bank until a later date. It is better not to have a bank at aU than to have one which is badly administered. Without any doubt a badly administered savings and loan bank will do more harm than good. It will furnish its members with opportunities for incurring new debts. It wiU not in any way fight against usury, and it will tend to dis- courage well-administered banks, which are giving excellent results. Q. But must we not avoid an excess of prudence ? A. Certainly. Prudence should never degenerate into cowaidice. As we said above, it is especially important to find two people who enjoy the confidence and esteem ol their fellow-citizens to fill the offices of president and cashier. The bookkeeping presents no difficulty. The Peasants' League has, moreover, edited an excellent handbook dealing with the administration and the bookkeeping of a rural bank. It furnishes all the forms and registra- tions, and finally it wiU, on demand, send an employee of the central bank of the Peasants' League to give all necessary information. Q. What must one do when one has found a president and a cashier suitable for the position ? A. We must then proceed to limit the scope of the rural bank. An experience of more than 50 years has proved that it is absolutely necessary to restrict the action of the rural bank to the smallest possible area. It is desirable not to go outside the limits of one parish. It is not necessary to unite several parishes except in the case where one of them would be too small to allow the establishment of a workable bank. A nucleus of 800 to 2,000 is most suitable, even though there may be flourishing banks in more thickly peopled parishes and less flourishing ones in less thickly peopled parishes. Q. Is it desirable to invite anyone who cares to come to assist at the opening meeting when one wishes to found a credit bank ? A. Generally speaking, this system is not to be advised. It is preferable to begin with a smaU nucleus of well-disposed people. Later, if one thinks fit, one can hold a public meeting to advertise the organization. Nevertheless when the bank is founded under the protection of an agricultural association, which we most strongly recommend, all the members of the association may be invited to the founding of it. Q. What is the general procedure for founding a rural bank ? A. After having determined the sphere of action of the bank and having found the president and the cashier, we collect six or eight well-disposed people, and with them we carefully examine the advantages and disadvantages of the step. If these people are ready to become members of the rural bank, we find out what other inhabitants of the district could usefuUy be invited to enroll themselves as members. We then appoint fiELGlUM. 493 the president, the vice-president, the three other members of the committee of management, the cashier, the president of the committee of supervision, and a vice-president, and four other members for this committee. The law demands that the committee of management be composed of at least three members, but we strongly advise composing it of six. At the same time we fix the date and the place for the opening meeting, and each of the members of this small committee undertakes to bring with him several weU-disposed friends, so that there should be at the opening meeting about 30 inhabitants of the district. It is above all important to form a good nucleus and to act in such a way that in the future the true Raiffeisen spirit will continue to reign in the institution. Q. In what manner will the procedure of the opening meeting be conducted ? A. In a short, precise speech we shall explain the fundamental principles, the object, the advantages, and the method of working of a Raiffeisen bank. For the preparation of such a speech we might make use of this little treatise and also might use my larger pamphlet on Loan and Savings Banks. After this we invite our audience to sign in duplicate the statutes of the constitution, explained in the course of the speech. Those persons present who desire to be founders of the bank sign the statutes in duplicate. The signatories of the act meet immediately afterwards in assembly to choose the members of the committee of management, those of the committee of supervision, and the cashier. Q. After the signing of the constitution, what remains to be done to assure the legal recognition of the rural bank ? A. The administration council will then see to the following details : (1) That the two copies of the constitution are registered. This registration is gratuitous. (2) That one of these registered copies is deposited at the office of the commercial tribunal within the 15 days mentioned in the date of the act. If there is no commercial tribunal in the district, the deposit is made with the clerk of the tribunal of first instance. (3) The committee must add to the copy which is deposited with the tribunal a copy of the act of consti- tution as weU as on a loose leaf of paper the signatures of the members of the committee of management, attested by the mayor. Witliin 48 hours the clerk will send this copy to the Moniteur, which wiU publish it within 10 days without charge. Five days after the publication in the Moniteur of the act of constitution the bank has legal existence. The constitution may be printed on unstamped paper. There is nothing to be done but to fill it in and sign it. Q. What rules should be adopted by the rural bank ? A. The model rules edited by the Belgian League of Peasants at Louvain. In these rules the clauses and the spirit of the German rules drawn up by Raiffeisen have been observed with scrupulous respect; they have, moreover, stood the test of more than 50 years' experience and have contributed so well to the success of rural banks that in 3,000 such banks not one has failed. We may draw attention here to the following articles as being of most importance: Art. 6. Concerning tlie quality of the members and the restriction of the sphere of operations. Art. 11. Concerning the collective and unlimited liability. Art. 16. Concerning the payment of the officers. Art. 46. Concerning the necessity of having a proper security in order to obtain loans. Art. 50. Concerning the determination of the maximum of dividend and of the reserve fund. Art. 54. Concerning alterations in the rules. And, finally. Arts. 58 and 59. Concerning dissolution of the society. Rural banks which do not accept these articles as they stand may not be affiliated to the Central Bank of the Peasants' League. For these various reasons we strongly recommend presenting for signature our rules as they are already printed. Q. Where may one get these rules ? A. The rules for rural banks, printed in two different forms, may be obtained from the office of the Peas- ants' League, Louvain. The big form of the rules serves the purpose of the act of constitution. There is noth- ing to do but to fill in the blanks and have them signed. At the same office can be procured all registers and forms necessary for the account keeping of the bank. Chapter II. — General principles concerning the foundation of a rural tanJc. Q. What is the object of rural banks ? A. The rural banks have as their object the bettering of the condition of their members from aU points of view, according to the commandment of Christ, "Thou shalt love thy neighbor as thyself." In particular 494 AGEICTJLTUKAL COOPERATION IN EtIEOPE. these banks aim at freeing the rural population from the extortions of usurers, and at furnishing capital for the business which they want to conduct, on the best possible terms. Q. Are there many rural banks in existence ? A. In Germany, where Raiffeisen founded the first loan and credit bank in 1849, there exist now more than 7,000, of which more than 2,000 are affiUated to the Central Bank at Xeuwied, founded by Raiffeisen himself. Such banks also exist in many other countries. In Belgium itself, where the first was established at the end of the year 1S92, there are now more than 150, of which the majority are affiliated to the Central Credit Bank of the Peasants' League. Q. What are the general principles on which to base a loan and credit bank of the Raiffeisen system? A. These principles are as follows: (1) The members of the bank are liable for the undertakings of the society, according to the principle of coUective • and unlimited liability (our loan and savings banks are cooperative societies, following the laws governing such societies) . (2) The Raiffeisen banks must tend to the material and moral welfare of their members. (3) Their action must not exceed the boundai ics of one pai ish or, at any rate, one community. (4) In order to conform to the requirements of the law, each member must have a share in the society. This share should be as small as possible. On these shares dividends will be paid to an extent not exceeding the percentage which is usuaUv allowed to deposits (3 per cent) . The entrance fee should be fixed at not more than 1 franc. (5) The management is absolutely free. The cashier may be paid. (6) AU profit, as far as our laws allow, will be turned over to the reserve fund. (7) The loan and credit banks will ti y to procure on the best possible terms for their members such capital as they need in their business, and the}" wUl loan money on moitgage for small sums on condition that these debts are repaid by installments, effected on dates which are fixed in advance. '' I. COLLECTIVE AND UNLIMITED LIABILITY. Q. What do we understand by this liability? A.. Collective and unlimited liability means that eacli member is liable with all his goods for all the debt owing to any creditor, and that this debt is divided equally per head among all the members. Q. Can you explain this more clearly by example ? A. Suppose, for example, a bank with 100 menibers owes me a sum of 1,000 francs. I can make any one of these 100 membeis ]i- 1 1 S^ ts 1 1 1840 28.73 20.95 31.15 23.11 29.34 36.26 33.35 35.51 33.06 26.21 28.05 32.58 28.73 27.25 28.56 28.55 27.11 24.46 21.94 19. 89 19.16 14.49 21.36 15.80 21.10 26.03 20.26 23.00 24.74 19.99 20.28 22.62 19.83 19.63 22.24 22.92 18.20 17.34 16.72 15.79 23.58 16.41 25.28 18.44 24.52 31.50 26.15 27.92 28.95 22.37 23.92 26.66 24.08 23.58 24.70 24.21 23.56 20.19 19.11 17.98 '2i.'63' 17.41 20.76 27.35 33.59 23.79 24.17 19.86 21.13 23.95 20.33 19.58 20.20 20.88 20.79 17.64 17.12 15.47 19.44 15.22 22.98 18.34 18.34 24.40 26.30 21.25 26.00 23.16 22.82 23.79 26.51 21.38 23.42 22.85 20.28 18.64 18.04 18.13 18.09 13.40 20.57 17.77 21.24 22.07 15.97 22.02 25.30 23.17 22.84 21.79 20.29 19.00 19.74 19.80 18.68 17.69 17.53 17.29 21.00 15.06 23.52 18.25 22.49 24.58 19.01 23.90 25.18 22.53 21.53 22.75 23.28 21.89 21.60 21.08 21.09 19.24 18.64 17.48 6.79 6.92 8.39 5.90 8.47 9.51 7.99 7.67 8.47 6.74 9.74 10.63 9.78 11.45 10.34 7.34 9.00 10.09 6.51 6.07 4.45 3.32 4.05 4.98 6.37 9.85 6.32 4.51 4.85 6.41 9.44 7.63 5.47 5.13 6.79 7.88 6.81 8.25 5.23 4.86 6.73 5.67 6.39 15.40 10.39 13.89 8.22 6.70 8.43 13.97 13.97 10.74 7.76 8.62 11.22 21.50 9.65 4.91 7.93 7.09 1850 1860 26.47 21.54 24.59 28.68 21.48 22.39 26.38 27.82 30.57 27.76 26.68 26.34 28.83 31.90 30.43 25.62 25.24 25. 00 " 22.26 20.10 24.79 27.07 21.00 23.89 26.86 26.44 27.54 25.77 24.46 24.33 25.89 26.09 26.41 21.69 20.69 19.80 34.58 37.22 36.01 39.11 37.67 36.55 35.12 33.21 33.72 35.13 35.15 31.65 34.80 32.90 32.32 28.64 27.61 28. 60 38.02 45.24 45.04 48.53 38.21 38.81 33.46 35.40 38.48 40.48 38.55 34.25 32.64 35.34 36.96 36.93 35.90 32.50 2.13 1865 2.55 1870 2.97 1871 3.08 1-872 2.77 873 2.97 1874 3.21 1875 3.20 1876 3.36 1877 3.15 1878 2,88 1879 2.84 1880 3.22 1881 3.24 1882 3.11 1883 3.16 1884 2.82 1885 135.00 200. 00 2.65 1886 18.83 14.21 15.93 14.80 17.65 16.20 15.65 25.24 19.33 28.90 29.20 6.32 4.90 7.57 136. 00 197.00 2.65 1887 19.16 13.42 15.02 14.46 15.95 13.83 15.73 23.53 18.90 27.03 27.78 6.99 5.18 7.62 136. 11 189. 58 2.61 1888 19.47 13.81 15.83 14.57 16.66 14.32 16.97 24.61 19.33 25.45 30.08 8.75 5.37 8.46 193. 20 2.61 1889 18.44 13.26 15.73 14.51 16.24 14.57 16.06 24.31 18.93 25.04 34.06 8.20 5.17 7.22 137. 14 201.44 2.59 1890 19.74 14.80 16.57 14.17 17.15 16.30 17.26 24.99 19.14 27.04 35.04 6.35 4.44 5.91 133.42 214. 63 2.45 1891 22.90 19.26 20.39 16.73 19.31 16.66 18.64 27.58 20.74 29.14 35.32 9.10 5.15 6.93 126.40 225. 00 2.65 1892 19.40 16.44 17.54 15.38 19.46 14.86 16.00 27.54 19.04 27.65 30.32 8.02 5.24 8.39 121.54 229.40 2.79 1893 15.52 12.85 14.05 13.35 16.61 16.40 15.78 28.02 17.89 28.60 27.84 4.78 6.27 11.14 130. 11 222.45 2.73 1894 13.61 10.89 11.82 12.18 15.85 14.39 14.72 20.66 17.39 26.45 26.43 5.78 5.34 8.30 128. 75 217. 18 2.53 1895 13.98 10.81 11.91 11.52 15.17 13.31 13.87 21.38 16.25 21.96 22.46 7.05 3.47 5.03 126. 00 217.96 2.45 1896 15.47 11.12 12.17 11.80 14.33 15.08 14.32 20.12 15.75 20.90 22.56 5.37 3.57 5.00 126. 54 209.75 2.46 1897 18.03 12.35 14.14 12.72 16.16 15.99 14.37 22.13 16.90 21.85 28.03 6.07 3.80 5.92 114. 90 215.49 2.53 1898 20.55 14.31 16.50 13.92 16.81 16.93 15.74 23.11 17.57 24.76 27.93 6.86 3.84 5.57 93.57 226.57 2.56 1899 16.19 13.75 14.79 12.98 18.23 16.79 16.32 24.84 17.94 26.78 24.42 5.53 2.97 5.36 94.94 237. 83 2.59 1900 16.25 14.28 15.10 13.52 17.70 16.79 16.37 23.94 17.81 33.93 29.07 5.81 3.37 7.67 131. 59 221. 18 2.77 1901 16.31 13.64 14.87 13.74 17.61 17.04 15.61 24.56 18.29 31.43 28.17 6.47 5.83 9.26 142.00 164.00 2.75 1902 16.35 13.63 15.24 13.42 18. 10 18.43 15.79 27.05 20.21 32.40 28.18 6.57 4.90 7.22 123. 77 167.52 2.71 1903 16.26 13.51 14.42 12.50 16.29 15.14 15.19 27.08 19.94 27.12 26.88 9.00 3.61 6.04 116. 74 188. 83 2.75 1904 17.35 13.75^ 14.92 12. 85 16.17 15.62 14.95 27.07 19.22 22.51 23.99 7.67 4.17 6.54 116. 98 202. 64 2.74 1905 17.63 14.65 15.68 13.55 19.81 18.14 16.09 27.71 20.07 24.46 25.75 8.16 4.93 7.87 146.41 226.26 2.80 1906 16.98 14.88 15.73 13.91 19.49 18.29 16.58 29.70 21.22 27.58 20.10 8.33 4.38 6.83 168. 99 186. 19 2.91 1907 18.69 16.64 16.47 15.10 21.64 19.13 17.88 28.54 20.90 29.80 35.39 7.72 4.66 6.83 170. 80 199. 70 2.87 1908 19.52 17.01 17.67 15.24 19.74 18.17 17.73 28.98 20.42 28.41 35.50 8.82 4.06 6.94 141. 96 226. 69 2.90 1909 22.15 16.54 18.59 15.31 20.37 22.15 17.53 32.56 21.34 29.46 31.02 7.69 4.53 8.72 139. 87 235. 00 2.95 1910 19.71 14.39 16.67 14.58 17.57 17.34 15.75 36.11 21.79 40.53 30.55 8.03 5.07 8.83 119. 33 224. 50 3.06 1911 19.33 15.53 16.87 15.41 18.55 18.78 17.77 47.04 22.70 44.46 31.35 10.48 5.32 7.59 124. 29 221. 32 2.23 1912 20.98 18.29 18.48 18.33 21.20 22.38 21.01 52.66 24.16 41.01 36.87 8.28 5.02 7.48 130. 00 256. 22 3.22 HOLLAND. 517 HOLLAND/ SURVEY OF AGRICULTURAL CREDIT IN THE NETHERLANDS.^^ Mr. F. B, LbHNia, Inspectot of; Agriculture. STATEMENT. personal agbioultubal credit. The Hague. While in. some countries, notably Germany and Italy, mutual agricultural credit was developed energetically in the second half of the last century and was reaching a state of prosperity, in the Netherlands the matter was still in the experimental stage^ and, it seems that the, wa.y to reach the desired end was still undiscovered. The report of the official agricultural commission issued in 1.889 shows that the credit system in rural districts of Holland was poorly organized and ascribes the unfavorable condition which existed in the agriculture of the country to. this cause. It is true that at that time more than one attempt had been made to introduce the Raiffeisen savings banks,, which had been so satisfsactory elsewhere, to the Netherlands, The matter wag announced by pen and speech, but no positive action was imdertaken, It is to the Federation of Dutch, Peasants that credit is due fpr indicating the proper way of approaching this matter. From its inception this Federation had written at the. head of its platform encouragement for cooperation among the rural classes, and soon after the; Federation was organized in 1896 preparatory conunis- sions were appointed, in, the different provinces for the, purpose of working towardi the introduction of the Raiffeisen btmks. The original German model, wthits unlimited responsibility of members, was adopted as a model for these little rural banks. Profiting by the experience of other countries, it was decided to found at once a central bank with which the local banks could become affiliated. Hence this central bank may be considered as the very heart of the organization. In fact, this institution advocates the establishment, of new banks and controls and. guides those already in existence; it also acts as cashier of its branches in lending them money and in keeping their deposits in safety. In the beginning the Federation, of Peasants; was generally of the opinion that the local country branches connected with the Federation should be cooperative associations, organized under the law of 1876 regarding cooperative institutions. This opinion, however, soon encountered opposition from southern provincial agri- cultural leagues of the provinces of North Brabant and Linbourg, which preferred for various reasons to man- age the rural banks in accordance with the provisions of the law of 1855 relative to associations. The difference of opinion was so pronounced that the two southern leagues decided to establish a separate bank at Eindhoven, while that of the Peasant Federation was located at Utrecht,. It , soon became evident that the Federation's bank had, better become independent, and, on June 9, 1898,. the, Central Raiffeisen Bank was founded in Utrecht. This institution is entirely nonpartisan in political, and religious: matters, To affiliate with it all that is required of rural bank* is, that the^ members be of good repute. The centrals bank at Eindhoven remains an outgrowth of the Peasant's Christian League, and to be a member of one of, its rural banks one must be a member of that league and subscribe to the formula that he believes in, God and recognizes the institution of property and of the family as the foundation of society and that he wiU live up, toi these principles. Thus the Eindhoven organi- zation is Catholic, while that in Utrecht is, nondenominational. The two institutions in practice, work iR, independent fields, the Eindhoven bank works principally in the southern provinces, whose population is for the most part Catholic, while the Utrecht bank operates in the remainder of the land, In 1901 a third bank was founded at Alfcrnaar, in the province of North Holland. This bank draws its membership largely fropi the Peasant's League and consequently it has Catholic affiliations. These three iastitutions. are managed on the same prinmipleg and the systems differ only in details. The Utrecht bank demands, that its branches, be organized in conforniity to the law of 1876 relative to cooperation; the Alkmaar bank makes the same requirement, while that of Eindhoven prefers constitutions drawn up in accordance with the 1855 law on associations. The Utrecht bank permits the adm^sion of nonagricultural members, thus taking the same view as Raiffei- sen, who wanted to create village banks, while the Eindhoven and Alkniaar institutions admit only farmers to membership. ' Information and evidence in Holland was secured by a aubcomroittftej ' This paper was presented to tbje Commissions, through the American Legation before the subcommittee entered Holland, and has been translated from the French. The " Questions " were sent in advance of tlie subcommittee so that the answers could be included. 519 520 AGEICULTUKAL COOPERATION IN EUEOPE. As to responsibility, the Eindhoven and the Utrecht banks limit that of the members of the central organi- zation, while the Alkmaar bank imposes an unlimited responsibility. Members of the local banks affiliated with that at Utrecht are jointly and equally responsible for possible deficits, it being understood that they jointly guarantee the payment of the share of each member in the deficit. The banks at Eindhoven and Alkmaar impose upon their members an unlimited individual responsibility. According to the statute about rural banks, incorporated societies for the advancement of agriculture may become members and have financial dealings with the banks. At the end ot 1909 the Utrecht Bank had 258 such societies as members of local banking associations. The maximum credit extended by the central bank at Utrecht to its branches, 70,000 florins; the Eindhoven and Alkmaar banks have placed no such limit and consider each case on its merits. On December 31, 1910, the Utrecht Bank had 317 local branches; its capital was 293,000 florins, of which 18,020 florins were paid in; the reserve fund amounted to 52,130,405 florins. At the end of 1910 this bank had deposits of 4,577,450 florins and its loans amounted to 998,080 florins. The transactions between the central bank and the branches amounted to 15,851,151 in 1907; in 1908 to 19,903,043 florins; in 1909 to 25,439,630 florins; and in 1910 to 29,074,918 florins. The interest on call loans was 3.25 per cent in the central bank in its dealings with the branches, as long as the credit of those banks exceeded their debit, but the interest became 4.25 per cent when the opposite was the case. On account of the money being high between January 1 and June 30, 1908, the average rate of interest was one-half per cent higher for that period . At the end of 1910 the Eindhoven Bank had 283 local branches. The capital of that bank was 556,000 florins, of which 6,541 were paid in; the reserve fund was 50,000 florins. The interest on deposits was 3.25 per cent and that on loans 3.75 per cent. The total deposits were 4,270,364 florins, and the total loans 778,288 florins. The transactions amounted to 7,461,059 florins in 1908, to 8,819,843 florins in 1909, and to 10,458,310 in 1910. At the Central Bank of Alkmaar the deposits on December 31, 1910, were 274,858 florins, and the loans 102,656 florins. Its reserve was 6,881 florins, and the number of its branches was 32. Its rate of interest on deposits was 3.25 per cent; on loans the rate rose from January 1 to April 1 to 4 per cent and before December 31 to 4.5 per cent. In 1907, which was an exceptional year, it was necessary temporarily to raise the rate of interest; from July 1 the rate was 4 per cent on deposits and 5 per cent on loans. The Government lends support to the central and to the local banks in the form of subventions. It loaned in 1910, 3,400 florins to the Utrecht Bank, 2,500 florins to that of Eindhoven, and 500 florins to that of Alkmaar. In return the Government demands that the management of the credit banks be looked over by expert account- ants selected by the state. In case this examination costs more than 500 florins the Government pays the difference to the banks. As to the local branches, the Government lends them money to defray the expenses of establishment; the banks organized under the law of cooperative societies receive 175 florins, and those established under the law of associations 75 florins. The total subventions under this head amounted to 16,000 florins in 1910. Up to the present time the three central banks have not been consolidated. There would doubtless be advantages in consolidation, experience having shown in recent years that at certain seasons of the year the loans are apt to exceed the deposits. This has been found to be the case in the central bank of Utrecht and also that of Alkmaar, which operate in districts rich with cattle. In these regions there exists in spring, especially in April and May, a great need of loans, which are gradually paid up and reach a minimum in November and December. If the local branches are not to be allowed to become embarrassed, it is necessary for the central banks to procure additional funds. This has been made possible by the Bank of Netherlands, which has agreed to discount notes issued by local branches. It must be realized, however, that such transactions may be disadvantageous to the central banks, the interest on such notes possibly being higher than that charged by the central banks on their loans. For this reason the question is now being debated as to what extent the Government Postal Savings Bank can place its funds at the disposal of the central banks in case of need. LAND CREDIT. The principal agencies for land-credit transactions in the Netherlands are the realty banks, individuals, notaries, incorporated societies, and endowments. According to the Statistical Annual of the Kingdom of the Netherlands the total real estate mortgages in 1910 amounted to 64,000,000 florins, of which 8,000,000 was held by the mortgage banks and 56,000,000 came from other sources. The system of mortgages as practiced in the Netherlands has some serious defects, especially as it applies to small rural properties. In the first place, the system is expensive; in the second place, outside of the banks HOLLAlfTD. 521 there are no guaranties against premature foreclosure; and in the third place, it is rendered difficult to lift a mortgage before maturity. That is the reason why in different quarters it was thought best to use coopera- tive methods, and in 1908 an institution was founded at Eiadhoven for handling rural mortgages. The admin- istration of the cooperative central of Eindhoven had reported that a large part of the savings deposits was invested by local branches in long-term mortgages, th6 members desiring to have a long-term credit cheaply. The Eaiffeisen banks, however, find it very inconvenient to have their funds tied up in long-term mortgages, and the administration decided to establish a rural mortgage bank, which would take this business off the society's hands. The mortgage bank of Eindhoven was incorporated as a stock company, and its articles of incorporation were approved by royal decree on October 7, 1908. The capital is 1,000,000 florins, of which 200,000 florins was subscribed by the central and the local savings banks. The management of the new bank has been temporarily intrusted to the Central Savings Bank, until the two institutions can be separated. ' The central cooperative bank of Eiadhoven and its branches are admitted to membership to the rural mortgage bank. It has been provisionally decided that mortgages will not be issued for more than 50 per cent of the assessed valuation of land, and only in cases where the local savings bank was willing to indorse the mortgage could the amount be raised to 66 per cent. The term of the credit is 40 years or longer if necessary, the mortgagor being obliged to pay in at least 1 per cent of the principal annually, but also having the privilege of lifting any part or all of the mortgage at any time. The rate of interest is 4.25 per cent, including twenty-five hundredths per cent expenses of administration ; no commissions and only the most necessary expenses, such as taxes and postage, are incurred. The dividends on the stock were 1^ per cent the first year and 2 J per cent in 1910. In regard to this new institution of agricultural credit, it is now being investigated in how far the Postal Savings Bank and the State Insurance Bank could assist it, by placing some of their reserves on notes of the rm-al mortgage bank, and, in case of the postal, by lending it money for long terms at reasonable rates of interest. If this system is continued at Eindhoven, other places will soon join in, especially the Raiffeisen bank of Utrecht, which indorses the idea in its program. The small landowners of the Netherlands would doubtless benefit greatly. In conclusion I may cite the conclusions of the official agriculture credit commission, founded by royal decree on June 20, 1906: The Commission concludes that while the system of agricultviral credit is susceptible of improvement the steps taken so far are sane, and developments in this direction wUl greatly improve the economic condition of the rural population. QUESTIONS. Q. What kind of rural credit associations are operative in your country ? Are they financial societies, syndicates, or mutual societies ? A. The local savings banks have adopted the fundamental principles of the Raiffeisen system. Every association is restricted to a commune or parish; very few have larger territories. At the head of each association is a directorate and supervisory council that serves gratuitously; all the profits are placed in a reserve fund which can not be distributed; all the members are jointly responsible without restriction. The members undertake no other obligations than this responsibility, the payment for stock not being required. The banks affiliated with that of Eindhoven decided to give credit to agriculturists on any agricultural values. The Utrecht bank has taken no official position on this matter, and some of its branches extend their credit beyond purely agricultural values. Q. What are the laws governing them ? A. There are two laws in the Netherlands regarding associations. The first law is entitled "Law on the right of association and meetings of the year 1855." According to this law all societies not working against the public order are approved by the King. Such associations can not, however, be purely for the self-interests of the members. Such associations are legal personalities. The second law is that on "Cooperative societies of 1876." This law refers to societies organized for the profit of the members and in which members can be admitted or dropped. The articles of incorporation of a society must be approved by a notary and published in the Monitor. When the question of creating rural banks was agitated it was debated which law should be utilized. It appeared that either the law of 1855 or that of 1876 was applicable. 522 AGEICTJLTUBAL COOPEEATION IN EUKOPB. The local branelies of the banks of Utrecht and Alkrnaar are incorporated under the \fm of ISTS-, andi, those of that of Eindhoven undei that of 1855. The contial banks at Utrecht, Eindhoven, and Alkmaar are all three incorpoiated by virtue of the. law of 1876 on cooperative societies, the first two having a limited responsibility of its mentbeia, and the. last an. unlimited. Article 36 of the by-laws of the Utrecht bank states that the societies' capital may consist; of an undeter- mined number of shares of stock at 500 florins. Every member must have at least 1 share and.naay havei ag many as 10. On the first share 50 florins must be paid in cash, and on each subsequent share. 10 florins. Article 8 provides that when a society is dissolved and its liabilities exceed its assets, the membes's must make good the deficit in pioportion to the number of their shares, all the members, however, being also jointly responsible for the total amount. In any case this obligation will not exceed 2,000 florins per share in addition to the value of the share. The Eindhoven bank prescribes that each member must take a share of 1,000 florins of which 1 per cent must be paid in. The members are responsible for equal shares of the society's obligations. This responsibility, however, does not exceed for each member the amount of his subscription to the capital, and when that is all paid up his responsibility is limited by his investment. The bank of Alkmaar demands an unlimited responsibility of its members in equal shares. Article 5 of the by-laws reads: All the members share alike in the profits and are equally responsible for the obligations of the society. Q. Has the government taken any action to help rural credits, and what form has such action taken? A. The Government came to the assistance of agricultural credit in the Netherlands in two ways, namejy: (a) By lending "subventions" to the central banks, in order to help them meet the expenses of super- visioa and inspection over the branch banks, and also to keep the centrals themselves under state control. (&) By giving subventions to bianch banks to defray the expenses of establishment. In 1910 the bank of Utrecht received 3,400 florins from the government, that of Eindhoven 9,500 florins, and that of Alkmaar 500 florins. In addition the government refunded to these banks the excess of their expenses over 500 florins in paying the expert accountants selected by the- government to examine their books. The amounts granted to local banks to defray the expenses of establishment are 175 florins for those organ- ized according to the law of 1876, and 75 florins for those organized according to the law of 1855. These sub- ventions are conditional on the local bank's afiiliation with one of the centrals. The government expended in 1910 a total of 16,000 florins in the interest of rural credit — 6,500 florins for central banks, and 9,500 florins for locals. Q. How do these different institutions procure their funds ? A. The central banks use, for loans to locals primarily, the deposits of other locals, as well as the meager government subventions. The by-laws of the central banks provide that its members may always be required to give notes up to the amount of their subscriptions to the capital of a local, and this system enables the centrals to procure necessary funds from the Bank of the Netherlands, which thereby renders a great service to the rural credit of the country. Q. What reforms do you consider necessary in order to further develop rural credit ? A., By adopting the views of the official agricultural commission, organized by royal decree on June 20, 1906, it seems desirable: (a) That the three centrals consolidate and thus make the combined funds available in case of need. (b) That the Postal Savings Bank place some of its funds at the disposal of the central rural credit banks. (c) That since the credit system of the middle classes is stfll in the state of early development and involves more risk than the rural credit, the banks of rural credit do not consolidate with, banks estabU^ed for the middle classes. And yet such a consolidation may ultimately be advantageous for both classes, concerned. A question that deserves careful study is whether a central credit institution both for rural and middle'-clasa credit should be under government auspices hke the "Preussenkasse" in Prussia. Q. What are the usual iaterest payments ? A. Most of the local banks pay an interest on deposits of 3 per cent. All pay more than the postal say- ings banks, which pay 2.64 per cent. For long-term deposits the lowest rate is 2.88 per cent and the highest is 4 per cent. The interest charge for loans is generally 1 per cent higher than that paid to depositors;, it varies from 3.75 to 4.5 per cent. HOLLAND; 523 Q. What reserves and balances are held by the banks? A. The 288 banks affiliated with Utrecht had, on December 31, 1909, a reserve of 122,980 florins and a balance of 55,081 florins. The 237 banks affiliated with EiacUipven.had a reserve of 190,467 florins and a balance of 48,622 florins. OPERATIONS OF THE R^RAL CREDIT BANKS IN RECENT TEARS. The following table shows: NUMBEE OF LOCALS AFHLIATED WITH THE CENTRAL BAIfRS. 1899 1900 1901 1902 1903 1904 1905 1906 1907 1908 1909 1910 Utrecht 13 33 21 46 35 62 55 80 77 104 129, 132' 9 170 154 16 208 190 23 234 216 26 271 237 29 290 263 29 317 Eindhoven 283 Alkmaar 32 Tjjtal i 46 67 97- 135 181 270 340 421 476 537 582 632 NtlMBEE OP MEMBERS -OF- SDCtt LOCAL BANKS. 1901 1902 1903 1904 1905 1906 1907' 1908 1909 UtrephJ; .f 4,605 6, 928 7, 712 9,679 10,495 11, 919 641 13, 583 14, 691 1,339 15, 372 16, 880 1,608 19, 858 19, 166 1,816 22, 499 Eindhoven 2, 501 3,016 21,949 Alknjafir , 2,466 Tqtal 2,501 3,016 11, 533 17, 391 23, 055 29, 613 33, 860 40, 840 46, 914 NUMBER OP SAVINGS ACCOUNTS IN THE BANKS AFFILIATED WITH THE CENTK.\LS. Utreqht,^ 5,579 , 6,366 9,659 9,109 13. 777 10, 961 1,107 18, 407 14, 255 1,996 23, 734 17,523 2,854 25, 972 20, 720 3,718 31, 230 Kin^hovtui - • 3,293 ' 4,397 24, 381 Alfemaar: 4,860 Total 3,293 4,597 11, 945 18, 76.8 25,845 34, 658 44, 111 50,410 60, 471 NUMBER or LOANS GRANTED BY THEM. Utrecht 1,814 2,307 3,185 3,037 . 4, 672 . 3,874 6,243 5,045 8,296 6,421 7,929 7, 708 10,899 Kindhoven 1,196 1,446 9.413 Alkmaar TOTAL NUMBER OF, SAVINGS DEPOSITS.' [Banks affiliated with the central bajil;.] J _-: 1900 1901 1902 1903 1904: 1905 1906 1907 1908 1909 TJdaealit.. 1,002; 198 1, 755, 141 1,538,325 2, 415, 663 2, 771, 742 3, 293, 614 121, 934 4, 265, 798 4, 201, 302 2, 224, 327 5, 739, 1?1 5,661,994 442, 157 7, 218, 332 6, 930, 122 665, 401 10, 208) 985 8, 425, 076 950, 290 13,156)555 658, 571 1, 161, 947 10, 353, 710 1, 298, 350 Total 658„571 1, 161, 947 2, 757, .339 3, 953, 988 6, 187, 290 8, 961, 422 11, 843, 282 14, 813, 855 19, 584, 351 24, 807, 615 TOTAL LOANS, (EyOEjPT ON RUNNING ACCOUNTS) THAT CAN BE GIVEN NUMBERS. U^stwhife. 600, 547 684, 215 1, 060, 484 982, 051 1, 695i 117 1, 606, 646 2, 273, 183 2, 240, 756 135, 827 3, 303, 725 3, 121, 446 357, 729 4, 963, 032 4,516,045 47'3, 174 5, 608, 77^ 5, 321, 067 506, 252 6, 748, 226 Eindhoven 221, 406 364, 277 6, 120, 913 912, 208 Tota,!,,.. 221, 406 364, ?77 1,284,762 2,042,535 3, 301, 823 4, 649, 766 6, 782, 900 9,952,250 11, 436, 095 13, 781, 347 * The figures in this and the following tables are flbrin8=2.10 francs. 524 AGEICULTUEAL COOPBEATION IN EUROPE. Some members, especially large agriculturists, have running accounts. Advances made on such accounts were as follows: 1900 1901 1902 1903 1904 ■ 1905 1906 1907 1908 1909 Banks affiliated witli the central of — Utrecht 173, 538 61, 555 126, 421 61, 408 276, 726 69, 715 422, 749 177, 629 840, 094 285, 316 1, 115, 173 431, 897 1,675,827 589, 034 2, 094, 690 Eindhoven 22, 437 25, 474 798,185 Total 22, 437 25, 474 235, 093 187, 829 346, 441 600, 378 1, 125, 410 1,547,070 2, 264, 861 2, 892, 875 The statistics of savings accounts and of loans at the end of December of each year do not give an exact idea of the business of the rural bank. That is why we think it useful to give here for certain years figures for the transactions during a whole year. The different banks affiUated to the central had the following deposits and withdrawals: 1904 1905 1906 Deposits. With- drawals. Deposits. With- drawals. Deposits. With- drawals. Rural credit banks affiliated to the central bank o£^ Utrecht $2, 977, 754 2,126,837 $1, 725, 001 1,313,415 $4, 482, 263 2,548,478 236, 621 $3,046,852 1, 640, 790 161, 228 $5,617,434 3, 680, 328 500, 035 $4, 153, 671 Eindhoven 2, 219, 636 Alkmaar 377, 105 Total 5, 104, 591 3,038,416 7, 267, 362 4,848,870 9, 797, 797 6, 750, 412 1907 1908 1909 Deposits. With- drawals. Deposits. With- drawals. Deposits. With- drawals. Rural credit banks affiliated to the central bank of — Utrecht $6, 933, 932 4, 368, 361 770, 837 $5, 454, 731 3, 100, 233 547, 593 $9, 687, 254 5, 022, Oil 1, 082, 714 16, 475, 811 2, 590, 593 81,847 $12, 233, 493 6, 075, 250 1, 391, 461 $9,314,497 Eindhoven 4, 146, 616 Alkmaar 1, 310, 991 Total 12, 073, 130 9, 102, 557 15, 791, 979 10, 884, 874 19, 700, 204 14, 772, 104 AGRICULTURE IN HOLLAND. Address by Mr. P. Van Koch, Director Department of Agriculture. The Hague. Twenty-five years ago agriculture was in a backward and low state, owing to the competition of other countries, not least among which was the United States, which were sending great quantities of corn to the European markets. Our farmers were beaten by their foreign competitors, as was shown at the international exhibition at Amsterdam in 1884. The Government, which up to that time had paid scant attention to agricultural interests, came to the conclusion that something must be done. In order to know what to do, a commission of inquiry was appointed. A large part of the advice given by this commission has been carried out by the Government. Since 1890 the Government has organized all grades of agricultural and horticultural schools; lectures are given to farmers by agricultural, horticultural, and dairy instructors in order to stimulate them in chang- ing and improving their farming methods. Experimental stations have been established; grants have been given for stock breeding, and so on. The prices of farm products have fortunately improved of late, and this fact also encouraged thetarmers to lay hand on the plow, as the Dutch saying is. Cooperative societies for buying and selling grew up all over the country; everywhere cooperative creameries and cooperative credit banks were established, and in this Way, by the cooperation of the farmers and the Government, agriculture was given a chance to rise again from its poor and backward state. At present agriculture is prosperous, but nevertheless the work of the Government and the farmers them- selves is being continued. And in order that this can be done successfully a board of agriculture is charged with the Care of all government measures in behalf of agricultural interests. Agriculture in general. — Agriculture is the greatest industry of the Netherlands. The total value of the yearly agricultural production is about 600,000,000 guilders. By drawing a line from northeast to southwest the country can be divided into two parts. Below this line the soil is mostly gravel and sand, brought there by the. glaciers and their melting waters from Scandinavia and mid-Europe. Here the soil is generally poor. It lies from 10 to 50 meters above the sea. The highest point of the Nether- lands is about 240 meters above the sea. In these sandy districts an important part of the land is stiU unculti- vated or is covered with wood. The cultivated land consists of arable land on the highest parts and grass on the lower parts, especially along the small rivers. Along the large rivers, which cross the sandy districts, the soil consists of clay (river clay), used for tillage as well as for grass. In the north and west the soil has been formed by alluvial deposits, and consists partly of clay and loam, brought there by the sea and reclaimed (sea clay), and partly of a kind of very low and wet peat soil. A large part of the west of the country lies below the level of the sea. Therefore all the rain falling on it has to be artificially pumped out. In old times farmers formed draining associations and large combinations of these. The lifting of the water was formerly done by windmills. Now these are largely replaced by steam mills. In order to drain the water from the land every parcel had to be surrounded by ditches. From these ditches the water is pumped into canals. From these canals it is pumped into larger ones, and from these it runs into the river or the sea. In old times many large lakes were found all over the provinces of North and South Holland. Most of these lakes have been drained and are now cultivated. One of the most important works of this kind was the pumping out of the Haarlem Lake (1848-1852). In the northeast of the country the reclamation of peat bogs is carried out on a large scale. Formerly these bogs were almost absolutely waste land. For three centuries the peat has been cut off and used for fuel, and the sand on which the peat lay is cultivated by mixing with it a thin layer of peat left at the bottom of the bog. These cultivated bogs (veenkolonien, as we call them) form now one of the most interesting agricultural districts, where potatoes are grown for potato-flour factories. Let us now glance at the different forms of agriculture. On the light sandy soil in the east and south, where most of the holdings are small (between 15 and 30 acres), the chief product is rye. The rye is not sold, but fed to pigs and, with grass and hay, to cows. The produce which goes to the market is pork and butter, the latter principally made in factories. On the rich clay and loam soils in Groningen, Zeeland, and in some parts of Friesland, North and South Holland, all kinds of crops are grown — corn, sugar beets, potatoes, flax, caraway seed, haricot beans, onions, etc Here the farms are larger, between 100 and 200 acres. The size of the herds of cattle kept on these farms varies greatly. In many cases farmers keep only a few head of cattle and sell the whole product of the land on the market. The grass districts are very important. They are mostly found in the provinces of Friesland, North and South Holland, and Utrecht. In these districts grass is practically the only crop. Hundreds of square miles of green land, absolutely flat, are broken only by the canals, the farmers' houses, and a few villages, whilst the meadows are dotted all over with cows. The chief product in these districts is milk. In Friesland most of the milk is used for butter making. This is done in large creameries, most of which are conducted on a cooperative plan. In North Holland the principal product is Edam cbeese, made partly on the farm and partly in factories. In South Holland the milk is used for Gouda cheese, which is made on the farms. In the grass districts, farms of 50 to 75 acres are very common. In the "Veenkolonien" the principal crops are potatoes, rye, and oats. The stock of cattle is very small here. The potato-flour factories and strawboard factories, conducted partly on the cooperative method, are interesting. HORTICULTUKE. The conditions for growing all kinds of horticultural produce are very favorable in Holland. The climate is soft and mild and the soil is never too dry because the water in the canals stands only a few feet beneath the surface of the garden and can be maintained on the same level in dry as well as in wet times. These canals are also useful to carry the produce to market and to get the manure onto the garden. The most typical Dutch horticultural products are the bulbs. They are cultivated on the sandy soil behind the dunes. Aalsmeer is a center of floriculture. Boskoop, Oudenbosch, and Naarden are large nursery districts. 526 AGMCtTLTTJRAL COOPEEATtOST t*r fiXJEOPE; Tiie most interesting vegetable-growing districts are the following: Tlie Westlaad near the Hague, with its important vegetable growing under glass; the Langendijk, a large cabbage and cauliflower "district neaJ-'Alk- maar; the Streek in North Holland, where early potatoes arie largely grown. Beverwyk is an important straw- berry district. Near Kotterdam and Delft vegetable growing is also a large industry. The most important fruit-growing districts are De Betuwe, South Limburg, and Zuidbeveland. In the Westland much fancy ftuit, such as grapes and peaches, is grown in hothouses. SOME STATISTICAL DATA. The country has an area of 3,200,000 hectares; 27 per cent of it is arable land, 37 per cent pasture, 2.S9 per cent is used for horticulture, 8 per cent for forestry, 16.5 per Cent is waste land, and 9 per cent is used for different purposes. In 1910 the number of farms (agricultural and horticultural) With more than 1 hectare of land' was 209,000. The Netherlands is a country of small farms; 72 per cent of the holdings run from 1 to 10 hectares, 15 per tent from 10 to 20 hectares, 11 per cent from 20 to 50 hectares; and less than 2 pfer cent is above SO hectlEirfes. Of the cultivated area 46.49 per cent is uSed by owners and 53:04 per centby tenants. Tenancy is intrferasing. The situation varies in the different parts of the country. In Friesland only 27 per cent of theland is cultivatfed by owners, and in Groningen 68 per cent. Fifty-one per cent of the 860,000 hectares of arable land is used for grain (rye, oats, barley, wheat), 18.7 per cent for potatoes, 6.47 per cent for sugar beets, and the remaining part for a large number Of other crops. The following table gives the number of the different kinds of farm animals in 1910: Total number , Number per 100 hectares of cultivated land Number per 1,000 inbabiteints Horses. 327, 000 15 66 Cattle. 2, 026, 000 94 348 Hogs. 1, 260, 000 216 Sheep. 889, 000 41 153 Goats. 224,000 10 38 The number of animals varies much in the different districts. In the "Veenkolonien of Groningen" th« nuiaber of cattle is only 24 per 100 hectares of cultivated land and in the grass districts of Holland it is about 200. The quantity of butter produced yearly is about 66,000,000 kilograms (46,000,000 in factories and 20,000,- 000 on the farms) . The cheese production is about 88,000;000 kilograms (42,000;000 in factories tthd 41^000,000 on the farms). CObPfiEATION. It is easy to understand that in a country with such a large number of small 'farmers cocjperaiion must thrive. In fact all kinds of cooperation are applied in Dutch agriculture. We have 735 credit and loan banks (Raiffeisen system) affiliated with 3 central banks. In 1913 there were 1,436 local agricultural societies, with 156;000 members. A great many of these local societies are sections of provincial societies, which are mostly affiliated with the national organizations : Neder- landsch Landbouwcomit6 and Koninklijke Nederlandscke LandbOuwvereeniging (the Netherland Agricul- tural Committee and the Royal Netherland Agricultural Association). In 1910, 1,101 of these local societies bought on behalf of 91,000 of their'members, 24,000^000 guilders worth of artificial manure, feeding stuffs, and seeds, under the inspection of the Government stations. So far as concerns cooperative production, the cooperative creameries take the first place. Of the 950 creameries nearly 700 are working on a cooperative basis. In 1910, 33,500,000 kilograms of butter were made in cooperative and 12,500,000 kilograms in private factories. There are further in this country 13 cooper- ative potato-flour factories, 6 cooperative strawboard factories, and 2 cooperative beet-sugar factories. Mutual insurance also is important. In the first place is insurance against accidents to laborers in agricul- ture and horticulture. In the beginning of 1913 about 12,000 employers, who paid yearly 18,000,000 guilders of wages, had insured their laborers. Mutual live-stock insurance is very common, as the following table shows: Horses. Cattle. Hogs. Gbfits and Nuiliber of cooperative ihsufance soeietifes. Number of members Number of animals insured 377 30,447 ■56,S14 882 89, 638 377, 304 107 10, 353 25, 575 177 8,785 14,'OflO a6LLAif6. 5^7 vFke ho*ti«ulturists have their dWn arganization. In all, there are 294 local horticultural societies, with 34,000 members. The most important of these societies are affiliated with a central organization, the Neder- landsehe Tuinbou-wraad (Netherland Horticultural Union) . About 90 of the «local societies have established auctions for the siale of the produce of their members. In 1911, 16,000,000 guilders worth of produce was sOld at these auctions. STATE AID TO AGEICULTURB. The organization of State aid to agriculture dates from 1898. In that year the first director general of agriculture was nominated. In 1905 the ministry of agriculture was estabhshed, of which the board of agricul- ture is a section. In 1911 the expenses of the board of agriculture amounted to 3,948,000 guilders. The costs of the principal branches of State aid were as follows: Agricultural and horticultural instruction, 872,000 guilders; experts for agriculture, horticulture, dairying, cattle breeding, etc., 190,000 guilders; grants for the -breeding 'of horses, cattle, pigs, sheep, goats, and poultry, 260,000 guilders; experiment land control stations, 182,000 guilders; veterinary service, 1,791,000 guilders. Our system of agricultural instruction has. grown with the recent development of agriculture. We have four grades of Government agricultural schools: First grade. — The high school (Rijks Hoogere Land-, Tuin- en Boschbouwschool) at Wageningen with a three years' course. At this school our experts are trained. It is the source from which agricultural knowl- edge is spread over the country. Second grade: — ^^Two agricultural secondary schools, one for Dutch and one for colonial agriculture. Both have a three years' course. Third grade. — Nine agricultural and four horticultural winter schools. These winter schools, with a course during two successive winters, draw their pupils from the middle-class farmers and gardeners. Fourffi grade. — Three hundred and twenty-six agricultural and ninety-two horticultural winter courses. These courses are given by the teachers of the elementary schools who have passed an examination for that rpurpose. The courses are given in winter in the evening or on Saturday afternoon. They have contributed highly to the development of farming in Holland on modern lines. About our system of advising the farmers by experts, I may say that in general every province has an a,gricultural 'C^tpert, a horticultural expert, and a dairy expert. In some provinces there is also an expert for cattle breeding and for the whole country we have experts for poultry breeding and bee farming. EXtOETS OF AGHICULTXJKAL AND HORTlCtrLTXIEAL PRODUCE. The Netherlands grow only a part of the grain they use. A part of it has to be imported, especially wheat and maize. On the other hand, Holland has important exports of agricultural produce — butter, cheese, meat, cattle, bulbs,, plants, vegetables, fruit, starch and strawboard. The total value of this export is about 225,000,000 guilders. The value of the principal exported articles js as f oUoWs : Guilders. CFullders. Butter -45, 000, 000 Cheese 35, 000, 000 Cattle 30, 000, 000 Meat ■ 25, 000, 000 Hortibultuial produce 20, OOO, 000 Starfch 9,000, 000 Strawboard 6, 000, 000 The increase in the export of -^icultural produce in the last years is due to different causes: 1. Soil and climate make our country fit for cattle breeding and gardening. 2. The vicinity of large consuming centers — London and the German mining and industrial districts. 3. The fact that Holland is a free-trade country. COOPERATIVE AUCTION MARKETS. Report op a Subcommittee. The Hague. In the Netherlands there are about 100 cooperative societies for the disposal of fruit and vegetables. Only market gardeners and fruit growers can be members of these societies. These members elect from their number a council, consisting usually of a president, a vice-president, a secretary, and two or four more members. On a favorably situated piece of«land, bought by the council in the name of the society, an auction building is erected and in this building the produce grown by the members is sold by the coimcil, assisted by one or more officials, appointed and ,paid -by the coimcil. 528 AGfelCtrLTtniAL COOPEEATION IN fiXJftOPE. This selling is done on the system which they call in England "Dutch auctions," and by means of an auto- matic auction apparatus, consistiag of a big dial with a pointer. Figures around the rim of the dial indicate the prices. On raised seats, opposite this apparatus, the merchants are seated. Every seat has a number and commimicates electrically with the dial by means of a button. Between these seats and the apparatus is a small canal, wide enough for a barge to be poled through. Every morning the growers gather the produce, ready for market, in their gardens, grade it, weigh it, and write the quantity down in a book. The produce is then put into a barge and one of the workmen poles it to the auction place, where he hands the book to the office. From the moment the auction opens the barges are poled through the small canal between the merchants' seats and the auction apparatus. The auctioneer announces the quantity and releases the pointer, starting it at a figure on the rim of the dial which indicates a price which is too high. The pointer swings round, indicating lower and lower prices. When the price which some merchant is prepared to give, is reached, he presses his button. The pointer stops, indicating the price at which the produce is sold; at the same time a number appears, indicating the seat of the merchant who bought it. As the merchants have always the same seats, these numbers at once identify the purchasers. Before the merchants can receive the produce they have bought, they must pay for it at the office. The amount for which the produce is sold is entered in the book above mentioned, and when the barge is poled out, the book is flung on the barge. When the workman returns home with tl;Le empty barge, the grower can see in this book what price his produce has brought. Once a week the grower can get his money at the office, less a certain percentage, which is retained by the council to pay the different costs, salaries, etc. The auction society in Loosduinen was established in 1900 by 46 members; the first auction was held April 10, 1900. The first year's turnover amounted to 238,000 guilders. In 1901 the society numbered 133 members, the turnover was then 275,000 guilders, showing a shght increase. This was because many members sold a big part of their produce directly to the exporters and not by means of the auction. In 19C2 a resolution was passed by which the members were obliged to sell aU their produce throiigh the auction. Some members did not like to bind themselves as to the way in which they should dispose of their products, and separated themselves from the society. The society went on with 116 members; the balance of 1902 shows a turnover of 456,000 guilders. Gradually the number of members increased; it is now 210. In 1906 the new premises were bought and the auction building and packing sheds erected. The cost was 81,000 guilders, of which sum 35,000 guilders were brought together by the members (obligation loan), the re- mainder was raised on mortgage. Every year a part of this debt is hquidated (in 1907, 21,000 guilders; in 1908, 8,500; in 1909, 5,500; in 1910, 4,500; in 1911, 1,200; in 1912, 20,000 guilders). The premises were unproved every year and new packing sheds built. The total expenditure has been 114,000 guilders, of which sum 61,000 guilders has been repaid. The yearly turnover has increased every year, as shown by the following table: Guilders. 1903 456, 000 1904 563, 000 1905 705, 000 1906 837, 000 1907 1, 054, 000 Ouildeis. 1908 1, 065, 000 1909 ' 1, 408, 000 1910 1, 562, 000 1911 1, 830, 000 1912 1, 895, 000 COOPERATIVE AGRICULTURAL CREDIT. Statement by Mr. J. F. Berkvens, Director Cooperative Central Bank of Eindhoven. The Hague. Cooperative agricultural credit in Holland is still of recent date. During the agricultiu-al crisis near the end of the last century, from which Holland suffered so much, many attempts were made to organize agricultural credit in the same way as had been done in Germany and in Italy, but without results. In 1898, however, the peasant association succeeded at last in forming a good organization, of which the central bank at Eind- hoven forms the central point. This organization was meant principally for the Roman Cathohc population in the southern part of our country, and therefore a year afterwards another organization was fomided on a neutral basis and affiliated with the central bank at Utrecht as the center. This operates in the other provinces and has a strictly neutral character. Afterwards a third, a Eoman Catholic organization, was founded at Alkmaar on a smaller scale. * The organization of cooperative agricultural credit in Holland has a great resemblance to the German organi- zation and in the main lines may be considered a copy of it. It will therefore not be necessary to explain at HOLLAND, 529 length how our Raiffeisen credit and loan banks are organized. These are local banks with a Umited area of operations. The administration is gratuitous; only the cashier receives a gratuity or a yearly wage. Credit is extended for short terms, and is meant to be used as working capital for the members and not as mortgage credit. The members of the local banks assume imlimited UabiHty for the debts of the bank. The locals are affiliated to central banks, and are hable for the debts of the central banks, but this liability is limited. Unlike Germany and France, Holland has placed no money at the disposal of the central banks. Their capital consists of the deposits of the affiliated local banks; but if it is necessary the Netherlands Bank, at Amsterdam, consents to give credit to a certain amount. The State only puts, yearly, a relatively small sum at the disposal of the central banks to meet the expenses of inspection of the local banks and of the central banks themselves by an accountant appointed by the Government. At the end of December, 1912, 346 local banks, with 27,600 members, were affiliated with the central bank of Eindhoven; 439 local banks, with 32,000 members, were affiliated with Utrecht; and 30 banks with the cen- tral bank of Alkmaar. The deposits at Eindhoven in 1913 amounted to 8,000,000 florins, of which sum about seven and a half mDlions of florins were withdrawn. The profits of the year 1913 amounted to about seven and a half thou- sand gulden. The reserve fund amounts to 68,000 gulden. The deposits of the central bank at Utrecht amounted in 1911 to about 17,000,000 gulden, the profits amounted in 1912 to 14,460 gulden, and the reserve fund amounts to 66,000 gulden. In order to provide for mortgage credit the central bank at Eindhoven founded in 1908 the coopera- tive peasants' mortgage bank, which lends money to its members at a rate of 4J per cent. The central bank at Utrecht has for a long time planned to found a cooperative mortgage bank, but has not yet succeeded in realizing this idea. However, in 1913 a large dairy bank, which is meant as a banking office for the affiliated cooperative dairy factories in the Province of Friesland, was affiliated with this central bank. LAND-MORTGAGE BANK OF HOLLAND. Evidence of Mr. J. F. Bbrevens, Director Cooperative Central Bank of Eindhoven. The Hague. Q. What is the amount of capital of your bank t A. One million gulden; issued, 230 shares; paid up, 10 per cent. Q. Among what class of people has the stock been distributed? A. Among the Raiffeisen banks; the members are Raiffeisen banks. Q. What is the amount of the shares? A. One thousand gulden each. Q. When was your bank organized ? A. In 1908. Q. What connection has your bank with the Raiffeisen bank? A. The central Raiffeisen bank is the manager of the mortgage bank. Q. So the mortgage bank is a branch of the central bank? A. The land-mortgage bank is a separate department of the central Raiffeisen bank; the latter only carries on the administration for it. Q. At what rate are your loans made? A. The farmers pay 4.75 per cent, the interest rate. Q. For what length of time do these loans run? A. Forty years. We have two kinds of loans. One kind is on annuity, which can be repaid in 5 years or 10 years. The longest time is 40 years. The other kind is loans for a fixed period without amortization. Q. What is the difference in the rate of interest? A. It is 4.75 per cent without amortization; with amortization the rate has to be calculated. Q. Have you tables prepared showing how much the annuity would be for any period of time? A. Yes; for 40-year loans the amortization rate is 1.05 per cent and expense one-fourth of 1 per cent. Q. What would be the net interest, then? A. Four and five-tenths per cent. 14174°— S. Doc. 214, 63-1 34 630 AGR1OULT0BAL COOPERATION IN EUROPE. Q. Then the interest would be 4.5 per cent, amortization 1.05 per cent, and the expense would be one-fourth per cent. That would be 5.8 per cent which the borrower would have to pay to the bank during a period of 40 years? A. Yea. Q. If a farmer secures from you a loan of 10,000 gulden, do you pay him the money? A. Yes; we pay him the money. He has his choice of receiving either the money or mortgage bonds, Q. What rate of interest do these bonds draw? A. At this time 4^ per cent. Q. Are those mortgage bonds in small or large denominations? A. They are of various denominations — 1,000 gulden, 500 gulden, 100 gulden. Q. Where are they sold? A. In Holland; to various people. Q. What security is behind these bonds besides the security given to your bank by the farmers? A. Both the assets of the bank and the mortgage. Q. What percentage of the assessed values do you allow ? A. As a rule, 50 per cent ; in some cases we allow 66 per cent. Q. How are these assessments fixed ? A. By the local bank. The board of the local Raiffeisen bank fixes the assessment and valuation. The land-mortgage bank has a man who also values the land. Q. Is he a local man,' or is he sent by your bank ? A. The mortgage bank chooses a local man for this purpose. He is not allowed to be a member of the local Raiffeisen bank. Q. How are the titles to landed property guaranteed in these mortgages? A. We have, as you know, the cadaster.* The state does not guarantee it. The cadaster has been used for taxation. If we sell a farm it has to be recorded, so from the record we can find the owners in all circumstances. But the state does not guarantee the record. Q. What exemption does the owner of land have against debt ? A. He has no exemption. Q. How do you foreclose your mortgages when they are not paid ? A. They can not redeem land here as in America. Q. What is your process of foreclosure ? A. If the farmer does not pay he is given six weeks' notice. If not paid at the end of that period we fore- close the mortgage, and the farm has to be sold in the name of the creditor. Authorization by the court is not necessary. Q. What length of time is required ? A. It can be sold immediately, but usually we allow four weeks. It is sold to the highest bidder. Q. Does the farmer pay any taxes on these mortgages ? A. We have some taxes on the registration of the mortgage. A kind of stamp act. A special tax on mortgages. Q. Is that paid more than once ? A. Only when the loan is made. Q. Are the bonds assessed for taxes ? A. There is just one tax which has to be paid in the begiiming. Just once to the state and no more taxes (2.50 gulden per 1,000 gulden). Q. Is that tax based on the amount of the mortgage? A. The tax imposed upon the bonds amounts to 2.50 gulden per 1,000 gulden. Q. The purchaser pays no taxes on the bond ? A. No. Q. Does the bank receive deposits ? A. No, it does not. Q. At present what is the market value of your bonds ? A. lOOi Q. In negotiating a loan with your bank does the farmer get the benefit of that premium ? A. The farmer gets only the nominal value of the loan. Q. If bonds were sellmg below par, would you give him the par value of his loan ? A. No, the borrower has to pay the difference by way of commission. ' A register of land titles. HOLLAND. 531 Q. If the market value of the bonds is above par, does the farmer get the benefit of the premium ? A. The bank gets the benefit ia case the bonds are selling above par. Q. Do you fiind it necessary to buy up these bonds in order to protect them ? A. No. In the case of these mortgage banks they are not doing that. In other cases it is general to do it. Q. What dividends does the bank pay ? A. Four per cent. That is the maximum. Q. Is the rate of interest the same on short-time loans as on long-time loans ? A. Yes. Q. Does the state send a special man to examine this bank 1 A. The state has no supervision over the mortgage bank. Q. Is it examined only by its own officers ? A. Only by its own officers every month. The same accountant appointed by the Government to examine the central bank examines this mortgage bank. Q. What is the present rate on commercial loans ? A. Six per cent. Q. What connection has this mortgage bank with the central bank ? A. The local banks of the central bank are the only members of the mortgage bank and only members of shareholding banks may borrow from it. Q. Do the local banks or the members of the local banks take the shares ? A. The local Raiffeisen banks which organized the mortgage bank take, the shares. Q. How many shares are allotted to each local bank? A. Five shares is the maximum. Q. What is the face value of these shares ? A. The value of each share is 1,000 gulden and the local banks pay in 10 per cent of that amount. Q. Do you call for the other 90 per cent at regular intervals ? A. We hope not, but each local bank is responsible for the whole amoimt. Q. Does this responsibiMty go beyond the value of the shares that it owns ? A, Each bank is responsible up to the face value of the shares. Q. What class of people buy these bonds ? A. All classes, farmers and others. The bonds are sold principally to local banks disposiug of many savings ; but also to farmers, clergymen, etc. Q. In the valuation of the land are the improvements considered in arriving at the market value for mort- gage purposes ? A. Yes; the improvements are considered. In 1911 in the whole country 266,000,000 gulden have been placed on mortgages on buildings and on farm property; 72,000,000 gulden were placed only on farm property, of which 9,500,000 gulden came from mortgage banks and 62,000,000 gulden came from private persons. From this you can see that the work of this bank is very small, since in 1912 only 230,000 gulden had been placed on mortgages by this bank. Q. If a farmer wanted to mortgage his farm, would he go to his local Raiffeisen bank ? A. He must go first to his local bank and the local bank gets the consent of the central bank. The central bank often advises against taking the mortgage, because the banks, disposing only of savings which may have to be paid back at any moment, must keep their money as Hquid as possible. If the consent is given, the farmer gets the money without the intervention of the mortgage bank, but out of the savings received by the local bank. The mortgage bank was founded in order to furnish money without obliging local banks to invest their money in loans for long periods, which, in times of crisis, might prove to be dangerous. RAIFFEISEN CENTRAL BANK. Evidence of Mr. J. B. Westehdyk, President Board of Supervisors of the Utrecht Bank. The Hague. Q. When was your bank organized ? A. June 12, 1898. Q. What is the amount of your capital ? A. 437,000 florins, of which 26,780 have been paid up. The shareholders are responsible for the amount of the face value of the share (500 florins) plus 2,000 florins, thus for 2,500 florins for each share. 532 AGEICXJLTX7KAL COOPEKATION IK EUEOPE. Q. Who are the owners of these shares ? A. The owners are only local banks which can take from 1 to 10 shares each. Two of the officials are obliged to take 1 share each. A loan may never go higher than 10,000 florins per share. This limit is made stUl lower if the responsibility of the local bank is insufficient. Q. This bank is the federated center of a number of Kaiffeisen local banks ? How many banks are ia this association ^ A. December 31, 1912, there were 439 local banks. , Q. If a local bank wants to secure money from the central bank what method does it pursue ? A. 11 the central bank loans money, it may claim promissory notes, mostly maturing within three months, from the local banks to the amoimt of the loans due by them in order to get them discounted by the Netherlands Bank. Q. What kind of security does the local bank give for the loan ? A. The liability is unlimited, but restricted according to the law for our cooperative associations, article 19. (Law of Nov. 17, 1876, sec. 227.) Something like the Unlimited Contributory Liability. Q. Are loans made for any specffic time ? A. Sometimes. If a local bank wants to borrow a large amoimt, sometimes the central bank makes a condition that a portion of the loan has to be repaid in a short time. Q. Are thesa Raiffeisen banks simply borrowers, or do they deposit ? A. Most of them carry deposits. Most of the local banks are debtors to the central during a part of the year and are creditors during a part. Q. What rate of interest does the local bank pay to the central for its loans ? A. 4i per cent for the debit balance of the current account. Q. What rate of interest does the central bank allow the local bank on its deposits ? A. The rate for the credit balance of the current account of the local bank is 3J per cent, thus the central bank profits by a margin of 1 per cent. Q. What assistance does the Government give to the central bank ? A. The Government gives a yearly subsidy of 3,400 florins. Besides, the State gives for each local bank, when organized, 175 florins. This subvention of 175 florius is intended as a subsidy for the costs of erection and first organization of the local bank. The 3,400 florins has to be considered as a subsidy for the cost of in- spection of the local banks by the inspectors of the central bank. The costs of this inspection are much higher than this subsidy, (in 1912, 10,885,255 florins). Q. For what purpose does the Government give to the central bank ? A. For inspection. The State appoints an accotmtant and if he costs more than 500 florins the State pays the difference. Besides the organization of the inspection of the central bank for the local banks, there is an inspection of the central bank by an accoimtant, appointed by the State Government. The salary of this accountant was in 1912, 1,300 florins, of which amount the central bank and the State paid each 650 florins. Q. Do you take deposits from outsiders ? A. Yes; 185,000 florins in the central bank are from private persons. The local banks get much more from outsiders. Q. What rate of interest do you allow those outside depositors? A. The same as for local banks. We do not make loans to outsiders. Q. What particular security do these depositors have ? A. They are guaranteed by stock, liability of the members, and all the possessions of the central bank; under which come papers of value. Q. Are the assets of the bank legally liable as security for the depositors ? A. Yes; but the depositors are not preferred creditors. Often in April, May, and June the central bank has not enough deposits to make the requu'ed loans to the local banks. Then this central bank claims promis- sory notes from the local banks to give these promissory notes in discount to the Netherlands bank. The promissoiy notes thus are guaranteed first by the local bank issuing them and second by -the central bank. These promissory notes come due within three months. OccasionaUy they are prolonged. Last May the central bank had over 2,000,000 florins worth of promissory notes running with the Netherlands bank. At this moment they are all paid up. Q. Are the officers of the central bank bonded? A. Only one officer is bonded; the chief administrator; i. e., the cashier. Q. If there should come a time of depression when you have maturing loans among these small banks and their members, would you call upon them for money or would you go to the bank of the Netherlands ? HOLLAND. 533 A. In 1897 we had a depression and just now in April, May, and June the central bank wanted money badly, but each time we could get it easily from the Netherlands bank. We do not know how it would go in times of war in western Europe. But we trust that we can meet the want of money even in such times. One should not lose sight of the fact that most of our local banks and also our central banks as a rule have many more deposits than advances. December 31, 1912, the deposits in our central bank were 6,502,849.43 florins and the advances given by it to the local banks 1,636,591.78 florins. Q. Explain to us how a local Rai£feisen bank is organized. A. Our first step is to ask the central bank to send us the chief inspector to explain all the things which we want to know, and then the central bank comes with a copy of the by-laws and constitution. The beginniag is usually made by a small number; 20 or 30 farmers agree to erect a bank. We caU in a notary and he is asked to pass on the articles of the organization. When this has been done we ask 175 florins from the State and after all these things have been examiaed by the State we get the money to pay for the erection of the bank. The notary has to pass the statute, which has to be published in the State Gazette, according to our law of 1876, above mentioned. The State does not inquire very closely into the erection of a local bank, biit this examination has to be done strictly by the central bank. The State does not give its subvention of 1 75 florins before the local bank has become a member of the central bank, and the central bank does not accept the local bank as a member before the exact examination of the latter. Q. Each member must take at least how many shares ? A. The local bank has no shares at aU. It must take at least one share in the central bank. Q. How do they get their reserve capital ? A. The local banks make a little profit each year, which profits are reserved, and so are growing slowly. The working capital they get from deposits and if these are not sufficient then from the cential bank. Q. Do outsiders deposit in the bank ? A. Yes. Q. What rate of interest does the local bank pay on deposits ? A. From 3 to 3f per cent. Q. What kind of security does a member put up if he wants to borrow money ? A. Mostly personal indorsement. Sometimes, but not often, the loan is secured by depositing papers of value; i. e., stocks, shares, and bonds. Q. If the demands for loans exceed the deposits, does the local go to the central bank to secxire a loan ? A. Yes. The central bank charges the local banks 4^ per cent and the local bank charges the borrower 4, 4^, to 5 per cent, according to the situation of the local bank. If it gets many depositors and makes few loans to the members, so that it is never short of money; then it loans at 4 per cent but does not borrow from the central bank. If, on the contrary, it has to borrow much^ money from the central bank, it sometimes charges its members 4J to 5 per cent. Q. When a Raiffeisen bank borrows money from the central bank, what rate of interest does it charge members for this money ? A. Mostly one-fourth of 1 per cent in excess of what is paid to the central bank; that is, as a rule, 4 J per cent, but sometimes a little more to make a little more profit. Q. Do the EaifFeisen banks declare dividends ? A. No. Q. In case a bank should go into liquidation, who would get the reserves ? A. It goes to some other local Raiffeisen bank in the community. Q. Is there any record of a failure of a bank ? A. No failures, but a few liquidations. Q. Can you tell me how this was caused? Did any of the depositors lose any of their money? A. Sometimes they can not find people apt and willing to act on board of directors or as cashier. No depositors lost their money. Q. Who are the officers of a Raiffeisen bank ? A. There is a board of directors of three to five members. These men are responsible for the direction of the bank. Then we have a board of supervisors of three to five members. These are to control the direc- tors. Then we have a cashier who is not a member of the board of directors, but who is an official who has to give bond for 2,000 to 5,000 florins. This cashier gets an annual salary. The board of directors, etc., work without compensation. The cashier's salary is from 200 to 1,000 florins, according to the size of the bank. Q. Are these local Raiffeisen banks examined ? A. They are examined monthly by the board of supervisors and the chief inspector of the central bank. Our chief inspector of Utrecht has seven inspectors as his assistants. This inspector has to examine the bank 534 ' AGBIOULTUKAL COOPERATION IN BUKOPE. once a year. If there is some distrust he has to examine more than once a year. The inspectors get theu- salaries from the central bank. The State has nothing to do with that. Q. Are there any membership fees paid by the members? A. When a man becomes a member of a local bank he has to pay a fee of one-half florin (20 cents). Q. Does the local bank ever loan to any except its own members ? A. No. Q. Have all of the Raiffeisen banks reserves ? A. Most of them have. Q. Are they growing in popularity ? A. Yes, indeed. Q. Are the members of this bank men who own property ? A. Most of them are landowners, but there are a great many tenants. Q. Is the rate of interest on loans this year higher than it was a year ago ? A. No ; it is very constant. ORGANIZATION OF A PEASANTS' COOPERATIVE LOAN BANK. Statement by Mr. C. Van den Hitkk, Head Inspector Central Raiffeiaen Bank at Utrecht. The Hague. The peasant population of Holland is beginning by degrees to see the importance in their behalf of a good and regular means of credit. The rapid development of peasant banks is a proof thereof. Nevertheless, we are stiU very far from the final goal: "A peasants' bank in every village." And yet, there must be a way to reach the goal. Agricultural credit, by means of cooperation, must be of national importance to the peasants; it will undoubtedly prove a blessing to the whole peasant population. Many a person who is convinced of the great value of peasants' banks will ask himself the question. What is to be done in order to procure such an institution in his village 1 To that end, it is necessary, in the first place, that he get other persons to his own way of thinking in the quickest and easiest way possible — one and another of his friends and acquaintances — in order to make known the purpose and the importance of the bank. He should then communicate with the central bank at Utrecht, asking for reading matter on the subject, and he will receive a free supply of pamphlets, a few annual reports, etc. He will secm-e the bank stiU quicker if, when he sends information concerning the agricultural society in his village, he will ask of the central bank some reading matter about agricultural credit. StiU, the spoken word is frequently better understood, since questions about rural credit give an intro- ductory opportunity for an interchange of views and very often lead to the removal of objections to loan banks which some peasants hold — objections which frequently arise from misunderstanding. It is our firm convic- tion -that, in consequence of a talk given by an expert, the organization of a bank has frequently been brought about. It is also our opinion that the peasants' loan bank will come much quicker and be in better condition whenever its organization has been accompHshed by means of a speech delivered. Now, the pith of the matter regarding the bank's organization being decided, the question arises, How to take hold of the business in order to be ready with all things as quickly as possible? From those who have already expressed themselves as ready to join, there should be appointed some sis or seven in order to form a "committee for the organization of a peasants' loan bank." Perhaps there may be one or more of the principal persons of the village who would be inclined to take a place on the committee. The task of these organizers is very simple and requires Httle work. They have to fulfill to the letter a few formalities that are prescribed by law as well as the carrying out of the preparatory measures. Their first work must be — 1. To pass the notarial deed of organization. — Thereupon, one of the members of the committee draws up a deed and goes with it to a notary with the draft of the constitution. He hands over to the notary a few samples of model constitutions, and informs him as to the surname. Christian name, and occupation of the organizers, as well as what must be included as laid down in articles 1, 3, 38, and 41 of the constitution. As soon as the notary has prepared the document, the organizers meet together when and where it seems best in order to hear the deed read over and to sign it. The notary then takes the document to the record office of the court of justice of the commune for publi- cation in the Netherland Government Journal and for announcement in one of the newspapers (in conformity with art. 5 of the law of Nov. 1, 1876, Government Journal No. 227). If one does not employ a notary, HOLLAND. 535 then 10 copies of the supplement of the Government Journal, in which the deed appears, shaU be sent to the administrator of the Government Journal at The Hague to be recorded at 10 cents per copy. As soon as the deed is registered, knowledge of the fact is given to the chief inspector of the central bank. 2. To draw up a register of members. — The central bank sends a blank register immediately after the publi- cation of the organization, which register, when filled out, must be recorded and stamped by the justice of the commune. This is done gratuitously. If the register has to be sent by mail, stamps must be inclosed to pay return postage. After the register has been returned it is copied as section 1 of the constitution. The aim should be to have the register ready before the first general assembly. In the meantime there have been received from the central bank the forms for management and book- keeping — books, registers, in short everything of which the bank has need,^ and the deed of organization has appeared in the Netherland Government Journal. The organizers now call together those who have pledged themselves to become members and those who later have apphed to the committee in order to hold — S. The first general assembly. — Having been considered beforehand, the assembly is called together to ful- fill all the requirements for membership which are laid down in article 3 of the constitution. The notice of convocation can thus be arranged : First general assembly of the Peasants' Cooperative Loan Bank at — . Order of business: (1) Opening exercises. (2) Signing of the register of membership. (3) Adoption of the rules of order. (4) Election of the board of directors and the council of supervision. (5) Election of two substitute members of the board of directors. (6) Adoption of the salary of the treasurer. (7) Election of a treasurer. (8) Communications, questions, adjournment. It is very desirable to take into consideration, even before the meeting, who shall be nominated as members of the board of directors and of the council of supervision. The success of the peasants' loan bank depends upon the choice. It is also of great importance that a good cashier or treasurer is found. On the other hand, it would probably be wise to abandon the organization of a peasants' loan bank in the villages where it is doubtful that the directors with qualified fitness and a smart treasurer can be found. Experience teaches, however, that such villages will not be numerous. The first general assembly shaU be presided over by the president of the committee of organization. One of the other organizers shall act as secretary. After the meeting the task of the committee is ended. Conformably to article 32 of the constitution, the regulation of the various business is left to the general assembly. The resolutions which are acted upon shall be embodied into regulations for its management, which rules or regulations can always be modified by the general assembly. The statutes for all peasants' loan banks are nearly alike, but the rules of management differ and must be adapted to local conditions and needs. For that reason, it is not necessary to follow exactly the accompanying model nor to accept all the articles laid down therein. They can be modified according to circumstances. MODEL FOE RULES. Article 1. Every member of the Peasants' Cooperative Loan Bank of , in addition to the constitution, submits himself to the stipulations of these rules of order. Art. 2. Each member shall pay, on his being accepted as such, an entrance fee of half a franc and receive free a savings book. Nonmembers shall pay for this savings book a fee of one-tenth of a franc. Art. 3. The regular meetings of the board of directors shall be held on the first Friday of every month. The treasurer shall be at his desk for business on Wednesday and Saturday of each week during the months of November, December, January, and February from 5 to 6 o'clock and for the other months from 7 to 8 o'clock. Art. 4. The loan bank shall have a total capital of 50,000 francs in deposits and savings, of which 20,000 francs shall be from the cen- tral bank. The limit of acceptance for a single individual or family shall be 5,000 francs. Art. 5. The board of directors may grant to a member a loan or credit in current account as high as 1,000 francs, and with the consent of the council of supervision as high as 5,000 francs. To agricultural societies the board may, with the consent of the general asseiAbly, grant a loan above 5,000 francs. Art. 6. All loans must be applied for in writing addressed to one of the members of the board of directors or to the treasurer, with a declaration as to the security, duration, and purpose of the loan. The cashier or treasurer is obliged to make known the decision taken in the matter to the party concerned in writing as soon as possible. ' It is desirable for many reasons that a fireproof safe shall also be forwarded through the intervention of the central hank. 536 AGEICULTUKAL COOPEEATION" IN EUROPE. Art. 7. After a loan has been totally redeemed, notice thereof shall be sent to the sureties. Aht. 8. Members of the board of directors, the council of supervision, and the cashier are obliged to subinit to members and nonmem- bers of the bank at all times the exact condition of the management as to deposits and loans under penalty of a fine of 50 francs, which fine shall be to the profit of the bank. Repetition of the offense is to subject the offender to dismissal from membership. Whether all are present or not, the fact of making matters public shall be decided by secret ballot in a combined meeting of the board of directors and the council of supervision, called together by the president of the council of supervision, or, whenever the matter concerns the president himself, the meeting shall be called by the vice-president. Art. 9. In order to promote savings on the part of the most indigent, of children, and of domestics, the least deposit in the savings bank is fixed at 1 franc. Art. 10. The interest rate on deposits shall be 3 per cent; that for loans 4J per cent. In current account there shall be allowed 3 per cent for credit and 4^ per cent for debit. For delay of repayments, a provisional charge of one-fourth per cent shall be made with a minimum amount of half a franc. In current account, a provisional charge of one-eighth per cent shall be made to cover all expenses of the bank. Art. 11. The interest on deposits shall be reckoned on the 1st and 16th of the month, following the date of deposit; the interest oa repayments shall be reckoned on the 1st and 16th of the month preceding the date of repayment. The interest for loans shall be reckoned one day before the payment; the interest on repayments on loans one day after the repayment. The interest for payments in current account shall be reckoned two days after the payment; for repayments two days before the repayment. Art. 12. No interest shall be reckoned on fractions of guilders. In the reckoning of interest itself, fractions of cents shall never be regarded. Art. 13. On loans or parts thereof that are not repaid on time, there shall be charged on repayments overdue 1 per cent more interejt unless delay in repayment has been granted. Art. 14. The board of directors shall have power to impose on members who neglect to attend the general assembly a fine of half a franc. Art. 15. Annually, in the month of January, all the savings-bank books must be delivered to the board of directors. They shall then be compared by the board with the books in which the cashier during the year just passed has entered the accrued interest, making notes of their examination where necessary. The manager then signs the balance sheet for examination. Art. 16. In all cases wherein the constitution or the regulations do not provide for it, the board of directors shall decide as to the first ensuing general assembly. General Assembly of the Peasants' Cooperative Loan Bank at , held the . MANAGEMENT. As soon as the order of business is disposed of, there shall be a separate meeting called of the chosen members of the board of directors and of the council of supervision, for the purpose of partitioning their duties. The board of directors selects a president (manager), a vice president, a secretary, and one or more members. The council of supervision chooses a president, vice-president, a secretary, and one or more members. Immediately after the division of duties the affidavit can be signed and sworn to, and aflBliation with the central bank at Utrecht can be requested. The cashier sends the certificate, accompanied by the above-mentioned documents, to the Central Cooperative Raifleisen Bank at Utrecht (marked "For inspection"). Within a few days a report is received to the effect that the bank is accepted as a member of the central bank. To complete the accession, the manager and one of the members of the board of directors must journey to Utrecht for the purpose of signing the membership register there. The accession can be accomplished just as well by sending a copy of a notary's certificate whereby the manager declares that the bank becomes affiliated with the Central Cooperative Raiffeisen Bank established at Utrecht ; but a visit to the central bank is to be preferred in order to be convinced the better as to the importance and the organization of the central bank as well as concerning the manner of procuring money therefrom. As soon as the bank is affiliated, the royal subsidy can be requested. To this end it is advisable to send in a request free of postage of the following form under a stamp of 22^ cents : To Her Majesty the Queen. Madam: With due respect, be it known to you that (followed by names, occupation, and residence), in their capacity as manager and members of the board of directors of the Peasants' Cooperative Loan Bank at , having learned that you have decreed that a subsidy to the amount of 175 francs shall be loaned through the Government to peasants' cooperative loan banks, affiliated with the Central Bank at Utrecht, , that the bank above named through their representatives has been affiliated with the said Central Bank since the • Whereupon, the undersigned do respectfully ask that Your Majesty may be pleased to grant to the Peasants' Cooperative Loan Bank at , a subsidy to such an amount, as shall be stipulated by Your Majesty, toward the indemnification and expenses of organizing the said peasants' loan bank. Which doing, etc., the obedient servants of Your Majesty, (Signatures.) ■(Name of place and date.) Not long thereafter the rcyal agricultural or horticultural teacher will visit or send a letter to the wntersi which will ask a few questions, and before long there will follow a mandate for the payment of the subsidy. If it should be desired to open the bank a few days before the acceptance is ready, there is no objection to it. Deposits can be directly invested at the central bank; loans, however, can be requested only after accept- ance by the central^bank. HOLLAND. 537 BY-LAWS FARMERS' COOPERATIVE BANK AND TRADING SOCIETY AT STEENWIKERWOLD. NAME, LOCATION, AND PTJKPOSE. The Hague. Article 1. This society, •wboeo headquarters are established at Steenwikerwold, shall be knovra by the name of the Cooperative Fanners' Bank and Trading Society at Steenwikerwold. Its purpose shall be: (1) The purchase and sale on a cooperative basis of the necessary requirements of the business; (2) to advance money to worthy membeis of the society who are in need of credit ia their business; (3) to grant opportunity to place in safe keeping money not temporarily needed ia business and to secure interest thereon; (4) to form a fund which shall serve to promote the welfare of the members. DURATION AND BUSINESS TEAR. Art. 2. The society shall continue for the time of 30 years, and shall be reckoned from January 1, 1901. The business year shall extend from January 1 to the last day of December — that is, from the first day to the last day of every year. members and RESIDENCE. Art. 3. Those who can become members of the society are: Persons over 21 years of age who reside and are members of legally con- stituted societies which are established in the communes of Steenwikerwold, Steenwik, Oldemarkt, Giethom, Vledder, Havelte — ^but only the part known under the name of the State of Wapserveen — and Weststellingwerf ; for the last-named commune only that portion which lies south of the River Linde to and including the village of Noordwolde. The residence of members who reside outside of Steen- wikerwold shall be deemed to be, so far as this society is concerned, that which is known to the secretary of the commune of Steenwikerwold. Art. 4. The admission of members is accomplished through the board of directors if agreed to by the council of supervision. After the council has given the matter consideration, it is within its authority to remove from membership any person deemed unworthy for the following causes: (1) The nonfulfillment of their obligations toward the society; (2) in a state of forced bankruptcy or when guardianship has been established; (3) failure to pay their loans or their annuities only after legal proceedings; (4) failure to pay for their share within mx months after the obligation to do so occurred, unless the board of directors shall decide otherwise. The notice of removal from membership shall be sent by registered letter. Art. 5. Each member has the right to withdraw from membership at the end of each society year, providing that within at least six months beforehand he has sent a written notice to the board of directors. Those who remove their residence to another commune than those named in article 3, or to one of the outlying parts of a commune mentioned in the same article, shall hold membership in the society up to the end of the society year. Both in the case of withdrawal from membership as well as in the change of residence outside of the territory of the society set forth in article 3, the same responsibility holds as is laid down in article 9. RIGHTS AND DUTIES OP MEMBERS. Art. 6. Each member has the right to request loans, under definitely drawn stipulations, for whatever purpose they are permitted. In the general meetings each member has an equal right to express his opinion or to vote. Members who are not present can be represented by another member on written authority. No member may either for himself or for another cast more than two votes. Every member has the right to ask for a copy of the expenses copied from the balance sheet — ^the profit and loss account. Art. 7. Members are conjointly and individually responsible for all obKgations contracted by the society on the basis of the con- stitution. Art. 8. Those who are members of the society are also individually responsible for all obUgations which were contracted by the society before their admission to membership. Art. 9. In case of death, withdrawal from membership, and change of residence by which the membership is diminished, still the responsibility remains on the heirs and legal successors up to the end of the year following that in which the death, removal, or change of residence took place. THE BOARD OP DIRECTORS. Art. 10. The board of directors of the society shall act through a board of management under the direction of a council of supervision. Art. 11. The board of management shall consist of five members, of whom at least three must reside in the commune of Steen- wikerwold. The first board, as such, shall be made up as follows: Geoige William Stroink, Walter Hartkamp, John Francis Spitzen, and Rev. Anthony Brants; the fifth member of the board shall be nominated at the next following general meeting. They shall remain in office three years; thereafter each year one of the members retires, but he is at once after the first year eligi- ble to reelection unless the general meeting shall decide otherwise. This retirement shall take place one after the other according to the above order. The members of the board shall be chosen by the members of the society, a majority of votes electing. From among their number the board of directors shall choose a president, who shall also be president of the general assembly, and a secretary, whose duty shall be to keep a record of the meetings. In the daily conduct of affairs the board shall be assisted by a managing treasurer or cashier. This officer shall be approved by the general assembly, and he shall receive a certain salary, which shall also be determined by the general assembly. Whenever he, in the judgment of the board of management, does not carry out his duties satisfactorily, he can be suspended by the board. In that case, the general assembly shall be called together within eight days to decide on the suspension or the dismissal of the managing treasurer. The managing treasurer is obliged to give personal or real security to an amotmt of 2,500 francs. He is charged with the duty of keeping the books and the cash according to the direc- tions of the board of managers. For money received he gives his own signed receipt, which must have been countersigned by two members of the board of managers before it shall be binding upon the society. He can, however, give out a provisional receipt of deposit for amounts less than 100 francs. The holder thereof is obliged, however, to exchange the said receipt, under penalty of its being declared void, within 14 days for a properly signed receipt in full. 538 AGBICULTUBAL OOOPEEATION IN EXJEOPB. Discharge of the managing treasurer shall not be permitted until the books and financial statements are examined by an expert and found correct. The expert examiner shall notify the board of directors of the fact. Aht. 12. The manager is obliged to inspect the deliveries of goods by tradesmen, and, further, he must perform all the business committed to him by the board of directors. Art. 13. The board of managers decides concerning the loaning of money and the granting of credit within the limits prescribed therefor by the general assembly after the council of supervision has passed thereon. The board of managers decides how the money which is temporarily not needed shall be invested, checks up the cash account of the managing treasurer or cashier each month, and the board is in duty boimd to take an active part in the conduct of the businesB. More- over, the board represents the society in legal and other matters, attends to the publication of the balance sheets, calls together the general assembly by notifying each member, and sees to it that its resolutions are executed. Art. 14. The board of managers in the exercise of its functions shall be assisted by at least ten councilors. They shall be chosen by a majority of votes; they shall serve for three years, in accordance with the make-up of its number; as far as possible they shall be nomi- nated from the various localities around Steenwikerwold and from the other localities of the communes mentioned in article 3 where mem- bers have their residences. The councilors shall advise the board of managers concerning the granting of credit, and they have to attach their approval to the agreements which must be signed for the society by one of the members of the board of management. Furthermore, they have always the right to make an examination of the books and documents of the society, and it is their duty to convince themselves every three months that all the outstanding money is secured by means of personal or real security. THE OENERAIi ASSEMBLY. Art. 15. The general assembly shall take place once a year. Moreover, general assemblies may be held whenever the board of managers or the council of supervision may deem it necessary, or when at least one-fifth of the members shall make written request for it. The time and place of the general assembly shall be made known to the members by the president by written notice at least eight days previous thereto. In this announcement regarding the meeting of the general assembly it shall also be made known what subjects are to come before it for discussion. Decisions shall be made by a majority of votes. For a modification of this constitution or for a dissolution of the society there must be cast at a meeting a majority of three-fourths of the votes where at least two-thirds of the members are present. Should there not be a sufficient number of members present at this meeting, then a call shall be issued for a new meeting within four weeks. Then — still only for the purpose of the modification of the constitution — with the newly gathered members this shall be decided, but with the distinct understanding that only then by a majority of thi-ee-fourths of the votes that are cast. Art. 16. The general assembly elects and dismisses the board of managers, the council of supervision, and, on the recommendation of the former body, the managing treasurer or cashier; it determines the bonds of the manager, and also the maximum of credit to be granted and the minimum of money that may be taken on deposit; it further decides concerning the amount of annuities and interest to be paid on accounts, and concerning the requirements that are to be collected, purchased, and sold for the members; and finally, it decides in every instance the complaints that are lodged against the governing bodies. THE BUSINESS OS THE SOCIETY. Art. 17. All tratisactions of a speculative nature are to be carefully avoided. The main object is the procuring of the necessary circulating capital for the granting of loans, the acceptance of deposits, the lending of money to the members on good security, and the promotion of the advantage of members by the cooperative purchase and sale of commercial articles. The aim of the society is not to work for the greatest profit; the purpose is to reach out the helping hand to the member the least favored with material wealth. Art. 18. Members are obliged to subscribe for a share in the society to the value of 5 francs. They can pay the said amount, if desired, in five monthly payments of 1 franc. No one may own more than one share in the society. Those who cease to hold membership in the society can receive back the amount of their share within six months. Art. 19. Loans to members of the society can always be granted by the board of managers. The board can advance loans on short time up to 1 year or upon long time up to 10 years. Nonmembers of the society participating in cooperative piu-chase and sale shall pay 3 per cent more than members. Bepayments must be divided as a rule into installments on account, and they must be paid by the borrower to the grantor of the loan. By decision of the general assembly, money can also be accepted and loaned in current account. Art. 20. Loans coming under real security must be supported by an amount of security at least one-third more than the credit granted. Art. 21. The society retains to itself the right at all times, in case of need, to call in its loans after giving four weeks' notice. PROFIT SHARING. Art. 22. AVhenever it appears from the presented balance sheets that there is a balance in profits, it shall be divided as follows: Fifty per cent shall be used for the formation of a fund which shall be used to promote the welfare of the members. The said fund shall remain the absolute possession of the society, so that the member who withdraws from the society has no right to any part of it. As soon as the fund has increased to the amount of the loans to members, on the recommendation of the board of directors, the future amounts can be placed at the disposition of the general assembly. The fund, however, shall never be divided among the members. Should the society be disbanded, then the general assembly shall decide as to the disposition of the said fund and also concerning the manner of its liquidation. Furthermore, 25 per cent of the profits shall be paid into a reserve fund that is established to guard against future losses. As soon as the said reserve fund has increased to an amount of 5,000 francs, then the 25 per cent shall in the same manner be paid into the first- named fund. HOLLAITD. 539 The remainiDg 25 per cent of the profits shall be divided among the shareholders, with this understanding, that never more than 5 per cent per share shall be paid. The remainder, if any, shall be paid into the reserve fund. Regulations for the Management of Cooperative Societies fob the Purchase and Manufacture of Agricultural Rbquikb- MBNTS for FrIBSLAND, HeADCJUARTERS AT LeEUWARDEN. chapter I. Article 1. Under the word "manufacture" (art. 1 of the constitution) shall be understood: (1) The cleaning of grain or seed; (2) the griading and milling of grain and feeding cake; (3) whatever else may be deemed necessary. Art. 2. The purpose shall be (art. 2 of the constitution): Section A: (1) To purchase the first quality of grain and seed, as well as artificial fertilizers or other agricultural necessaries, for general business; (2) to provide all kinds of required goods; (3) to mill various grains into meal after having been properly cleaned of dirt and wastes; (4) to be regularly inspected by the Imperial Agricultural Experiment Station; (5) to levy an increase of at least 1 per cent on the cost of production to cover expenses, wages, etc. Section B: (6) In places throughout Friesland, where at least 15 members reside in the neighborhood, to establish branch depots, as well as at places where there is an established cooperative dairy, having the same minimum number of members, or where such a dairy is about to be established; (7) to rent depots in mountain districts; (8) to place storekeepers there who are desirous of an opportunity to establish a residence in the locality. CHAPTER n. Art. 3. The only condition of membership is that the person joining the society shall ■Write his own signature in the membership register in that place where he resides. Should he move away, then must his name be taken oft the register. Art. 4. For societies (as defined by arts. 35 and 3c of the constitution) the same rule holds as is laid down in article 3, in that there must be subscribed on the register at least the names of the president and secretary of the society; meanwhile, they are obliged to give proof of their authorization either by an examination of the records or by delivery of a signed copy thereof. chapter m. (See art. 16 of the constitution.) Art. 5. The board of directors has control of the purchase of the requirements, assisted by the manager, who shall cooperate with other societies and shall determine the price of goods that shall be charged against the members. Art. 6. Every six months there shall be sent to the members a schedule of existing orders that have been booked and so far as possible directly delivered. Art. 7. Goods can be procured from the storehouse and the factory at Leeuwarden and from the sheds at Wolvega, as well as from the established depots everywhere (as indicated in art. 2 (6), (7), and (8)) at the same prices; or, if paid for, the goods can be delivered by the storekeepers to the purchaser or delivered by the employees in the vicinity of Leeuwarden; or, if paid for, they can be shipped by barge, boat, railway, or tramway to places where there are no established depots. Large or small direct shipments (artificial fertilizers, for example) are most often sent freight on board, since the marketing of carloads is too uncertain. Art. 8. During the delivery of goods all payments can be postponed by the manager, but the furnishing of credit is forbidden. Art. 9. The condition of payment is cash, or at the utmost payment within one month after delivery. Should payment not be made within a month, then arrangement shall be made concerning the amount by a note for the debt, with interest. In order that trouble may be avoided by the administration, the payment for goods taken from depots is strictly for cash. Art. 10. The manager is charged with these duties: (1) The supervision of the receipt of goods; (2) the preparation of samples for inspection; (3) the delivery of goods; (4) the keeping of the books and documents in accordance with commercial methods; (5) the making of payments and the receiving of money; (6) all correspondence; (7) to lay before the management what seems to him to be in the best interests of the society, or what may be communicated to him or asked of him by the members; (8) to establish or provide for depots, with a minimum number of 15 members, where such are desired; (9) to nominate sagacious storekeepers from the active members; (10) all other things which are required of him by or through the board of directors. Art. 11. The duties of storekeepers shall be definitely determined and stipulated, and they shall be instructed in these duties. Art. 12. The manager and the storekeepers shall furnish sureties, who shall be responsible for their business transactions, stipulated before a magistrate; these documents must be retained in the possession of the president. chapter IV. Art. 13. The board of directors meets as often as the president deems it to be necessary. Upon the request of two members of the board the president is compelled to convoke a meeting of the directors. Art. 14. The secretary shall keep the records both of the business management and of the general assembly. Art. 15. The maximum amount of capital is fixed at 300,000 francs. Art. 16. The orders in behalf of the society shall be signed by the manager. Art. 17. The board of directors has control over the monthly balance sheet of the manager, and always decides as to what shall be ordered and handled in the course of trade. Art. 18. The board of directors takes charge of all incoming documents or proposals both of individual members and of the manager. It shall be always prepared for what might come up for consideration in a meeting of the members. Art. 19. The president takes charge_of the valuable papers which the board of directors has accepted. 540 AGEICULTTJEAL COOPEEATION IN EIIBOPE. CHAPTER V. Art. 20. The work of the couBcil of supervision, in strict accordance with the divisions of Chapter V of the constitution, is to provide for the members directly a service compatible with good management, administration, etc. CHAPTER VI. Art. 21. The president shall preside over the meetings of the board of directors, as well as over the meetings of members. Art. 22. Members shall, so far as possible, present at the meetings whatever seems to be of importance both to the members as well as to the society. The roll shall be taken at every meeting. Art. 23. Every member has the right to challenge the business management. Still, he takes upon himself the obligation, if he would do this publicly before the meeting, to make known to the manager the specific charges at least five days before the meeting is to be held, this last being in accordance with article 30 of the constitution. Art. 24. Upon receipt of written request to this effect the president sends word to every member in accordance with the express de- mand. Concerning every subject relating to bad management the vote shall be taken twice, except when the meeting decides otherwise. Art. 25. With the consent of the board of directors, the president has the right at all times to deprive a member of his privileges because of misconduct. chapter vn. (See Chapter VII of the constitution.) Art. 26. An inventory (art. 35(') of the constitution) shall be taken of all goods in stock, as well as of all materials. Their value shall be estimated and made according to their cost value, market value, or appraisement. Art. 27. After all running accounts are received and article 26 is satisfied the net results of the business shall be presented by the manager to the board of directors and council of supervision, in order that accounts may be balanced concerning the business as prescribed by article 35(') of the constitution. Art. 28. In case of a favorable net result the surplus shall be divided as follows: (1) The interest on loans shall be paid; (2) a certain amount shall be charged to offset the decrease in value of a certain class of goods; and (3) the remainder shall be placed in the reserve fund. chapter vm. Art. 29. In aid of the management every member should strive to keep and to return as promptly and in as good condition as possible the empty packing cases and sacks in order to require no unnecessary purchasing of such things. Furthermore, they should be handled as carefully as possible. Art. 30. Upon the recommendation of the board of directors or of at least 10 members of the society the modification of these regulations can be considered in any general assembly. Thus agreed to in the general assembly of March 7, 1911. BY-LAWS COOPERATIVE STEAM DAffiY AT LEEUWARDEN. Section I. The board of directors. The Hague. Article 1. If a member of the board of directors, for any reason whatsoever, ceases to be a member of the society, he at the same time also ceases to be a member of the board of directors. The resignation of the withdrawing director shall be accepted, so long as nothing against the performance of the duties of the office has been laid before the members. Art. 2. The board of directors shall nominate one of its members, or anyone from the society's membership, to be the temporary mana- ger of the manufactory in case of vacancy in the office by default. It also has authority to appoint a temporary manager it deemed advisable. The daily inspection of the manufactory and of its opera- tions shall be regularly and mutually shared by the members of the board of directors and council of supervision. Art. 3. The remuneration, as prescribed by article 34 of the constitution, shall be 150 francs a year. Moreover, the board of directora has the right to include in its account any and all expenses made in behalf of the society. Sec. II. The manager and booiheeper. Art. 4. The daily control of the affairs of the manufactory to its fullest extent is laid upon the manager-bookkeeper or cashier. The business should be done as much as possible in accord with the ideas of the board of directors, and he is obliged in important affairs to seek the advice of the board. Furthermore, he shall carry out his instructions to the best of his understanding as stipulated between him and the members and imtil they are modified. Art. 5. He shall aim to be present in the manufactory as much as possible, especially whenever it is in operation. Should he be prevented from betug there, then he shall give notice of the fact to the president, who shall then take charge of the business as is laid down in article 2. Art. 6. He is in duty bound to examine promptly and carefully all milk that shall be delivered to the manufactory. Art. 7. He shall keep strict account of the quantity of milk delivered by every member, its quality, weight, and fat content, and he shall lay these records before the board of directors at the end of each week. In extraordinary and special cases he shall be obliged to call together the board of directors. HOLLAND. 541 Sec. III. The rights and duties of members. Art. 8. Milk must be delivered by members in the morning before 8 o'clock and in the evening before half past 7 (standard time) at the proper place in the manufactory, in cans fit for transporting milk, which members so desiring may procure through the society at cost price and which may be charged against their account. Members who pledge themselves to deliver their milk at the depot earlier than the time designated shall receive a remuneration therefor which shall be determined by the board of directors and the coimcil of super- vision. If delivery is made after the designated time, the milk shall either be refused or a deduction shall be made in the price of 2 cents per kilogram on account of causing a delay in the busiuess. Art. 9. The exact time for delivery shall be agreed upon between every member and the board of directors, which time shall be noted at the office, and also the time of arrival shall be registered there. For the sake of good order and to make regular and good work possible everyone should aim as much as possible to be present at the manufactory at the designated time. Art. 10. In order that the milk cans may be kept by the members ia a satisfactory condition, after every delivery of milk they should be carefully cleaned with scalding water and should be kept in a cool and clean place. Milk cans which through defects are unfit for the milk carriers may be considered by the board of directors as xmfit for use. If it happens, after having been twice warned, that the cans or covers have not been cleaned with sufficient care, either the milk so delivered shall not be paid for at the full price or it shall be sent back to the place of the offending member. Art. 11. The milk must at milking times in summer as well as when it remains in the stable be kept in the shade as much as possible and shall be removed from the stable as quickly as possible. The milk must be forwarded to the manufactory every milking time and immediately after the milking as quickly as possible, either by water or upon a wagon furnished with springs that is satisfactory to the manager. Art. 12. Members shall receive the buttermilk and whey in proportion to the milk delivered by them in the preceding 12 hours, it being taken back by each one on the first return trip from the delivery of the milk, and, as far as possible, in separate cans. Whoever is negligent in this matter forfeits for that occasion his due amount of buttermilk and whey to the profit of the society. Art. 13. The milk must not be mixed, but shall be delivered to the manufactory just as it comes from the cow. Members are under the general obligation to bestow such care on the milk as is necessary for the preparation of good butter and cheese. Art. 14. In the case of a member who delivers nulk which has been lowered in value either by the addition of water, the removal of cream, or in other manner, or who in any other transaction permits himself to act contrary to the purpose of the society, any further milk delivered by him can be temporarily denied by the board of directors until the following meeting of the members. If satisfactory explanation thereof is not made, then the board of directors has authority to inflict the penalty on any one of the members, in conformity with article 15 of the constitution, or impose a fine ranging from 25 to 500 francs. Art. 15. Members are under the obligation to deliver all the milk of their cows to the manufactory, with the exception of that which they need for raising calves or for domestic use. Art. 16. Fines up to 100 francs, to be paid to the society's profit, may be inflicted for breach of any of the following regulations: It is forbidden to deliver (1) milk from cows which have calved within four days; (2) milk which, on account of the approaching calving time is abnormal; (3) whole Ttiilk that is unfit for use. It is forbidden to deliver except separately (4) milk from sick cows; (5) milk which is not fresh or which for any other cause is unfit for the customary working; (6) milk from market or other cows whose milking places have been irregular; (7) milk taken from cows within the fourth to the ninth day after they have calved; (8) all milk which seems to the contractor somewhat doubtful. Milk mentioned under divisions (4) to (8), inclusive, shall be separately worked and paid for in accordance with the full value of good milk. Art. 17. Milk which has been sent as good milk to the factory, but which can not be worked as good milk, shall be separately worked and paid for accordii^ to its value or shall be returned to the party who sent it. To the manager is left the matter of deciding in such cases the outcome of the transactions. Milk returned that was unfit for use shall not be paid for. In every case direct infor- mation shall be given to the deliverer. Art. 18. In the case of contagious sickness in the family of the member, of his employees, or among his animals, immediate knowl- edge shall be given to the manager, and the milk shaU be handled as laid down in article 16, No. (8). Should the mUk be necessarily destroyed, then whatever loss there may be shall fall upon the member, the milk being paid for upon an equitable basis. Art. 19. Every member who absents himself from a general meeting or who comes late shall have deducted from his or her next ac- cruing milk account as much as 50 cents or sha,ll be deprived of his or her vote as the meeting shall decide. A widow can be represented under written authority given her either by a member or by a son who is of age. Every member, unless he be a director, can only be represented by a member duly authorized. Only one who has a legitimate excuse for having neglected to send his written defense and with the approval of the board of directors can make a speech concerning exemption from the fine. At extraordinary meetings the board of directors do not have the right to pass on the question of the determination of fines. Art. 20. The board of directors has the authority to limit or even to forbid the use of any particular feeding stuff which seems to have a bad effect on the dairy products. Art. 21. The member who keeps more cows than would appear from his business is subject to a fine of 10 guilder per cow above the number reported. Every member is obliged to pay into the reserve fund a paid-up share for every cow added to his herd up to the greatest number he has kept since his name was subscribed to the register. Art. 22. The members of the board of directors are obliged at all times to make an inspection of every member's premises with ref- erence CO Hie condition of the animals, to make a separate examination of every cow's milk, and to inspect the feeding stuffs, the milk cans, and, in short, all things which can have an effect upon the production of pure milk. Art. 23. Members are bound to carry out the suggestions of the managing treasurer or the board of directors as to what can tend to increase the value of the dairy products. Art. 24. The quantity of milk delivered at the manufactory shall be weighed by the person who has been appointed by the board of directors to do so. He shall give a receipt therefor to the person bringing the milk, keeping the serial number of the member who delivers it, the date of its delivery, and the quantity delivered. The value of the milk as certified to shall be determined at the manufactory. 542 AGBICtTLTUEAL COOPERATION IN EUROPE. Abt. 25. The members shall receive on Fridays, at the time and place designated by the board of directors and council of supervision, payment for the value of the milk delivered by them during the preceding week. As a means of determining the value of the milk, the weight and the fat content of the nulk delivered shall be taken separately for every member, in connection with the price of butter on the market at Leeuwarden during the week. Once in four weeks a settlement shall be made of the remainder in proportion to the amount of milk delivered by every member. Art. 26. Members have the right of free entrance into the manufactory whenever it is in operation, just the same aa the members of the board of directors and the council of supervision. The manager, however, has authority to temporarily deny a member the privilege of entrance. As to other persons, no one shall have access to the manufactory without the consent of the managing treasurer. Art. 27. To smoke or to chew tobacco in the manufactory is strictly forbidden. Sec. IV. Definite regulations. Art. 28. Differences at the manufactory between the members of the cooperative society or between the employees of the manu- factory shall be settled by the managing treasurer. The one decided to be in the wrong has the right of appeal to the directors. Art. 29. These regulations can be revised at all times in a regular meeting of members. The proposal to change the regulations may be made by the board of directors or by petition of seven members in writing to the board, and the vote on it by the ineeting shall be by ballot. Thus stipulated at the meeting of members held at Leeuwarden, January 2, 1897, and modified at various meetings thereafter. DENMARK. 543 DENMARK/ COOPERATIVE WHOLESALE SOCIETY. Mr. F. Neii.son, Manager. STATEMKNT. Copenhagen. The cooperative movement in Denmark is a farmer's movement. Besides our distributing societies, we have about 1,150 cooperative dairies, and 38 pig and cattle abattoirs, 1 wholesale society, 1 egg-exporting society, and various societies for exporting live cattle and butter. We have 1,330 distributing societies — as many as there are in England, but not so large. The average turnover of the Cooperative Wholesale Society is about 50,000 crowns or about $14,000. Nearly all the local societies (1,280) are in the country; only 50 are in the towns, and the societies in the towns are not larger than those in the country. This is the great difference between distribution in Denmark and in other countries. Almost all of these societies are members of our wholesale society here, which is a sister society of the Cooperative Wholesale Society of England. SCOPE OF THE COOPERATIVE WHOLESALE SOCIETY. Denmark is divided into 23 districts; and each district elects a member of the board of representatives, which, of course, consists of 23 members. The board of representatives elects a committee of 7 members. Only two of the committee, the chairman and the vice-chairman, devote all of their time to the work of our society. The five other members devote only their spare time to the work. The committee does not buy or sell. It appoints the managers and oversees the general conduct of the business. Our capital is about 8,000,000 crowns. We have a share capital which amounts to 800,000 crowns, a large reserve fund — 4,500,000 crowns, and real property amounting to 3,000,000 crowns. We have various warehouses which have cost us 3,500,000 crowns and on these we add rent of 3,000,000 crowns. This will give you an idea of our financial standing. Then we have a small insurance fund of 400^000 crowns, which we would use in case of the markets going against us. Besides our head office at Copenhagen, we have 11 depots through which we distribute our goods to the various districts. Copenhagen distributes goods for Zeeland. We own several manufacturing establishment including sugar and chocolate works, a tobacco factory, soap works, and a rope factory, each employing about 100 men. Denmark exports so much butter that we manufacture about 70,000,000 pounds of oleomargarine. I do not think it is used so much in any other country as here in Denmark. We make it very carefully, however, and we eat it. DISTRIBUTIVE SOCIETIES. The first two societies were organized in 1886 ; but it was only after 1890 that we had more than 500 societies. To-day we have 1,364. The annual turnover in these societies is now 70,000,000 crowns; and of this seventy millions the societies have bought from us fifty-five millions' worth of goods. They buy practically everything from us. I think we are on the right side when we say that they buy only five or ten million crowns outside of our society. They are under no compulsion, however; they can buy where they like and need not buy from us unless they find that we are the cheapest. The average membership of these 1,364 local societies is 141 members, and the average reserve fund is 2,600 crowns per society. We now have a million and a half kroner and every year brings an increase. We import only manufactured goods for the household. The turnover last year of roasted coffee was 2,500,000 crowns; 556,000 crowns represent chocolate; tobacco, 700,000 crowns; rope, 430,000 crowns; and soap, 900,000 crowns. The oleomargarine work started three months ago, and we expect a large turnover from this. * Information and evidence in Denmark was secured by a subcommittee. . 14174°— S. Doc. 214, 63-1 35 645 546 AGEICULTUEAL COOPEEATION IN EUBOPE. QUESTIONS. Q. This wholesale society is owned by whom ? A. The wholesale society is owned by members of the distributive societies — these number 1,364. Q. Owned by members or by the societies ? A. It is practically the same; the societies are the members. Q. Each society then has shares in the wholesale store ? A. Yes. The share capital is owned by individual societies. Q. What are the conditions of membership of the individual societies ? A. When a society wants to join our society, it must pay on the basis of 100 crowns per 20 members. Q. For 25 members how much ? A. The same as for 40. Q. The annual turnover of this wholesale society is how much ? A. Fifty-five and one-half million crowns. Q. Out of the profits do you first pay dividends on share capital? A. We pay 5 per cent interest on share capital. Q. How much on the patronage ? A. Last year SJ per cent dividend on the turnover. Q. Will you mention the different funds ? A. We have a capital and a reserve fund. One-third of the profits are kept back for a reserve fund until it has reached a certain amount. The two-thirds is returned to the societies as dividends. This reserve fund now amounts to 4,500,000 crowns; and then we have rent interest enough on our societies' buildings, which have cost us 3,500,000 crowns. Q. What is done with this reserve fund? A. We keep it as capital. It goes into stock in trade. Q. Describe the details of your business. A. It is just like an ordinary wholesale business. We send out our price lists and our travelers and we sell at market prices. When we make a profit, we keep it until the general meeting has decided how it shall be disposed of. Q. Do you sell lower than other wholesale houses ? A. No; we sell at the same price. Q. Tell us how you started this store. What was your purpose ? A. It was started here about 30 years ago. At first it was a very small society. The founders started it because they could not buy cheaply, and were not treated as well by the merchants as they should have been. Of course, the merchants looked upon the distributive society with no kindly eyes, and where they could force it to pay high prices, they did. The founders thought it would be best to import for themselves, and this store was opened more than 30 years ago on a small scale; but from the first it has increased, so that to-day our business is the largest in Denmark. Q. Have there ever been any failures? A. No. Various societies have been attempted; the first one started in Jutland and another started here. These two were combined in 1 890, and since then they have run together and have worked much better than before. Q. Does the history of this movement show that it was a great effort to get these societies to federate? A. Yes ; it was at first. It is only within the last five years that practically all of the societies have joined us. Q. Has this society, or have the local societies, anything in the nature of banks ? A. No, we have not; but the packing houses, dairies, and distributive societies, have deliberated on the matter of starting a bank, and it is quite likely that one will be started soon. To-day our money transactions are made through the ordinary commercial banks. I should like to say that it is much more trouble to run a large business than it is to run a small one. In 1888 our gross profit was 2^ per cent; to-day it has risen to 7^ per cent. At the same time, too, our net profit has increased in the same way. It has grown from three-fourths of 1 per cent to more than 5 per cent, and in this connection you wUl remember that we now pay more for wages than we did when we were small. Q. Do you have a savings department ? A. Yes. Q. What interest do you pay ? A. We pay 4^ per cent on savings. Q. The local societies also have savings departments? •A. Some; but only a few. DENMARK. 547 Q. Are these savings departments protected by law? A. Yes; we are not allowed to caU them savings departments. We caU them the loan departments. Q. How do you use the savings deposits ? A. We use them together with our own money to purchase stocks of goods. Q. So you use your own money to run the business; do you ever have to appeal to the banks ? A. It is not necessary to-day. Five years ago we had to appeal to the banks. Q. What is the amount of savings deposits? A. A little less than 3,000,000 crowns. It is only the money we have from friends who believe in our business. COOPERATIVE EGG EXPORT SOCIETY. Mr. C. T. Madsen, Manager. STATEMENT. Copenhagen. The eggs are sent in here from our different stations and upon arrival are sorted, after which they are taken into a chamber and "candled." The bad eggs are rejected, and the good ones are stamped with the trade stamp of the export society, which is registered in Germany, Norway, Denmark, and Sweden. The- eggs are stamped with two small numbers, the first number indicates the station from which the egg came, and the second number the farmer who produced it. By reference to the books it is easy to ascertain whence aU eggs come. The defective eggs are charged up to the account of the farmer who sends them in. If it occurs that bad eggs come from the same person several times, he is first warned and then fined; and if the offense continues he may be expelled from the society. We accept e^s only from our members. When the eggs are packed, they are put into boxes for shipment. There are 1,440 eggs in each box. QUESTIONS. Q. Does the buyer of these eggs know how old they are? A. Well, we call them fresh eggs — our trade mark is the guaranty. They are about a week or 10 days from the farm to the London market. Q. Can you determine the age by the candle ? A. We candle each to see how fresh it is, and it does not matter if an egg is 8 or 10 days old. It all depends on the quality of the egg. Mr. Madsen next conducted the party to the egg pickUng room, and stated : We have here eggs to the value of $30,000. Of course, the quaHty of these eggs is the very best. They are kept in these vats until they are wanted, and then they are crated and shipped. By A Member. What is the preparation ? A. That is a trade secret. Q. WUl they keep indefinitely ? A. No. Q. Do you find that in this solution the yolks settle to one side? A. No; those that settle are not exported. Q. Is there any government inspection? A. None. Q. How long do you keep them here ? A. From 6 to 9 months. Q. Is there any difference in the price of these and fresh eggs? A. Of course, in the spring, fresh eggs are cheap. Q. Does this method take the place of our cold storage? A. Yes; but we have never used the cold-storage system here in Denmark. Q. How many local centers or stations are there ? A. Five hundred and fifty local centers. There are 10 big packing stations similar to this one. Q. How are the eggs collected ? A. Of course every producer is pledged to collect eggs once a day. Once a week at least they are collected and sent out. Q. By individuals ? A. As a rule each center has a collector. Q. At so much per dozen ? 548 AGEICULTUEAL COOPEBATION IN EUKOPE. A. About lialf a cent per dozen. Q. About what per cent of the total output of Danish eggs do you handle ? A. About 20 per cent. Q. Are the eggs bought and sold by weight ? A. They are bought by weight because they are sold by weight. Q. Could you tell us the most popular breeds of chickens ? A. I do not know. Q. Can you tell us the range of prices paid the producers ? A. Of course the producer gets everything, for there is no profit made. Q. That is, the actual producer ? A. We deal, of course, with the centers which manage the business. Q. What is the center able to pay the producer ? A. Last year on the average about 18 cents per dozen. Q. How long have you been in business ? A. Since 1895; about 18 years. Q. Is your business increasing ? A. To start with, in 1895 we had a few hundred members, but now we have something Uke 40,000; The turnover is about £250,000 per year. Q. Do you take any active steps to encourage poultry raising ? A. Yes; we have a competition for the best laying poultry breeds. We pay £80 every year as prizes to the individuals. Q. Prizes are given on the best year's record ? A. The best laying hens will produce something like 240 eggs per year, but I can not give you the exact figures on this subject. The average is about 150 eggs per year. Q. Are you doing anything with reference to poultry feeding? A. Not at the present time. Q. Does your association employ any experts to meet with the farmers and discuss poultry and poultry raising ? A. The State has an expert who is at our service. COOPERATIVE ORGANIZATION. Mr. F. Nielson, Manager Cooperative Wholesale Society. statement. Copenhagen. I am going to give yOu a record of the movement of the cooperative societies in this country. After the crisis of 1880 to 1890, when the best European farmers were pretty nearly failing, the small farmers of Denmark combined to try to build up the decline caused by the banking crisis. On account of the low grain prices, the expenses of agriculture and the price of other foods, meats, bacon, and butter were increasing, and for that reason they were trying to arrange a system of agriculture in this country. It was not possible, on account of the smaU production, to get a good price on butter and eggs, and the means of trans- portation were not good. So everybody manufactured what he liked. For that reason, the farmers endeavored to get better prices for their eggs and other products when put upon the world's niarkets by using such brands as would create a demand in the world's markets. Then they started the cooperative production of butter. This movement was slow on account of the existence of a cooperative system which had been in vogue since bygone days, but which had not shown good results. In 1882 the first cooperative dairy was started, upon such features of the old system as could be adapted to existing conditions. In the course of 10 years the movement had grown so much that in each community aU over the country there was at least one cooperative dairy. It was financed so that the members of the cooperative society were hable only for the amount used for the buildings, machinery, etc., the members giving no cash. The system succeeded in raising prices to the producer, but the members did not rely upon it, because they did not believe that these dairies could produce first-class butter. This was a mistake. The products from the cooperative dairies brought a higher price than the products of the dairies run by the large landowners. . In this way the small farmers were able to receive a better rate of interest on capital invested in their smajl farms than it was possible for the large landowners to realize. It was usually claimed that the cooperative movement should take care of the great capitaHsts of the nation. The Danish movement did not take this view. DENMARK. 549 So, too, the movement had some social mission to fulfill. Before this movement was started the small farmers were dissatisfied and they were not counted for very much. But now the "housemen," as we called them, endeavored to raise their products to the level of those of the large landowners and farmers, and in this way the cooperative movement among the small farmers proved the foundation of the agricultural move- ment throughout the country. Now, what we call the small farmers usually have from 2 to 4 cows, while the larger ones have from 5 to 20. For this reason the movement of cooperation is of great importance to the upbuilding of Danish agriculture, because it is founded on the movement of the small housemen getting together along cooperative lines. Two facts will show you the importance of this movement: Of the net agricultural area of Denmark 15 per cent belongs to large landowners and 85 per cent to small farmers. These 85 per cent have been compelled to raise the grade of their products so that they can compete with the large farmers. This is the real social problem which has been solved by the cooperative movement. You saw at the Egg Exporting Society some of our results. The result of this confidence in the cooperative scheme has been that more farmers have gotten together in cooperative associations and bought feeds, manures, and fertilizers, and the results have all been good. The small farmers get their necessities in this way at the same price at which the large landowners get theirs. QUESTIONS. Q. Your organization is really the result of necessity, and originated with the poorest of the farmers of Denmark, and therefore poverty is not an insurmountable obstacle to cooperation. A. That is just right — you never know what you can do untU you try. Q. What different branches of agriculture are organized ? A. Those dealing in the disposition of butter, eggs and bacon. Selling beef has been tried on the coopera- tive plan several times, but has not shown any profit. The farmers said, "What is the reason that we can not beat the other feUow?" But when they tried it and failed, they said, "What is the use of losing money?" The experiment showed that it could not be done. All of the fertihzer used in Denmark is imported, and one- third of what is used is bought by the cooperative system. Operating farms on the cooperative system has been tried several times, but that has not been successful. Most of the people want to be independent — their own masters. So that form of cooperation probably wiU never be general in this country. Now, another feature of the Cooperative movement is the raising of seeds under the control of agricultural societies and associations. That is to bring about real cooperation between the producer of seeds and the consumer. In this field, the wholesale society, which you visited, has done a great work. Of course it is impossible to say whether it wiU be a good thing or not, for it has just been organized. There is a country across the sea where you make pretty good farm machinery. We tried to get hold of this machinery of yours. The cooperative associations wanted to get it for the farmers at reasonable prices. Now, if you gentlemen who are here to learn something would, in return, try to get your American manufac- turers of machinery in touch with the small farmers here, you would have a fine place in the memory of our people. We have written the manufacturers frequently, but they do not answer A Member. We would like to get in touch with them ourselves. Q. Will you give us a general outline of the relationship of the individual to the local associations and the local to the general? A. So far as the dairy associations are concerned the members of the local associations are compelled to deliver the milk they produce to the dairy for a certain number of years. Q. If he does not, what is the penalty ? A. The member who does not dehver his milk is prosecuted and has to pay a penalty according to the amount of the milk which he has not delivered and which would have brought so much to the dairy. So far as the bacon factories are concerned he has to pay 10 crowns for each pig which he does not deliver. The dairies usually sell their products for export on their own account, but now some of them have gotten together and the company exports butter to England. Q. Is there a rule now that these locals must patronize the central organization ? A. It has never occurred that the local has failed to do what it ought to. Once in a while it happens that a certain farmer does not do so. Q. Does that obligation extend to the buying departments? A. Yes, sir. Q. Is the buying and selling done through the same officials ? A. Yes. Q. Do your central societies sell to the consumers, or sell to some one who reaches the consumer? A. The central organization sells to the local, which distributes to the consumers. 550 AGEIOXJLTUEAL COOPEKATION IN EXJBOPE. Q. Are the farmers' products sold by the central society to what we would call the retailer? A. They are really sold to the wholesale men. There is no commission charged and only the officers receive a compensation. Q. How is cooperation affecting the people in a social way ? I mean, as to social conditions ? A. They have become more prosperous. Q. Has cooperation created a more friendly feeling between the country and the city ? A. The social and economic conditions have improved. In these 25 years the farmers feel a little more independent than before. Still the cities show at some times that they do not like the independence of the farmers ; but now they have found out that the commercial interests of the cities can flourish only when the farmers have money. Q. Has the cooperative system helped to stem the tide of migration from the country to the city? A. I do not think you can say that the movement has stemmed the tide. COOPERATIVE LAW. Statement by Mr. Btjlow. Copenhagen. Apart from credit unions, mutual insurance companies, and, in some measure, savings banks, there is in Danish law no special provision for the treatment of the legal position of cooperative associations. There was a proposal for an act which should deal with the matter. The intention was to regulate the inauguration, operation, and dissolution of these and similar institutions. This proposal was several times put before the Rigsdag Parliament, the last occasion being during the session of 1912-13. It failed, however, to become a law. As a result, the cooperative associations of Denmark now find themselves in a singularly untrammeled position, free from legal control, and to a very large extent their own lawgivers, a position which they very much appreciate. The societies have no obhgations as to registration, pubUcation of rules, or the responsibility of members of the association toward the debts incurred by the union. It may be said that their position is autocratic. As to methods of taxation of cooperative societies the following laws have been passed: LIABLE TO TAXATION. (A) By the treasury. [L. June 8, 1912; sec. 2, Vr. 5, a-/.] The following are hable for payment of tax on income. (a) Joint-stock and other companies in which not all the members or shareholders assume urJimited respon- sibility for the liabiHties of the society or company, unless the profits of the concern are exclusively devoted to benevolent, artistic, scientific, or similar aims. (b) Cooperative supply associations which distribute goods outside the circle of their members. (c) Mutual insurance companies which provide policies that do not participate in the mutual responsi- bilities. {d) Associations which have as objects the making, refining, improving, or selling of products other than those of its members. (e) Associations whose object is the making, refining, or selling of the products of its members at retail. (/) Credit unions, credit institutions, mortgage societies, and savings banks where part of the profits are reserved for founders, guarantors, or shareholders. (B) By the municipality. [L. May 15, 1903; sec. 16.] Joint-stock companies and other limited companies domiciled in Denmark may be taxed by the munici- pality not to exceed 3 per cent per annum, chargeable on the net profits. But if a company can prove that a certain proportion of its income is derived from business operations abroad, its liability for taxation is propor- tionately diminished. The same taxation falls upon supply associations which distribute articles to other than members, mutuai insurance companies providing policies which do not contain a participation in the liabilities of the concern, or which are not under the supervision of the ministry, or which accumulate funds in excess of 200,000 kroner. On the other hand, no society whose object is the working, improving, or selling of the products of its members, even if the business is not absolutely restricted to its members, or which exists for' the purchase of raw materials for its members, is liable for taxation. DENHABE. 551 EXEMPTION FROM TAXATION. [L. May 15, 1903; sec. 20.] Credit unions and credit institutions, the statutes of which are confirmed according to laWj and savings banks operating under the provisions of the savings-bank act of May 28, 1880, with the exception of those which fall under section 11 of the act mentioned. MORTGAGE CREDIT. Statement by Mr. H. B. Hajby. Copenhagen. Suppose a farmer possesses a farm and is in need of ready cash. He goes to the credit asso'ciation and signs a contract in which he acknowledges that he owes the money which the bank has paid to him under this contract. This is just what you call a mortgage. Then the institution issues a mortgage. The farmer gets his money issued in notes that he is able to sell anywhere. For a 4^ per cent mortgage the price is now 2^ per cent, and in this way he gets his cash, and he pays for this money a fixed annual or semiannual payment to the credit institution. That is sixty-five hundredths per cent per annum plus the interest on the mortgage of ii per cent. One-half per cent is for amortization of the debt. In the course of 60 years the loan is repaid. The loans are issued in series, and they are collected in such a way that the loan taker is responsible for the whole series. A farmer can not borrow more than 60 per cent of the valuation of his property. SMALL HOLDERS AND GOVERNMENT LOANS. Statement by Mr. Waage. Copenhagen. I shall give you a report of the small farmers' credit in this country under the control of the Government and aided by government loans. In 1899 the Government called this system into existence; first, for a period of 5 years, and later renewed for 5 or 10 years. The State has put at the disposal of the people who want to start small farms some millions of crowns ; it started with two millions, and now it has been increased to four milHons per year at 3 per cent. Only the very small farmers can get this State credit. During the period this has been working about 6,000 small farms have been established. The borrower has to fulfill some obligations, too, to get the loan, because the State is not giving the money away, and it wants some security that the money does not go to the wrong quarter. The idea was to assist the small farmer, who had previously worked for other people, to build his own home and become independent. Therefore the law says that those who have worked at least four years for other farmers can enter applications for a loan. The loan the Government grants is 90 per cent of the valuation, so you see it is a higher rate of loan than the small landowner can get from the credit associatioli. When entering the application for such a loan the borrower has to follow it with a declaration from the head of the' community where he, lives regarding the land he wants to cultivate, and at the same time make declaration that he is a sober, economical, and hard-working man; otherwise he will not get anything. Each county has a commission that first investigates the application, and later, when the application is approved, dictates how the money shall be spent. The small farms established in this way must be occupied individually. The land can not be cultivated in a cooperative way. The owner of the ground may sell or dispose of it, but it must continue as a small farm. When a man sells it to somebody else, the new owner may keep the State loan if his qualifications are such that he, if he applied, would get the loan himself. The Government has had to take over only a very few small farms because the owners failed to fulfill their obligations. The loans the Government has granted in this way amount to 25,000,000 crowns; of this amount the Government has lost practically only 10,000 crowns. CREDIT INSTITUTIONS. Evidence of Mr. Cohn, Statistician Department of Agriculture. Copenhagen. Q. I understand that money is loaned generally on mortgages as in the Landschaf ten of Germany. Is it true that you have credit associations loaning money on personal credit or security ? 552 AGKIOULrUBAL COOPEEATION IN BUEOPE. A, Such associations do not exist. Q. Have you any Raiffeisen or Schulze-Delitzsch banks ? A. No; we have something similar and I will ask Mr. Waage to explain it to you. There have been some unions here like the Raiffeisen. Q. But you have none now ? A. In 1898 the Government gave a State loan of 5,000,000 crowns to such unions. Q. Did they meet with much success ? A. The farmers who got these loans appreciated them, but they had only 5,000,000 crowns and it did not amount to much. Q. As I understand the Raiffeisen system, it is to get the farmers to use their own deposits. Was it the case that here the farmers are not the depositing people ? A. The farmers used only the State deposit, not their own, and not for this purpose. They existed for only a few years. In 1908 a new act was passed stating that the loan had to be repaid in the course of a couple of years. Q. How do the farmers in Denmark get personal credit 1 A. Through the savings banks, the ordinary banks. Q. Is there any credit need among the farmers which is not being met ? A. No ; the opinion is that nothing more is necessary and that is why the Raiffeisen system is not now in operation in Denmark. Q. What rate can the farmers get at the present time on deposits ? A. Four per cent. Q. What is the rate that he has to pay for loans ? A. About 5 per cent. Savings banks are very well developed in this country. We have about 500, as I remember, but most of them are small. In nearly every vdlage you will find a savings bank. Q. Is it your opuiion then that it is the high development of the savings banks which has made the other unnecessary? A. Yes, I think so ; because these savings banks loan money to farmers in their own neighborhoods. Q. Who owns the stock in the savings banks ? A. The people put savings into the savings banks and other local people borrow it. Q. Are they joint-stock companies? A. It is no company; it is an institution called the savings bank. Q. Is it founded by the Government ? A. No ; it is philanthropic. Q. Who controls the savings banks ? A. There is an inspector from the Government. Q. You have directors ? A. Yes. Q. Who appoiuts the directors? A. It varies. In some cases it is a self-perpetuating body. Q. Can you tell us when they began ? A. In the beginniag of the nineteenth century. Q. Who founded them ? A. Well, the first man who founded them in this country was Mr. Holstein. Q. Will you tell me what gave rise to them ? A. I think it was a movement coming from Germany. There were savings banks in Germany before that time. Q. Are the depositors represented on the managing board — that is, on the board of directors ? A. No; that is not the case. There are different savings banks, but in most of them the directors nominate themselves. Q. Are they private institutions ? A. Yes. Q. What is done with the proceeds of the institutions — that is, the profits ? A. Well, most of it goes to the reserve fund and when that amounts to 5 per cent they begin to devote it to benevolent purposes. Q. If we wished to estabhsh one of these institutions, how would we go about it ? A. Well, I suppose the way it is done here. Some of the farmers would desire to found a savings bank and then they would make rules for it. DKNMABK. 553 Q. You do not regard them as owning that bank ? A. No; they are simply managing it. Q. It is regarded as a satisfactory institution for the public welfare? A. Yes; there are only a few of them owned by companies. Q. Is it a private institution of a public character for the public welfare ? A. Yes ; it started quite as a philanthropic institution, but in the last 20 or 30 years, many of the big banks have savings departments where they take in savings, too. Q. Do any of the profits ever get back to the depositors ? A. No. Q. Does it tend to keep the price of money low? A. I think it is a very good system, because the money which is earned in a certain place stays there. It is loaned out to the members where it is received, against personal credit; that is, most of it. Part of it is loaned on mortgages, but most on personal security. Q. How do you get these ofl&cers to begin with and to whom are they responsible ? A. It all started as charity. In the beginning they received no salaries at all. Of course, it has developed, although in the very small ones they pay hardly any salary at all. Q. Are these officers supervised? A. Yes; there has been one inspector since 1880. He travels around in the summer time looking into them. They have to send accounts to this inspector once every year. Q. These banks are established under some law? A. Yes. Q. Could we get a copy of that ? A. Yes; it was enacted the 28th of May, 1880. Q. Do you make anything in the nature of stated advances to farmers? A. Yes; just what Mr. Waage mentioned a httle while ago. It was not only for smaU farmers, but for all farmers. Q. I mean at the present time, you have no advances from the Government for large farmers ? A. No. Q. Is it as easy for farmers to secure personal credit as it is for people in the city ? A. Of course; I think it is about the same — just about as easy. Q. Have you a system of government guaranty of registration of land titles? A. Yes. Q. Something like the Glerman "Groundbook"? A. Yes. Q. Do you regard this as essential? A. Yes. Q. Does the Government guarantee your title ? A. Yes; if you have it put into the book. Q. If, by any chance, any mistake is made in the entry who is responsbUe? A. The officer who makes the mistake. Q. Does the farmer suffer ? A. I never heard of its happening, so can not say. Q. In connection with these advances to small farmers, do they encourage any movement from the city to the farm? A. No; I can not say so. Q. Does the Government raise the funds for these loans by bonds or general taxation ? A. That is rather complicated and hard to explain. Q. The question I wish to ask is. Do they issue bonds against these small holdings ? A. No; they do not do that. Q. What is the attitude of large farmers toward this small-holdings scheme? A. The large farmers, of course, are interested to see the increase in population in the country, that they may have more hands for work. Q. You h&,ve already stated that the city people were favorable to it ? A. Of course; the small holdings do not affect the city in any way. Q. This policy is one which meets with the favor of the city ? A. I do not thiak that the city is interested in a general way at all. 554 AGBICULTUEAL COOPERATION IN EXJEOPE. AGRICULTURAL ORGANIZATIONS. Mk. H. C. Larsen. statement. Copenhagen. The Danish agricultural organization is pretty complicated. The first institution founded was the Royal Agricultural Society, in 1869. Since the year 1900 the small agricultural societies have been organized in the country, and now there are 120, with a total of 92,000 members. In 1900 the new movement of the " housemen" and the small farmers became definite, and there are now 850 unions throughout the country. These unions cooperate in their respective communities, and then they again cooperate with the central head office here in Copenhagen. There has been an act passed enabling the Government to give annually 1,000,000 crowns for the purpose of improving the cattle, horses, hogs, sheep, etc., under certain provisions. Then we have a kind of organiza- tion where a certain number of farmers get together and employ a man who tests and controls the cows so far as the milk production is concerned, and keeps the books. This movement began in 1895, and at present we have 350 such small associations over the country. They are rapidly increasing in number. They have 12,000 members to-day and 530 associations, and these members own 225,000 cows. QUESTIONS. Q. Are these cattle registered ? A. Yes. Q. What is the name ? A. They have to be registered but not pedigreed. Q. Is there any organization to procure for the farmers better transportation facilities or better freight rates 1 A. Most of the railways belong to the Government, and for that reason it is not regarded as necessary to appeal for better freight rates. That is a question which is settled by Parliament. Q. Do you have any government power which has to do with the regulation of rates ? A. It is under the minister of pubHc works, and the rate is fixed by the Parliament. All private roads are controlled by the board of public works. The steamship connection is very important. The steamships compete with the raUroads. Then we have export rates. Under my department we made a contract with the biggest steamship company here to have regular steamers go to England. In this way we have a fairly cheap rate for all exports to England. Q. That does not apply to other countries ? A. No; because that is our biggest market. We have secured a fixed rai^e to England. Q. Does the department of public works have any control of rates of private concerns ? A. Yes. Q. In certain parts of America stronger young men and women have left the farms so rapidly that it has affected the population. Has that taken place in any rural part of Denmark ? A. Well, you see that Copenhagen is a very large town compared to the whole country — between one-fourth and one-fifth of the whole population is here in this city. Q. Is the fondness of the people for their homes so great as to keep the people in the country as a rule 1 A. Yes; I think so. Q. That is, they stay in the country ? A. Yes — when they do not go to America. Q. To be specific — can a penalty be enforced against a member for not complying with the rules of an organization — does the law give you that authority ? A. No. Q. We have States where you can make a contract to deliver a product which does not exist. We have other States where you can make that contract and dehver the product five years hence, and that contract can be enforced. Can you enforce the contract for the delivery of stuff that does not exist ? A. If you promise to do so. Q. What proportion of your legislature are farmers ? A. I can not tell you exactly — 60 or 70 per cent, or about two-thirds of the House of Commons. Q. We understood that the people of Denmark regarded the welfare of the small holders as a great financial assistance, therefore the whole country rejoiced at the prosperity of the small farmer. Now, this afternoon when we asked if the people of Copenhagen looked with favor upon this general policy we got the opinion that they did not care. Is not a great policy like that of importance to the citizens of Copenhagen? In our coun- DENMABK. 555 try we think the welfare of the farmers as of great national importance. Is it true that the citizens of Copen- hagen have no concern as to the welfare of the farmers ? A. I do not think that it was said in that way; it was just the opposite. The citizens of the city began to understand that their welfare was in close connection with the welfare of the country. When the farmer has money, aU of the country has money. Q. When the social and normal standards of the country are high, those of the nations are high ? A. Yes. Q. But could you say that Copenhagen could continue to flourish without the wealth of the country ? A. No, no. Q. I take it for granted that these societies were chartered by the Government. Of course, in our country they could sue and be sued. Now, are such societies chartered? And can they sue and be sued? A. Yes. You need to be incorporated to be responsible. PEOPLE'S HIGH SCHOOL. Statement by the President. Lyngbt (neak Copenhagen). These schools are for grown up young men and women. The first school was erected in 1844 in a coimtry belonging to Denmark at that time. The object of this school is to make the young people fond of their coun- try, their language, and their history. What they learn here is the history of Denmark, the history of her men, their own language and literature. More than anything else they learn the history of Norway and of Denmark. The young men come from November until April and the young women from May to August; the young men pay 200 crowns for five months, something like $11 per month. They board and live right here. The young women pay less. Then we have a fund from the Government, the condition being that the school must have a certain number of pupils and follow certain regulations. The Government pays something for the pupils who can not afford it; altogether the Government grants these schools, of which there are 80, 350,000 crowns per year. In this school we now have 64 pupils and 20 have pensions from the State. These pensions make it possible for all to attend the school. The pension is given only to those who could not otherwise afford to come. We have 80 of these schools in Denmark, with an attendance of about 8,000 pupils per year, about equally divided between boys and girls. Now, the young ladies wUl show on the map where they live. [At this point each of the young ladies of the school marched up to the big map of Europe hung on the wall and pointed out her individual home.] Every part of Denmark is represented. The age of the pupils who attend this school is from 22 to 25 years. TWO TYPICAL COOPERATIVE STORES. Report op a Sttboommittee. store at slan6erup, about 20 miles from copenhagen. Copenhagen. Slangerup is a village having a population of between 700 and 800. It is in the midst of a fertile farming country in which the average individual holding is from 90 to 100 acres, rather larger than the average hold- ing in Denmark. The store was started in 1905 with 50 members. It now has 350 members, drawn both from town and country. There are no qualifications for membership apart from the payment of a membership fee of 10 crowns. Members' liability is unlimited. The capital invested was 20,000 crowns, all of which was provided by an ordinary bank at 4J per cent interest. This liability has been reduced to 15,000 crowns. Stock to the value of 25,000 crowns was carried, and so far as the committee could determine after a complete inspection of the entire premises, both stock and premises were in a most satisfactory condition of order, repair, and cleanliness. The officers consisted of a board of five directors elected at an annual meeting of the shareholders, and a manager responsible to the directors. The manager was provided with a home. He supplied aU the help required (four assistants) and gave his entire services for 5 per cent of the gross receipts. These receipts in 1912 amounted ta 120,000 crowns, and after expenses were paid and a reserve fund provided for, a profit of 10 per cent was returned to the shareholders on the basis of their purchases. Of this profit, 4,000 crowns were received from-the Cooperative Wholesale -Society, ~-Th«- law-forbids-the- society -t not been transferred to the bank, it is only the local board to which defaults are to be reported. If the latter should find that the borrower does not fulfill all his obligations in question, the whole loan may be called in with 12 weeks' notice, and, failing payment, the local board may, after previous public notification pursuant to the act concerning compulsory sales by public auction, without previous citation before the commission of arbitrators, and without legal proceedings and judgment, cause the agricultural plot with its mortgaged buildings to be sold by public auction. If the due interest and the reimbursements are not paid at the fixed time, the local board has the same right of satisfaction, in which case, however, the notice of repayment is reduced to six weeks. Sec. 30. If the amounts of loans granted to a municipality pursuant to section 25 have not within two years been used in purchasiiig properties intended to be parceled out into agricultural plots and in building on same, the remaining amounts are to be repaid to the bank. If a mimicipality has purchased a property and parceled it out into agricultural plots, and if before the expiration of the above period all the parcels have not been sold to persons witiout capital, qualified according to section 12, the portion of the loan intended to fall i» the parcels not sold, inclusive of the estimated value of the buildings to be erected, shall also be repaid to the bank, unless the board oi directors of the bank should in certain cases permit a longer respite. If the municipality should receive extraordinary reimbuisementi from its borrowers, such reimbursements must be paid into the bank. NOBWAY. 597 8x0. 31. At the expiration of each year the local board ahall, agreeably to the proposals made by the working committee and pursuant to a form drawn up by the board of directors of the bank, make a report to the bank on the loan operations during the past year. LOANS TO PERSONS WTTHOUT CAPITAL POH THE PTJHPOSE OP ERECTING, COMPLETING, OR ACQTJIRrNG DWELLINGS. Sec 32. All Norwegian citizens, men or women, without capital have a right to obtain loans for the purpose of acquiring dwellings according to the present act. By, persons without capital are meant persons who will want an essential help in money to be able to acquire dwellings according to this act and who, pursuant to the opinion of the working committee, mentioned in section 34, do not possess a fortune of more than 2,000 kroner in the towns and in the parts of rural districts built over in the manner of towns, and of 1,500 kroner in rural districts otherwise. Loans for workmen's dwellings are only granted on condition that tiie dwellings are calculated to accomodate two households at the most, that the site which has served as a basis at the stipulation of the loan value does not exceed 1 acre, and that the value stipulated in accordance with section 35, without deducting the capitalized rental of the site, does not exceed 5,000 kroner in the towns and in the parts of rural districts built over in the manner of towns and 3,000 kroner in rural districts otherwise, and in such a way that the appraised site, also without deduction of the capitalized rental, has no greater value than 1,500 kroner in the towns and in the parts of rural districts built over in the manner of towns and 1,000 kroner in rural districts otherwise. The board of directors of the bank has to decide whether, pursuant to the above provision, some part of a rural district is to be regarded as built over in the maimer of towns. In the rural districts the site, if belonging to the borrower, is to be valued and registered separately. In all cases the limits of the site shall be distinctly marked out. Loans for dwellings on rented ground can only be granted if the term of lease is stipulated in such, a way that it does not or can not expire without the consent of the bank and the guaranteeing municipality before the term fixed for the repayment of the loan. Sec. 33. In addition to municipal guaranty the bank is to have mortgage on the property in question, including the buildings on same and their simi insured. Sec 34. In each municipality the local board shall elect a working committee, pursuant to the rules contained in section 14, without however, applying in the towns the regulation relative to the representation by farmers or freeholders on the committee. In rural munici- palities the local board may decide that the committee, mentioned in section 14, shall act as working committee with regard to loans to be granted to persons without capital for the erecting of workmen's dwellings according to the present act. Instructions for the working committee are to be drawn up by the local board and to be submitted to the approbation of the board of directors of the bank. Sec. 35. When a person without capital wishes to obtain a loan for the purpose of erecting, acquiring, or completing a dwelling of his own, he shall remit to the chairman of the working committee his application for loan, addressed to the bank and conformably to a schedule drawn up by the directors of the bank. If the loan is required for the purpose of erecting or completing a dwelling, the appli- cation must be accompanied by a plan of the building work and an estimate of costs. The property is thereafter to be surveyed and apraised by the members of the working committee as has been fixed in section 17. The appraisers have also to go through the plan of the building and to appraise the latter pursuant to the plan approved of. The amounts of these valuations with deduction, in case the plot is leased, of twenty-five times the amount of the annual ground rent constitute the loan value of the property. Sec. 36 (pursuant to act of Aug. 8, 1908). The working committee shall remit to the local board the application for loan and the valuation document, accompanied by the opinions of the committee as to how far and for what amount the loan applied for ought to be guaranteed by the municipality. The local board shall thereafter decide for what amount the municipality will be a guarantor over against the bank, and also whether they make it a condition for undertaking the guaranty that the bank shall request first mortgage, or, if not first, then with what priority. No loan must exceed nine-tenths of the loan value nor nine-tenths of the actual purchase price, with the addition of the estimated value of the buildings intended to be erected, stipulated in pursuance of section 35. The total amount of a loan must never exceed 2,500 kroner in the towns and in rural districts built over in the manner of towns and 2,000 kroner in rural districts otherwise. , Loans without municipal guaranty shall not exceed five-tenths of the loan value nor five-tenths of the actual purchase price, with the addition of the estimated value of the buildings intended to be erected, stipulated in pursuance of section 35. Sec. 37. As soon as the local board has resolved that the municipality will guarantee the whole loan applied for, or part of it, and the applicant in the latter case declares that he, even after the reduction made, desires to obtain the loan, the chairman of the working committee shall send in to the bank the application for the loan, with the opinions of the working committee, the valuation document, and the resolution of guaranty of the local board. Against a mortgage bond duly registered and recorded, the bank will pay the amount of the loan granted to the municipal cashier or to some other person nominated for this purpose by the local board, who, again, will pay over the sum borrowed to the borrower by the order of the chairman of the working committee. Particulars of the regulations regarding the disbursement of the loans will be given by the local board. Sec 38. As long as the bank's loan is not entirely repaid, the borrower shall be bound to keep the mortgaged buildings in repair and to keep them insured to their full value in a fire insurance company approved by the board of directors of the bank, as well as to treat the soil appertaining to the buildings and their appurtenances properly. The chairman of the working committee shall superintend the observance of these precepts. Should he find that the borrower does not act up to these engagements he shall report it to the local board and the directors of the bank. The latter may then, conformably to the provisions of section 8, call in the entire loan, which should always be done in such cases when it is demanded by the local board. LOANS TO BUILDING SOCIETIES AND TO MUNICIPALITIES POR THE PURPOSE OP ERECTING DWELLINGS FOR PERSONS WITHOUT CAPITAL. Sec. 39. Building societies having for their object to procure for persons without capital homes of their own and whose by-laws as well as plans for construction, alienation, or lease of such dwellings are sanctioned by the King may, against municipal guaranty, obtain loans from the bank for the purpose of erecting dwellings for such purpose. A municipality may also obtain loans from the bank for the purpose of erecting such dweUings itself, conformably to plans for the construction, alienation, or lease of the buildings sanctioned by the King. The provisions under section 32 shall be applicable as to the size of the dweUings, their appraised value, and the area of their sites. The dweUings can only be transferred or let to persons qualified according to section 32. The municipality shaU every year send in to the board of directors of the bank a special report, couched pursuant to detailed regu- latinnn ii(nT>n1 the use of the loans in Question and the disDosal of the dwelUnerS erected by means of these loanS. 598 AGRICULTURAL COOPBRAOTON IN EUROl'Si. GENEKAL PROVISIONS. Sec. 40. If, in case of death, the agricultural plot should pass into other hands than those of the surviving spouse or an heir, who is declared by the working committee to be qualified for taking over the plot, the municipality concerned may withdraw the guaranty for a loan incumbent on the plot according to chapter 2 or 3 of the present act, or the bank may recall the loan with six month.s' notice^ or, failing payment, may enforce the recovery of the loan according to the provisions under section 8 and section 29. The same rule shall be applicable if the plot should be purchased agreeably to allodial right. Sec. 41. If an owner of a plot has obtained a loan under this present act, he can not obtain a new loan on the same plot. If, how- ever, in case of the owner's death, the surviving spouse or an heir will take over the plot, an additional loan may, conformably to the rules of loans in the chapters 2 and 3 of this act, be granted for the purpose of paying wholly or partly the amount which the spouse or the heir has to pay for taking over the plot. A similar additional loan may also be granted in consequence of the increase in value which an agri- ciiltxual plot has obtained thereby that ground, previously uncultivated, has been cultivated, provided such cultivation has taken place without contribution from public funds. Sec. 42. The remuneration accorded for valuations under this act shall not exceed 9 kroner for each valuation. Such payment shall within this limit be fixed through a regulation drawn up by the directors of the bank and shall be paid by the applicant in question. The fee which the chairman of the working committee is to have for his work according to this act shall be fixed by the local board concerned and be paid by the municipality. Sec 43 (pursuant to act of Feb. 13, 1905). No public fees shall be paid for public transactions occasioned by the first acquisition of agricultural plots and workmen's dwellings and by the mortgaging of same according to this act, and the deeds of transfer, etc., requisite for such acquisition shall be exempt from stamp duty. The costs which a municipality has to pay on account of the apportionment of the land tax and which, under chapter 3 of the present act, are required to establish agricultural plots for workmen, shall be refunded by the borrower concerned as regards plots acqvEred by per- sons without capital as their property. The bank or the municipality must not let the borrowers pay the expenses incurred by the man- agement of the loan money and the settling of the loans. Sec. 44. Every person entitled according to this act to obtain a loan may, through the chairman of the working committee, request a copy of the act and of the forms, regulations, and instructions drawn up pursuant to the act. Sec. 45 (pursuant to act of May 24, 1907). A municipality can stand a guaranty for loans according to this act (townships only accord- ing to sections 4 and 5) the amount of which must not, at one and the same time, exceed 150,000 kroner for a rural municipality and 100,000 kroner for a township, however, so that larger municipalities are allowed, with royal assent, to undertake guaranty for higher amounts. From the amounts above mentioned shall be deducted the sums which the niunicipalities interested, at any time, may have bor- rowed from the fund for purchase of land or the house loan fund. Sec. 46. The present act shall take effect on the 1st day of October, 1903. SPAIN. 599 SPAIN. AGRICULTURAL CREDIT AND COOPERATION IN SPAIN. I. INTRODUCTION. Although Spain is preeminently an agricultural country, which imder the Roman Empire supported a population of 166 persons per square mile, there are at present only 100 persons to the square mile. Its total area is 126,000,000 acres, of which 90 per cent are devoted to agriculture, being seven and one-half times less than the area of farm lands in the United States. The population of Spain (20,000,000) is only four and one-haK times less than the population of the United States. Over 16,000,000 acres are devoted to grain raising and 40,000,000 acres (31 per cent) are being exten- sively cultivated, but only 2,160,000 acres (2 per cent) are under intensive cultivation. About 7,548,000 acres are planted in vineyards and orchards, and 12,280,000 acres (10 per cent) are iu woods and brush. The largest part of the area is in pasture land (41 per cent), and 10 per cent of the area is absolutely sterile. One may see at a glance that Spanish territory is very little developed. The coimtry is dry, hot, and sunshiny, with little afforestation, and not much rainfalls, and it loses a large part of what rain it does enjoy by floods, and for this reason has to depend for its best results in agriculture upon irrigation and deep plowing, which makes the earth spongy and retentive of moisture. Iehigatton. The immediate vicinity of the rivers was irrigated by the Romans and the Moors centuries ago by simply diverting the water from the mountain streams and rivers of the Pyrenees in the north and the Sierra Nevada in the south into artificial channels, and thence into irrigating ditches. However, only about 2 per cent of the farm lands of Spain have been brought under irrigation in a period of 2,000 years. The reason why they have not extended their irrigation system farther away from the river banks is owing to the expensive char- acter of the construction necessary and the lack of funds available for performing such work. The northwest Provinces, and especially Galicia, and Asturias, have a better distribution of moisture and are the main cattle-raising regions. The central portion of the country, including both old and new Castile, are only good for grain raising, having only about 8 inches of rain in the spring of the year, which is just suffi- cient to give the grain a good start. Estremadura, bordering Portugal, and the Andalusian Provinces have some large and extensive farms where modern machinery is being used with good results, and the same treat- ment should be applied to La Mancha, in the plains of Castile. The Basque Provinces and upper Aragon are hilly and have a fair amount of moisture, but lower Aragon, Huesca, Cataluriia, and Mediterranean coast Prov- inces all have to depend upon irrigation for their best results. The same is so generally of the whole south of Spain, and wherever the proper distribution of moisture has been provided a very high production has been obtained by intensive cultivation. The rugged parts of the country are devoted to fruit raising, vineyards, almond trees, olives, figs, etc. ' InfoTmation and evidence in Spain was secured by a subcommittee and is presented as a continuous report. The territory visited included: Barcelona, Lerida, Tarragona, Castellon, Valencia, Albacete, Madrid, Zaragoza, Huesca, and Jaca. The authorities on rural credits personally interviewed were: His excellency Senor Don Fermin Calbeton, at present minister from Spain to the Vatican in Rome, and formerly minister of agriculture, his excellency El Vizconde de Eza, president of the National Asso- ciation of Farmers of Spain, who had previously presented a plan for agricultural credit, Sefior Don Eduardo Gullon, royal delegate in charge of the positos of Spain, and Senor Don Jose Zulueta, deputy to the Cortes, and author of a special rural credit plan. The same people were consulted concerning production, distribution, and rural organization, and in addition the following: United States Consul General Henry H. Morgan, Calle Mallorca, 234 Pral. ; V. Pras. F. W. Trowbridge, Los Riegos y Fruerzas del Ebro, S. A.; Ing. Auxiliar, SeHor Jaime Nonell-Comas, department of plant hygiene; Senor Don Eusevio Bertrand, member of Parliament, Prop. La Ricarda; El Marquis de Camps, senator and forestry engineer, Catalunia; Senor Don Jose Zulueta, member of Parliament, farmer, Province of Catalunia; all of Barcelona, Spain. El Conde de Montornes, senator and manufacturer of fertilizer, president of Citrus Fruit Growers' Federation; Prof. Martin-Alonzo, Antonio, in charge of the agricultural experiment station of Valencia; Senor Don Luis Leon Duran, agriculturist of the Irrigation Society; Senor Don Carlos Soulon-Francech, secretary of the Citrus Fruit Growers' Fed- eration; all of Valencia, Spain. United States consul at Madrid, Frederick T. F. Dumont, 9 Lealtad, information on public roads in Spain; El Marquis de la Frontera, secretary of the National Cattle Raisers' Association of Spain; El Vizconde de Eza, president of the National Agricultural Association of Spain; royal delegate of positos and Senator, Senor Don Francesco Gullon; Senor Don Jose Cascon, "Ing. Agronomo,"- Palencia; all of Madrid. 601 602 AGKICULTTJEAL COOPERATION IN EUBOPB. Everywhere there is a great deal of money needed to carry on the operations as they should be carried on to effect economy in Spain. Large sums are needed to establish irrigation in most sections, and farming in the grain district could be done on a large scale with modern machinery to make it pay. It is discouraging to the poor tenant farmers in Castile, for they can only get a very meager return for their labor according to the agricultural methods which have always prevailed there, and which are still in vogue owing to lack of capital with which to buy modern machinery and to carry on farming in a progressive manner. Hard as they may work, little good can result from their efforts, so long as what little rain does faU flows away in floods before it can soak into the soil. If they could have traction plowing, the greater portion of the moisture might be retained and the cost of the work lessened. In the irrigated districts the people are not lazy, for they can see a reasonable reward for their efforts — ^not so in the dry sections. Much of the land is held in large estates, the owners of which hardly ever see it, depend- ing upon managers to farm or rent the land. The tenants and small farmers have had little means with which to carry on the operations or to adopt modern methods. Money is scarce in Spain, especially in the country. About the only, way for Spain to progress in agriculture is to get more money behind its operations, but the question is how to get money and where to get it from. It is not a question of farm labor by hand, but rather of great irrigation works and modem machine methods of cultivation. Need foe Ageicultural Ceedit. His excellency El Vizconde de Eza, a great farmer himself and conversant with agricultural conditions in aU parts of the world, believes that the Bank of Spain should be required to furnish the money and coordinate system of regional banks established to link together to supervise and assist the local credit societies which already exist under the nam6 of "Los Positos" and "Cajas Rurales," etc. Senor Don Firmin Calbeton, former minister of agriculture, maintains that private banks can be induced to furnish the capital, and he has studied the other European systems of agricultural credit and looked carefully into the present requirements of Spain. In his proposed law, which is included in this report, he provides for a central bank, called "Institute Nacional," at the head of a system of regional banks, which in turn are over the present system of local credit societies, which are also described under the head of "Existing credit institutions," in Spain. The interesting feature for us in the United States of the agricultural credit situation in Spain is the careful study which the Spanish Government has made at close range of the systems of agricultural credit in the other European countries and the systematic way in which it has gone about investigating its own requirements. It has attacked the problem in a scientific way from its own viewpoint, keeping in mind: 1. The existing institutions providing for rural credit. 2. Opinion of those affected in aU parts of its own country. 3. The best and latest practice in other countries. Peoduction. The same tendency which is noticable in Italy may be observed in Spain to take advantage of the good climatic conditions and to put the land under intensive cultivation through the use of a proper distribution of moisture, chemical fertilizers, scientific crop rotation, employment of leguminous plants, and ^icultural machinery. Wherever such methods have been adopted the yields are extremely high in Spain. In Part VI of this report some idea is given of the extent to which the Spanish farmers have brought up their production, and the rate of progress is very rapid at the present time. Distribution. There are several reasons why the farmers of Spain have found it to their advantage to improve their methods of distributing farm produce. Among them may be mentioned: 1 . The close proximity of the great markets of Great Britain and the Continent. 2. The earlier seasons in Spain, which enables it to demand the highest prices, because it can furnish the markets with earher produce than any other country in Europe. 3. The direct railroad connections with the north and the closer proximity with the continental market gives Spain an advantage over northern Africa. Part VII of this report sets forth some of the improvements which have been made in distribution ana marketing. Two of the largest farmers and fruit growers' associations in Spain — the Cattle Raisers' Associa- tion and the Citrus Fruit Growers' Federation — are among the most important in Europe. SPAIN. 603 Rural Organization. Although Spain is one of the last countries in Europe to adopt a proper system of rural organization, it has within the last few years accomplished a great deal in this direction. The basis of its system is found in the "Sindicatos Agricolas," which correspond to the "Syndicats Agricoles" of France, and which have devel- oped along the same lines. From these "Sindicatos Agricolas" and under their protection and guidance there have been estabUshed mutual insurance associations, agricultural credit societies, provident societies, etc. The local associations have been federated and coordinated with very successful results, particularly in the citrous-fruit region of Valencia. The "syndicatos" were origin?lly estabUshed to purchase the requirements of the farmers in a collective manner so as to take advantage of wholesale rates, and they have always carried on an active propaganda for the general improvement of agriculture and the betterment of the condition of the farmers. Much of the progress accomplished in Spain has been due to the activity of the department of agriculture, which has established excellent schools in many of the Provinces, and the professors from the department are continually engaged in bringing the knowledge of modern methods to the attention of the humblest farmers. n. RURAL CREDIT INSTITUTIONS IN SPAIN. There are at the present time in Spain over 6,530 local institutions, recognized by the State under the law of sindicatos, which furnish agricultural credit to the farmer. They are known and distinguished as follows: Positos, distributed largely over the south and central Provinces 3, 530 Syndicatos agricolas, distributed over all the Provinces 1, 559 Cajas rurales, distributed over the north and eastern Provinces 384 Cameras agricolas, distributed over the Mediterranean coast 100 Associaciones de Labradores, mostly in Aragon 85 Mascellaneous associations, generally distributed 872 Capital is limited in amount and devoted mainly to short-time individual loans for productive purposes. The positos had over $14,000,000 out in loans last year, averaging $60 each, the number of loans being 239,276, and the rate of interest 6 per cent annually. Assuming that the other 3,000 associations were render- ing a similar accommodation, the corresponding number of loans would be 204,000 of $60 each, amounting to $12,240,000. The total number of loans then would be 443,276, and if they averaged $60 their entire amount would be $26,596,560. There are 3,400,000 farms in Spain, so only 1 out of 8 farms could be accommodated from the above-described sources. Long-time credit — Central lanks. — The Land Mortgage Bank of Spain (Banco Hipotecario) and the Bank of Spain (Banco de Espana), etc., are authorized by law to furnish rural credit, the former on land-mortgage security, at an interest rate not to exceed 6 per cent, and the latter on personal guaranty with two responsible signatures, for both long and short time periods, at an interest of 5 per cent (notaries' fees, etc., amount to 2 per cent more). The Bank of Spain is so exacting about the guarantors that the few loans that have been granted have all gone to very large proprietors or to associations and the small farmers have received prac- ' tically no service whatever. The mortgage bank has in circulation 290,696 bonds of 500 pesetas, valued at 145,348,000 pesetas, and also 910 bonds of 100 pesetas, amounting to 91,000 pesetas. The total is equivalent to $26,178,000. On December 31, 1911, it had 545 loans, amounting to 18,763,700 pesetas for the year, and a total to date of 153,788,024 pesetas. Repayment had been made of 6,958,070 pesetas during the year and 146,829,954 pesetas to date. Land had been acquired through foreclosure since 1872 valued at 925,305 pesetas. The bank has a fund of 25,000 pesetas available for short-time loans to farmers. The profits for this year amounted to 2,330,225.68 pesetas. They were distributed as follows: 6 per cent dividend distributed to shareholders ^i 350, 000 Reserve fund 116, 511 Divided among the board of directors 86, 371 3 per cent extra dividends to the shareholders 675, 000 Divided among the administration staff 15> 546 Balance forward 86, 796 9 per cent total dividend on the stock. The obligatory reserve fund at the end of 1911 was 4, 677, 177 Special reserve fund ^^i ^^ 604 AGBIOULTTJBAL OOOPBRATIOir IN BUKOPE. Amount loaned from 1873 to 1911: Pe»etM. Rural 130,000,000 Urban - 192,139,279 The amount of the loans for the year 1911: Rural - 5,713,250 Urban 11,646 450 Average amount loaned, 34,400 pesetas. It win be noted that the operations of the bank were profitable and that the distribution of profits was made in a conservative manner, that the proportion of loans to the farmers was small compared to those in the cities, and that the amount of the loans being over $6,000 each would indicate that they were made to large proprietors. Table oj annual amortization. Cost of taking out a loan. Payments required for: Per cent. 10-year period 12.98 20-year period '. 8.22 30-year period 6. 53 40-year period 5. 82 50-year period 5. 44 Property inspection is made by El Banco Hipotecario and charged for in the proportion of 100 pesetas for a 20,000-peseta loan; 200 pesetas for a 100,000-peseta loan. Stamps Registration certificate. Real-estate tax Notary for registration. . Percentage of loans. Amount of loan. 2,500 10.00 15.00 31.25 2.60 58.85 2.32 5,000 15.00 21.50 52.00 5.00 103. 50 2.07 Exclusive of notaries' charges. The notaries' fees are even greater than the summation of the above charges. OtJier sources of mortgage credit. — In 1902 there were 44,944 land holdings in Spain mortgaged for 320,686,683 pesetas, and out of 29,994 mortgages only 1,511 were recognized by law, the amount of each loan being about 4,000 pesetas, these recognized mortgages totaling 6,005,797 pesetas. There were 314,680,286 pesetas loaned on 28,483 conventional mortgages (private agreements), the average amount of each being 11,000 pesetas. The amount of mortgages on rural property was 172,016,942 pesetas; the amount of mortgages on urban property was 148,369,441 pesetas. During this same year (1902) the mortgage bank loaned a total of 7,302,700 pesetas, of which 4,447,750 were on urban property and 2,854,950 pesetas were on rural property, which represents less than one-sixtieth of the total amount of outstanding mortgages on rural property in Spain. In 1894 only 2,700,000 pesetas were canceled on "pacto de retro" (when the property is sold to the lender for less than its value, with the understanding that the deed is to be canceled when the loan is repaid) out of 14,200,000 pesetas loaned in this way. There were 5,589 land mortgages bearing 6 per cent interest, amounting to 19,500,000 pesetas, and 11,744 credit operations, amounting to 114,800,000 pesetas, performed in a year, of which about one-sixth were long- term loans. Savings-hank deposits in 1910. — During the year 419,553,879 pesetas were deposited in savings banks, being an amount of 21 pesetas per inhabitant, compared to 122 francs in England and France, 130 in Switzerland, 102 in Italy, and 325 in Prussia. This shows how little saving has been done in Spain, and consequently how difficult it is to secure capital in credit associations from among the members. Estimated investment in Spain in 1910. — Foreign capital, 3,000,000,000 pesetas; Spanish capital, 3,500,000,000 pesetas; total, $1,170,000,000. Defects in the present system: (a) The greatest defect in both the long-time and short-time rural credit is the lack of capital available for this purpose. (6) The intricate formahty and considerable expense required in taking out loans, particularly on mortgage, is prohibitive for the small farmer. (c) There is a lack of coordination and supervision over the local credit associations. (d) Too large a proportion of the loans are being made at present by private parties without proper super- vision, resulting in usury. SPAIN. 606 Efforts and methods for reform. — The several inquiries, studies, and proposed plans for agricultural credit which have been instituted by the Government and submitted by leading individuals and associations, and a consideration of the systems which are working successfully in other countries, public hearings, conventions, and discussions in the "syndicatos," "cameras agricolas," etc., discussion through the press, and special inves- tigation by the Institute of Social Reforms, have brought about an expression of pubUc opinion which has finally resulted in the framing of biUs which have been enacted into laws for the improvement of rural credit facilities. Some of the things which have actually been accomplished by the laws already passed are — (a) Existing local credit societies have been reorganized to meet present-day requirements. (6) Burdensome taxes have been removed from the operations of rural credit associations. (c) The formalities required in taking out loans have been simplified and the expense reduced. id) Interest rates have been lowered and brought under control. Proposed law for agricultural credit. — The excellent results accomplished by the Institute of Social Eeform which is a bureau of the department of agriculture, led the minister to believe that a similar institution for agricultural credit might be equally successful. The proposed law provides for such an institution, to fulfill the following purposes : (a) To undertake the reorganization of the local rural credit associations now in existence, with a view to making them meet existing needs. (b) To encourage the formation of regional and special agricultural banks through which the local societies may be coordinated, directed, protected, assisted, and financed. (c) To provide for the securing of funds and the investment of the surplus for all local and regional banks. (d) To simplify the method of procedure in taking out both long and short time loans, and to regulate, within reasonable limits, the-interest rates and fees on loans to farmers. (e) To standardize bookkeeping and other business methods, to safeguard all operations against loss, and to exercise general supervision over the whole agricultural credit system. (f) To encourage private initiative and provide for the autonomous operation of aU local associations (special by-laws for local societies to meet their individual conditions), but reserving the right to have them aU supervised and controlled in a general way by a central institution. Existing Institutions. (1) El Banco de Espana: The National Bank of Issue, subsidized by the State, and authorized by law to provide "personal credit," guaranteed by two signatures. (2) El Banco Hipotecario: The Land-Mortgage Bank of Spain, allowed the exclusive privilege of issuing "land-mortgage bonds." (3) Private land-mortgage institutions. El Banco de Leon XIII and El Hogar Espanol, can not issue bonds, but may loan to the local credit societies, on mortgage guaranty. (4) Las cameras agricolas: Formed under the law of June 30, 1887, and authorized by law of November 14, 1890, to form savings and insurance associations (Cajas de Ahorros), mutual loan societies (Montes de Piedad), homes for the aged and infirm (Casas de Soccoro) . (5) Los sindicatos agricolos: Cooperative agricultural purchasing associations, exempt from taxation and import duty on agricultural supplies, and authorized by the law of January 28, 1906, to establish: Rural Credit Societies (Cajas Eurales), Banks (Bancos), Local Credit Associations (Positos), and other sim.Uar credit associa- tions (Sociedades), for the purpose of furnishing credit to the membership of such "Sindicatos." (6) Los positos, and cajas rurales: The direct sources of agricultural credit in each rural community of Spain, some Provinces having one form of these institutions whereas others have the other form. (7) Miscellaneous credit institutions: Bancos populares, of the Luzzatti type, and Schulze Delitzsch, and Raiffeisen type banks. There are various other credit institutions in different parts of the country known by a great number of different names but they are all capable of being classified under the above seven headings. The sindicatos, cameras agricolas, positos, and cajas rurales, are the local credit institutions. The Bank of Spain, and the land-mortgage banks do not afford much service to the average small farmer, but they are of considerable benefit to the very large proprietors, and help to finance the local credit institutions. BANK OF SPAIN. The Bank of Spain was authorized by law of May 13, 1902, to extend personal credit to farmers guaranteed by two responsible signatures, (guarantors). Owing to differences in the several regions of the realm it was found necessary to require much greater formalities in some localities than in others. Around about Madrid (La Mancha), in Andalusia, and in Estremadura, it is relatively easier for the farmers to borrow what funds they 606 AGRICULTURAL COOPBRATIOX IX EUROPE. need, because of their wealth and importance (holders of large estates), whereas in other regions, where the land is subdivided into small holdings, the bank can not be certain of the responsibility of those who ask for loans, and is obliged to refuse them. The sindicatos, which are treated in the same manner as are individuals by the bank, have like difficulty to secure loans from it unless they are well known by the bank's officials in the provincial branches (Succursales). In such Provinces as Badajoz, bordering Portugal, which is the dairying section of Spain, even the tenant farmers operate in a large way and are known to be responsible. They have received excellent service from the Bank of Spain because of the well known responsibility of the guarantors in that region. In Leon, for example, there being no cajas rurales, through which the bank might be assured of the responsibility of -borrowers, they can get no credit from it, although there are many responsible persons there, who wish to borrow. The Bank of Spain makes loans at 4J per cent to farmers who can furnish satisfactory guaranty, and another one-half per cent is added for taxes. When these loans are made through the cajas rurales, li to 2 per cent more have to be added for expenses, bringing the interest up to 6i or 7 per cent. The expense of taking out loans directly is rarely less than 7 per cent, because of the notaries' fees, etc., which have to be paid by the individual. The Bank of Spain, having branches in the several Provinces and being the bank of issue and subsidized by the State, really ought to furnish the capital for an agricultural credit system, as recommended by his excel- lency El Vizconde de Eza. LAND-MORTGAGE BANK OF SPAIN.' This bank, founded December 2, 1872, was authorized by article 23 of the law to perform the following operations : 1. To loan on properly registered real estate up to one-half of its appraised valuation on first mortgage guaranty, repayable over a long period in annuities or six-month periods, or for shorter periods with or without amortization. 2. To acquire mortgage bonds, the guaranty for which meets the requirements of the preceding article. 3. To make loans to town councils and legally authorized deputations for contracting loans, up to the amount specified, even without a mortgage guaranty, provided the repayment is secured by a tax or impost set forth in the authorization. 4. To acquire for discount notes or bonds against Provinces or towns according to the conditions set forth in the preceding article. 5. To make loans to the public treasury. 6. To issue, in virtue of the operation already enumerated, a sum equal to the amount of outstanding loans, mortgage bonds or other obligations repayable at fixed dates, or by "lottery." When entitled "first" or "prize" bonds they are payable on return to the bank at sight. 7. To negotiate the above-mentioned "mortgage bonds" or "debentures" and to loan on similar ones. The capital is preferably to be invested in the manner above indicated. Under article 24 the bank is also authorized — 1 . To receive deposits of all kinds of money value, whether cash, notes, warehouse receipts, or bonds, and to allow the depositors "current account" for the amount of their deposits and to furnish pass books or receipt books specially prepared for the purpose of enabling them to keep track of their accounts. 2. To employ fund deposited on "current account" for loans, preferably issuing their own bonds against these loans or else Government bonds, and also to employ such funds in discounting bills of exchange. 3. To take charge of the investment of State funds, such as those from the collection of taxes and duties, and to take charge of the movement of Government bonds as the service may require. 4. To manage by administration, or through renting, properties or establishments of the State, Provinces, towns, corporations, or private individuals. Under authority of article 25 the bank may perform all commercial operations which have as an object the promotion and encouragement of agriculture, mining, or building construction, opening credit accounts for the purpose with such societies as the Government may approve for any of these operations. However, there must always be a mortgage or other positive guaranty which is easily convertible into cash. The exact details con- cerning the bank's relationship to the above-mentioned operations are finally determined by its own board of directors. ' These are the regulations from the by-laws of the Banco Hipotecario which most closely relate to agricultural credit. A mere readuig shows that this bank was created to loan in large amounts and the loans to be employed in important works of reform, but not to satisfy the needs of the small farmers. Considering the obstacles, requirements, and prohibitions that such loans demand and the legal formahty m taking them out with the fearful consequences of foreclosure, one may clearly see how unlikely the small farmer is to take advantage of the facilities afforded by such a bank. SPAIN. 607 By article 26 the bank shall receive annually from its debtors — 1. Interest at the same rate as is paid on the "bonds" issued against the loan guaranties on each loan. 2. As a commission and for expenses, a sum not to exceed six-tenths of 1 per cent annually. The Gov- ernment may increase this sum or percentage upon petition from the bank, setting forth a just cause therefor, and with the approval of the first council of the Government. 3. For amortization, such an amount as the duration of the loan may requu-e. Article 28. Borrowers may repay to the bank the amount of their loans whenever they like, or they may repay part at a time, but the partial payment must be in some multiple of 250 pesetas and according to the other regulations established by the constitution. The repayments may be made in cash, mortgage bonds, or debentures at their nominal value and pertaining to the same year and series as those issued against the loan which they repay. The borrowers in such cases have to pay the indenmity fixed by the board of directors, which may not, however, exceed 3 per cent of the loan. Article 29. The bank shall employ for retiring its outstanding bonds every year the sum paid in by borrowers to amortize their loans. Article 30. The capital, interest, and mortgage-bond prizes have as a special guaranty, without the need of any other, all the other mortgage guaranties on the bank's operation and also all rights which have been ceded to the bank. Article 31. The debentures or mortgage bonds, whether payable to bearer or to a definite person, are legal tender, and the courts will uphold any purchaser of them in recovering the principal and interest from the bank at their maturity. Article 32. Whenever the bank shall have in its power pubhc property or merchantable bonds as a guaranty for an unpaid debt, it may, when the same become due, sell such property or bond in the manner provided by the law. Article 33. "When a mortgage loan falls due, or any fraction thereof, with interest, and when it is not paid as agreed, the bank shall notify the debtor in writing. Unless he pays within the extra time allowed by law the bank may get a court order for a temporary posses- sion of the real estate in question (restraint). When the court shall become convinced of the legitimacy of the debt and the failure to pay it, such court shall issue an order demanding payment or surrender of the property to the bank. This order must be complied with within 15 days of the date thereof. A note is made in the registry of titles on the date of issue of the court order citing the "restraint" against the property. After the 15 days the bank may collect rents due and to become due and the income from the operations of the property (farm), using the income first toward covering the cost of maintenance and operation and applying the balance to the repayment of the debt. The bank, with the agreement of the debtor, may continue collecting the debt from the gross proceeds of the property, or propose after a time, even without the debtor's agreement, the dispossession of the latter (foreclosure) and the satisfaction of the loan in the manner provided for by law. (See the following article.) When the bank holds bonds or other collateral, property of the debtor, it may deduct their value from the amount of the outstanding part of the loan and proceed to the recovery of the balance as follows: Article 34. If the regular conduct of the bank's business would suffer by the failure of immediate payment of the loan on its maturity in the judgment of the bank's directors, they ma,y apply for a court order authorizing foreclosure. In such case the proceedings of article 33 may be omitted and the proceeds of sale applied to the satisfaction of the debt (summary procedure). The court, when satisfied that the debt is legitimate and unpaid, proceeds at once to advertise the property for sale in the Official Gazette and at the same time in several local newspapers for a period of 15 days, also serving notice on the debtor through one of the clerks of the court. The sale is conducted like any voluntary auction, except that it must conform to the regulation of the law covering "foreclosure," which restricts the price at which the property may be "struck off." With the consent of both parties, the appraised value of the property taken on the date of commence- ment of the loan or a new valuation by experts may be agreed upon as the selling price. Should the debtor pay the loan prior to date of sale, the proceedings are suspended; otherwise the judge orders the sale to proceed and the debt to be satisfied. With the proceeds of the sale payment is made as follows: The sum due the bank, with interest to date of sale, cost of the sale and dispossession (foreclosure), also 3 per cent on the amount of the loan, goes to the bank as an extra. Article 35. The "restraint," or in case of "foreclosure" according to the provisions of the two preceding articles, may not be suspended unless the request comes from a prior mortgage holder, but not for the death of the debtor nor because of the insolvency of the owner of the property. When the property has been sold under foreclosure, the purchaser shall pay the bank the entire amount legally due to it in satisfaction of the law within eight days, the balance going to the court, which will distribute it as the law requires. Of course any credits like bonds or other collateral which the debtor may have had on deposit at the bank and which have been used to cover part of the amount due on the loan are deducted and only the balance may be claimed by the bank in case of foreclosure. Article 36. When the mortgaged property changes ownership, the new proprietor assumes all obligations for the mortgage and is bound to fulfill every one of the provisions, just the same as the original contractor of the loan. The new proprietor must notify the bank of his purchase within 15 days; and failing to do so, he will be held liable to foreclosure in the manner set forth in the preceding article. Article 37. The Government hearing the approval of its supreme council in full, hereby approve the constitution of the Land-Mortgage Bank of Spain (El Banco Hipothecario) and will resolve such doubts and questions as may come up as it goes into operation. Extra article. The provisions of this law are applicable to all other establishments for land-mortgage credit which may be formed. EXTEACTS FROM THE BY-LAWS OF THE BANCO HIPOTECAEIO (OCT. 12, 1875). Article 2. The objects of the bank are — 6. To loan on first mortgage to proprietors of real estate in Spain, the property being duly recorded in the bureau of deeds, and the amount of the loan not to exceed one-half the maximum value of the land and repayable in annuities or payments every six months, either for short or long periods of time and with or without amortization. A first mortgage being defined as a loan guaranty by means of which all previous mortgages against the land have been satisfied. 7. To acquire (guaranteed) securities with a preexisting mortgage guaranty which are in the condition referred to in the preceding article. 8. To issue against the previously mentioned securities mortgage bonds maturing in short or long periods of time, said mortgage bonds not to exceed the value of outstanding loans, and which may be used as "primas" or "prize" bonds in the lottery. Article 8. The bank may perform any financial operations calculated to encourage and promote agriculture, mining, and building con- struction, and it nia,y open for this purpose credit accounts with such societies as the Government may authorize or with corporations or 608 AGEICULTUKAL COOPERATION IN EUROPE. syndicates and with inflividuals; always secured, however, with first-class collateral or mortgages which may be easily and quickly con- verted into cash. The time on debentures or bonds may not exceed three years. However, for certain operations under slightly diSering conditions from those governing mortgage loans the bank is empowered to issue "special bonds" of a duration not to exceed five years. Article 9. The bank may, prior to making loans, issue "temporary bonds" not to exceed 4,000,000 pesetas ($800,000), to be used in the class of operations indicated in article 8. ' Article 73. To secure a loan, the bank must be furnished with a mortgage on real estate valued at at least twice the amount thereof. If there exists other mortgages of prior date the only way to get the loan will be to deposit with the bank sufficient collateral to cover the amount of said mortgages, together with its corresponding interest, so that the bank may be in a position to pay off such prior mortgages. The bank may grant a loan even though there be a "quitrent" or "easement" or other perpetual right against the property to be mort- gaged, but the amount of the loan may not exceed half the balance in valuation after deducting the sum of the "quitrent" or "easement." A loan may also be made by the bank even when there are other claims against the property, providing such claims be assigned to the bank, or in case they are legally removed. Article 76. Loans on vineyards, woodland, and such other improved property as owes its value partly to destructible adjuncts of the soU shall be for amounts not exceeding a third of the extra value added to half the valuation of the soil by such improvements. Example: Land worth 200 pesetas and having improvements valued at 300 pesetas more per acre, would be entitled to a loan equivalent to 100 pesetas for the land and 100 pesetas more for the improvements; total, 200 pesetas per acre. Pine woods may only be mortgaged for half the value of the lands on which they stand, for they may disappear from them by fire. Buildings to be used in manufacturing or for industrial purposes will only be admitted at such a value as they would have were the purpose for which they were constructed abandoned (even less than intrinsic value). Article 77. The following will not be admitted: Undivided properties, except where all the coowners consent individually and col- lectively to the mortgage, or farms from which the productive part is separated, unless the proprietor of the productive part consents to come under the mortgage. Article 78. Only such property will be accepted as a mortgage guaranty as will produce dependable and nonperishable products or a reliable income. EL BANCO DE LEON XIII AND EL HOGAK ESPANOL, ETC. Private banks like those above referred to have rendered a considerable service to the farmers of Spam, particularly the funds which they furnish to the siadicatos, cameras, positos, and cajas rurales. The Leon XIII, situated in Aragon, and established by the initiative of the archbishop of Zaragoza, is rehgious in character, but has done much to serve the farmer. It has estabhshed cajas rurales in many communities and furnished them with funds. It carries on an active and intelUgent propaganda work. El Hogar Espanol, a society in Madrid for furnishing loans on land mortgage credit, has rendered a con- siderable service to large property holders and to some societies, but is of almost no use to small farmers. Los Montes de Piedad de Leon y Cordoba. In the Provinces of Leon and of Cordoba, the positos, not hav- ing been remodeled, an attempt has been made to implant agricultural credit on a small scale through institu- tions of this character. They perform the same kind of operations that are furnished by cajas rurales in other localities. La Caja de Socorro de Crespo Rascon, one of the most important of these banks, in Salamanca, with a capital of over 3,000,000 pesetas, loans at 2^ per cent on amounts under 2,500 pesetas, and at 3 per cent for loans exceed- ing that amount. It provides for the Province of Salamanca and also for two towns in the Proviace of Avila. The 2^ per cent loans may be secm-ed the same day as apphed for, and the larger ones within a week of appli- cation. CHAMBERS OF AGRICULTURE. Authorized by royal decree November 14, 1890, they include permanent associations established by Spanish citizens in conformity with the law of January 30, 1887. Their purpose is to further and encourage the interest of agriculture. After haviag their constitutions approved by the minister of agriculture, they have, m addition to the rights granted by the former law, the following: (a) The right to found mutual loan associations (montepios) and savings and insurance associatioM (cajas de ahorros y de seguros), workingmen's clubs (centres), and homes for the aged and infirm (casas de Buccoro) . (b) The right to acquire, sell, or rent to their members machinery, implements, fertihzers, seeds, cattle, and to guarantee payment of purchases of these objects which may be made directly by their members. (c) Right to receive deposits of all kinds, to take funds on current accounts, to collect letters of credit, and to sell agricultural products for the account of their members. (d) To contract loans facilitating the operations above mentioned. Their responsibility shall be fixed by their by-laws and when not so fixed it shall rest upon the board of directors, individually and collectively. SPAIN. 609 LOS SINDICATOS AGRICOLOS. These cooperative agricultural purchasing associations under Article I are defined in the law of January 28, 1906, and may create and encourage institutions for agricultural credit requiring personal, depository, or mortgage guaranty, whether such institutions be internal to their own association (subsidiary) or as sepa- rate cajas, bancos, or positos, to facilitate the credit operations of their own members. Article III. Sindicatos agricolos shall enjoy the lawful rights granted by article 38 of the Civil Code. Article VI. The formation, modification, combination, and dissolution of sindicatos agricolos shall be exempt from stamp tax or other Government imposts. Contracts and agreements, into which they may enter, will, likewise, be exempt from taxation. Institutions for insurance, credit, or cooperation formed by sindicatos and founded on mutuality shall only be taxed on such dividends as may be dis- tributed among their members. Article VII. Any import duty paid on agricultural machinery, tools, fertilizers, seeds, or cattle for improving the breed shall be rebated or returned upon petition to the minister of farming, previously requiring the approval of the minister of agriculture. LOS POSITOS. Corresponding to I Monti Frumentari of Italy, these were for centuries the only institutions performing any kind of banking function in Spain and have served as the basis for the development of the several agricultural credit systems of Europe. They were established by Justinian during the Roman Empire as the collecting stations and depositories for the tribute consisting of grain, wine, and olive oil which was exacted from the Provinces. They fell into disuse with the decline of Rome, but were reestablished in Spain by Ferdinand and Isabella to furnish subsistence for the poor and to store the surplus agricultural products in time of plenty. These products were given out in times of famine and the excess was frequently sold for export and the pro- ceeds loaned to the municipalities and the State for public works such as the building of schools, roads, and other public institutions and the furnishing of armament for the wars. Philip II of Spain reorganized and in- creased the numbers of the positos in 1555 and so vigorously did he press their development that by 1558, there were 12,000 of them in the Peninsula. When their reserves began to pile up, they became an attraction to the public authorities and the provin- cial governors used them to "corner the grain market" and sold at high prices. In 1584 Philip II ordered an investigation which brought out many abuses in their management and resulted in their reorganization. They loaned out their stores of grain, etc., and received as a guaranty sUver and other forms of money, and these loans were repayable by money, labor, or more agricultural produce. The municipahties and Provinces, as well as the State, did not always pay back the loans which they had received from the positos, and for this reason their successful operation was often hampered; however, they were of great benefit to the agricultural classes. They contributed about $1,000,000, toward the establishment of El Banco de San Carlos, the first mercantile bank of Spain. They preferred to loan grain and be repaid in cash. In 1792, owing to the wars and bad management, their number had fallen to 8,082, of which 2,833 were under private management and 5,249 under the Crown (positos reales). They had on hand at this time a value in cash of 55,105,419 reales, in wheat 9,452,692 reales, oats and barley 577,795 reales. Later, in 1800, they had on hand a total value of 104,000,000 pesetas, 84,000,000 pesetas being in cash and 18,000,000 in wheat, which was worth at that time 9 pesetas per Spanish bushel. In 1850, after the French invasion, no positos nor any sign of their wealth could be found. The French army was very much interested in finding them, but upon inquiry of the Spanish they were told that during the last 50 years the wealth of the positos, being in the form of stored grain, had aU been eaten by the rats. During this period laws had been passed by the Spanish Cortes ordering the investigation and reorganization of the positos, royal orders going out in 1840, 1854, and 1855 to the provincial governors. In 1861 another royal order was issued, instructing the provincial governors to find out what had become of the missing positos and their capital, and in 1863 another investigation developed the fact that there were stiU in existence 3,418 positos, possessing a capital amounting to 190,000,000 reales (about 47,000,000 pesetas). Apparenjtly they had suffered from too much reform legislation and too much loaning to the Government and the municipalities, as well as exploitation by the authorities by whom they were administered. They have been quite skeptical about Government inter- vention and legislation calculated to reform them ever since. The positos were again ordered to be reorganized by the law of June 26, 1877, and once more in 1885, at which date they were found to have on hand. 21,000,000 pesetas in cash and 40,000,000 pesetas worth of grain, a total of 61,000,000 pesetas, wheat being worth at this time about $1 per bushel. By a law of January 23, 1906, the positos were put under the minister of agriculture and authorized to make loans to the farmers for the purpose of enabling them to buy fertilizers, machinery, etc., and to act as rural credit societies (cajas rurales) . They were allowed by the law to advance 50 per cent in cash on the value of grain deposited in their 14174°— S. Doc. 214, 63-1 39 610 AGEIOXJLTUBAL COOPERATION IN EUROPE. storerooms by the farmers. Interest was restricted to 4 per cent, and the time of the loan to one year with the privilege of extending it to two years, a guarantor being required to sign the note with each borrower. In 1907 there were 3,460 positos, distributed over 38 Provinces and having a cash and grain capital of 94,000,000 pesetas. It was estimated at this time that there were 206,396,617 pesetas of Government loans and advances to municipalities which had not yet been paid back to them. In 1910 the number of positos had slightly increased, there being 3,520, but their funds were estimated as 90,000,333.88 pesetas, a slight decrease. The positos are considered to be a good foundation on which to buUd up a system of agricultural credit, because they can be easily modernized to act as local credit societies. They already know the farmers in their respective communities, and these farmers have confidence in them on account of their traditions and history. Since the minister of agriculture took them under supervision they have been gradually undergoing a reforma- tion that is making them meet the present-day needs for agricultural credit. What they lack is a proper coordinating system through regional banks and some central institution. CAJAS ETIEALES. An order of the regent dated September 30, 1841, authorized the formation of laborers' banks (cajas rurales), suggesting that the positos be transformed and modernized. A commission appointed for this pur- pose reported the following recommendations : 1. That the necessary capital be secured by private subscriptions and by making available the property (real estate) of the positos. 2. That the taxes on the wealth of the positos be apphed to their capital instead of being collected by the Government. 3. That the management of such banks be entirely in the hands of their stockholders and free from interference by the State. 4. That loan privileges be given preferably to those who had most contributed toward the capital of such banks, with precedence to the smallest borrowers. 5. That an annual statement, with declaration of dividends (which might be used to augment the capital) be required. 6. That shares be of a value equal to 250 pesetas in towns and 100 pesetas in villages. Up to this time positos had hardly been supplying a satisfactory rural credit service; they had — (a) Furnished seed grain at planting time to all the farmers, who repaid it with interest after the harvest. (&) Given out grain, olive oil, and wine to the poor and the wayfarers, and to sufferers from famine. (c) Stored the surplus products and disposed of them for the owners (means of communication' being limited it was difl&cult for the farmers to market their grain, . and the positos aided them in doing so, for they could operate on a larger scale). (d) Furnished loans to the Government and municipalities. (e) Received grants of land and gifts of goods from philanthropic persons. Xf) Served as depositories for the collection of taxes when the latter were in the form of grain, etc., and otherwise assisted the town councils (aynintamientos). As transportation facilities improved the farmers felt more need of funds with which to buy fertilizers, tools, etc., and less necessity for a community granary. When tradition stood in the way of changing the positos to the form of banks, or when there were no positos in a locality, cajas rurales were formed to make loans to farmers. The law of June 26, 1877, authorized the positos to continue as they were but to make loans for agricul- tural purposes as long as there were any funds in the treasuries, at 6 per cent per annum, precedence being given to the smaller borrowers. A permanent commission was created by the law of 1877, to govern positos, and was empowered to transform the grain in their treasuries into cash, or vice versa, as the exigencies of the locality might require. AU lands and other properties owned by the positos, except their warehouses, granaries, and offices, were ordered sold at pubHc auction and the proceeds placed in their treasury. Payment was to be made by the purchasers, in nine installments over a period of 10 years, the balance of the debt drawing 6 per cent interest. Cash was required in payment, when the posito was on a cash basis, otherwise grain was acceptable. The town councUs were allowed to administer and run the positos, one-sixth of the profit of their operation going to them (ayuntamientos), to cover the cost of management, the other five-sixths of the profit went to swell the reserve. The members of the town council were held individually and collectively responsible for all loans made by them. They were required to keep special accounts of the operation for each posito, and were expected to furnish a balance sheet at the end of each fiscal year. SPAIN. 611 They were inspected by tlie permanent council of positos at regular intervals and they hired employees to keep the books, to give out and receive grain and money, the salaries ranging from $150 to 1300 a year for these bookkeepers. There was an income from the operation of the farms and other property owned by positos, also from other bequests, as well as the five-sixths of the interest from the outstanding loans. An annual inventory of all property belonging to the positos, whether movable or immovable, was required, and statements issued every year showing the number of borrowers, the value of loans outstanding, the funds in the treasury, the inventoried value of the property and the total of aU of these items. In the year 1910 there were 3,520 positos, loans outstanding for 78,693,327 pesetas, 5,903,903 pesetas in the treasury, 6,110,103.17 pesetas represented by the inventory, a total of 90,707,333.88 pesetas. The exact date being June 30, 1910. On December 31, 1912, there were 3,529 positos situated in 38 Provinces with 76,974,843 pesetas in loans, 12,239,980 pesetas funds in the treasury, 6,214,077 pesetas worth of property, as shown by the inventory, a total of 95,429,900.95 pesetas. The total number of loans was 239,276 during 1912. In 1912 the average amount of outstanding loans in each Province amounted to 2,263,966 pesetas, funds in the treasury averaged 360,000 pesetas, inventory averaged 182,767 pesetas, total wealth of each Province in capital of its positos 2,806,733 pesetas. The average amount of loans was 7,037 pesetas per Province. The average value of each loan amounted to 322 pesetas. The entire capital in American money was equal to $17,177,400, of which about 80 per cent was out on loans, 13 per cent in the treasury, and 7 per cent tied up in property. There were in 1910, besides the 3,520 positos, distributed mostly throughout the central and northeastern part of Spain, the following number of other similar institutions, covering the rest of the Kingdom: I SindicatoB, fumisliiag rural credit 538 Cajas rurales, furnishing rural credit 290 Catholic banks, furnishing rural credit (in Aragon) 127 It may be seen that the quantity of capital available is very modest considering the vast amount of terri- tory covered and the expensive character of agricultural operations necessary in so dry a country. It is also apparent that the rate of progress is not as rapid as it should be. This may be accounted for by the fact that these local rural credit institutions are suffering from a lack of funds. m. SUGGESTIONS FOR THE IMPROVEMENT OF THE RURAL CREDIT SYSTEM.^ Questions were sent out to every Province in Spain to get the opinion of aU those most directly interested in the improvement of the rural credit system. Replies were received from 38 Provinces, the following sources being heard from: Nine chambers of commerce, 11 reviews (pubhcations), 24 rural banks (cajas rurales), 96 town councils (ayuntamientos), 18 municipal courts (juzgados), 37 agricultural purchasing societies (sindi- catos), 14 chambers of agriculture (cameras agricolas), 10 provincial councUs of agriculture, 14 provincial councils of industry and commerce, 5 savings banks (cajas de ahorros), 70 persons actively engaged in agri- culture, including registrars, engineers, notaries, etc., 36 miscellaneous societies hke agricultural associations, departmental experiment stations, cattle raisers' associations, agricultural schools, farmers' unions, farmers' clubs, economic societies, social centers, bankers' associations, college of notaries, college of business, and positos. Altogether 347 replies were received. The naost complete categorical reply answering every question came from the Agricultural Association & Rural Savings & Loan Bank of Priorato. This answer is printed here, together with the questions sent out. Q. Should rural credit societies be formed on the principle of mutuahty, with unlimited habihty, or would it be better to have share capital with habiUty limited to the amount of the share capital ? A. In communities where possible, mutuahty, otherwise agricultural banks (bancos agricolas), or the Bank of Spain (El Banco de Espana), should furnish the capital. Q. If the constitution and operation of such societies is based upon mutuality, how shall their managing directorate be elected ? Should it be gratuitous or ought the managers to be paid ? A. The board of directors should be elected from the whole membership without distinction, two out of eight retiring each year. Directors should have fees paid to them for each session attended and the regular employees and operating manager should always be on salary. Q. In case share capital is adopted, what should be the maximum and minimum number of shares allowable for each member to hold, the value of each share, maximum and minimum; what should be the organization; how should shares be paid for; and to what extent should capital share in the profits? A. There should be no share capital; mutuality preferred. ' Written evidence furnished to the subcommittee. 612 AGBICTJLTUBAL OOOPBBATION IN EUBOPB. Q. Should a rural credit society loan only to a group of persons, like a sindicato, or association, based on the collective guaranty of all the members, or should loans be made to individual members guaranteed by their associates ? A. Credit should be given equally to individuals and unlimited liability societies. Q. Should the interest charged and time allowed on each loan vary according to the purpose for which it is to be used, such as working capital, change in cultivation, reestablish ment of vineyards, purchase of live stock, machinery, and tools, fertilizers, etc. ? A. The board of directors should decide the time, and the interest should never be less than 3 per cent. Long-time loans may be given for replantmg of vineyards, etc. Q. What should be the interest required for each of the above purposes, and the time and form of the repayment of the loan ? A. Not less than 3 per cent, and the terms of repayment should be determined by the board, according to character and conditions of borrower. Q. Should local societies be established in every conununity, should they cover a certain population, or should they cover such a territory as the means of communication renders most easy to operate as a unit? A. Not more than 2,000 members, and these within easy communication with each other. Q. Ought each group of local societies to be represented by a regional bank for coordination and pro- tection 1 A. Wherever the Bank of Spain has a branch, for where there are now bancos agricolas, it would be a mistake to establish an additional regional bank. Where such institutions do not exist the local societies might establish one. Q. Does agricultural credit, based upon local societies, coordinated by regional banks, need the help or intervention of outside banking interests ? A. Until such time as sufl&cient capital may be raised locally, in each region, outside banking interests like the Bank of Spain (El Banco de Espana) ought to furnish it at reasonable rates and under restriction by law. Q. Should one or more popular banks (bancos populares) having the function of encouraging and estab- lishing local societies be necessary ? A. No need of such banks. Q. Ought the State, with its own funds, directly or indirectly to undertake the formation of an agricul- tural credit system ? Should the State subsidize such existing agricultural credit societies and national banks as will transform themselves to meet present-day requirements ? A. Just as soon as an agricultural credit society begins lending money at interest below the commercial rate, undoubtedly the banks which have loaned them funds should have the right to raise their rates of interest, or the State could subsidize them for the difference. Q. Might rural credit be extended to laborers, factory hands, sailors, and fishermen ? A. Industrial credit is already well provided for; however, if sailors and fishermen choose, they could unite, forming special local credit societies to draw from the same sources as those for agriculture. Q. Would it be better to create popular savings banks and mutual insurance associations, together with a credit society, all under the head of a single cooperative association, or to have each entirely independent, or to have any one feature at the head and the others as branches or departments ? A. It is believed that the development of rural credit societies will cause all other kinds of cooperative institutions to come into existence also. Q. Would it be possible to establish, through local, regional, and popular banks, or in such financial establishments as are doing a loan business, current accounts, etc., with real estate or agricultural products on deposit, as a guaranty, in a manner similar to the mercantile practice where stocks of goods are a guaranty! A. Undoubtedly, yes ; but it should not be forgotten that the land-mortgage bank law affects this matter, nor what a new ruling in this law may establish. Q. If so, would the land-mortgage law have to be modified, the law of title registration, and the law of civil procedure? A. Stamp tax should be abolished, as well as all other taxes on land transfer. Only the rural credit society should be empowered to inspect and prevent frauds, and the Civil Code should secure the proprietor of land in the first right to payment of rent, from agricultural products, letting the money lenders come next. Easy and rapid procedure, with provision against fraud in this matter, will facilitate credit operations. Q. Is it possible to create, in respect to harvested crops, a document equivalent to mercantile warrants, which would secure loans made to farmers upon deposit of such produce in a warehouse ! A. Yes ; and warrants will be of great advantage. SPAIN. 613 Q. Wliac should be the relationship between rural credit societies and agricultural purchasing societies (sindicatos), savings banks, and other like institutions? A. The credit societies (cajas rurales) should serve as banks to the sindicatos when these latter are simply small purchasing societies, but when a sindicato is very large, with several departments, the caja rural should be its banking department, all under one management. Q. Should loans furnished to agricultural societies, sindicatos, cooperative associations, etc., be subjected to different regulations, as to duration and interest rate, from those on which loans are furnished to individuals ? A. The board of directors should decide; however, it would seem that associations ought to be encouraged by receiving at least as good terms as individuals. Q. Are special regulations necessary in loaning to farmers who desire funds to enable them to irrigate their land ? A. Yes ; especially where previously arid lands are to be irrigated, for such improvements add to the wealth of the coimtry. Q. May the formation of farmers' unions, or circulos, be considered within the scope of a rural credit society ? A. By no means, because banks are economic and circulos, etc., are purely social. Sindicatos might establish them. Q: In what manner and to what extent should the State enter into the establishment, operation, modification, and possible dissolution of rural credit societies ? A. Only to make laws favoring and regulating their development and to make sure, by means of inspec- tion, that such laws are properly obeyed. Q. Is it necessary or desirable that the State should buy for the rural credit societies, agricultural implements and machinery, etc., to be turned over through them to the farmers at cost ? Is it preferable that such purchases should be made by local associations, while the State experts from the official laboratories see to the genuineness of such articles ? A. No; nor for the cajas rurales. This is the business of the sindicatos, and the State should in nowise enter into it. Q. Should rm-al credit societies act as intermediaries between the farmers and the experimental farms (granjas) and other bureaus of the department of agriculture for the purpose of facUitating the dissemination of technical agricultural advice ? A. This should be done by the sindicatos, but the cajas rurales should direct any questioning farmer to the sindicatos. Q. Should the operation of rural credit societies be under uniform rules aU over, or should the necessary autonomy be granted, so that each may develop to meet the needs and customs of its own particular locality 1 A. In all matters of a purely general natm-e there should be uniform rules established by law, but in opera- tion and development complete autonomy should be granted, so that each may adapt itself to its own special conditions. The society giving the above replies has little sympathy with the policy of gratuitous service in manage- ment, quoting that popular adage "The unpaid employee, no matter how little he works, does too much," and continuing states that the Bank of Spain, which enjoys a subsidy from the State, ought to furnish capital to regional banks at 2 per cent, and that these in turn should provide the farmer with fxmds through local credit societies. Such societies, in order to develop properly, require complete autonomy and shoidd operate inde- pendently of any official pressure, otherwise politics may enter in and undo everything, no matter how good the intentions of those at the head of the Government. ABSTRACT OF ANSWER FURNISHED BY EL DUQTTE DE VERAGUA PRESIDENT, GENERAL CATTLE RAISERS' ASSOCIATION OP SPAIN. The questions in this reply are grouped under the following three heads : (a) Establishment and operation of riu-al credit societies. (b) Organization of agricultural banks. (c) Instruction and legislation by the State. The foundation principle, of cooperation, "Each for all and all for each," should be kept clearly in mind, used as the basis in forming the societies, and restricted by law, to prevent abuse of the term cooperative. The principle of cooperation is a safe basis, whether the society be formed of the Raiff eisen type, with unlimited liability 614 AGEICTJLTUEAL COOPERATION IN EUKOPE. or of the limited liability type, where the responsibility is restricted to the share of capital, or to any other limit. Although their main function should be loaning to farmers, their higher aim should be to further agricultural development and rural life improvement. It shoidd be kept in mind that the smallest farmers, with no other guaranty than their personal character, should be given the advantages of credit, as well as the owners of large estates. The societies, as weU as the character of the loans, and the guarantee exacted, should be formed to fit the conditions and needs of each locality. The State should lay down the general regulations for coopera- tive associations, and see to it that they are obeyed. It should supervise, advise, and protect the societies and take care that no fraud shall creep into their regulations. Three kinds of guaranty bill we found advisable: Mortgage, depository, and personal character, and the amount in time on loans should vary with the kind of guaranty and the purpose for which the loan is to be used. Loans, although the main thing, are not the only credit functions, for discount, current account, open credit account, collections and disbursements, purchase of lands or goods, savings bank deposits, etc., should be handled with a view to facilitating agricultural projects. Coordinating institutions are necessary to protect and advise the local societies and to carry their reserve. This covers questions 1-7, 12, and 17-20. The regional banks should foUow as a natural consequence in the upward movement, which starts with the farmer, passes to the local societies, to the bancos regionales, to the head or central bank. The local society should be near and conveniently situated to the farmer and simple in operation, or he will not naake use of it and it will not keep close watch over him. Capital must be attracted and diverted from the more hazardous enterprises in which it now seeks invest- ment. The attraction must be the safety of rural credit guaranties, for the interest can not be high enough to attract investment. The local credit societies must take care of the short-time individual loans on personal guaranty, but the regional banks may loan to the large proprietors in considerable amounts and for a longer period and should be secured by mortgage guaranties. They might well loan also to the cattle raisers, whose products are even more dependable than crops, for live stock makes a good guaranty when insured. The cattle raisers need loans to build warehouses and to enable them to seU cooperatively, and live stock warrants are even more prac- tical than crop warrants. It would be well to have reinsurance departments in the regional banks to assist the live-stock mutual insurance societies. This covers questions 8, 9, 10, and 11. Legislation. — The laws covering the three classes of guaranty are satisfactory. The transfer tax should be revised and also the laws on land-title legislation might be given some attention. The constitution of the land-mortgage bank might be broadened so that it may render some service to the smaU farmer,' which it fails to do at present. The CivU Code needs reforming, for its article 1863 requires that landowners shall have first right to coUect rent out of farm products, and that the money lender only has second chance at these farm products. Usurers now take advantage of the law in making wash sales by agreement, and thus deceive the producer in making returns on commission sales ; this should be remedied by law. It is stiU more impor- tant that the penal code should be brought up to date. The less secure a guaranty, the more .efficacious should be the means of collecting the debt ; that is why in all modern laws on agricultural credit fraudulent failure or insolvency is ruled as a penal offense. The provision for foreclosure in the mortgage law also needs reforming. Agricultural education. — The State need not buy agricultural machinery, etc., but it should send demon- strators into the country to show the farmers the advantage of using it and how to operate it. By little modi- fication most of the laws in Spain relating to agriculture can be made effective — it is most important that they should be enforced. The civil, penal, and other laws, such as that of procedure, need some reform, and the laws covering sindicatos agricolos only need to be enforced. The positos which have served as a model for every agricultural rural credit system in Europe, and id which the farmers already have confidence, are certainly the starting point, and the proper basis on which to begin to build a successful system of agricultural credit. The syndicates and their local banks are the other agencies which should be used as a foundation for the local credit associations. IV. ABSTRACT CALBETON'S INTRODUCTION TO PROPOSED RURAL CREDIT LAW. In view of the two replies to the "questions" quoted above, the summary of all the replies received, set forth in the introduction of Fermin Calbeton, minister of agriculture, to his proposed law, is of interest.) Referring to the freedom from State intervention accorded to the sindicatos, he deplores the lack of devel- opment in many of these societies, which merely "exist on paper," at the same time enjoying all the privileges accorded by law to the others which are rendering the greatest service to their coimnunities. He points out to those who maintain that agricultural-credit institutions should be left free from supervision and inspection SPAIN. 615 by the State that in France such societies are prospering under the impulse given them by funds furnished from the Bank of France, under agreement, through the State. In Germany the concessions of the Imperial Bank have also been brought about through the Government. In these countries there exists a widely dis- tributed and "well-developed cooperative spirit;" whereas there is a lack of cooperative spirit in Spain which makes even more necessary such Government initiative as has been applied in France and Germany; otherwise cooperation and rural credit would never get started. As a basis for action by the State, it was decided to begin by collecting information concerning the laws which had best succeeded in other countries (see Abstract of Foreign Laws) ; also the review of the existing laws bearing upon the subject in Spain. To get at the require- ments of the various parts of the country at home, a collection was made showing: (1) A list of the banking institutions which were supplying agricultural credit at present; (2) copies of the several agricultural-credit projects which had been advanced by the several associations interested in agriculture and by individuals; (3) and a report on the replies made to a form of questions which was sent out to all the Provinces in Spain and finally published on March 23, 1910. The, purpose of these questions was to get the opinion of all parties concerned, from all sections of the country, as to what sort of a system would be the best; and the replies showed that in some regions there was a most encouraging and lively interest, whereas in others there was a discour- aging apathy, indicated by failure to reply. The existing institutions formed or established to further agricultural credit, together with their laws, were studied with a view to determining what further legislation might be necessary. In 1881 a previous questionaire had been sent throughout Spain to determine whether there was difficulty in securing loans for the farmers. The replies showed that there was a great diversity of conditions in the several Provinces of Spain, but that the average rate of interest was from 14 to 20 per cent; and another investigation in 1887 showed that the farmers felt the need of having the positos modernized, and the leading agricultural associations agreed with the farmers, but took the broader view that coordination of these local credit associations was also neces- sary. During the next 10 years many conventions were held to consider ways and means for establishing rural credit, and as a result of the progress in public opinion the laws of January 23 and 28, 1906, relating to positos and sindicatos, were enacted. Id 1908 some excellent projects for agricultural credit were submitted, among them those of — (1) Senor Zulueta, of the Federacion Catalan, Balear, Barcelona. (2) Senor Navarro Reverter, Congreso Nacional en Valencia. (3) Vizconde de Eza, Associacion General de Agricultores de Espana. (4) El Duque de Veraqua, Associacion General de Ganederos del Reino. Among the replies to the questions of March 23, 1910, there were technical suggestions from competent authorities; experiences from the workings of credit institutions; opinions of official departments; violent desires expressed by poor farmers; walls from the victims of the usurers; the scientific and the practical; the empirical and the systematic. All viewpoints were reflected in the replies. (See Inquiry, Mar. 23.) The tabulated results of the replies to the questions show how public opinion stood, and may be sum- marized as follows: 238 replies favored mutuahty as a basis for rural-credit societies; 160 replies favored un- lijnited liability; 75 replies favored share capital; 119 rephes favored limited liability; 116 replies favored time variable and interest fixed; 98 rephes favored time variable and interest also variable; 184 replies favored current account secured by mortgage or collateral; 168 replies favored warrants on warehouse deposits; 156 replies favored coordination of local-credit societies; 89 rephes favored aid from outside banking institutions; 136 rephes favored popular banks; 142 replies favored subsidy by the State; 22 replies favored formation of national banks; 347 replies favored positos, transformed and modernized; 28 rephes favored abolishing positos; 80 replies favored supervision by the State; 33 replies favored inspection and accounting by the State; 9 replies favored autonomy for sindicatos; 8 replies favored supervision of the accounts of sindicatos; 96 rephes favored separation of cajas from sindicatos; 156 replies favored interconnection between sindicatos and cajas. Nearly all agreed to the need of reforming and modernizing the positos and the cajas rurales (the other local societies estabhshed wherever there are no positos), which they think are the proper local agencies for agricultural credit. Many variations in opinion exist as to the remaining questions. Senor Calbeton feels that the State should take the lead in encouraging the establishment of a progressive and coordinated system of rural credit, interpreting the failure to reply to the questionaire by a large proportion, even of the positos and cajas rurales, as indicating a pubUc apathy which can only be awakened by a powerful and well-organized force like that of the State. DISCUSSION OF FOREIGN LAWS. Recognizing that cooperative spirit and private initiative are lacking in Spain, the rural-credit laws of the other European countries in which these essential fundamentals are better developed are reviewed in the 616 AGEICULTTJEAL COOPERATION IN EXJKOPB. light of Spanish requirements. In Germany agricultural credit, starting through private initiative with the Schultze Deilitzsch and Raiffeisen banks, aided later by the laws passed by the Government which facilitated the financuig of these rural banks, has proved wonderfully successful. Perhaps France is the country which has resolved the problem of agricultural credit in the most perfect manner. The law of November 5, 1894, put the syndicats in a good condition; the arrangement with the Bank of France in 1897 solved the question of funds for the agricultural-credit associations, and the law of 1898, amended in 1906, establifhing simple and modern agricultural warrants, and creating the inahenable patrimony of the farmers was the most important of aU. Possibly the most important of all the foreign laws, from the Spanish point of view, are that governing the rural banks of Bulgaria, and the Danish law of April 22, 1904, which, though not entirely agricultural, is most worthy of study on account of its details of organization. A rural credit bank should not simply loan to the farmer and then wait impassively for him to repay the loan, together with interest. It should constantly endeavor to encourage and help him to make a profit by the use of the loan. The funds of positos which are not serving the farmers, but lying inactive, should be made available by being deposited with the corresponding regional bank, where they may draw interest, which in turn may be returned and expended for the benefit of the community. The capital for use in agricultural credit should be furnished by private bankmg institutions, and they should be willing to furnish it at a reasonable rate of Interest, because of the safety of the guaranty and the benefit which would result to their bus'mess indirectly through the increase and general prosperity which would result from a successful rural credit. The State supervision and protection, together with the provision for having the directors chosen from among men of high standing and responsibility and who wouM broadly represent all interests, should insure confidence in the plan of the proposed law. V. PROPOSED AGRICULTURAL CREDIT LAW.' LETTER OF TRANSMITTAL. The constant preoccupation and determination of the undersigned minister has been to arrive at a definite solution to that most important problem "Agricultural credit," for he recognizes that it is one of the most imperi- ous national necessities, and constitutes the soUd basis for agricultural development. With this objective, the inquiry, of which the results were published on March 23, 1910, was carried on throughout Spain to ascertain the views concerning agricultural credit of the institutions and individuals concerned in it and best informed about it. The ready and intelligent response from all sections by those most conversant with the complex aspect of this arduous subject has done much to clarify the matter. The minister of agriculture can not refrain from setting forth briefly, as the nature of the subject demands, the most illuminating replies and information, accompanied by other data, petitions from various congresses, proposals from private or parlimentary sources, statistics from rural credit societies, the positos (confessional banks), examples of foreign legislation — ^in fact, of all those elements which conduce to the better appreciation of the fundamentals of the question. Under the provisions of the law of January 23, 1906, and the royal decree of December 28, 1908, the royal delegation of positos becomes extinct, so that the Cortes should, as soon as possible, give consideration to forming an organi- zation to take its place. From private initiative we ought undoubtedly to expect the best results in matters of agricultural credit- The agricultural cooperative societies (sindicatos), rural credit societies (cajas rurales), and such other associa- tions of greater importance as may be established for the development of cooperation among the laboring classes (farmers) for the increase of production and facilitating progress wiU encounter all the Government aid they merit. For this purpose there is created in the proposed law an organism which, without in any way Umiting free association, shall supervise and encourage initiative, and offer the moral support and economic assistance which are so much needed. In this connection our ancient positos, abused by us as much as they are lauded by foreign- ers, will positively progress, becoming modernized and reformed to meet present-day requirements, adding to their ancient, simple, and modest loaning function, operations by check, agricultural warrants, acquiring of machinery, and all sorts of new credit procedures which serve to educate and stimulate private associations, as well as to assist the laboring man (farmer) in his operations. The efforts of the ministry will not terminate with this proposed law, which is only a first step. The Civu Code and the Penal Code are now being studied by a commission, so as to amend them to meet the require- ments indicated in the replies to the inquiry referred to as published by the ministry March 23, 1910. ' Presented to the Cortes by His Excellency Permin Calbeton, Minister of Agriculture, July 8, 1910. - J SPAIN. 617 The undersigned minister not relying entirely on his persevering and exhaustive study, but desiring always to be inspired by those who have at heart the best interests of the country, confides the carrying out of this task to the wise cooperation which is always given in affairs of this kind by the Cortes of Spain, which, considering the unquestionable national importance of this proposed law, will certainly not fail in this instance. The provisions of the proposed law follow : Article 1. Under the supervisioii of the minister of agriculture, there shall be created a "National institute of agricultural credit" (" Institute"), which shall direct the normal functioning of the positos, assuming toward them all the authority at present vested with the State authorities except those reserved by the said minister, as set forth in special regulations, as coming directly under his authority. The Instituto (National institute of agricultural credit) shall also act as the official financial agent for the purposes set forth by the succeeding articles of this law. As such, it shall inspect the operation of the other societies of agricultural credit, of rural banks of all sorts, of irrigation societies, reclamation and drainage societies, and such other analagous institutions as are established for the benefit and encouragement of agriculture or which may be established for such purposes in Spain. The Instituto shall serve to coordinate and protect such societies, and shall have the right to furnish them with such funds as they may need for their operations, at a rate of interest not to exceed 4 per cent annually. Article 2. Upon recommendation by the Instituto, there shall be created regional banks, in such number and location as the ministry of agri.cultiu'e may decide, and which shall be tributary to the Instituto and its operations, serving as intermediaries between it and the positos or other local credit societies. There shall also be created one or more special agricultural credit banks, the number and location of which shall be determined by the ministry. These institutions of agricultural credit, of whatsoever sort, which shall be deemed con- venient and which may be appropriate for the uses, customs, and necessities of each regional community, shall be established under the supervision of the Instituto. Article 3. At the head of the Instituto there shall be appointed a managing director named by the ministry of agriculture, whose yearly salary shall be 20,000 pesetas. Article 4. The board of directors of the Instituto, having consulting and resolving power, shall be made up of four Grovemment ap- pointees, aa follows: One from the supreme council of production or corresponding department, another from the federated agricultural societies, a third from the consiilting agricultural congress, and the fourth from the Natioanl Association of Cattle Raisers. The by-laws of the Instituto may provide for other voting directors, each banking house being permitted to name one for every 20,000,000 pesetas of capital it may furnish, the positos in like manner, and also the special agricultural credit banks may be permitted to name vot- ing directors, in accordance with the by-laws of the Instituto. Each one of these latter classes of establishments may have 'at least one representative. Article 5. The managing director of the Instituto, being a delegate of the ministry, is ex oflScio the chairman, authorized to manage the business operations, issue call for board meetings, preside at them except when the minister himself is present, and act aa executive agent of the board. Article 6. The Instituto shall be divided into four sections: (1) Bookkeeping, clearing house, and investment department. (2) Statistical, propaganda, and social matter department. (3) Inspection — accounting — auditing departments. (4) Assessment department. At the head of the office there shall be a general secretary, appointed by the ministry upon recommendation by the directors of the Instituto. The selection of employees shall be made with absolute freedom by the managing director, but they must be approved by the board. Appointments shall be made provisional subject to removal or cancellation, as the board may decide at its annual election, and in accordance with the report of the president of the regional bankb relating to the employees in such banks. The dismissal of employees may only be accomplished through action by the board on previous recommendation of the chairman. Article 7. The board shall conduct not more than four sessions a month, each director receiving a fee of 20 pesetas per session. Article 8. The Instituto may, under (1) of article 6, require of the granges, experiment stations, or other departments of the ministry of agriculture, such advice, reports, analyses, etc., as are necessary on agricultural operations, soils, fertilizer, vines, olive oils, and other agricultural products. The management of each of the above-mentioned departments is obliged to furnish such information. Article 9. Regional banks, created according to the provisions of article 2 of this law, and having at least a million of pesetas of capi- tal, may issue bonds in the form determined by the constitution. The special banks and other institutions may be created, if necessary, with such capital as in each case may be advised by the Instituto and of the form deemed most desirable. Article 10. At the head of each regional bank there shall be a managing director appointed by the Instituto as an advisor to their directors in the consideration of reports and resolutions which come up in the order of business. The stockholders shall elect one director from the positos of the locality, another from the local agricultural or credit societies, and a third shall be chosen by the local branch of the Bank of Spain, and a fourth shall be chosen to represent such other banking societies as have furnished capital to the regional bank — ^this fourth director shall be chosen from the board of one of the before-mentioned banks. As a part of an ad^dsory council, having equal rights and responsibilities with the directors above referred to, there shall be an agronomous engineer, either from the department of agriculture or the nearest agricultural experiment station; also one representative of the Cattle Kaisers' Union or of the Chamber of Agriculture — these latter chosen by the Instituto. This council shall hold not more than two sessions per month, each director to receive a fee of 10 pesetas per session. Article 11. Regional banks shall have the double character of financial institutions and subordinate organs of administration for the Instituto. As financial institutions, they may furnish loans directly of their own accord, or first with the approval of the Instituto, accord- ing to the respective provisions of their constitution, as in case of positos, and all classes of agricultural credit institutions, farmers' irriga- tion societies, rural banks, or their equivalents. Loans may also be furnished directly to individuals engaged in agriculture, to be used for the purchase of seeds, fertilizers, agricul- tural implements and machinery, live stock, reclamation or drainage, improved cultivation, and for the restoration and planting of vine- yards or orchards, and for increasing land holdings, and for acquiring property for irrigation purposes — in fact, for any purpose benefiting 618 AGRICTJLTUEAL COOPERATION IN EUROPE. agriculture, although it may not have been here enumerated. A mortgage guarantee is also required for long-term loans which may be repayable by annuity. Regional banks shall enjoy the advantages mentioned in article 153, paragraphs 2 and 4, as well as those of article 135 of the mortgage law, and they shall be exempt from taxation as provided in the law covering agricultural societies. They may perform such banking operations as receiving deposits, furnishing current and credit accounts, checking accounts, etc., as their by-laws may stipulate. Article 12. As administrative branches under the order of the Institute, they shall supervise and guide the positos directly, and shall inspect every kind of agricultural credit inistitution within their respective zones, as well as all associations for irrigation, etc., which are registered with the Institute, with the purpose of seeing to it that the law may be lived up to, and the interests of the laborers (farmers) of the zone may be safeguarded. Article 13. The positos, while retaining their local character and original constitution, must have the latter so amended as to conform with the provisions of this law concerning progressive methods of management so that they may operate as modern agricultural credit associations. They shall make loans in cash to the farmers of their vicinities or zones for a term of one year, renewable at expiration for another year. These loans must be used strictly for productive agricultural purposes and be secured by a guarantee either personal, col- lateral, or mortgage. They may operate as savings banks and under authority of the Institute they may open credit accounts with farmers, discount warehouse receipts, purchase agricultural machinery, implements, fertilizers, etc., so far as to facilitate the development of agriculture in their respective zones, always complying, however, with the requirements and rules of the Institute. They shall be under the immediate supervision of their corresponding regional bank, acting as branches or agencies thereof in their checking or discount operations, and they shall not charge more than 4 per cent per annum for loans. The positos shall pay over to the Institute 1 per cent of their operating capital as a contingent fund, and a fifth part of their net profits shall be set aside for legal reserve and management. The balance shall go to increase the funds of the positos. They shall enjoy exemption under the law covering agricultural societies from taxes or imposts. Documents published by their board of directors shall be considered as official records and may be filed in the archives of the bureau of land title registration. Article 14. The board of directors of each posito shall consist of four members from the town council; one member from the social reform union of the zone; two members from among the 20 largest stockholders, selected alphabetically; and two from among the local patrons of the positos, chosen from among those who have fulfilled their credit operations completely during the three years just past; one member from among the priests of the locality, preferably the arch priest, if there be one; and one public-school teacher, who shall act as the secretary, receiving such a salary as the by-laws provide. The board shall elect a president, who may be reelected, the election taking place once every two years at the same time as the election for voting directors of the regional bank. Article 15. The members of the board of directors shall be personally and collectively responsible for repayment of such loans as they may authorize in case the guarantors on such loans should fail. The secretary is empowered to refuse recognition of any loan which may seem to him suspicious, although it may have been authorized by the board. In such case it is his duty to notify the regional bank, and if it passes the loan, the secretary shall be relieved of the responsibility. The Institute upon recommendation from the regional hank may suspend collection of moneys due it from the positos, and fine the board of directors, or even expel them from office, it they persist in making questionable loans, or otherwise transgress the rules. Article 16. The positos shall adopt the method of bookkeeping indicated in the constitution, accoimting monthly to their regional banks, but may, with consent of the Institute, govern themselves in other respects by special by-laws. They shall hold a general assembly once a year, at which all members interested shall have power to vote, in order to elect the two representatives to the regional council. Article 17. The reinvestment of funds shall be effected by an executive agent dependent directly from the Institute, following the same procedure used for investment of funds of the State, with such modifications as the constitution may provide. These investments shall enjoy all rights and exemptions conceded by the law to the public funds of the Government. Article 18. The undistributed portions of the cash capital of the positos shall be deposited in the corresponding regional bank, according to the provision in the constitution, the positos holding a receipt and drawing 2i per cent interest per annum on such an amount as the regional bank shall make use of. The Institute may declare dissolved such positos as fail through bad management, idleness of their funds, etc., to render due service to their respective communities or zones. Tie funds of such positos as may be dissolved shall go to regional banks, which must pay over 2J per cent interest per annum on such funds to the town council from which they came. Such interest shall be expended toward rural police or other expenses essentially for the benefit of such agricultural community. Article 19. Besides the regional bank and such others as the Institute shall establish, there may be permitted in Spain any agricultural credit institutions established in private initiative prior to the passage of this law. Such institutions, together with others that may yet be established, must, however, present their articles of incorporation, constitutions, and by-laws to the Institute for approval before it shall account to the ministry of agriculture each year. Those special agricultural credit institutions connected with irrigation work, the development of agriculture, cattle raising, and reforestation may establish themselves with freedom as to form and be at liberty to carry on the following operations: Agricultural credit for insurance and trust, harvesting and cattle raising, cooperative production, cooperative distribution and sale of agricultural products or their derivatives, and the issuing of warrants and agricultural bonds, and all similar opera- tions now performed independently by private initiative. They must, however, submit their rules, by-laws, and constitutions for the approval of the Instituto. The Instituto may provide capital or otherwise assist independent institutions provided their statutes have been approved by the ministry of agriculture and registered with the Instituto, and provided they comply with the formalities of the law, including the publi- cation of their by-laws and rules. The Instituto may establish savings banks for the use of farmers, cooperative laborers' societies, pension societies for agricultural labor- ers or others connected with agriculture, housing societies for agricultural laborers, and any other association for the purpose of solving the various problems of agricultural society, especially such as are occupied in dividing up of large tracts of land and selling it in small parcels to farm laborers at reasonable prices. Private institutions to be founded as special agricultural banks must have a capital of at least half a million pesetas each. Article 20. Special institutions of agricultural credit which secure the approval of the ministry of agriculture shall be considered liie the agricultural societies (sindicatos) and shall come under the same law, and their documents shall enjoy the power and privilege con- ceded by articles 214-215 of the Commercial Code (Codigo Civil) and the concessions provided by the law of December 2, 1872, under articles 33 to 36, inclusive. SPAIN. 619 Article 21. In order that independent institutions, such, as those referred to in the preceding article, may enjoy the benefits and privi- leges conceded by the law and be assisted by the Instituto, they must register with it in the manner and form provided for the purpose the following: 1. A certified copy of their articles of incorporation and two samples of their rules and by-laws. 2. A report setting forth in detail exactly the scope of their proposed operations, a sample form of the documents they are to use with a statement of the capital at their disposal, and how it is guaranteed. 3. They shall present annually a certified statement of their operations during the year, and a general balance sheet then having been duly registered and approved, they may open credit accounts with their correspondent regional bank or credit institutions formed by the Instituto. They may then obtain capital and loans, provided the guaranty which they offer, whether it be material, mortgage, or col- lateral, is deemed satisfactory and sufiicient by the loaning institution. Article 22. The Instituto will see to it that the proper declarations required by law for agricultural societies are properly made by such societies, in order that they may enjoy the privileges conferred by the law covering them, and the ministry of agriculture will con- firm such declarations with the royal order and transmit the same to the ministry of farming. The Instituto has authority to send its in- spectors to visit the societies registered with it, and if any of them are discovered to have departed from the procedure laid down in the rules or from the provisions of their own constitutions and by-laws, as approved, a fine of from 10 to 1,000 pesetas may be imposed upon them by order of the general council. If any society exceeds the limit of its guaranty and fails to comply with its obligations to the Insti- tuto or to the credit institutions dependent therefrom or shows signs of inability to fulfill its contracted obligations, the Instituto must, in an impartial manner, either correct such abnormal conditions or propose to the ministry the suspension or dissolution of any society found in such a state of irregularity. Article 23. The members of any society whatsoever who consider themselves aggrieved by the same may file a protest with the corre- sponding regional bank. Provided their case does not properly fall under the jurisdiction of the court, and after an investigation of the complaint by the regional-bank inspectors, such complaint shall either be dismissed or a report made to the Instituto with recommenda- tions concerning it. The decision of the regional bank may be appealed from to the Instituto, beyond which the only recourse shall be to the supreme court.. Article 24. The ministry of agriculture shall publish the rules governing the execution of this law, recognizing that it occupies the place formerly held by the royal delegation of positos, and shall fulfill the duties and assume the responsibilities of the latter, as set forth in the laws covering positos. Within one year the Instituto shall publish the final rulings which shall take the place of the provisional ones, submitting them to the minister for his approval. Article 25. The minister of agriculture shall include in his budget an appropriation amounting to 175,000 pesetas yearly to cover the cost of management and operation of the Instituto. Article 26. The Government shall negotiate with such credit institutions as it may deem most worthy the financial arrangements necessary to obtain the fund required to establish and found the establishment and extend the desired aid to the agriculturists as contem- plated by this law. The amount of 50,000,000 pesetas shall not be exceeded, and a due accounting shall be made to the Cortes. Article 27. All previous laws which conflict with or oppose the provisions of this law become null and void. Temporary article. Any existing institutions desiring to profit by and enjoy the benefits of this law and to obtain the rights and advantages under it must transmit to the Instituto within a period of six months the documents indicated in article 21 of this law. This law shall go into effect from the date of its publication in the Official Gazette, in which the constitution of the institute shall be printed. VI. PRODUCTION. Land tenure. — Although the total area of Spain (126,000,000 acres) is only one-fifteenth that of the United States, the proportion devoted to farming is 90 per cent of its entire area, whereas the United States devotes only one-half of its area to farming. The population of Spain (20,000,000) is only four and one-half times less than that of the United States, and the density of rural population is probably about the same. American farms are mostly between 75 and 250 acres in area, with only a few under 10 and over 500 acres, whereas those in Spain are mostly very large or very small, a large part of the area being in holdings of from 500 to 35,000 acres, owned by absentee proprietors, and much of the remainder in small holdings, under 10 acres in area, worked by their owners. The large holdings in Spain are mostly worked on the share system by tenants under the supervision of a local agent of the proprietor, although the tendency is toward the dividing up of the large estates, as provided under the law abolishing primogeniture. Those who work the land are now encouraged to pur- chase farms of medium size (100 to 200 acres in the dry-farming section and 10 to 50 acres in the inten- sive irrigated section) . Holdings of less than 5 acres are not found to give satisfactory results in Spain, and the farms smaller than that are now being combined. With the abolition of tenure by the oldest son, the large estates are being divided up among the other heirs, many of whom are glad to sell, and this gives those who work the land the opportunity of purchasing. In the northeastern Provinces, Lerida, Catalonia, Tarragona, and Gerona, much of the land is virtually, though not absolutely, owned by those who work it. They pay to the heirs of the original proprietors a certain proportion of the income in grain, fruit, etc., annually. In some cases this tribute is purely nominal, whereas in others it amounts to a considerable percentage of the annual yield. Those who occupy the land have never had to pay much for it and can not be dispossessed so long as they pay the tribute, which is rarely burdensome. They may sell and transfer the property which they are operating, allowing the purchaser to assume the responsibility toward the heirs or the proprietors. 620 AGEICTJLTUKAL COOPERATION IN EUROPE. Absolute ownership exists in most parts of Spain, although the records of farm titles are much more perfect for the large estates than for the small farms, for the reason that the large proprietors, being better educated and more familiar with the procedure of registration, have been careful about it; but the small proprietors, through ignorance and disinclination to go to the expense and formality of registration, have frequently neglected to put their properties ,on record. They have depended upon the right of continuous occupation, and the most serious inconvenience they experience is in attempts to borrow money on mortgage. Climate. — The greatest drawback in Spanish agriculture is the lack of moisture, which is due to the small amount of rainfall, still further aggravated by the destruction of the forests, and the high rate of evapo- ration and the floods which result. The temperature of the lowlands in the south and along the Mediterra- nean coast is semitropical, but that in the high plateaus of central Spain and the northwest and north is subjected to heavy frosts in the wintertime. The Pyreenees Mountains, in the north, and the Sierra Nevada, in the south, are covered with snow most of the year, the melting of which keeps up the flow in the streams in the northern Provinces and Grenada during most of the suminer. The sun, shining brightly almost all the time, parches the greater part of the peninsula, especially the Plains of Castile, where there are few trees, and none of the streams are fed by mountain snows. There is an average annual rainfall of about 8 inches in this section, and as this comes mostly in the springtime, with little vegetation to hold it back, it escapes in great part in floods. The lands nearer the coast have a rainfall aver- aging from 14 to 18 inches, and there being more vegetation in these sections a larger part of it is retained. Even here, to carry on agricultural operations successfully, from 20 to 26 inches more of water have to be added by irrigation. Possibilities and remedies. — The great markets of Europe demand more foodstuffs than can be produced in the countries immediately surrounding them and pay the highest prices for that which reaches them the earliest in the season. The climate and close proximity of Spain enables it to supply the earliest demands ahead of any other country on the Continent. The remedies necessary to enable Spain to take advantage of this high-priced early market are: (a) Irrigation; (6) modern scientific methods of cultivation; (c) fertili- zation; (d) proper system of crop rotation, which is always necessary everywhere. Reforestation will do much toward affording permanent relief and should be supplemented by smaller growths, such as permanent meadows, which will assist in holding back the floods. With deep plowing, to enable the soil to retain the moisture and facilitate the penetration of the plant roots, the dry-farming sections are now having their pro- duction more than doubled, even where irrigation has been unfeasible. Land which was formerly left fallow from one-half to two-thirds of the time is now being covered with forage crops, which improves the fertility and prevents the erosion of the soil. This practice is just getting a good start and is certain to be extensively followed. Agricultural machinery. — ^There is a popular belief that because labor is only 40 cents to $1 a day that it does not pay. to use machinery. This view is not shared by well-informed farmers in Spain, and American mowing machines, reapers, etc., are much in demand. The ocean freight rates from New York to Cadiz or Barcelona amount to $6 per 2,240 pounds, or 40 cubic feet of volume. The freights from the ports to the interior on the railroads is much higher, amount- ing to $15 per long ton to Madrid. The import duty is $18 per long ton on agricultural machinery, which is "knocked down and crated," but this is rebated to the agricultural societies (sindicatos). Example: Mowing machines when knocked down and crated should not be rated at more than one-third of a ton each, and they cost less than $38 each at retail in the United States, so the wholesale price for export should be still lower. The freight amounts to $2 each, so they should not be worth more than $40 f. o. b. dock in Spain; transportation to the interior, $5 each; cartage and assembling, $2 each; commission to the sindicato, $3 each; bringing the price up to $50 to the farmer. This is the price at which they retail to the farmers in France, even in the interior of the country. The American manufacturers insist on selling to gen- eral agents in Paris and Hamburg, with the result that the French buy and use our American machinery and manufacture other machinery similar in appearance, which they sell to the Spanish and the Italians and which retails in those countries at $80 and $70, respectively, per machine. El Sindicato Nacional de Maquinaria Agricola, a private manufacturing company in Spain, makes plows, thrashing machines, etc., but imports mowers, reapers, etc. Its prices are $80 for mowers; $150 for reapers (which retail at $55 in the United States and should sell at $80); grain drills, 6 feet wide, at $130; disk har- rows, 5 feet wide, at $80; 1-horse cultivators, at $45; 2-horse cultivators, for replowing, $75; 1-horse 5-point grain drills, $40; fertilizer distributers, 10 feet wide, at $150; 1-handle 2-horse plows, at $12; and spring- toothed harrows at $30. Is it any wonder that machinery has not been introduced more rapidly by the small farmers in Spain, in view of the prices at which it has been offered to them ? SPAIN. 621 The cost of harvesting wheat by hand, with labor at $1 per day, is at present $4 per acre. A reaper with a two-horse team at $3 and a driver at $1 a day can harvest at least 10 acres at one-tenth the cost; it might, under most favorable circumstances, harvest 20 acres. Other agricultural machinery is capable of making a proportionate saving, notwithstanding the low cost of labor in Spain. Live stock. — A comparative statement showing the relation between the live stock in Spain and that in the United States indicates that we have two and one-half times more large cattle and only three-fourths as many small animals, in proportion to area, and actually less asses and goats than they have in Spain. Statistics for 1910. Class of animals. United States. Spain. Laige: Horned cattle 61, 804, 000 19, 833, 000. 4, 210, 000 106, 000 2, 317, 000 495. 000 Horses Mules 865, 000 Asses . 835, 000 Total 85. 953, 000 4, 512, 000 Small: Hogs 58, 186, 000 52,448.000 2, 915, 000 2, 296, 000 Sheep 15, 471, 000 Goats 3, 285, OOO Total 113, 549, 000 21. 052. 000 The breeding of fighting bulls in Spain is considered very much as that of race horses in Ergland and America. Great attention is paid to it, and the result is that the race has been greatly improved. The finest jackasses in the world are also produced by the Spanish, and they are imported by all other countries for breeding purposes. Mule raising needs encouragement in Spain, for at present the French are exporting great quantities of these animals to their southern neighbors. The best goats are a brown, short-haired variety, native to the Province of Alicante, from whence they are exported to all other parts of the Peninsula. They weigh 55 to 96 pounds each, seU for $20 to $35 each, produce from 2 to 2^ quarts of milk daily, and are fed almost entirely on dry alfalfa and beans, at an expense of 9 cents a day each. They five to 16 years of age, and are productive from the second year. A large part of the milk supply in all Spanish towns is furnished by goats, which are milked in the presence of the purchaser, being driven from house to house. There are a few goat dairies which distribute the milk in bottles, and there is a small amount of cheese manufactured from goat's milk. Over 60,000 goats are slaughtered for meat in the city of Barcelona every year, and last year 1,797,754 pounds of goatskins, valued at $573,647, were exported from Spain. Crop distribution. Acres. Per cent. Extensive cultivation.. Intensive cultivation. . Ligneous plants (vines) Woods and brush Pasturage, no trees. . . . Absolutely sterile : 37, 800, 000 2, 160, 000 7, 548, 000 12, 280, 000 48, 628, 000 31 2 6 10 41 10 Total area of Spain. 126, 000, 000 100 There are 16,163,190 acres devoted exclusively to grain raising— 9,628,680 acres of wheat, 2,011,150 acres of rye, 3,296,550 acres of barley, and 1,226,810 acres of oats. Oomparative production. — The same kind of land which is valued at $40 an acre under the old method of dry farming, and which produces about 15 bushels of wheat to the acre every second or third year, thus averag- ing about 6 bushels per acre, can be made to produce eight times as much under irrigation, proper cultivation, etc. Under these improved conditions the selling price of the land is also increased to from $300 to $1,000 an acre. Examples : 622 AGEIOULTXJEAL COOPEEATION IN EUEOPE. (a) In the Province of Lerida, on a farm owned and operated by Sefior Don Jose Zulueta, a system of irrigation was put in and the land plowed to a depth of 18 inches by mechanical traction and |24 worth of fertilizer used per acre (superphosphates, bone meal, and lime). The first crop produced was 558 bushels of potatoes per acre, which were sold at the rate of 50 cents per bushel and resulting in a gross yield of $279 per acre. This land had previously been valued at $40 an acre and had been producing 15 bushels of wheat at $1.60 per bushel, giving an income of only $24 per acre. Deducting the cost of fertilizer, the production had been increased over tenfold and the value of the land to over $400 per acre. The next crop planted was alfaKa, which was left on the ground for three years, giving an average yield of 10 tons per year (14 tons first year, 11 tons second year, 8 tons third year), and the last crop was plowed under, together with another $24 worth of fertihzer, and a crop of beets planted. (6) Gran j a la Eicarda, property of Senor Don Eusebio Bertrand, 1 mile west of Barcelona, Province of Cataluna, consists of 750 acres (250 under cultivation, 250 in meadows, and 250 a lake and woods), and situated in an alluvial plain bordering the seacoast. The owner values the land at $300 to $400 per acre, exclusive of improvements. The meadows and the land under cultivation are furnished with an abundance of water from 18 artesian wells, overflowing naturally into irrigation ditches. The owner operates the farm himself, employing a superintendent to look after detail work. The main feature is a dairy of 150 cows, 50 Holsteins, weighing 1,500 pounds each and producing 7,700 pounds of milk each per year; 50 Swiss, weighing 1,400 pounds each and producing 7,000 pounds of milk each per year; and 50 Jerseys, weighing 1,200 pounds each and producing 3,500 pounds of milk each per year on the average. About half these cows were being milked all the time, each one continuing for 10 months and staying dry the other two months. The 75 cows which were not giving milk were mostly young stock and those which were going dry and were allowed out in the pasture part of the time. The milking cows were kept in a stable con- stantly and fed on green alfalfa, dry hay, roots, and grains. At some times of the year as many as 100 cows were being milked at a time. Most of the calves are fatted and sold before they are a year old, the maximum weight being 180 pounds for yearlings, 330 pounds for 2-year-olds, 660 pounds for 3-yoar-olds, dressed weight. The meat is sold in the local market at Barcelona at 16 cents a pound, dressed weight. The mUk is also sold in Barcelona in glass bottles holding 1 hter, at 10 cents each at the distributing station, or 12 cents at the apartments of customers. The nulking is done by hand in tin pails having a small top, and taken to a cooling room where it is imme- diately strained and passed through a cooler and then left to stand in 20-liter cans submerged in a tank of running water of 18° C, the temperature at which it comes from the cow being 42° C, Eighteen is the tem- perature of the overflowing well water, which is sufficiently low for cooling the mUk in the winter time. For summer delivery the cans are transferred from the 18° tank to a refrigerating tank, where they are chilled to 5° C. before being sent out and then dehvered by a wagon carrying 40 cans of 20 liters each to a distributmg station in the city. In the month of June, 40 cans were being taken each morning, and 35 cans in the after- noon, making 1,400 liters a day. The proprietor of la Ricarda is a very pubUc-sptrited man, having built this dairy for the purpose of supply- ing the demand for sanitary milk. The buildings are equipped in the most modern manner, of reenforced concrete, with hollow walls, carefuUy ventilated, and the entire interior of both the milk cooling room and the milking stables being lined with white glazed tiling, ceiling and all, and the floor as well. The feed and aU the materials are handled by industrial railways and the equipment is of the highest order. There is a cooking room for preparing the feed, and every cow is provided with a separate drinking basin supphed with running water, and a separate manger, all of porcelain. They also have a covered manure pit and a large storage wing to the barn, where the hay is stored in bales and the grain in bins. The farm has an electric plant from which the adjoining village is lighted by electricity as well as all the farm buildings, and power is furnished by it to motors for operating all the stationary farm machinery. There are mowing machines, reapers, grain drills, fertilizer distributors, and a thrashing machine which not only thrashes all the grain grown on the farm, but that of the small adjoining farmers as well, for the cost of trans- porting the grain to this central thrashing plant and the moderate fee charged is very much less than the hand method in vogue throughout the country; much time is also saved, and the grain marketed cooperatively. The purpose of all these improvements has been to demonstrate in this community the advantages of using machinery for agricultural cultivation, the benefit of using fertilizers, leguminous crops, and proper crop rota- tion. The example is being followed by the surrounding farmers, who are now forming cooperative societies to carry on their operations in a similar manner in several of the nearby communities. General farming operations. — The dairy and all work connected with it, such as cutting the green alfalfa for feed, and harvesting the grain and hay for the dairy, is operated by a staff of 16 workmen employed con- stantly throughout the year under a superintendent and his wife who live on the place, the pay of these penna- SPAIN. 623 nent workmen averaging 60 cents a day. Extra labor is secured from tlie adjoining village at the rate of 60 cents to $1 a day at planting time and whenever necessary. CROP ROTATION. Wheat. Oats. Rye. Corn. Artichokes. Oowpeas. Alfalfa. Beets. Beans. Beets. Clover. Alfalfa. Several other crops, such as potatoes, "fava" (a kind of bean, which grows on a tall coarse stalk, and is thrashed out and fed to the cattle, the stalks being used for bedding), and fruits are also raised on the farm. The greatest gross income per acre, amounting to $480 in one year, resulted from raising beets and beans following alfalfa. A gross income of $300 per acre resulted from alfalfa alone, which was cut every two weeks during seven months, yielding 75 tons green weight (25 tons dry, about $12 a ton), which was fed to the cows in the dairy. The second and third year production of alfalfa is considerably less than the first, but the average for three years is 14 tons dry per acre. Potatoes, artichokes, and vegetables are very profitable to raise, but require a good deal of labor. The several kinds of grain are grown for the purpose of supplying feed to the stock on the farm, and not because they are the most profitable, although they require the least labor. Wheat yields 48^ bushels per acre, at $1.60 per bushel, amounting to $77.50, and the straw, which grows 6 feet high and yields 2^ tons per acre, at $10 per ton, yields another $25, and is used as cut feed for the cattle. Total gross income from wheat, $102.50 per acre. The very great advantage of irrigation and proper methods of fertilization, crop rotation, and scientific cultivation are clearly indicated by a comparison between these two examples (a) and (&), and the old dry farming methods previously followed. It is also strikingly shown that grain is the least profitable crop under intensive methods. No amount of careful cultivation and hard work can possibly bring about high production when moisture and humus are lacking in the soil, and now that example has shown what can be done, the farmers are coopera- ting through their sindicatos to duplicate it. The fertile plains (Las Huertas) between the mountains and the seashore in the Mediterranean Provinces, of which Valencia is the most highly developed, are irrigated partly by diversion of the river water through canals and irrigating ditches, and partly by individual wells from which the water is pumped into irrigating ditches. This land is all high in price, ranging from $300 or $400 to $1,000 per acre for lands under cultivation, and from $1,000 to $3,000 per acre for citrus fruit orchards. About one-half of the oranges, mandarins, and lemons grown in Spain are produced in this district, and the total citrus fruit production of Spain amounts to more than that of the United States, being equal to about 20,000,000 American boxes. The selling price last year amounted to a total of over $13,000,000. Oranges are packed in crates holding 420 each and weighing 175 pounds, and sell for from $1 to $1.25 per crate at the orchard. Onions and potatoes are the next two most important crops in this section, and, like the citrus fruits, are mostly shipped to England, The Netherlands, and Germany for distribution. Almonds, tamarinds, rice, wheat; fava, and many other vegetable crops are raised in the irrigated section. In the unirrigated section they raise melons, figs, oUves, vineyards, locust-bean trees, and some wheat and rye. In both the irrigated and unirri- gated sections the introduction of leguminous crops is doing much to add nitrogen and humus to the soil and the yield per acre is just as high as that cited under examples (a) and (6). Farm of the Count de Montornes, Valencia: Prof. Antonio Mayhn, in charge of the experimental farm of the Count de Montornes, gives the following figures for production on unirrigated lands in the Province of Valencia, for the last 15 years: Wheat, lOJ bushels per acre; lye, 17 bushels per acre; barley, 8 bushels per acre; oats, 14 bushels per acre; fava, 6^ bushels per acre; corn, 10 bushels per acre. On irrigated land: Wheat, 35 bushels per acre; rye, 45 bushels per acre; fava, 35 bushels per acre; corn, 44 bushels per acre; rice, 90 bushels per acre; beans, 23^ bushels per acre. Only 2 per cent of the area of Spain is farmed intensively and a considerable proportion of that was put under irrigation by the Romans and the Moors 1,500 to 2,000 years ago, and it is only within the last few years, since transportation facihties have opened the markets of the world to Spain, that the need and advantage of extending intensive cultivation has been felt. The means of accomplishing this has been found in cooperation. Cooperation in production. — There are at the present time some 500,000 farmers in Spain, associated together through 2j5D0 cooperative societies coming under the general title, as defined by the law of 1906, of "Sindicatos AgriTcJas." Nearly 1,000 of these have been formed since the law of 1908 exempting them from taxation and extending their privileges; 83 farmers' associations and 100 chambers of agriculture are included in the 2,500. In 1908 there were 856 sindicatos and within the next year 300 more were formed. 624 AGBIOULTUEAL COOPERATIOK IN EUBOPE. Eight of these sindicatos are associations of farmers for putting in irrigation works and six of them for estabhshing rural police. The great majority of these sindicatos were estabKshed by the farmers for the pur- pose of purchasing seeds, machinery, fertiKzers, live stock, etc., for the improvement in production. Their success in this respect is proven by the rapidity with which they have developed, and an idea of the scope they cover is given by the following Hst of sindicatos existing in 1909: Agricultural purchasing associations (sindicatos) : 983 Chambers of agriculture (cameras agricolas) 18 Cooperative irrigation societies (asociaciones de riego) 8 Agricultural credit societies (cajas rurales) 136 Mutual cattle insurance associations 6 Rural police associations 6 Mutual fire insurance associations 1 Several independent cooperative associations having a membership covering nearly the whole peninsula, such as the National League of Agriculturists and the National Association of Cattle Raisers, have been very active through propaganda work in establishing the local sindicatos and in coordinating them in their pur- chasing operations and encouraging modern methods in production. Such private enterprises as the Syndicate of Agricultiu-al Machinery, which manufactures modern agri- cultural machinery in Spain and sells it throughout the peninsula through agencies, the president being Senor Don Eusedio Bertrand, of Barcelona, and La Casa Montornes, of Valencia, which manufactures chemical ferti- lizers on a very large scale and sells them at wholesale through the sindicatos, the president of which is also the president of the powerful Sindicato Agricola de Valencia, have done a great deal toward introducing improved methods and cooperation in production. Conclusion. — Under the influence of the cooperative movement production has been increased in quality as weU as quantity; conservation of the natural resources, such as the fertility of the soU and the forests, has been encouraged. The more suitable kinds of cultivation have been introduced into the agriculture of Spain, and the region of intensive cultivation is being extended wherever irrigation is possible. The stock-raising industry is being transformed through the development of crop raising, so that the cattle may be fattened more quickly and better than they were by the former methods of allowing them to depend entirely upon grazing. The industry has been made safer through the introduction of animal insurance and rural poUce. The cattle raisers' association is carrying on a campaign of education among aU its members, teaching them the requirements of the market and how they should raise their stock to meet these requirements. It also instructs them in the introduction of more suitable kinds of stock and helps them to improve the breed. The department of agriculture has travehng professorships in the several Provinces and experimental farms on which the modern scientific methods of farming are being demonstrated, and they also make separate demonstrations on the farms of the various sections of the country. The experimental department in the combatting of plant diseases, of which the King is the president, has stations in each of the Provinces, and the director of each one of these stations is authorized by law to under- take the extermination of plant pests whenever they may be reported to him. Senor Don Jaine Nonell-Comas, of Barcelona, in charge of the cryptogramic department in Catalunia, has a very complete museum with life- sized reproductions of the most prevalent plant pests, and in connection with each there is a remedy which he has worked out for overcoming it. The law authorizes him to go with a staff of experts wherever an outbreak of plant disease is reported and to proceed at once to suppress it. The owners of the property on which the plant disease is started may either furnish the common labor necessary in the suppression of the epidemic or may pay the cost of the same. The Government furnishes the expert direction, chemicals, and apparatus. The result has been the overcoming of such diseases as phyloxera, which threatened to exterminate aU the grapevines, not only in Spain, but in the other European countries, and also the overcoming of the citrous-fruit tree diseases. A remedy has been found for almost every disease which has yet appeared, and cooperation has been the most influential factor in enabUng this program to be carried out. Vn. DISTRIBUTION AND MARKETING. Centuries ago the old Gothic lonja, produce exchange of Valencia, was frequented by the Venetians and other great traders of the Mediterranean, and Cadiz, on the Atlantic, was the great distributing port for the whole world. Recently Barcelona has come to the front, being at present the most important shipping center of southern Europe, having nearly a milhon inhabitants. The raiboads leading north into France at Fort SPAIN. 625 Bou, on the east, and Irun on the west of the Pyrenees, have been carrying quantities of Spanish produce through to the northern markets, and now a new direct line through the center of the Pyrenees, from Jaca, in Upper Aragon, to Oloron, in France, is almost completed. The railroad development within the Peninsula, although backward, is certain to develop rapidly, and the citrus fruits, onions, and other vegetables which have been shipped by sea not only to the British market, but also to the northern Continental markets, will soon go more directly to these markets by rail. The most important agencies in the development of the distribution of farm products in Spain are the great national cooperative associations, such as the National League of Agriculturists and the National League of Cattle Raisers. The leaders in these two associations are men of international reputation, who attend the agri- cultural conventions in the several countries of Europe, always studying the latest developments in agricultural progress and adapting them, together with the best modern practice, to the operations of their farmer at home. Next in order of importance come the private marketing associations, like La Federacion Naranjera, the citrus fruit growers' federation of Valencia, headed by El Conde Montornes, and managed by Senor Don Carlos Sar- thou Francesch, which handles the major part of the orange and lemon crop of Spain, and has just arranged this year to handle the large onion production of Valencia. The sindicatos in all parts of Spain are doing what they can toward helping their members to market their farm produce collectively, and it may be plainly seen that the progress is sure to be important. NATIONAL ASSOCIATION OF CATTLE RAISEES. This association, having over 38,000 members distributed over the whole of Spain, had for years been carrying on a campaign of education to encourage better methods of production and had produced excellent results. It was induced to undertake cooperative marketing for its members by an attempt made to have the import duty on foreign meat removed, through representations made to the Government by the mid- dlemen in Madrid. This association was established in the time of the Moors, with the original purpose of keeping open Las Vias Pecuarias, the trails over which the live stock were driven from the plains, where they were pastured in the wintertime, to the summer pastures in the mountains. As the country gradually came under cultivation the tendency was for the private property holders to prevent the free passage of these flocks and herds, and the association was principally occupied for many centuries in keeping open these passageways. Gradually this society became interested in every movement for the benefit of cattle raisers, and at the present time its scope covers the cooperative purchase of all the raw material used by its members, improved live stock for breeding purposes, cattle insurance, rural-credit societies, cooperative sale of cattle, cooperative cheese factories and butter-making plants, wool washing, and the publication of monthly bulletins showing the state of the market and the condition of production, annual report, special instruction to the members con- cerning market prices and requirements, and the methods of production to best fulfill these requirements, cow- testing associations, live-stock breeders' associations, regional and central stock exhibitions or fairs, and general propaganda work. Many of the most prominent officials in the Government being members, this association has been able to interest the Government in having laws and executing them for the improvement of the cattle-raising industry and also to reduce the cost of their products to the general public (the consumers) . MEAT SUPPLY OF MADRID. The consumers buy directly from the meat markets either in the several public markets, or in the shops throughout the city, paying 40 cents a pound for the best cuts of beef, 25 cents for round and rib roast, and 14 and 18 cents for neck and hock cuts. The dealers buy in halves and quarters, at an average price of 15i cents a pound from auction jobbers, who purchase directly from the producer's association and pay all the fees to the municipality. They receive for their profit all the pai;ts except the dressed beef, such as the hide, horns, hoofs, and heads, etc. The producers receive about the same price that these auction jobbers get, namely, 15^ cents a pound for dressed beef, on the average. The producers have to pay a killing fee to the municipality, whose employees do the slaughtering at the rate of 80 cents per head for beef cattle and 8 cents each for sheep and hogs. They also pay the freight charges from the shipping point, and 2 per cent plus the cost of delivery to the abattoirs, as a fee to the Associacion General de Ganaderos. Example : - , Shipping from one of the principal centers in the Province of Galicia, a distance of 722 kilometers, to Madrid, m cars holding 15 steers each, weighing on the average 450 kilos live weight and corresponding to 300 kilos dressed beef, the charge is $50 per carload or one-half a cent a pound on the dressed beef. The journey takes 36 hours, and, assuming the dressed weight of the steers to average 660 pounds, at a price of 15 J 14174°— S. Doc. 214, 63-1 40 626 AGSlCULtUBAL COOPEEATION IN EtTftOtE. cents, the gross' price per steer anaounts to $100. The steers are 3 years old, and the freight amounts to about $3.30, the slaughtering fee to 80 cents, the 2 per cent commission to $2, and the incidental charges to about 90 cents, making a total cost of $7 per head, or 7 per cent, for marketing. The middlemen who have been eliminated are {a) the country buyers (comisionistas), (6) the shippers (expeditores), (c) the commission men (tratantes), {d) the slaughterhouse men (matadores). The auction jobbers (abastacedores) have not yet been eliminated but are soon to go, and the really necessary middlemen (tablajeros) are the only ones which the cattle raisers' association feel are entitled to existence. The best milk-producing goats are imported from Murcia. They weigh 55 to 96 pounds alive, and give an average of 2 to 2^ quarts of milk each daily. They sell at $20 to $35 each and are fed entirely on dry alfalfa and beans at a cost of 9 cents each per day. They are productive from the second to the sixteenth year. Each year the flesh of 60,000 goats is consumed in Barcelona. Goats' milk is largely used throughout Spain, some of it being sold in bottles, but mostly milked directly in the street. Only a little cheese is made frond goats' milk. There are about 3,500^000 goats in Spain, and last year 1,197,754 pounds of their skins, valued at $573,647, were exported from the Peninsula. The abastacedores have nothing to do but auction off the dressed beef to the dealers (tablajeros) and sell the by-products, out of which they get their profit, amounting to an average of $25 per steer. They pay to the municipality a fee amounting to $15 per steer, leaving them a profit of $10, or 10 per cent. The Cattle Raisers' Association considers this profit unreasonable and is considering the advisability of taking over under its own management the auctioning and disposing of the by-producta. It has recently acquired pasture lands and stockyards outside of Madrid, covering about 1,000 acres. The members pay $2.50 a year for every 1,000 sheep, hogs, or other small animals, or for every 100 large cattle they possess, as a fee to the association. In 1909 there were slaughtered in Madrid 77,299 head of cattle, 19,741 calves, 300,294 sheep, and 61,675 hogs. This does not include those kiUed on the outside and shipped into the city already dressed. The reforms accomplished are largely due to the little booklet entitled El Problema de las Subsistencias, the criticism by the society of cattle raisers to the Government report (see attached translation). PROBLEM OF THE HIGH COST OF FOODSTUFFS. In 1909 the Government ordered an inquiry into the reason for the rapidly increasing cost of foodstuffs, |>articularly meats, in the city of Madrid. Upon the publication of this report the Associacion General de Ganaderos published a small printed booklet criticizing the findings of the Government report and setting forth the true reason for the high cost of meat, together with recommendations to the Government as to the steps necessary to bring about the reduction in the cost to the consumers and an increase in the profits to the pro- ducers. (Date October, 1910.) The Government acted upon these recommendations, with the result that four out of five sets of unnecessary middlemen have been eliminated, the cost of meat to the consumer is reduced, and the producer's price increased. MEAT SUPPLY OF MADRID.' There was instituted by the president of the councU of ministers a public inquiry to find out the best means to adopt for the economic supply of the necessities of life for the people of Spain. During this inquiry the dealers and the commission merchants made a strong effort to show that the high cost of foodstuffs was due to the tariff on imports from foreign countries, knowing that whether the materials came from outside or from the home market they would get their commissions anyway. When the report of this inquiry was about to be published the National Association of Cattle Raisers (Asociacion General de Ganaderos) could not fail to respond, even though for the sole purpose of repeating what had so many times and with so little result been stated before to the pubHc authorities. The royal decree ordering this investigation would seem to indi- cate that no attention had been paid to the fact that the increasing cost of foodstuffs is not so much due to defects of production as to the unfortunate system of marketing, slaughtering, and fees (taxes, etc., on the products), and to the action of the middlemen. In tiew of the above fact, it is evident that the remedy should be looked for along these lines, which are unquestionably the causes of the high cost of the majority of the articles consumed. This association will ' Translated from pamphlet entitled " The Problem of Food Stuffs," published by the Duke of Veragua, president, oh behalf of the National Association of Cattle Raisers. Nearly all the recommendations made in this report were shortly after adopted by the municipality of Madrid and by the Govenunen of Spain, with the result that the marketing of cattle is all under the direction of the association of cattle raisers, and the price to the con- sumer has been very considerably reduced. sPAiir. 627 only occupy itseK with the foodstuffs within its own sphere and an examination into those factors bearing upon the price of meat. It haa receatly and energetically shown the ab&urdity of the contention of the meat distributors of Madrid, who have undertaken an interesting campaign in which they stiU continue to distort the true facts concerning the high cost of meat and to conceal their own responsibihty for the same. They try to deceive the people and the Government, attempting to create the impression that defects in production are responsible and demanding facihties for the importation of meat from foreign countries. To illustrate how absurd are the contentions of these dealers, and how they themselves are mainly to blame; for the high cost of meat, let us consider that they acknowledged, when before the Institute of Social Reform during the inquiry, that they charged the consumer 22 cents a pound for the same meat which cost them 12 cents. Other stUl more flagrant cases of abuse were brought out in the testimony of the retailers, auctioneers, and the representatives of the producers, with the result that a verdict was brought in against the tariff reduction which had been asked for as a remedy by the meat distributors. The problem may be stated as follows: Is the, high cost of meat due to scarcity or defects in production; or, on the contrary, is it due to other causes ? "What are these causes, and how may they be remedied ? Spain being a country so preeminently agricultural that prosperity and progress in all its industries are directly dependent upon the encouragement and development of agriculture, and as the live-stock industry is one of the strongest supports, having to transform and supply a large part of its products, as well as to furnish fertilizer and motive power for its operation, therefore it is evident that the State should defend and encourage the live-stock industry. Even if we were to suppose, for the sake of argument, that the present high cost of meat might be due to. defects in production, ought not the State to endeavor to correc.t„these defects ? It should not be forgotten that if the Government neglects its sacred duty to the fatherland, and does not duly protect and upbuild agriculture and stock raising at home, the day will soon come when we shall be dependent upon foreign countries for the staples of hfe, and when once our oattle-raisdng industry in Spain shall be discouraged or partly destroyed it will not be possible to reestablish it again in a moment. Should the State at some later date awaken to its error and desire to reestablish the prosperity of the hve-stock industry much time will be lost in so doing, and in the interval the prices of such staple products as meat, bread, and potatoes will rise to even higher prices than those at present prevaUing. Certainly our Government wiU not allow itself to be influenced by unfounded excitation aroused by private individuals and special business interests, for the purpose of inducing a reduction in the import duty on foreign meat, the effect of which would be to make home production economically impossible and would deprive the producers of the very means by which they are at present able to offer the market stability. A few of the nec- essary measures required to remedy the defects in the present system will now be indicated. TEANSrOBMATION OF THE STOOK-EAISING INDUSTET IN SPAIN. First of aU, before examining into the high price of meat, let us consider the present status of the stock-rais- ing industry and the protection which it at present enjoys through the tariff. Much has been said concerning the decrease in the number of cattle in Spain. Let us see whether such decrease really exists or not. Unques- tionably stock raising was in a flourishing condition throughout the Peninsula during the sixteenth, seven- teenth, and eighteenth centuries, but sheep and goats were in the predominance, there being few cattle and hogs, because of the poor market for their meat at that time. Spain was the only country producing merino wool for centuries, and, having a monopoly, the price was high until other nations began producing merino at the begin- ning of the nineteenth century, after which the prices fell because of foreign competition. Coincident with the falling off in the wool market an edict was issued by the Cortes de Cadiz forbidding the free use of pasturage and authorizing the private ownership and restriction of many of the large areas of land which had formerly been covered with enormous flocks of sheep which were allowed to pasture without restriction. Up to this time the only restriction to pasturage; throughout the Peninsula, had been on the vineyards and grain flelds, but, starting with the nineteenth century, a larger proportion of the land came under culti- vation and the sheep-raising industry lost a large part of its pasturage at the same time that it suffered the loss of its wool market, and as a natural result the shepherd's cottages of Curiel, Infantado, Campo, Alange, Paular, Huelgas, and many other pastoral towns, rapidly disappeared. More recently the tendency has been to plow up aU kinds of land regardless of its adaptability for crops, ignoring the fact that less extension of terri- tory and better fertilization, crop rotation, and cultivation are necessary. The mania for destroying the forests has resulted in changing the climate and causing what Httle rain does fall to run off in floods, eroding and ruin- ing much of the fertile land of the river valleys. The State has also been to blame for leaving agriculture and stock raising to take care of themselves, while its aid and encouragement were given to other less worthy industries. 628 AGftictrLTufiAL coot'teSAlnoN m titJfeoffi. All these causes have combined to reduce the industry of raising sheep and goats, although they have not diminished so rapidly as such discouraging causes might have been expected to make them. The transforma- tion has been due in part to the new requirements of the market. Wool is no longer the main product, for sheep are now raised principally with a view to their meat-producing qualities, and for the same reason cattle and hogs are being given the preference, because of the market demand for meat. The complete transformation of the live-stock raising industry will come with a perfected system of irrigation, which will result in a large intensive production of forage and animal food. STOCK RAISING HAS NOT DIMINISHED. It should be taken into account, first, that the diminution previously referred to applies only to sheep raising; second, that this diminution has not continued during the last century; third, that the present campaign against live-stock production has its arguments based upon a decrease in the number of cattle and not of sheep; and, fourth, that the number of cattle and hogs have not only not diminished but actually increased in the last few years. The proof of this is found ia the latest official statistics which show that in 1891 the total number of cattle, sheep, goats, and hogs amounted to 20,039,215 head; in 1907 it was 20,778,803; in 1908, it was 24,046,829; and in 1910, it was 25,564,000. A steady increase in the number of all classes of live stock is shown by these figures, which would be even greater, were it not for the fear of the stock raisers that their taxes would be in- creased if the census returns seem to show them in a too prosperous condition. Evidently the increase in the cost of meat can not be due to a falling oflf in the number of live stock raised in Spain. CATTLE RAISING AND THE TARIFF. Even though what has been previously shown ought to be enough to refute the reasons given for reducing the tariff on foreign meat, it will not be out of place to verify the facts stated by some people, that these duties are prohibitive, and to see just how much protection our cattle raisers are receiving. Right here our association can not help but express astonishment at the inconceivable findings of the municipal commission of Madrid. Two previous mayors, and many other investigators, have stated definitely, in the report of findings on the sub- ject presented last year, that the only cause of the high price of meat is the present system of abattoirs and markets. But the municipal council absolutely disregards these statements and shuts its eyes to the true nature of the problem. It bases its findings upon faulty arguments and mistaken data and figures (for example, the duty of 45 pesetas on beef cattle and 35 pesetas on calves), and finds it more necessary to undertake the organization of measures of sanitation, which will naturally be very slow and expensive to carry out. It also advocates the removal of the duty on foreign meat, which would result, in its opinion, in no disadvantage to the cattle raiseis, for it claims that they are already exporting cattle from the Peninsula to foreign countries. Can it be, then, that cattle are so scarce and their production so faulty in Spain when they are able to be exported and, after paying all transportation charges and foreign duties, to compete in the foreign markets? The present tariff regulation, in paragraph 473, indicates an import duty of 35 pesetas per head on beef cattle; even though it is true that the first tariff was fixed at 45 pesetas, it only applies to those cotm tries which never can ship any cattle to us, with a result that the only tariff that actually applies is that of 35 pesetas. In the same column calves are required to pay 11 pesetas, which also applies to hogs; sheep are to pay 3 pesetas; and goats 2 pesetas a head. From the official schedule of 1909 beef cattle are valued at 375 pesetas per head, calves at 85 pesetas, hogs at 90 pesetas, sheep at 23 pesetas, and goats at 20 pesetas. Sheep are then required to pay a duty of 13 per cent of their value, goats 10 per cent, hogs and calves 12 per cent, and beef cattle 9 per cent. These duties are very much less than those approved by the law of March 20, 1906, which under Schedule C of class No. 4, duties on cattle, calls for 15 per cent of their value. This, then, is the much-talked-about pro- hibitive protection that our cattle raisers enjoy. Let us compare it with that in foreign countries, for example: Germany, 111 francs per head (28 per cent of their value) ; France, 50 francs per head (13 per cent of their value); Italy, 38 fire per head (10 per cent of their value) ; and Switzerland, 37 francs per head (10 per cent of then' value) . This comparison shows how little foundation there is for the claim that our import duties are pro- hibitive, and, comparing them with the duties on many of the raw materials used in other industries, we find that these are frequently 40 and 50 per cent of the value, whereas the duty on cattle never exceeds 15 per cent. If we examine now the effect upon the price of meat of the import duty, it appears that an increase oi one-tenth of a peseta per kilogram results. This is now likely to influence foreign meat against coming inw our market, for it represents such a small amount compared to the cost of transportation. The type of cattle which come from the Argentine Republic and other points in America generally weigh 300 to 400 Hlograms dressed, and being taxed 35 pesetas each result in the one-tenth of a peseta above mentioned, whereas the reduction that is desired in the cost of meat to the consumer should be at least ten times this amount. sPAiir. 629 It should not be left out of account that the demand of our consumers and the conditions under which meat is sold in our market makes it inadvisable for us to import American beef, because it has an excessive amount of exterior fat and interior suet, which results in a large amount of waste to the consumer. Why is it that our Galician and Molines beef is preferred in our market? What comparison can there be between.it and the Durham, Angus, and Hereford cattle which the Americans can offer us ? Absolutely none. A certain large wholesale beef dealer in Madrid imported some American cattle, had them slaughtered, and, taking care not to label the source from which they came, undertook to sell them to his own establishment and through that of other wholesale dealers, but had no success with any of them. If this occurred with cattle imported alive, having the advantage of a certain period of time in Spain before being slaughtered in which to become acclimated, what would be the result with refrigerated beef, which would require to be consumed immediately it left the refrigerator in order to prevent its decomposition ? We ought also to take into account that the royal sanitary council has opposed the introduction of refrigerated beef because of the climate of our country and the lack of refrigerating facilities in the retail markets, which would result in the decomposition of the meat before it could be sold. Besides, it is absurd to consider the removal of the tariff, because in order that foreign meat should reach our consuming centers, and also get to the consumer in proper condition, it would be necessary to establish cold-storage receiving stations, refrigerating cars, and refrigerating facilities in all the retail markets. The cost of constructing all these and the time necessary to accomplish it would result in a far greater increase in the cost of meat than would be offset by the removal of the tariff. TEUE CAUSES OF THE HIGH PRICE OF MEAT. Now that we are examining into the true causes of the high price which the public pays for meat, it may be well to indicate the following points: (a) The unbusinesslike arrangement of abattoirs and markets, together with the action of the middlemen. (6) The taxes and fees that are charged upon meat. (c) The slowness and expense of the transportation arrangements. (d) The lack of interest of the State in agricultural and live-stock interests. Much has been written and a great deal said about the abuses of the abbatoirs and markets. The muni- cipality of Madrid has been petitioned repeatedly and the public has been clamoring continuously for a remedy to the unreasonable system of middlemen which now exists. The parhament has heard these requests and the Government has recognized the justness of them by the royal order of the 13th of October, 1882, and in the decree of April 6, 1905, presented by Senor Gonzalez Besada, which have never been carried into effect, and again by the preamble of the decree authorizing this inquiry. The chamber of commerce and the National Congress of Cattle Raisers, the National Agricultural Asso- ciation of Zaragoza, the councils of agriculture, the periodical press, and numerous organizations, including our own association, have repeatedly protested against the vicious organization of the abbatoirs and the per- nicious intervention of the intermediaries, which has aU been recognized by the municipaUty on several occa- sions, and more especially in the reports published in 1907 by Senor Sanchez de Toca, former mayor, and very recently by the present mayor, Senor Francos Rodriguez, and which has been graphically set forth by Sefior Maltrana, the special delegate of the abbatoirs. A careful study by Senor Maltrana indicates that the sale of meat during the last year has amounted to more than 23,364,307 pesetas, and the price paid by the public for this same meat was 43,469,261 pesetas; that is to say, 20,000,000 pesetas has been consumed between abuses of the middlemen and fees and taxes. And still there are those who ask what is the cause of the increase in the price of meat. Let us examine in detail a few of the thousand and one abuses that are committed in the abbatoir and market of Madrid and which are the continued cause of discouraging producers from selling in our market, although very much the same conditions obtain in the other centers of consumption, for the supply comes from all parts to Madrid and the prices in all other markets are influenced by those which are quoted in this center. The auctioning of meat in Madrid is monopolized by a limited number of dealers, who are called " abas- tacedores." They are the only ones who can slaughter animals, and upon them depend both directly and indirectly the personnel of the abbatoir, and they are the absolute masters, who, by collusion among them- selves, fix the purchase price to suit themselves, and after selling the hides and all the other parts except the dressed beef for their own profit they dispose of the latter to the retail dealers (tablajeros). The producer finds it impossible to sell directly to the tablajeros, neither can he sell directly to the abastecedor, who will only buy in the open market, to which the cattle raiser can not afford to go in person, for he can not neglect -his other interests. 630 AGBIOXTLTUEAL COOPEBATION IN BUEOPB. There exists still another intermediary, the commission man (tratante), who lives in perfect harmony with the abastecedor and shares the dominion of the abbatoir with him, and also the excessive profits, at the cost of both the producer and the consumer. Very rarely this tratante, who enjoys the privilege of the open door of the abbatoir, buys directly from the cattle raiser. There generally exists another middleman, who buys from the producer and sells to the tratante. REASON WHT PRODUCERS DO NOT COME TO THE CENTERS OF CONSXJMPTION. The producer finds it impossible to come to a market, for the following reasons : (a) Ignorance of the prices quoted, which are generally a mystery; those published are often falsified for the purpose of attracting innocent cattle raisers, in order that they may send their cattle to flood the market, thus causing a reduction in the prices, attended by enormous losses to themselves. '(&) Because in Madrid there exist no pasturage facilities where cattle may be kept properly, those which do exist being miserable and infected. There are some which belong to the middlemen themselves, where the cattle are not fed, or else the prices are excessive for what little feed they do furnish. Cc) Because the abastecedores prefer to buy of their allies, the tratantes, who monopolize the business, or if they ever do buy of the cattle raisers it is on such unfavorable conditions as to discourage such dealings. (J) Because the cattle raisers can not come to Madrid with each consignment of cattle, for to do so would increase the expense too much, and there are no persons whom they can trust to represent them in the market. CATTLE RAISER CAN NOT SLAUGHTER FOR HIS OWN ACCOUNT. The cattle raiser finds it impossible to sell directly to the tablajero, because of the following reasons, which are taken advantage of by the abastecedor: (a) The slaughtering has to be accomplished by personal employees of the abastecedor; naturally he would not consent to having anyone else do it. (J) There exists no guaranty whatever as to the weight allowed in the abattoir, this having been estab- lished in the time of the ancient Romans and being subject to shrinkages and discounts only too well known. (c) The cattle raiser is allowed no credit whatsoever for any of the parts except the dressed beef, such extra parts forming the principal basis of monopoly of the abastecedores. {d) The cattle np,iser would find great difficulty in selling the dressed beef to tablajeros, partly because of the slowness with which they pay and the little personal knowledge that he could have of their responsibility, and also for the reason that they would be afraid that if they bought of him the abastecedor would refuse to sell to them any more. (e) They lack trucks in which to transport the meat, this trucking business representing one of the most important monopolies enjoyed by the abastecedores. (/) There does not exist in the abattoir any person to defend the interests of the cattle raisers, the representative being named by the abastecedores and tratantes. The purpose of the royal decree of Besada, providing for a real representation of the cattle raisers, has been openly opposed by the middlemen, who allege that as they are the ones who slaughter the animals they should be permitted to name the repre- sentative, whereas it was originally intended that he should be named by the cattle raisers. The cattle raisers, not being able to take any part in the market or the operations of the abattoir, sell thfedr animals to the little dealers, and these, in turn, sell to those who have the slaughtering privileges of Madrid, afld these sell to the abastecedores, who, in turn, sell to the tablajeros, with the following result: (1) Besides the abastecedores there generally exist three other middlemen between the producer and the consumer, and (2) the prices that exist in the market are neither fixed nor known by. the cattle raisers, but estab- lished by the dealers, and it may be also noted that part of the tablajeros are grouped together in wholesale associations who buy of the tratantes and who enjoy the benefits of the sale of aU the extra parts in the same manner as the abastecedores. ABUSES OF THE ABATTOmS. The principal abuses which are committed in the abattoir to the disadvantage of both the producer, and the consumer, in that they lower the price to the former and raise the price to the latter, are the following: 1. The abastecedor has a right to all the extra parts (despojos), without having to pay anything for them. These despojos, which include the head, tongue, brains, tripe, liver, feet, blood, and all other extra parts, are valued for each head of cattle at least as high as 22 pesetas. If the liver is not in good condition and is rejected and burned by the inspector, the abastecedor discounts 6 pesetas, in. spite of the fact that he has notpaid-a cent for it. Besides, to repay him for the duty charged by the municipality, the abastecedor retains the hade, the price of which in a 440-pound animal varies between 40 and 50 pesetas. For sheep the despojos are worth SPAIIT. 631 2 pesetas and the same for hogs, to say nothing of the additional vakie of a good many parts which are not enumerated. Ihis appropriation at the despojos, which constitutes the basis of monopoly, induces the abaste- cedores to prefer small animals, because with an equal quantity of pounds of meat they obtain a larger quantity of despojos. 2. 'ihe slaughtering is done in the early hours of the day and the weighing at 4 o'clock in the afternoon, allowing eight hours in which the meat becomes dried out; in spite of all this there is a discount of 1,600 grams per beef animal, 100 grams for sheep and hogs, and if they are not completely dry at the weighing hour the management takes off another kilo, in which case two kilos are deducted in paying the cattle raiser, and in the case of hogs another half kUo is also deducted. 3. Besides these public discounts there is no guaranty as to the weight, which is estimated by the old Roman procedure and not by actual weighing. This constitutes the basis for payment and is always less than the actual weight which is charged against the tablajeros, the difference being enjoyed by the employees of the abastecedor. 4. Discount for points (puntos) which is established at the caprice of the abastecedor, and amounts to a reduction of 80 cents per hundredweight for each punto per animal, regardless of the size of the animals, whether fat or lean, or whether the animal is accepted or rejected by the inspectors, for when rejected the discount is taken from another animal of the same consigioment. 5. If an animal was found to have suffered from the effect of a blow, the abastecedor deducts a certain number of kilos even in a case when the inspector accepts it and allows the bruised portion to be sold to the consumers, for which the abastecedor receives pay from the tablajero. 6. The slaughtering duties which the municipality charges amount to 4 pesetas for each beef animal, and the abastecedor on this account deducts 4^ pesetas, retaining, without any right whatsoever, the .extra half peseta per head. 7. Another half peseta is deducted for each beef animal or each hog and a tenth of a peseta for each sheep as a commission charge, although there exists absolutely no explanation for it, the abastecedor not acting in any capacity of a commission man. 8. For the pay of one who is illegally termed the representative of the cattk raiser, a commission is charged for each animal, although not officially allowable. 9. For each 10-cent stamp charge on receipts a discount of from 25 to 50 cents is charged, according to the amovmt of the receipt. 10. The amount of the bill is discounted 1 per cent and sometimes IJ per cent when payment is made in bills (instead of silver) . 11. In case of sheep a depreciation discount of a half peseta is charged for each skin, although the pur- chaser of the skia makes no reduction in paying the abastecedor. 12. Another haff peseta is frequently deducted for defects in the despojos of sheep, for which the abaste- cedor has paid nothing whatever to the producer. During the year 1909 there were slaughtered in the abattoir of Madrid 77,299 cows, 19,741 calves, 300,494 sheep, and 61,675 hogs. This does not include the animals which were killed oiutside of Madrid and sold within the city. Without taking into account the losses which are impossible to calculate, such as inaccuracy in weight, reductions for bruises, or the value of the hides, there results between duties, fees, and abuses a loss of 13,967,967 pei^tas, of which the duties amount to 9,288,293 pesetas, and the abuses of the abattoir to 4,-678,975 pesetas. The uncalculated abuses amoimted, according to Sr. Sanchez de Toca, to 12,200,000 pesetas. An analysis shows that each head of beef cattle was taxed in addition to the abuses of the middlemen 92.73 pesetas; each calf 23.30; each sheep 7.12; and eaieh hog. 68.12. The above figures show clearly to what extent the duties and abuses are responsible for the high cost of meat, and why it is that the producers are discouraged from trying to ship in their products to the market in Madrid. MEANS OF TRANSPORTATION. The freight rates on the railroad have been constantly discussed in the agricultural congresses and the Government has been deluged with petitions asldng for a reduction and unification of the railroad tariffs. Some people suppose that the excessive cost and slowness of transportation were the only cause of the ruin in produc- tion and the high price of foodstuffs; others, not knowing the industrial character of the railroad companies and the legal power of their concessions, have undertaken to force upon them unreasonable reductions in the tariff' which the railroad companies refuse to Jrecogn'ize on the gnooind that they were contrary to the provisions of their concessions, maintaining that the State had no right to modify the original tariff. These errors and the power of the companies have undoubtedly been the cause of the failure in the raUroad conference of 1907. 632 AGBICTJLTUBAL COOPEBATION IN EUBOPB. Although the high cost of transportation can not be considered as the only cause for the unfortunate agri- cultural condition of our country and the power of their concessions must be considered, still it must be admitted that they have had a great deal to do with the critical situation that exists in agriculture and cattle raising, and that the Government has the means, more or less direct, of forcing th6se companies to meet the demands of public opinion. The principle of high freight rates in a poor country is wrong. It is difficult to increase production and develop the agricultural wealth of the country without economical means of trans- portation. The limits mentioned for transportation rates in the railroad concessions should be interpreted to mean the maximum tarifiFs allowable, reserved for abnormal circumstances; still these maximum rates are charged for the transportation of cattle and the railroad companies claim that if they charged any less they would lose money. Nevertheless it may be seen by the following example that less rates have been established in numerous cases without having resulted in loss to the companies, for wherever competition exists these prices for trans- portation are reduced and still the companies continue in business. While the current price of the tariff amounts to 62 to 75 pesetas, per car-kUometer, still in the line from Santander to Madrid there has been established for cattle a rate of 39.2; in that from Corunna to Barcelona, 31; in that from Medina del Campo to Barcelona, on two-story sheep cars, a rate of 37^; and in the line from Car- tagena to Barcelona, 14 per story; and in the line from Badajoz to Barcelona, 16.1 per story. Besides showing by these examples to what point the companies have been able to reduce their freight rates, without prejudice to their own interests and of their own accord, the following comparison shows very clearly that it can be done: Cartagena-Barcelona, 811 kilometers, amounts to 118 pesetas; Cartagena-Madrid, 529 kilometers, amounts to 198.87 pesetas, which is 80 pesetas more, although the distance is '276 kilometers less. This case and many others which might be cited indicate the necessity of studying the means of arriving at a uniform system of raUroad tariffs. Our association does not ignore the enormous d'fl&culty that must be overcome, neither does it believe that it is impossible to overcome it. The theory advanced by the railroad companies that a reduction in the tariff would not result in a sufficient increase in the amount of freight transported to make up the difference is not well grounded in the case of trans- portation of cattle, for if the freight rates were reduced the cattle raisers would cease to use the vias pecuarias and would ship cattle over the railroad which they are now driving over the traUs. It is necessary to improve the facilities for loading and unloading, especially with a view to performing these operations more rapidly than at present. Attention should also be given to scrupulous disinfection of the cars, for it is well known that the railroads have been one of the principal means of propagating the epidemics which have caused fre- quent and enormous damage to our cattle-raising industry. The Government can also help in requiring the companies to reduce the freight rates by taking off the tax upon such transportation which amounts at the present time to about 20 per cent. Besides the railroads the other means of communication which the cattle raisers use are the vias pecuarias which, in spite of the constant efforts of this association, are occasionally absolutely intercepted. These high- ways for cattle, untU such time as the country shall be irrigated and put under proper cultivation, must be kept open so that the cattle may be driven from the summer pastures to the winter pastures and also to the railroad stations and the markets. In the several assemblies of cattle raisers held at Zaragoza in 1903, at Madrid in 1907, and as formulated by the Association of Agriculturists in 1887, and in the investigation of the high cost of foodstuffs by the chamber of commerce, it has been indicated unanimously that one of the principal necessities in the defense and encouragement of cattle raising is the conservation of the vias pecuarias. It is indispensable that the State shall occupy itself with this matter, employing the necessary means for the defense and conservation of these highways, keeping open those which are reaUy necessary and selling the obsolete ones, the proceeds from which could be used for the encouragement of the live-stock industry. MEANS OF ENCOUEAGING THE LIVE-STOCK INDUSTRY. Without going into all the reforms that might be established for this purpose we will point out some of them, as follows: 1. By developing irrigation work and transforming the methods of cultivation a greater amount of forage crops and pasturage may be developed. 2. At the present time a great deal of interest attaches to the food value for cattle of the by-products of manufacturing, and the State may exert a decided influence by reforming the law relating to sugar so as to prohibit or make difficult the production of alcohol, and also in a similar manner by restricting the wine manu- facturers from producing alcohol from the grape skins. The beet pulp, cane residuum, and grape skins would then be available for cattle feed. SPAIN. 633 3. The establishment and development of agricultural credit, permitting the formation of cooperative societies of production, distribution, and insurance of cattle. 4. Providing the proper protection for the industries derived from cattle raising, such as the transformation and sale of products like wool, cheese, butter, etc. 5. The perfection and unification of the Department of Anhnal Hygiene with a view to guaranteeing the health of the cattle coming into our frontier. 6. The State should dedicate more resources for the celebration of stock fairs, for the establishment of stock-raising experiment stations (granjas agro-pecuarias) , and for establishments for the improvement of the race of cattle, importing the best type of foreign cattle appropriate for each locality, and paying still more attention to the selection of the native prize animals, which should be bought by the Government at each stock fair and maintained for the benefit of each locality toward improving the breed. 7. The State should oblige the municipalities to provide weighing scales at the railroad stations and markets, so that the cattle may be weighed alive, thus enabling the producer to know the exact condition of his cattle, being aware of what he is raising and what he is selling, and to do away with the guesswork and estimates by observation, which have always resulted to the disadvantage of the cattle raisers. The true meaning of the quotations reported from all the markets and shipping points in Spain, which are now a mystery and signify nothing, since they are based upon incorrect weights determined by observation, will be apparent when exact weighing is established. Having indicated in a general way the means of encouraging the cattle-raising industry which should be adopted by the State, we will now proceed to indicate, in a concrete manner, the methods of procedure which should be adopted to do away with the true causes for the high price of meat, namely, the improper arrange- ment of abattoirs and markets, and the high duties and fees imposed on the meat by the municipalities. ORGANIZATION OF MARKETS AND ABATTOIRS. As a basis for the reform, the middlemen should be suppressed and means provided for the proper representation of the producers at the consuming centers. To accomplish this, the following provisions will be necessary: 1. In order to secure the economic existence of the cattle at the markets, pasture lands and stables should be provided and food should be provided for the cattle at a reduced price, stated as an exact tariGf. To bring about this reform the cattle-raising association offers its collaboration. 2. As a means of putting the cattle raisers in relation with the tablajeras, agents should be named, charged with receiving the cattle and effecting the sale directly to the tablajeras and to make collections for the meat and the extras (despojos) as well, delivering the same to the cattle raisers. The intervention of these function- aries should always be obligatory, they should be put under bond, and should receive a certain percentage of the net sales. They should be named and assigned by the municipality from among candidates proposed by or acceptable to the association of cattle raisers, for these agents are nothing else but the representatives of the cattle raisers. Contracts between the agents and the tablajeras should be made in triplicate and in writing, one copy remaining in the office of the superintendent of the abattoir. A daily bulletin should be published, indicating the prices and the quotations, and our association also offers its cooperation in this matter. 3. In the same manner as the weighing scales should be provided in the railroad stations and in the mar- kets there should always be scales in the abattoirs. The method of applying the duty or tax should be reformed to depend upon the live weight, so that the daily quotations at the railroad stations and markets may be under- stood and interpreted by the producer, who will then know the value of their animals, and will in this way be encouraged to improve the character of their production so as to bring about the very best dressed beef. 4. The services in the abattoir should be entirely under the direction of the municipality, as should also the trucks which are used in transporting the meat, being the property of the municipality or of the estab- lishment which is in charge of this service. All employees should be directly paid by the municipality. 5. The municipality should have absolute control of the use and the transformation of the despojos of all the animals which are slaughtered, paying the value of them to the cattle raisers, the income from their sale accruing to the municipality or to the establishment in charge of this service. 6. The so-called faithful representatives of the cattle raisers and the weight guessers at present existing should be suppressed and superseded by real representatives, approved by the cattle raisers' association, who should record the weight from the scales. 7. The slaughtering fees should be removed, for they are among the most objectionable elements, tending to discourage the producers from sending cattle to market. 6S4 AGEICULTtJBAL COOPBEATION IN" EITEOPE. 8. In all the lai^e cities all kinds of cattle produced in Spain and slaughtered in other abattoirs should be permitted free entry to Madrid, being subjected to proper inspection and sanitary arrangements, as well as required to conform to the royal decree of April 6, 1905. There is no good reason why lambs and calves should be admitted when aU other classes of animals are excluded in a slaughtered condition. This reform would increase the quantity of meat shipped in and result in the creation of rural abattoirs in the centers of production. 9. The number of retail establishments (tablajeras) should be limited, for there are at present many of them which sell less than 110 pounds of meat a day, and in order to cover their expenses they naturally have to increase the price to the consumers. TKANSPOBTATION AND DtJTT ON MEAT. (a) The railroad transportation tariffs on cattle should be reduced and the imposts upon such shipments should be removed by the State. The reduction should be at least one-third from the present rates. The unification of the tarififs and their classification are necessary and a beginning should be made by requiring them to be uniform over all the lines of each company. Cattle should be transported more rapidly than they are being transported at present, and the facilities for loading and \mloading, the disinfection of the cars, etc., should be properly provided for. The State should also take measures for the defense and conservation of the vias pecuarias. (6) The unreasonable duties which are placed upon meat are due to an error on the part of the munici- pality in considering the abattoir as a source of income, instead of considering them as a source for public serv- ice. The high duties on products for consumption which are at present adding so considerably to the price of meat should be immediately removed. The duty of 1 per cent should be removed, because it is absurd that an additional burden should be placed upon one article of consumption to make up for that taken off of another (tax was taken off of wine). The duty charged for slaughtering and dressing should be reduced and limited to an amount just sufficient to make up for the cost of operating the municipal abattoir. By carrying into effect these reductions in the duties and modifications in the management and faulty regulations of the markets and abattoirs, the 14,000,000 pesetas which are annually disappearing among the abuses and the excessive duties will be done away with. The high profits of the tratantes and the other middlemen which are at present interpolated between the producer and the consumer may be deducted from the selling price of meat and partly added to the price paid the producer. In this way important benefits may be brought about in the price of the most important article of food not only without prejudicing the agricultural or cattle-raising industry of the nation, but actually with profit to them. FEDERACION NARANJEEA AT VALENCIA. Prior to the organization of this association the citrus-fruit producers of Spain had no control whatever over the selling price of their products, and had to accept whatever returns the commission merchants and shippers chose to report. Frequently the returns were not sufficient to pay the charges of gathering, crating, and transportation. Shipments were frequently reported to have arrived in bad condition and corresponding reductions made from the seUing price. The local syndicate (sindicato) of Valencia made a careful investiga- tion of the marketing problem, finding that their produce was frequently stored next to the boiler on board ship, resulting in its deterioration from excessive heat, that it was generally carelessly stowed away in the hold of the vessels, so that it shifted about and bruised the fruit, and that the shippers showed Uttle interest in having the shipments go direct and arrive in good order at the market. The returns were found to be less than the true selling prices, or these prices were arranged by collusion between the shippers, commission merchants, and the purchasers in the foreign markets. The officers of the local syndicate decided that it was about time to organize a cooperative marketing de- partment, and they invited the other citrus-fruit producers to join with them. As a result La Federacion Naranjera was formed, taking advantage of the privileges granted by the law of January 28, 1906. (See by- laws translated and attached.) The purpose of this society is to further the interests of aU its members in purchasing by wholesale all the raw materials which they use in their industry and selling collectively all their produce. Every year the association estabUshes an internal agreement between the several sindicatos and individuals who make up its membership, regulating the manner in which the fruit shall be gathered, graded, packed, shipped, and sold, and providing for the method of distri^v+inw the profits. When the federation was first formed its managers went to the steamship and railroad companies and demanded proper accommodations and freight rates. They were resisted at the start, but by bringing pressure from the Govermnent to bear upon the transportation companies they succeeded in getting satisfactory accommodations. They next established SPAIN. 636 receiving stations in the several communities, where the fruit was collected and packed under the direction of their own inspectors. They also sent agents to London, Liverpool, Amsterdam, Hamburg, and Odessa, whose duty it was to keep track of the market, advising the central office in Valencia of the quantity of each kind of fruit that it would be safe to ship to each, to receive and sell at auction, and to look after the general interests of the federation in the foreign markets. Immediately the prices went up and the citrus-fruit industry became profitable. A year ago a special agreement was entered into between the producers as to the prices which should prevail during the season for first, second, and third grade fruit, and the new agreement has been entered into for the season just passed of 1912 and 1913, the prices being fixed at $1.90 to 12.35 for first class, $1.35 to $1.80 for second class, and 90 cents to $1.25 for third class, no oranges to be less than 2 inches in diameter, these prices per thousand to the consumers f . o. b. the farm. The price of lemons has been as high as $7 per hundred pounds, and the net profits of operation among the citrus-fruit growers average from 7 to 12 per cent per annum. The officers of the federacion have recently encouraged the onion and potato growers of Valencia to organize cooperatively for the sale of their products, the price of which at present is very low, onions selhng at 25 cents a bushel in crates 11 inches by 14 inches by 4 feet, holding 2^ bushels, and weighing 125 pounds, and potatoes in 2-bushel sacks, weighing 125 pounds, and selling at 50 cents a bushel f. o. b. dock Valencia. On June 12, 1913, the docks at Valencia were piled high with crates of onions deHvered at 62 cents a crate for shipment to England. Six weeks later a crate of these same onions was selUng at retail through a country grocery store tu New Hampshire at the rate of $4.50, seven times the price received by the producer. These onions had been sold to a dealer in London and then reshipped to America. When a more complete system of cooperation is estabUshed the prices to consumers in America ought to be less and the Spanish producers ought to get more. Citrus fruits. — In addition to the 20,000,000 crates of citrus fruits shipped from Spain last year there was a great deal of fruit which was allowed to waste because of poor facihties for conserving it. The large quantities of marmalade which are being manufactured from sour oranges in England might a great deal better be manu- factured in Spain, where the labor is less expensive, and where a very large quantity of overripe fruit, which can not stand shipment, might be utilized. The federacion having already estabhshed packing houses will soon begin the conservation of marmalade. The average orange crates hold 450 and weigh 175 pounds, but some crates are made considerably larger, so the prices are quoted per thousand, and have averaged this year about $2, making the averaged size crate of 450 oranges net the producer nearly $1 per crate. At Beniopa, Valencia, there is an orange and lemon property belonging to Senor Don Jose Rausell, 80 acres of which is planted in oranges and lemons and valued at $1,000 per acre, 20 acres more of unirrigated land being planted in locust-bean trees, and is valued at $500 an acre. The citrus-fruit trees are watered from an inexhaust- ible well on the property by a pump operated by a 6-horsepower gasoline engine and hfting 2 cubic meters of water to the ground below it and 800 Hters to the higher ground per minute. The locust-bean grove is too high up to be watered from this well, and so remains unirrigated. Lemons have been sold in 1911 for $1.80 for 25 pounds, or $12.60 per 175-pound crate. There are 30 men constantly employed at about 40 cents a day, and additional help during the busy season at from 60 cents to $1 a day. The best orange-growing land in Valencia before planting is valued at $1,000 per acre, when the trees are 10 years old at $1,500 an acre, and for the finest old orchards the value runs as high as $3,000, one having sold recently for $2,800. Cooperation has been so successful in the distribution and marketing of the citrus fruits and is being taken up with so much enthusiasm by the other producers in Valencia that the effect is sure to spread to other parts of Spain. BY-LAWS OF THE CITRUS-FRUIT GROWERS' FEDERATION OF VALENCIA. I. CONSTITUTIOJf AND OBJECT. Article I. The agricultural sindicatos which subscribe to these by-laws under the law of January 28, 1906, form themselves into a union entitled "Federacion Naranjera" for the purpose of accomplishing the following results: 1. The estabUshment of whatever services of a mutual nature may be considered beneficial and Ukely to encourage the production and advancement of the interests of the several subsidiary associations in the citrus-fruit industry, such as, for example— (a) The acquisition of agricultural machinery. (6) The purchase of raw materials for chemical fertilizers. (c) The acquisition of insecticides to combat citrus-fruit diseases. (tO The utilization of the by-products of the citrus-fruit industry. (e) The acquiring and manufacture of materials for the packing of citrus fruits. (/) Formation of mutual insurance associations for protection against risk in transportation. {g) Organization, cheapening, and improvement in transportation facilities. (A) Formation of agreements and establishment of agencies to facilitate the banking operations connected with the shipping and sale of citrus fruits to the interior of Spain. {%) Establishment of agencies, both in Spain and foreign countries, for selling purposes. 636 AGEICULTUBAL COOPERATION IN EUEOPB. 0') The sending of commercial expeditions to investigate interior and exterior markets, and to open up new centers of consumption for citrus fruits. {¥) Acivertising by means of conventions, conferences, and publications the facts relating to and methods concerning the cultivation and packing of fruit, and information as to its export, its sale in the markets of the world; quotations, in fact, of everything which may be of interest to the associations of producers and exporters. 2. Holding conferences to stimulate progress in the cultivation and packing, giving prizes for the highest production, and also for the greatest improvement in quality, as well as for the invention of means of preserving citrus fruit in the most perfect and economical manner. All these services may be adapted and developed for the production of onions or other similar products which may be produced by the subsidiary sindicatos, in which case as many sections may be added as are necessary. 3. Study and defense of the agricultural interests of the subsidiary associations of the federation. 4. The maintenance of harmony among the federated interests by means of arbitration of any differences that may arise. 5. The extension of the scope of the association and the securing of a greater number of adhering elements. Art. II. The Citrus Fruit Federation is considered as an agricultural syndicate, under the law of January 28, 1906, which grants tax exemption, prescribes duties and obligations, grants privileges and assistance, and which recognizes the rights under article 38 of the Civil Code, permitting the acquisition and possession of goods of all classes, the right to contract obligations and to perform all manner of business transactions in conformity with the law and by-laws. Art. III. In the inherent operations relating to the special services that the federation gives, or which are organized for its benefit, the funds of the subsidiary sindicatos may not be used, and in consequence, according to the ruling of the 16th of January, 1908, in no case, even should the federation be dissolved, shall any dividends be declared on such operations. Art. IV. Associations of producers and exporters of agricultural products existing and established according to the law of agricultural syndicates in Spain are eligible to membership in the federation. They must furnish a sample of their constitution and by-laws accept- able to the central council (junta central), it being understood that by the mere act of applying for membership they accept the constitu- tion of the federacion naranjera. Art. V. Any subsidiary association shall lose its membership, either by voluntary resignation, whenever it may be dissolved, or in case it is excluded from membership by the junta central because of having failed to comply with its obligations or the provisions of the constitution, or for having performed acts prejudicial to the federation. When subsidiary societies are excluded, or when they resign, they shall still be subject to the fulfillment of the contracts they have made in the name of the federation, either for it or for themselves. The federation shall retain the funds which shall have been paid in, even though not invested, untU such time as the subsidiary com- pany shall have fulfilled all its obligations. Art. VI. The legal residence of the federation is fixed at Valencia until such time as may be otherwise decided by the central council. It shall remain in operation indefinitely and can not be dissolved as long as there remain three of the subsidiary companies united by the ties established by the federation. n. MEMBERSHIP. Art. VII. The rights of subsidiai^ sindicatos are: 1. To be represented by three voting delegates in the meetings of the central council. 2. To have the advantage and participate in the profits which the organization of the federation make possible. Art. VIII. Their obligations are: 1. To abide by the constitution and comply with the decisions of the central council and with those of the executive committee, in so far as such decisions relate to them. 2. To pay such dues as are provided for and chargeable to them under the ruling of article 18. 3. To -submit to arbitration by the central council such differences as may arise betT^een them, and to abide by its decisions. 4. To give an account to the general manager of the federation of the services they have received from individuals or societies which may be under the jurisdiction of the federation. III. resources. Art. IX. The federation counts for its support upon the following means: 1. Pees and dues from its subsidiary societies or other institutions which it may establish. 2. The difference between the commissions which it receives for its services and the cost of performing these services. IV. rules and management. ' Art. X. The federation shall be governed and managed: 1. By a central council. 2. By the executive committee. Art. XI. The central council is made up of delegates from all the federated societies and is the representative body of the federation. Every two years each subsidiary society names from among its own members three voting delegates to assist at the meetings of the' central council (junta central), these delegates having the power to represent their companions who are absent whenever the president shall call meetings. In the voting of fees, duties, etc., each subsidiary syndicate shall have three votes for first 5,000 boxes of fruit exported in the previous season, and for each 5,000 boxes or fraction thereof in excess one more vote shall be allowed. The syndicates upon first coming into the federation shall be allowed votes according to the number of boxes which they estimate that they will be able to export, as previously pro- vided. But the second season they will depend upon the number of boxes exported the first season. Art. XII. The central council shall hold a meeting in the month of July to nominate president and vice president of the central council and the three delegates who are to constitute the executive committee. These nominations or appointments shall be for one year and reelection is not permitted. In this meeting the accounts of the federation for the previous year and the estimated expense for the following year shall be considered and approved. SPAtlt. 637 Art. XlII. The central council shall also consider in a meeting before beginning the operations of tte season the funds which shall be applied to each section, establishing a plan and other arrangements for 6 he campaign. At the end of the season the accounts shall be considered and approved at another meeting. Art. XIV. An extraordinary session may be called by the president or by request of three subsidiary associations of the federation or by separate localities through their delegates. Art. XV. In ordinary or extraordinary sessions such subjects shall be considered as are necessary and four-fifths of the delegates present shall be required to pass any matter unless it was announced in the call for such meeting. Art, XVI. When delegates foresee the impossibility of attending one or more meetings, and when vacancies occur during the year, they shall be filled and substitutes appointed by the subsidiary associations affected. Art. XVII. Members of subsidiary societies who are serving on committees or the directorate have the right to take part in discus- sions, but not to vote in the meetings of the central council; other members and invited guests may be present merely. The presidents of subsidiary associations in localities where meetings are being held may sit at the council table. Art. XVIII. The duties of the central council are: (1) To abide by and cause others to abide by the constitution and decisions adopted. (2) To interpret the meaning in cases wherever a doubt arises. (3) To pass upon the admission or exclusion of members and concerning claims that may be presented by members. (4) To decide upon the development of the pirrposes of the federation, and upon the form and desirability of establishing branches or agencies, or of utilizing for such purpose departments of the federated association or of individual establishments, or subsidiary or inde- pendent associations, or such means as may be considered necessary or convenient in each case, regulating the services which such estab- lishment or appointment of agencies shall require. (5) To determine the number of employees, the amount of salaries, and other details of the central office of the federation. (6) To establish an obligatory fee or due of a certain amount for each subsidiary association, to cover ordinary expenses of the federa - tion, and to agree upon the fees or dues required of the branches or sections which may be established to cover their operating expenses. (7) To decide upon the funds which are considered necessary to cover unforeseen circumstances or emergencies, and to make assess- ments in an equitable manner upon all of the subsidiary associations. (8) To raise loans or to receive funds in the form of loans, bearing interest not to exceed the legal rate, for the purpose of establishing or rendering services such as are not covered by the budget of the preceding year. (9) To examine and approve the annual accounts. (10) To protect and encourage initia.tive and activities, plans, etc., for the development which may be considered necessary to accom- plish the purposes of the federation. (11) To verify everything which is considered to be allied to the interests of the federation, even though no mention or provision has been made for it in the constitution, but which may be inferred from the spirit thereof. (12) To provide special commissions to deal witl\ the public authorities whenever necessary, and whenever the occasion arises that the interests of the federation demand it. Art. XIX. The president of the central council, and, failing him, the vice president, shall — (1 ) Represent the council, and through it the federation, in all official and social acts. (2) Carry on communications with the authorities, corporations, associations, and individuals. (3) Call and preside at the meetings, direct the discussions, decide tie votes, and fulfill the duties inherent upon their office. (4) Authorize by their signature the acts of the assemblies, the certificates, and other documents which by their nature require it. Art. XX. The executive committee shall be made up of an executive officer, a treasurer, and a secretary, designated by the central council from among the delegates of the subsidiary associations composing the same. In case of absence or sickness, the duties of the executive committee shall be fulfilled, in the interval, by substitutes or alternates. Art. XXI. The duties and obligations of the executive committee are: (1) To direct the central office operations of the federation. (2) To collect fees, dues, and assessments which may be agreed upon by the central council. (3) To collect commissions on receipts which are obtained through special services not required of the federation. (4) To pay the expenses which have been incurred. (5) To verify transfers made, to equalize the estimates for the several departments, and to pass upon the legitimacy of any claims against the society. (6) To supply to the subsidiary associations all manner of reports and information interesting to them, maintaining a continuous com- munication with them, and to clear up any doubts they have submitted to it. (7) To provide facilities to the subsidiary associations for intercooperation or intertransaction for their mutual advantage and the furthering of the objects they are pursuing. (8) To carry into practice the services and other agreements made by the central council, in conformity with the special rulings or prohibitive orders emanating from the council. (9) To present at the meeting of the central council, in June of each year, the accounting of the preceding year and an aimual report recording the services rendered, the deficiencies observed, and the reforms or innovations which ought to be introduced, as well as to present to the annual meeting the estimate or budget of general expenses of the federation for the year to come. Art. XXII. The executive officer of the federation, representing the central council, and through it the federation, shall sign all acts proper to his position or which demand the exercise of the functions delegated to him, administrative as well as legal, putting after his signature "Federacion Naranjera, El Gerente." This signature binds the federation. Art. XXIII. The executive officer of the federation shall represent the same in the central office and everywhere else, before all manner of authorities, tribunals, corporations, active associations, performing all manner of procedures, both ordinary and extraordinary, including the abrogation, revision, and settlement of disputes of an administrative character. He is endowed with authority to grant power of attorney, appoint agents and representatives for the purpose of accomplishing the operations necessary; to exercise all manner of operations for the federation, paying out of its funds the expenses caused by disbursements for its benefit or the protection of its inter- ests; to carry on correspondence, to carry into effect the decisions of the central council which come under his charge, and to authorize all payments. 638 AGEICULOrtTEAL COOPEEATIOIT IN BtTEOPE. Art. XXIV. The treasurer shall take charge of the receipts, verify the payments authorized by the executive officer, and fumisli monthly statements and an annual balance sheet. Art. XXV. The secretary of the federation shall also act as secretary of the central council, his duties being: To keep an accounting of the syndicates subsidiary to the federation and to have charge of the seal and the archives of the federation. He shall keep the books, issue calls, with the authorization of the president, to the subsidiary associations, of the meetings of the central council, giving an account of the matters to be considered in an order of the day, and edit and sign the acts and certifications in conjunction with the president. Art. XXVI. At shipping points to which the products are brought throughout the country for export there may be organized branch offices, the establishment and maintenance of which shall be charged to the subsidiary associations which are directly served and benefited by them. Such collecting stations must develop their activities in accord with the executive committee upon which they shall be dependent, acting as auxiliaries. v. ADDITIONAL. Art. XXVII. To amend the constitution a vote of four-fifths of the subsidiary associations shall be required. Art. XXVIII. Circumstances not provided for in this constitution shall come under the laws. Valencia, May IS, 1912. Note. — The present constitution modifies that approved in ViUarreal on August 1, 1909, when the "FederacionNaranjera" wag established. TORRE MELINAS AT BARCELONA. A poultry farm situated about a mile to the north of the city and owned and operated by Senor Don Jose Pons-Arrola has 8,000 fowls kept in separate pens, 1 cock and 16 hens in each. The chickens are hatched by incubators, 800 daily, and raised by brooders, with a loss of only 10 per cent mortality. The hens average 800 eggs a year each during the period from 6 months to 2 years of age, when they are killed and sold. Most of the chickens are sold at once after hatching at 10 cents each to people who come and buy them at the farm. When not sold immediately they are kept for four months, when they weigh 6 J pounds each and sell at 65 cents. Setting eggs sell at 80 cents and those for table use at 40 cents a dozen. Ducklings just hatched sell at 20 cents, and duck eggs for $1 a dozen. The proprietor also keeps some live stock, his sheep yielding 15 pounds of wool each, at 30 cents a pound, and the lambs weigh 100 pounds at 4 months old and sell at |12 each. This is not a cooperative farm, but its proprietor is the leading ofl&cer in a local sindicato, and he is oper- ating this farm as an example to show what can be done. GRANJA LA RICARDA AT BARCELONA, The milk from La Ricarda is transferred from 20-liter tin cans to 1-liter glass bottles at a central distributing station in Barcelona, and the delivery is made by boys, who carry the bottles around in carts and baskets to the consumers, the price being 12 cents a quart. There is only one other dairy supplying cow's milk in the city, only about 2,500 liters of the entire supply coming from these sources. Ooat's milk in Barcelona. — The greater part of the milk consumed in the city of Barcelona is produced by herds of goats, which are driven around the streets of the city once in the morning and again in the after- noon, and the quantity required by each consumer milked while he waits. This is considered a very sanitary arrangement and would be if the containers for the milk were always kept clean. The price varies from 8 cents to 14^ cents a quart, according to the quantity purchased and the time of year. When bought in quan- tities not less than a pint it rarely costs more than 9 cents a quart. CONCLUSION. For magnitude and results the cooperative selling operations of the citrus-fruit growers (Federacion Naran- jera), and the Cattle Raisers' Association (Asociacion General de Ganaderos) are among the most important of any cooperative agricultural undertakings in Europe. They have only been occupied with distribution and marketing for a few years, but they have been wonderfully successful from the very start, due largely to their excellent organization as purchasing societies for production prior to their undertaking the sale of produce. Although there are not very many cooperative selling associations among the Spanish farmers, the large number of sindicatos already existing there form a solid basip on which to establish them, and with the example and encouragement of the two examples already described much progress is being made. VIIL RURAL UFE. The people in the country districts of Spain live mostly in villages, partly because of the traditional custom of grouping together for mutual protection and defense and also for the reason that a large part of the open country in Spain is very dry, dusty, and lacking in vegetation throughout a large part of the year. The tenure of land has something to do with it, too, for there has been Uttle inducement to build separate houses on the large estates. stAiN. 639 The 114,000,000 acres of farm laad are divided up into 3,400,000 separate farms, the distribution probably being about as follows: Farms, averaging 5 acres each 2, 000, 000 Farma, averaging 100 acres each 1, 000, 000 Large estates, averaging 10,000 acres each 1, 300 In the Basque Provinces, Gahcia and the Levante (Mediterranean Provinces), there is more vegetation and moisture, and there are more small farms, on many of which the proprietors live in separate houses, although a large proportion do live in villages scattered over the country, which is more attractive to live in. The people have always been greatly attached to their homes in these parts of Spain and take pleasure in making them attractive by planting gardens, flowers, and fruit trees. Bordering on this small farming territory, but farther inland, are the partially irrigated and dry farming districts where the medium-sized holdings of 40 to 200 acres are situated, and where almost the entire rural pop- ulation live in villages. In the great central plains, where the large estates are, those who work the land live temporarily in cabins on the land, though their permanent residence is in the towns. The rural life in all parts of the country where vegetation is lacking would seem to be very miserable and monotonous, and the people of these sections appear to reflect this miserable existence in their personal appear- ance and customs. They look dried up, half starved, and overworked. The country people in the pleasanter regions are strong, handsome, and robust, as well as good natured and fuU of fun. All but the very highest type of people are interested, above everything else, in buU fighting. The amusements most popular among the Spanish are about in the following order: BuU fight, all forms of musical entertainment, especially the guitar and vocal music, dancing, and fairs and feast days, church festivals, etc. Since the syndicates have been developed, the country people have been drawn together socially through their influence, and the private associations and farmers' clubs have also done much along these lines. Rural-Ufe conditions in Spain became so bad about a hundred years ago, and so many people emigrated to America that the Government began taking an active interest in trying to find a remedy. In 1812 laws were passed abolishing "primogeniture" and ahenating pubhc lands of the Crown, the Provinces, and the town coimcils. Very little benefit accrued to the people who worked the land, for only those with money were able to buy these lands when they were sold at auction, and they fell into the hands of capitahstic speculators. Formerly, when people in a rural communtiy were out of employment, the town coimcHs allowed them to work on their lands and stdre the proceeds in the positos, but when the public lands were sold and held by speculators, who would not give employment, the rural workers were worse off than before. The farm laborers had formed unions to protect their interests, and there developed a sort of strife between them and the capitalists who had acquired the land. To remedy this a law was passed in 1812 declaring combinations or unions illegal, but it was very difficult to enforce this law, and another more stringent edict of a similar char- acter was issued again in 1863. For many years great misery prevailed, so that finaUy in 1883 the Social Reform Commission was estab- lished to act as arbitor between capital and labor, to study the whole problem, and to make recommendations as to the means for bettering these unfortunate rural conditions. In 1903 this commission was transformed by royal decree and called the Social Reform Institute and placed under the department of agriculture, as a special bureau, with 395,300 pesetas a year for expenses. This institute has proved one of the most valuable institutions ever estabUshed in any country for encour- aging improvement in social conditions. It studies the problems of the working classes and their relationship to the employers, frames measures to remedy these conditions, acts as a court of arbitration, and sees to it that the measures which it recommends are made into laws, and that these laws are enforced. Nearly all the laws which have been recently passed by the Cortes for the betterment of agriculture have been formulated and recommended by the institute. The laws of 1906 and 1908 relating to syndicates, transformation of the positos, and establishment of thrift, the law of 1911 authorizing the building of houses for workmen, were all planned and passed under the initiative of the institute. The State, the Provinces, and communes are authorized by law to grant, free of charge, such land as may be necessary for workmen's houses, and these houses are exempt from taxation, as well as the concerns engaged in building them, and the Govern- ment grants 500,000 pesetas annually toward this work. PUBLIC EOAD IMPROVEMENT. National highways are built and maintained by the State, provincial highways at the expense of the Province in which they are situated, and district highways are built and paid for by the townships, which may borrow from 40 to 70 per cent of the cost of construction at 5 per cent interest, and amortizable in 30 640 AGSlCVLTtTEAL COOPEBATIOK IK BUfiOPE. years, by anfluities, from the Federal Government, which appropriates a certain limited amount annually for this purpose. This year it is estimated that the ayuntamientos will be granted $720,000 for district roads, which are estimated to cost 11,980,000, and it is planned to spend $474,000 on building new national roads. Contracts wUl be let for 1360,000 worth, and the balance of 1114,000 will be done by the direct administration of Government forces. New construction is estimated to cost $6,100 per mile, and maintenance, $144 per mile. The district roads must be sufficiently wide to allow two carts to pass, but they are to be constructed in the most economical manner, and even bridges are dispensed with wherever possible. Provincial and State roads must have a 20-foot roadway, from shoulder to shoulder, with gutters 2 feet 8 inches by 12 inches, with a mac- adam surface 15 feet wide, and tapering from 8 inches thick in the center to 4 inches thick at the sides. The present condition of the road situation in Spain is shown by the following table: Year 1910. Already constructed In process of construction. Started but stopped Projects approved Projects studied Projects to be studied Total proposed mileage. Kind of road. First class. 4,443 38 13 16 9 50 Second class. 6,188 212 16 211 410 73 Third class. Miles. 15, 873 2,880 469 4,548 9,782 9,906 Total. Miles. 26,504 8,130 498 4,775 10,201 10,029 55,137 The Government will spend $2,160,000 for new construction during the next six years, and $3,291,858 for maintenance, mostly to be done with the Government's own forces, the estimated cost being about half for teams and carts and the other half for labor. There is an additional amount of $720,000 appropriated for maintenance by contract. The national highways are those connecting the principal seaports with the capitals of Provinces, and those connecting such Provinces and leading into Madrid. Provincial highways lead from the provincial capitals to the largest cities and to the raihoad stations. District roads include all those not included under the first and second class and correspond to our county highways in America. It is these district roads which are most lacking in development in Spain, and as may be seen from the table, they are being given the most attention by the Government at the present time. THEIFl ASSOCIATIONS. By royal decree of July 7, 1911, there has been established an institution of mutuality and providence or thrift in the public schools of Spain. The children are taught to begin making provision for the future in the following ways: (a) Savings bank accounts drawing compound interest, (h) insurance of dowry for girls, (c) old age pensions for all, (d) vacation colonies and health insurance, etc., for all. This institution has worked well in Italy, and is being taken up with enthusiasm by the Spanish teachers and the rural population. TRAVELING PROFESSORSHIPS OF AGRICULTURE. These are doing a valuable work through lectures and demonstrations in all parts of the country, and through the distribution of printed documents, couched in simple language, explaining the most approved modern method of cultivation, fertilization, crop rotation, and agricultural machinery operation. Demon- strations are made by the farmers themselves, on their own land, under the direction of the professors, and witb fertilizers, spraying materials, etc., furnished by the agricultural department. Prizes are offered to those who may produce the best results, and much interest is taken in this work by the church and the schools. GEANJAS AGRICULTURAL EXPERIMENT STATIONS. In each Province there is established an experimental farm and school of practical agriculture, where the most suitable crops and live stock for the Province are tried out, the best foreign breeds being imported, and foreign crop seeds as well. Agricultural machinery of the latest type is tried out on these farms, and when that SPAIN. 641 best adapted to the locality has been determined upon, the professor of agriculture immediately makes an effort to have it adopted. The children from the public schools, after having a certain amount of elementary education, are admitted to these schools of agriculture. CONTROL OF PLANT DISEASES. Some very able experts on plant pests are in charge of the several departments under the ministry of agri- culture throughout the Provinces of Spain. They visit any section where an epidemic is reported and make a very careful study of the pests. In the case of insects, they watch their habits and determine how they can kill them without at the same time damaging the plant or the fruit. The remedies which they determine upon are tried on the experimental farms, and when found to be practical they are published and introduced under the direction of the traveling professor of agriculture or directly under the supervision of the plant disease experts. LOCAL MARKETS. There being few cities with a large population, the -system of a central market place and regular maiket days for bringing in the produce from the surroimduig country generally prevails. In the larger towns there may be several separate markets and much of the produce brought in by rail or steamer, but the consumers near by go out to the market to make their purchases at least once a day. This results in a comparatively economical distribution of farm produce except where the transactions are sufficiently large to admit of an intermediate wholesale department, or where the produce is transported for some distance. The price of labor being low and women and children generally taking care of the sale of produce in the markets, the cost is kept down pretty low. Usually women pack the farm produce on donkeys or load it in carts and bring it in to the market and sell it themselves, while their husbands remain laboring in the fields. Sunday is the day for selling live stock, and in the small villages this is made a sort of holiday occasion, like a country fair, and the people appear to take great pleasure in trading among themselves and visiting with one another, somewhat as farmers in certain parts of the United States do at auctions. A farmer having a dozen pigs a month old wiU take them to the market in baskets on mule-back and sell one or two to each of his neighbors, these in turn will feed these pigs for a week or two and bring them into the market and try to trade with someone else for a larger and fatter one, so on until they are full grown, when they are usually sold to some traveling buyer who ships them to a larger town. FLOWER MARKETS. Almost every town and city in Spain has a flower market where women and girls exhibit and sell cut flowers which are mostly grown in the suburbs. One of the wide, shady avenues in Barcelona called "Las Ramblas" has a central sidewalk, along either side of which for five or six blocks stands are erected for the exhibition and sale of flowers. The flowers are brought in from the country and put on exhibition about 7 o'clock in the morning and the sale goes on until 11, when aU that are not sold are removed and the street swept up for the day. Great quantities of flowers are sold and at very moderate prices, the poeple buying them at the same time that they go to the general market for vegetables, etc. INTERIOR COLONIZATION. The Government encourages small farmers and fruit growers to acquire and develop imused lands, and there have been established several very successful colonies, one of which, on the Mediterranean coast, has developed stony hillsides, laying up walls and making terraces on which are planted fruit trees and vineyards; another is situated on what was formerly a sandy waste near the mouth of the Eiver Guadalquivir, where by the planting of leguminous crops the moisture has been led up by the roots and some very successful farming has been done. EMIGRATION. The number of people leaving Spain for foreign countries is constantly increasing. Those who go to America usually remain permanently, but there is an annual exodus to Algeria during the harvest time in northern Africa which is only temporary. In the period from 1881 to 1890 one-tenth of 1 per cent of the population emigrated; from 1891 to 1900 forty-two one-hundredths of 1 per cent, and from 1901 to 1910 sixty-three one-hundredths of 1 per cent emi- grated annually. The Government is at present very much concerned in preventing this permanent emigration, but so many abuses have been perpetrated by the Spanish Government that the people, particiflarly in the country, are very suspicious of any attempt which the State authorities make to better their condition. 14174°— S. Doc. 214, 63-1 41 642 AGBIOULTUEAL OOOPEBATION IN EUEOPB. THE ETJRAL DESPOT, " CACIQUE." "Caciquismo" is an evil similar to that practiced by "the gombeen man" of Ireland. In Spain the usm-er or dishonest superintendent of some large absentee proprietor usually tyrannizes over the people in a community, and he frequently has a store or drinking saloon through which he manages to get control over the working classes. This evil is most pronounced in localities where the land is held in very large estates or at the opposite extreme where the holdings are so small that the proprietors can hardly make a living on them. It is noticeable that wherever cooperation has been introduced "caciquismo" has disappeared. THE INFLUENCE OF THE OHUECH. There is a difference of opinion as to the influence of the Church of Eome, which is the only religious organization of consequence in the rural communities. Whenever the leaders of the Cathohc organization are people of high ideals and progressive, their influence is undoubtedly of much benefit, as demonstrated by the work done by El Banco de Leon XIII at Saragosa. The Basque Provinces are almost entirely under the influence of the Church and a considerable progress has been made by it among the farmers in cooperative credit. Where the monasteries are very strongly entrenched it is said that a large proportion of the inhabi- tants who are too lazy to do any work join the religious orders and expect the balance of the population to support them. A very strong resentment is manifested among the industrious working people in almost every part of Spain against the monasteries, and many influential people in the Government feel that a process similar to that which has been adopted in France is the only proper solution to the problem. COOPEKATION IN RURAL LIFE. The mutual associations among the small farmers through the sindicatos, cajas rurales, positos, and socie- ties of prevedencia, etc., have invariably done a great deal to overcome the several disadvantages of Spanish rural life. The whole nation is united in the belief that cooperation in all its phases should be encouraged. It is recognized that this is a matter which wfll not make the most rapid progress by being left to itseK. The Government, through the department of agriculture, and more particularly through the bureau of social reforms, is making a continued effort to guide the progress of cooperation and to stimulate the formation of cooperative societies; at the same time it believes that the initiative should come as far as possible from the people themselves, its function being to point out the way and make it easy. Private individuals in almost every part of the country are becoming interested in taking the lead in the movement, and Government officials are following it up. Many small villages are being supplied with electric light, and factories are being established in the open country for the purpose of manufacturing the raw material at the place where they are produced, such as sugar-beet factories and marmalade factories. The people are thus enabled to continue to live in the country and have further means of employment, while the factories get the advantage of the lower and more stable kind of labor. There is a considerable movement of imattached laborers from one part of the Spanish Peninsula to 'another, following up the harvesting of the several successive crops. They start in the early summer har- vesting wheat in the south, and continue the same work northward until the harvest is over; then they go back south again and begin on the vineyards, and finally, in the wintertime, are occupied in the citrus regions. Judging from the very remarkable progress that has been made in the Province of Catalania, and in the asturias around Bilbao, and the Provinces of Grenada and Sevfllia, although in the first two mentioned it has been due more to the development of manufacturing and mining, it wovdd seem as though the other Provinces of Spain are likely to follow in very much the same way that the progress in the northern Provinces of Italy has been developed southward in that country. The industrial development, through combination, has accomplished what the rural populations will have to bring about by cooperation. The citrus fruit growers' federation in Valencia is an example of what should be done on a large scale, and the work being done by the farmers in Aragon represents the more local movement, FRANCE. 643 FRANCE/ fflSTORY OF AGRICULTURAL CREDIT. Address by M. Jean Oodet, Senator. Paris. When I had the honor of serving in the Chamber of Deputies I introduced the two laws which are to-day the foundation stones upon which agricultural credit in France is built. These laws are known as the law of 1894 and the law of 1899 on agricultural credit. The purpose of the laws of 1894 and 1899 was to establish a system of personal short-time agricultural credit for France. Since then the Government has supplemented this by other laws which have provided for long-time mortgage credit and a system of credit for agricultural cooperative societies. It is my purpose, however, to only attempt to give you a historic view of these two laws and to explain the guiding principles which actuated the French Government in supporting their enactment. At the time the law of 1894 was proposed for the establishment of a personal short-time agricultural credit system in France the agricultural syndicates operating under the law of 1884 were already strongly organized and formed a valuable nucleus for establishing the credit system. Thus, when the Chamber of Deputies imder- took to organize personal agricultural credit in 1894 the provisional unions and the agricultural syndicates were taken as the basis of the system. These unions and agricultural syndicates formed a nucleus from which our agricultural credit system has developed. The other guiding principle which the French Government sought to incorporate in its credit system was mutuality. The French Government, however, does not pretend that it first provided a system of credit based on the principle of mutuality. It was thought that this principle was first recognized in Scotland in 1796, but a study of documents and papers recently presented to his excellency the French ambassador to Japan reveals that the honor should be removed from Scotland and given to Japan, where forms of mutual credit associations have existed from time immemorial. ' Statement by M. Albert Viger concerning the scope and methods of the studies of the Commissions in France. — Perhaps you will be somewhat surprised to see in the program of your studies in France that arrangements have been made for you to visit societies in different parts of France. This has been done so that you may study intimately the Fraich agricultural credit systems. The first steps toward the establishment of an agricultural credit system in France was to organize rural credit from below — to see that the roots were 'firmly fixed in the agricultural population itself. An idea formerly prevailed in France, as in other countries, that agricultural credit could only be established by the formation of great central banks from whence credit would flow out to all the local centers. When the Government of France finally took up the question of agricultural credit in earnest, it was planned on an entirely different principle. It was decided that agricultural credit should begin with the lowest group; that the cooperative agricultural society or syndicate should form its own credit bank, and that these should grow from below. Under the French system we, therefore, have the credit syndicates, and out of these the departmental banks usually located in the principal towns, and finally the central federation of credit over which I preside. The development of the system has been from the growth of the small units. In preparing a plan for your studies in France, our idea has been that you should see the things from which the local agricultural credit society has grown; therefore, several excursions have been prepared which will take you into the parts of France where you will be able to see this growth. You will, for instance, visit southern districts where agricultural credit has been developed to supply needs quite different bom the needs in districts where cooperation was already developed. While these special study groups are making investigations of the local organizations a section of the commission will stay here in Paris, and I will, if you wish, be pleased to direct their labors. The task of the group who remain in Paris will be twofold. They will have to study the organization and development of agricul- tural credit in France with a view to its possible adaptation to American needs; and will also have to study the administrative machinery by which the French system works under the protection of the ministry of agriculture. The members of the French committee have felt it their duty to place themselves at your service and we are happy to be able to render you a service in the valuable work you are doing, and at the same time be able to render a service to the laborers of the soil, who are so especially essential to the well-being of our two nations. 645 646 AGEICXTLTTJBAL OOOPEBATION IN EUEOPB. The France credit societies under the law may organize on the principle of either limited or unlimited liability. If they choose to organize on the principle of limited liability all the members are not responsible for a debt which any one of them may have contracted toward the society, but when organized on the principle of unlimited liability, the entire group becomes responsible for the indebtedness to the association of any one of its members. As has been very truly stated by Senator Viger, the main concern of France has been to see that our agri- cultural credit should rise from below — that is, from out of the very midst of our rural democracy. Our statesmen realized that any system imder which a central bank would send out money to the little local societies would be destined to failure. One of the elements of success is that the people should watch over one another, and therefore the system of the small local body rather than the central system was recognized as the one which would lead to success. The objects of the local bodies are to promote, guarantee, facihtate, and meet the agricultural operations and requirements of the members of the local syndicate itself. Certain concessions have thus been granted by the Government to these organizations. For instance, the law is simplified to the very utmost as regards their formation. They are also relieved of taxation. Up to this point, however, the law had created only an instrument of credit without a money discount equivalent. Under the law a farmer could make out a bill of exchange, but he was still unable to discount the bill for cash. Was this condition because of a scarcity of money in France? Far from it. The Bank of France maintains a lower rate of discount than is practiced in any other country of Europe, and in 1911 did a discounting business of 25,000,000,000 francs. France did not therefore lack money, for besides the Bank of France there are five other great financial institutions which, in 1911, discounted four and a half bilhon francs of business. There are also private banks, so any difficulty which the farmers experienced in rediscounting their bills could not be attributed to lack of money in the country. The farmei, you must remember, is a slave of the soU. The soil grows his crops, but it requires time, and the average time for which the farmer requires credit is eight months. An interest rate of 8 per cent demanded at the private banks was not reasonable, so the French Government determined that the fanner should not discount his bills at the ordinary banks. It has been foimd by experience that the usual periods of discount are from 25 to 26 days, and that the average yearly discount is 10 per cent, which is a remimerative rate for the use of money. Led by these considerations the French Government has recognized the necessity of silbsidiztDg banks organized for discounting farmers' bills. Two years after the enactment of the fundamental law of 1894, which founded this organism of agricultural credit, the charter privilege of the Bank of France expired and was renewed by the Government only on the condition that the Bank of France was to advance to the Government the sum of 40,000,000 francs, free of interest, to use in subsidizing the rural credit banks, and on the further condition that it was to pay a yearly sum calculated at one-eighth of its circulation, but not to be less than 2,000,000 francs, to be used for the same purpose. In reahty this has amounted to five or six milhon francs a year available for agricultvu^al credit. Senator Viger, who at the time was minister of agriculture, introduced the law of 1896, which provided that the 40,000,000 francs were to be advanced to the Government free of interest by the Bank of France, together with an annual sum of not less than 2,000,000 francs to be employed for the pirrposes of promoting agricultural credit. This law also created a commission composed of senators, representatives of local banks, directors of the Bank of France, and certain other parties, which was to sit in connection with the department of «griculture and decide on the distribution of these funds to the regional agricultural credit banks. These regional banks, besides having the duty of distributing money for credit purposes to the local bante, fill another and exceedingly important function. They discount the bills of the local banks and indorse them -with their signature. This is necessary because the Bank of France, under the law, can only discount bills indorsed with three signatures. By this means the farmer's bills indorsed by himself, then in tmn indorsed by the local bank and the regional bank, may be discounted at the great financial institutions and at the'Bankof France. The organization of the regional banks has thus opened the Bank of France to the French farmer. The amount of money which has been advanced by the Bank of France for this purpose is 122,139,648 francs. This sum, however, is a loan and not a gift. It was a loan originally made for five years, but on the request of the regional banks has been consistently renewed, after consultation with the proper authorities, and always with the unlierstanding that it is not to be considered by the local banks as a gift. The stipulation has been made that the local banks mtist set aside 10 per cent every year for the ultimate repayment of the loan. FBAITOB. 647 SHORT-TIME AGRICULTURAL CREDIT. Statement by M. Bene Wohms, Chief Bureau of Information, Ministry of Agriculture. Paris. There are three forms of agricultural credit in France, the first of which is short-time personal credit, of which I shall spBak, artd which in general is only given for about one year. This credit is strictly personal. No mortgage or pledge of security Other than the indorsement of some one of known respectability is required. This kind of credit is also decentralized and only distributed through the local associations. A third character- istic is that it carries a cheap interest rate, varjdng from a minimum of 3 to a maximum of 5 per cent. There are two distinct units in this system, the first being the local banks, of which there are 4,000 in France, and the second the regional banks, of which there are 100. These two sets of banks serve every purpose. The local banks guarantee the safety of loans and pass on their security. These banks know the people well, and the result is that the loans they grant are almost always paid. The local banks form the first security for the loans. The regional banks distribute to the local banks the funds placed at the disposal of agricultural credit by the Government. This is a highly valuable service , for it would be impossible for the Government to have knowledge of all the local banks and decide how the funds should be distributed, but it is possible on the oth-er hand for the Government to have intimate knowledge of the 100 regional banks. The tegional banks disbursed in 1912 exclusively for the purpose of extending personal short-time credit 60,000,000 francs derived from the State and 25,000,000 from their net capital, reserve, and deposits. During this period they thus disbursed 85,000,000 francs for personal short-time credit. These regional banks during the few years they have existed have accumulated a reserve fund of 5,000,000 francs and are administered at an annual cost of less than 500,000 francs, which is proof enough of the economy of their management. The 4,000 local banks have a combined membership of over 200,000 and employ in their operations a subscribed capital of over 18,000,000 francs. In 1911 the local banks granted new loans to the extent of 82,000,000 francs, in addition to the 52,000,000 francs of outstanding loans brought over from the previous year. The farmers during the year repaid the banks 72,000,000 francs, so that outstanding loans at the end of 1911 aniounted to 62,000,000 francs. About 1,000 of the local banks have adopted the principle of unlimited liability, while the other 3,000 work on the principle of limited liabiEty. In this you will see that the French system diflFers from the German system under which the local rural banks are chiefly based on the principle of unlimited liability. COLLECTIVE LONG-TERM CREDIT. Statement by M. I;ouis Tardy, Chief Inspector for Agricultural Credit, Ministry of Agriculture. Paris. Long-term collective credit is needed to complete the structure of an agricultural credit system begun by short-time credit. In France, as well as throughout the world, agriculture is becoming more and more indus- trialized and therefore requires a long-term credit. The main purpose of this form of collective credit is to pro- mote the prosperity of the small holdings. Under a system of an industriahzed agriculture the small holders must employ collective methods in order to compete with the large holders in making purchases if they would enjoy the same advantages. It was in order to secure for the small holders the possibiMty of cooperation in making purchases and in securing their requirements that the Government undertook to provide the facilities by which they could secure collective long-time credit. The law of 1906 authorized the regional banks to make collective long-time loans to cooperative associa- tions organized for the purpose of purchase, production,, and distribution. The principles underlying this law are the same as those underlying the laws of 1894, 1896, and 1899, which have already been explained. In other words, the Government stimulates independent initiative, but does not replace it. The law defines the conditions to which the cooperative associations must comply in order to receive recog- nition and to be entitled to enjoy these credit facilities. The law provides that long-term credit can only be granted to associations for production, conservation, or marketing of products actually produced by the associates of the cooperative associations which are to enjoy the credit; or to associations for caiTying out agricultural work, whose members are actively engaged in agricultural work. The rate of interest can not exceed 4 per cent on this form of credit, and dividends must not be distributed on capital, but to the members according to their contributions to the societies for productive purposes. 648 AGBICULTTJBAL COOPEBATION IN BtTEOPB. The total amount of credit that can be granted to these societies is fixed at one-third of the sums paid by the Bank of France to the regional banks for agricultural purposes. The money used for this form of agricul- tural credit is primarily supplied by the advances made by the Bank of France. The authority for granting long-time credit is left with the same commission which controls the grants to the regional banks. A cooperative association in order to obtain long-term credit under this method must make out an appUcation and submit it to the regional bank, which in turn transmits it to the ministry of agri- culture, thus conforming to the principle of decentraHzation which controls the whole agricultural credit system of France. When an application is received at the ministry of agriculture for this form of credit a technical inquiry is made into the condition of the association making the request in order that the needs of the association may be determined. The commission will allow a grant only after being fully acquainted with the Heeds of the associa- tion, and then only on the condition that the association give a mortgage on its entire properties and secure it on the unlimited liability of all its members. Interest varies from 1^ to 2 per cent on loans made to cooperative associations. This favorable rate of interest is always granted on the basis of belief that the promotion of agriculture means the promotion of national interests. Agriculture, it is contended, is more heavily burdened than other industries, and in order to fight rural depopulation and further the social interests of the nation the welfare of the farming population must be cared for. Agricultural cooperative association existed in France before the enactment of the law of 1906. For instance, cooperative dairies date back to the fifteenth century, but the law of 1906 has greatly promoted their development. Since the law was passed, over 10,000,000 francs of credit has been granted to more than 300 of these associations. There is a total of 3,000 of these associations, but only 300 have taken out loans. The purposes of the associations are varied; a large number are dairies for butter making and for the preparation of by-products of milk. These dairying associations are essentially for the small farmers and unite among their membership 75,000 peasant families, of which a famUy rarely possesses more than 2 cows. In the south of France you wiU find the cooperative wineries and the cooperative distilleries. There are also cooperative slaughterhouses, cooperative railways, and cooperative breeding associations. In short, all forms of activity are represented among the French cooperative associations. Cooperative associa- tions are organized for fiower growing and flower selling. These associations have not, perhaps, the importance of those in California, but aheady they have done an appreciable service. I am, therefore, convinced that if you will promote cooperative associations for production and distribution in the United States by providing the proper credit facilities, as we have done in France, it will be the turn of France to admire the results of your reports. LONG-TERM INDIVIDUAL CREDIT. Statement by M. Vinrbux, of the Credit Foncier. Paris. The law of 1910, providing for individual long-term agricultural credit is the latest stone in the structure of agricultural credit in France. This form of credit is granted by the local banks through the regional banks, which receive funds for this purpose out of the advance made for the purposes of agricultural credit by the Bank of France. It is only granted to small agricultural holdings, for the purpose of the law is to attach the small peasant farmer to the boU. The value of the loan is not to exceed 8,000 francs. The maximum period for which the loan runs is 15 years and is only allowed in the case of young farmers. The purpose is to assist the small farmers to purchase holdings, and to encourage young men who have finished their military service to take up a small farm. Credit under this system is also granted for the purpose of trans- formii^ a farm, for instance, from a tUling to a grazing farm. It is also granted for reconstitutii^ a farm, so that after a farm is destroyed by flood a loan will be granted for the purpose of its reconstruction. These loans are extinguishable by amortization. The rate of interest is as a rule 2 per cent. The secunty required is of several kinds, the principal one being a mortgage on the farm. Other securities, such as life msur- ance policies or personal indorsement, will be accepted. The law has only been in operation two years, but over 12,000,000 francs have already been loaned under this system of long-term individual credit. Having already proved a success, the law will undoubtedly give FBANCB. 649 better results in the future, and will be a powerful influence in the upbuilduig and strengthening of the small peasant holdings.* ORGANIZATION OF AGRICULTURAL INSURANCE. Statement by M. RenA Worms, Chief Bureau of Information, Ministry of Agriculture. Pabis. Considering the subject of agricultural insurance, Senator Albert Viger's ' valuable services to French agriculture may be easily understood when you find that he is the author of the laws which have permitted the organization of the ^agricultural mutual insurance societies of France. The primary principle on which these laws is based is the need of protecting the farmers from certain dangers which may at any time destroy their property or cause the loss of their live stock. When insured this danger of loss is reduced to a minimum. The need of farm insurance therefore is now generally recognized. The fundamental principle of agricul- tural insurance in France is that the farmer should insure under a mutual plan. Under this system all the farmers contribute to a common insurance fund, and when a misfortune overtakes one of them he is indemnified out of the common fund. Agricultural insurance in France recognizes three principles, which are: First, the farmers' need of insur- ance; second, that the needed insurance should be on a mutual plan, and third, that there must be a system of reinsurance. I may explain what is meant by reinsurance, by supposing that there should be successive fires or a wide- spread cattle disease in the community. In that event the local insurance fund would not be suflicient to meet the needs. It is therefore necessary that the local or communal societies should federate in departmental insurance associations for the purpose of reinsuring themselves. We thus have communal insurance and depart- mental reinsurance. The French Parliament has recognized the importance and value of the mutual system of agricultural insurance, and laws have been passed to regulate and assist it. In 1898 such a law was passed, and since then appropriations have been made to assist the mutual insurance associations. In 1911, for instance 1,000,000 francs were appropriated and since the passage of the law of 1898 a total of more than 10,000,000 francs have been granted by the Government to the French agricultural mutual insurance societies. Besides financial assistance, the French Government in 1900 passed a law which permits agricultural mutual insurance societies to organize under the same arrangements and laws which govern the agricultural syndicates. Expense of organization and operation have thus been reduced to almost nothing. With the assistance of these two laws the agricultural mutual insurance societies have multiplied rapidly in France. At present there are 9,000 local communal societies for cattle which are reinsured in 65 depart- mental societies. These societies have a membership of over 500,000 and insured stock worth more than 600,000,000 francs. These figures may not impress you as being very large, perhaps, because such operations in the United States are conducted on a bigger scale, but you must consider the relative size of the two countries. We also have in France 3,000 local fire-insurance societies, reinsuring in 27 central societies. More than 100,000 people are insured in these societies and property valued at over 1 billion francs is under protection. This fire insurance is strictly for agricultural farm buildings, excluding all town insurance, and insurance of villas and chateaus. It is exclusively for the insurance of agricultural buildings. There are, as you may know, four well-defined classes 6f agricultural insurance: Insurance of cattle, insur- ance of farm buildings, insurance against hail, and insurance of agricultural laborers. Insurance against hail and insurance of agricultural laborers against accident in work have not been developed up to the present time in France. These two forms of agricultural insurance are of recent development, but they will be rapidly promoted ' Senator Albert Viger, at the close of this address, made the following comment: "I would like to tell you of an incident that will show the social reflex action of these long-time loans. "One day while at my country home, a noncommissioned officer who had been in the employ of my grandfather, came to solicit a position in the civil service. He wanted me to obtain him a position as postman. I asked him, 'How is it, you who belong to a family of farmers, are seeking a position under the Government; would it not be better for you to live independently on the land? ' He replied, ' I do not want to be a servant, but I have no money. ' He told me he would like to have a little farm, but did not want to work as a hired man. So I took him to the local bank, and after an inquiry a farm of 3 hectares was bought for 12,000 francs. The local bank then gave him a loan of 8,000 francs on the long-time individual credit plan and money with which to stock the farm on short term. "That man is to-day the owner of the farm, has a son, and has settled down as landowner instead of being a servant. "We are very proud in this instance of having created a new citizen for the rural democracy of France, which is the source from vrhich we get our best soldiers and citizens." ' Senator Viger presided at the meetings held for the Commissions in Paris. 650 AGKIOULTtJEAL OOOPEBATION IN BX7E0PE. in France in the future, especially insurance against accident, which recent legislation has made obligatory. Under these laws the heads of farming enterprises are required to insure their laborers againSt accideilts. The development of mutual insurance in France has met with many enemies and has encountered the active opposition of the commercial insurance companies. The mutual insurance companies naturally take away the business of the commercial companies, aaid in their fight against their development the commercial companies have gone so far as to prosecute them before the courts, claiming that their mode of conducting business is illegal. These suits have been before the lower courtsfor five years, and only very recently verdicts were returned in favor of the mutual societies. The Supreme Court of France has also just handed down a decision sustaining the mutual insurance societies as being within the law. Among the departmental societies there is a growing desire that there should be reinsurance in a central national body which would reinsure for the whole country. There is at present a party in France which advo- cates a Government central reinsurance body. This plan is very popular, but has encountered strong opposition from those who prefer to see national insurance organized by private initiative and not by the State. Already steps have been taken toward this end. A central national society organized along private lines has been formed for the reinsurance of fire risks which now insures about one-half of the risks of the mutual insurance societies. I, of course, can not say how this question will be settled, but I can foretell that a national reinsurance body of some kind will become a fact. Such a body will strengthen the whole structure of mutual agricultural insurance, and in reality be the ciapstone of the system. MUTUAL COOPERATIVE INSURANCE SOCIETIES. Statement by M. Tourman, Member of the Chamber of Deputies. Paris. The National Federation of Mutual and Cooperative Associations was formed for the purpose of federating cooperative credit associations and those organized for production, distribution, and agricultural insurance into one centralized institution. The idea has been to organize the small agricultural communities after the plan of a regiment, with officers, noncommissioned officers, and the men in the ranks, each local community or "regiment" composing a part of the agricultural cooperative system. As an instance of what might be called the integral cooperation of rural force in a community, I can cite an instance in my own district. There we have a cooperative society for the mutual societies to which the members of the community belong; a mutual agricultural credit bank which supplies long and short time personal credit; and a cooperative daily which collects all the milk of the district and sends it to the societies in Paris organized for the sale of milk. By being a member of these associations a small farmer, as an agricultural laborer, who was formeriy isdlated, can secure the assistance of a whole network of mutual cooperative associations, insure himself against troubles, and at the same time secure an instrument with which to advance himself. A mutual cooperative insurance society, to which the members of the community belong, completes the system. This society insures the farm buildings and the cattle, so that the small farmers may be protected. The insurance societies insure the cows of their members up to 80 per cent of their value. The organization of these societies may be compared vsdth the organization of the human body in that the local associations are the fu'st cell in the organism, being in turn federated in a department federation, while the departmental federa- tions make up the national organization as the complete body. The national federation is divided into several sections: One for mutual agricultural credit societies; tfne for mutual agiicultural syndicates, collective purchasing societies, and other similar bodies; another for coopera- tive production and sales society; and a fourth section for mutual agricultural insurance and benefit societies. Each of these sections is presided over by a section bureau. A supreme bureau under the direction of Senator Viger, composed of the presidents of the section bureaus, in turn directs the whole federation. When any of the small societies want advice or information, they apply to the central federation. The headqilarters of the federation are veryjnodest. At first rooms were orcupied which had been lent to the federa- tion, but now headquarters are in its own quarters in the Rue de Vanelle. The administration of the federation is very simple. In the fii'st place, no salaries are paid the president and other officials, except a very small salary paid the general secretary. The general secretary answere 10,000 letters annually;, with a staff of only three stenographers gets out a monthly bulletin containing importaftt arti- cles on all questions of cooperation, mutuality and insurance; organizes two annual general asseffibliBs; ana makes the arrangement for the annual national congress; takes up all questions of agri6ultur'd OT dreflit cooper- ilPR&iNOE. 651 ation, and any other question wfki©h. may be of public interest. In this manner all the local societies are brought into direct touch with ths' central organization of the fedenation of French mutual agricultural societies. In conclusion, permit me to say that the mutual agricultural cooperative societies have for their motto a design of two hands clasped, and underneath the motto, "Each for all aridtall for each." REINSURANCE ASSOCIATIONS. statement of M. Albert Vigbr, Senatoi; President National Federation Mutual Agricultural Cooperative Aesociatione. Paris. There are some people who seem to think the Government should do everything that any class of citizens might request. I believe that there are certain matters which the Government should attend to, and that there are certain other matters which should be left to the initiative of the citizens themselves. When the question of having the Government foranthe mutual insurance societies first came up, I was opposed to it because I thought it should be undertaken by those directly interested in the matter. I thought that the National Federation of Cooperative Associations, which is composed of about 10,000 federated associations, having together 650,000 members, should be the body to conduct the propagandain the interest of reinsurance societies and the national central reinsurance society of the third degree. Out of this agitation there has been formed a board of administration which has found that the National Reinsurance Association at the present time reinsures to the third degree 31 regional mutual insurance societies, representing 2,000 local societies with 47,000 members and with 64,000,000 francs' worth of cattle. Also, that there are now reinsured 22 departmental fire insurance societies, representing 2,200 local mutual societies with a combined membership of 80,000 and insured property worth 660,€00,000 francs in farm buildings. RELATIONS BANK OF FRANCE WITH AGRICULTURAL CREDIT BANKS. Addfess by M. Aupetit, Chief of the Bepartment of Economic Studies to the Bank of France. Paris. Before attempting to explain the cooperation between the Bank of France and the agricultural credit banks, I think it w^ll to state what the Bank of France can not do under its charter and regulations before telling what it does do. . It must be remembered that the Bank of France is a bank of issue; that is to say, its function is to issue paper money and reimburse it. It issues notes either against deposits or on the guarantee of credit operations, but is prohibited from issuing loans on any other grounds. The repayment of the 5,000,000,000 francs of notes in circulation is therefore guaranteed either in coin or in commercial paper protected by bonds. The notes guaranteed by coin are not a source of legislative concern, but the notes guaranteed by commercial paper and bonds demand a more careful attention. Special care is taken to insure the quality of the surety by which these notes are guaranteed. In the first place, the legislature has determined that the Bank of France must make acceptances for a longer period than three months where such paper forms the security of circulating notes. In the second place, all notes discounted must be indorsed by three persons of known solvability and who become collectively responsible for the biU. One of these indorsements, however, may be replaced by the deposit of securities, the power to determine the value of such paper being left to the bank or the indorse- ment may be replaced by a warranty for goods. This law was signed by Napoleon as a part of the statutes of the Bank of France. The object was to make the notes emitted by the Bank of France safe and to give them a known security. In assisting agriculture the Bank of France has been limited by these statutes and laws laid down a century ago. In order for agriculturists to avail themselves of the facilities offered by the Bank of France, they have to conform to these requirements. Subject to this reservation, however, the Bank of France has always made every effort to assist agriculture, being, as it is, an institution for national credit, and recognizing that agri- culture in France is more important even than manufacturing. The Bank of France assists agriculture in three ways, which should be distinguished. First, it facilit.ites the individual agriculturist in securing loans and discounts. Second, it makes possible the success of the agri- cultural credit banks and facilitates the rediscounts which they offer the commercial banks. Third, it provides the Gavernment with funds, in the form fof an advance and an annual grant, with which to supply the needs of the agricultraral credit banks. 652 AGBIOULTTJEAL COOPEBATION IN EUBOPB. As regards the relations of the local banks and the individual farmers, the Bank of France for many years past has made a special effort to further them by oflfering discount and loan facilities. The bank has been useful to the farmers in this respect. The fundamental difficulty which the bank encounters in this connection is that the farmer in France is not considered as a merchant or a trader. I regret that it is necessary to enter into a discussion of technical details, but I am afraid this point can not be made clear unless some technicalities are given. As I have stated, farmers and agriculturists in France do not come under the law of traders, and consequently the law of bankruptcy does not apply to them. Their creditors are without the protection which the creditors of a man engaged in commercial pursuits have. The French law of bankruptcy provides that when a man becomes bankrupt he must cease to operate. Legal proceedings are simplified for the creditors, while they are also guaranteed that the assets of the bankrupt will be equitably distributed among all creditors. In order to recover bad debts from people who do not come under the bankruptcy law, such as farmers, it is necessary to resort to the law of restraint, and the creditors are not sure of an equitable distribution of the assets, but are paid according to the restraints. A number of efforts have been made in France to bring the farmers under the commercial act in order to promote agricultural credit, but all such efforts have failed, because of the general sentiment against placing the farmers under the ordinary commercial law and exposing them to the danger of being forced into bankruptcy. The Bank of France, sharing this general feeling of solicitude for the farmers, instead of curtailing agricultural credit on these grounds, provides a fund for the granting of such credit in spite of the legal difficulties of recovering debts. An experience of many years' duration shows that the risk which the bank runs in granting credit under this system is at a minimum. The Bank of France has gone out to meet the farmer by opening branch banks in the provincial towns. These branch banks now number 570, and are placed in all the towns of 8,000 or more inhabitants. Some are even placed in towns of less importance. A representative of agriculture is made a member of the board of administration of each of these branch banks, while recently the Bank of France has called to its general board a representative of the agricultural interests to sit side by side with the representatives of the great financial, commercial, and industrial interests. The Bank of France has also assisted the farmers by conducting an educational propaganda and has found that it has not lost by instructing and explaining to the farmers the advantages of which they can avail them- selves. As is well known, the rate of discount of the Bank of France is the most stable and lowest in the world, 3 per cent being the regular rate. However, at the present time, for political reasons, it has been raised to 4 per cent. The Bank of France has also always insured to the poorest farmer the same advantages in the price of money as is insured to the capitalists. Another evidence of the interest of the Bank of France in the welfare of the farmers is shown in the facilities which it has provided, that they may secure the three indorsembnts required under the law in order to have their notes discounted by the bank. For instance , the farmer can replace one of the required indorsements by giving a general guaranty which can be given once for all and cover the whole series of discount operations. Another method by which the signa- ture can be replaced is by depositing papers with the bank. In this case the value of the paper is determined by the bank according to the financial status of the client, and the bank keeps the paper at the lowest figure according to the standing of that client. A third way in which this thu'd indorsement can be replaced is hy the deposit of a warranty for goods. Under this plan the warrants for the goods are left in the custody of the farmer himself subject to certain legal requirements. These three kinds of facilities provided by the bank itself have made it possible for a large number of farmers to avail themselves of the credit offered by the Bank of France without having to comply with the legal require- ment that notes must carry three indorsements. French farmers can thus furnish all legal guaranties by obtain- ing the signature of either the landowner, if it is a case of a tenant farmer, or of one of their relatives or friends of good standing who is willing to indorse the note for them. As will be recognized, a very large number of farmers were not able to bring together these tliree forms of indorsements until after the establishment of the local rural credit banks. It was to supply farmers with the means of getting this security that the local agri- cultural credit banks were instituted. Another difficulty in the way of the farmers getting credit from the Bank of France was the legal restriction limiting notes discounted by the bank to a period of three months. As agricultural credit in France requires loans for at least six to nine months, this dtBBculty also had to be overcome. This was accomplished by having the Bank of France renew notes every three months in its dealings with farmers. Such renewals are of course voluntary on the part of the bank and subject to the general economic situation of the country. PRANCE. 653 This fact alone renders a bank of issue unable to supply all the needs of agricultural credit, no matter how much it may desire to assist the farmers. The whole question of the renewal of the notes is one of prudence. The solicitude of the Bank of France for agriculture, however, has always made it possible to be of real assistance, especially to the stock breeders, by granting them credit for the fattening of their stock. Some of these loans are very important and some are very small. Out of a total of 450 of such accounts 250 do not exceed the sum of $4,000. The sum of the loans granted individually to the farmers in the past 10 years amounts to about $100,000,000, and this figure would be very much higher if it were made to include loans which are apparently granted for commerce and industry, but which indirectly benefit agriculture. It should be noted that in France, contrary to what occurs in England and in the United States, it is gen- erally the seller who gets credit of the buyer by takii^ a note which he discounts. Thus all agricultural supphes are sold by the merchant on the farmer's note, which he discounts at his bank. This transaction would appear to the advantage of commerce, whereas in reality the advantage is to the agricultural community. The Bank- of France also makes every effort to assist the local banks, and has given pioneer assistance to the local credit banks. These local credit banks, as has been explained, have two functions. In the first place, they act as independent banks so far as their capital and deposits are concerned. The advance made by the State enables them to act as independent banks. As soon as the credit demands of their chents exceed their own resources, they render assistance to their members by rediscounting their bills at the Bank of France through the medium of the regional banks. While these banks usually rediscount with the Bank of France, it should be understood that they are free to rediscount them with any other bank they may select. Some of these banks, in order to facilitate the discount of their bills, have placed with the Bank of France a fund to secure such discounts. At the present time the Bank of France conducts regular discounting business with all of the 100 regional banks, and through them with more than 3,000 of the local cooperative credit banks. The third way in which the Bank of France assists agricultural credit in France is by granting large sums to the Government to be used to finance the local and regional «redit banks. When the charter privileges of the Bank of France were renewed in 1897, it consented to advance to the Government the sum of 40,000)000 francs, repayable and without interest, for the purpose of agricultural credit. It also consented to make the State an annual grant in proportion to its profits, not less than 2,000,000 francs to be used for the same purpose. This annual grant has, in fact, been considerably more than that sum. During the past 16 years, since this arrangement was made, the Bank of France has given over 90,000,000 francs to the Government for agriculttural credit. This 90,000,000 francs, together with the loto of 40,000,000 make 130,000,000 francs advanced by the Bank of France for agricultural purposes. This year the sum which the Bank of France wiU pay to the Government is expected to amount to 14,000,000 francs. This grant will be proportionate to the amount of business done by the Bank of France. The important service rendered French agriculture by the Bank of France is very highly appreciated, and it would seem very difficult or practically impossible for a bank of issue to do more for agriculture than the Bank of France has done. It must be borne in mind that its first duty is to guarantee its circulating notes, and in so doing it is also guaranteeing the prosperity of agriculture. ORGANIZATION AND OPERATIONS OF THE CREDIT FONCIER. M. ViNHBUx, of the Credit Foncier. statement. Paris. The French Credit Foncier is a great financial institution, which, Hke the Bank of France, is subject to the legislative provisions of the French Government. The governor and the two vice governors are appointed by the French Government. The Credit Foncier has existed since 1852 and transacts two kinds of business: First, it grants loans on mortgage security; and second, extends loans to municipaUties. Mortgage loans are made on the security of mortgages on houses and town property, or mortgages on agricultural lands. Such loans may be made in three forms: First as a short-term loan on mortgage not to exceed a term of 9 years — -these loans are not repayable by amortization and can not be repaid until the expiration of the term; second, in the form of long-term loans which mn from 10 to 70 years; these are repayable by amortization, and can be repaid in full at the pleasure of the borrower before the expiration of the term for which they are made; and third, in the form of current account rted to be about half and haH. FRANCE. 655 CEEDrr FONCIER. Evidence, of M. Julks Lucas, Chief of Bureau, Oflice.of the Secretary-General. Paris. Q. Oi^ Wihe^t b^si^is ttp. c^ipit*!, qf your in^it,i;tion established? A. The Land Credit Bank (Credit Foncier) of France was founded in 1852. The bank's capital was fixed at 25,000,000 francs, of, which 10,000,000 francs was immediately ispijed according to article 2, decree of March 28, 1852,, which is as,follQ>7s: ^ The.eociety.'e guaianty fund> shall be fixed at 25,000,000 francs, and shall be divided into 50,000 shares of 500 francs each. Twenty; thoijgaflid, sljare? mu^t be.subfleribiedifprbyithje socipityibefcme it imy^S definitely egtabhehed. The other 5,900,p00 frajicsni^y be £^pi)Jie4, accprdilRg^ to tl^^ ^decision of tl^e, cou:!icil oi administration, in proportion to the needs of the society, in such manner that the guaranty funds sjiall be maintained in thp proportion of at least 5,000,000 for each 100,000,000 of bonds issued. The holders of the first shares shall have a right of preference in the proportion of the number of shares owned by them to the sub- scription of shares at par thereafter issued. The capital of the society shall not be increased above 25,000,000 francs without the consent of the Government, and upon the deci- sion of the general assembly of shareholders, which shall be formediOf,2,Q0 jnfinil?ers,Qwi>ing the greatest nuinber of shares. The Government granted^to the. land bank a subsidy of 10^000,000 francs,, which had to be invested pro- portionately to the amount of the loans made, at/ a rate of 5 per cent of the loans realized under the following provision of law: [A^embly of November 18, 18^2.] Abt. 3. A subsidy of 10,000,000 francs is accorded by the Government to the Society of the Land Credit Bank of France, in conse- quence of the decree of March 27, 1852. Such suhsidy sh^ll be invested propoirtionately to the amount of loans effected, conformably to the following article: "The Land Credit Bank of France agj:ee?,t6 lend upon mprtg9,ge,up to the ainount of 200,000j000 francs, on the basis of an annual repayment of 5 per cent, which shall conjprjae theiinterest, amortiza,tiqn, and expensessof administration, and which shall extend the debt to the limit of 50 years." In consequence, there is accorded to the Society of the Land Credit Bank of France a subsidy of 10,000,000 frapps, whicth shall be invented in proportion to the amount of. loans effected. This subsidy was invested by the Government in successive accounts, and the total amount of the 10,000,000 francs was not realized until in 1864, the loans effected by the Lajid Credit Bank hftd reached 200,000,000 francs. This sum has never been comprised in the bank's capital. Q. Was this sum ever augmented by the Govepament of France in any manner whatever.? A. No; it has not had any other addition from the Government. The nominal capital was 25,000,000 francs, of which 10,000,000 francs, divided into 20,000 shares, were immediately issued. That is to say, the Land Credit Bank arranged in the beginning to realize some of its capital from the sale of capital stock, and by means of the subsidy of the Government, was able to raise the 10,000,000 francs at the rate of 5 per cent of the loans realized. This was done under article 4 of the constitution, which is as follows : The society's capital is fixed at 200,000,000 francs. It is designed as a guaranty of the society's obligations, and especially of the land obligations (or mortgages) and communal obligations. It shall be divided into 400)000-'share8iOf 500 francs- each, entirely paidup. The amount of the nominal capital of the shares shall be maintained in the .proportion of one-twentieth at least of the capital realised by the the issue of bonds in circulation. The land credit bank is at the present; time authorized to raise its capital to 250,000,000 francs, repre- sented by 500,000 paid-up shares of 500 francs, providing that the amount of the bonds in circulation shall attain to 20 times the actual nominal capital of the shares. This, augmentation shaU take place either at one time or in two installments. The minister of finance shall previously determine the amount of bonds in circulation. The, capital of the land credit, b^nk must be represented — (1) By a fourth, at least, of French Government bonds or treasury certificates. (2) By a fourth or more either in loans destined for the public service or in loans to the colonies or coimtries under Government protection, or in deeds or bonds accepted by the Bank of France as a guaranty of advances. (3) And as to the balance, either by mortgage or communal loans or securities for mortgage credit, realized in accordance with the conditions determined by the constitution; or by land or communal bonds; or by the bonds or advances on the bonds accepted by the Bank of France as a guaranty of advances; or by bills of exchange or commercial paper indorsed by two signatures at' least and made payable to the order of the bank; or, finally, by the advances of necessary fimds to cover the semiannual payments due by borrowers or the value of the lands acquired in conformity to the constitution in foreclosure proceedings. 656 AGBIOULTURAL COOPERA.TION IN ETJBOPE. Fifty thousand new shares were issued on November 28 and December 12, 1911. In consequence the capital of the land credit bank has been increased to 225,000,000 francs, which is its present capital. Q. What share has the French Government in this sum of 225,000,000 francs ? A. The Government has never subscribed for shares; it has only invested the subsidy of 10,000,000 francs. Q. Is the increase in the bank's capital provided primarily by the issue of shares of capital, or is it provided by savings and profits ? A. The bank's capital has never been increased except by the issue of shares successively, with the right of preference reserved to existing stockholders. However, in 1882, 39,000,000 francs were withdrawn from the reserves (profits capitalized) and employed in freeing as they became due the 260,000 shares then existing. The successive augmentations of the capital have been rendered necessary by the obligation imposed hy law and by the constitution to maintain the number of shares issued in the proportion of at least one-twentieth of the capital realized by the issue of the shares or bonds in circulation. The bank can employ a part of the capital which it receives on deposit to make loans for 90 days or more upon its bonds. The conditions and the proportion of this employment are determined by the council of administration. Q. What provision is made for the increase of capital ? A. By the issuing of shares, in an amount increasing in proportion to the development of the bank's loans. These successive increases of capital stock are as follows: Year. Shares. Year. Shares. Year. Shares. 1852 1853 1856 1858 20, 000 52, 639 58, 993 59, 418 1859 1860 1862 1869 59, 975 60,000 120, 000 180, 000 1877 1882 1888 1901 260, 000 310, 000 341, 000 400, 000 And since 1912 there are 450,000 shares, the value of which at par is 500 francs. Q. We are told that your institution has received a monopoly for 25 years. What is the nature of that monopoly ? A. After the decree of March 28, 1852, no other authorization for a land credit society could be granted during 25 years within the jurisdiction of the Court of Appeals of Paris. This privilege was extended through- out the whole of "France by the decree of December 10, 1852, as follows: No other authorization for a land credit society shall be granted -within the jurisdiction of the Court of Appeals of Paris before the expiration of a period of 25 years from the date of the publication of the present decree. To-day the Government, then, could authorize by decree new societies of land credit by taking advantage of the privileges established by the decree law of February 28, 1852. But no other authorization has ever been granted and the Land Credit Bank of France therefore enjoys a monopoly. Q. What special privileges under existing law would your bank enjoy were the Government to cancel your monopoly of making long-term loans ? A. 'The cessation of the monopoly would not create any change in the situation regarding the land credit bank. The privileges which the bank enjoys are: (a) The power of paying off legal mortgages. (b) A privilege imder incomes and profits and, as a consequence, a right of sequestration. (c) A simplified procedure of foreclosure and sale. (d) The exemption from the decennial renewing of the mortgage inscription. (e) The exemption from seizure of the land credit bonds. These privileges are granted under the following provision of law: No loan can be realized except after the fulfillment Of the formalities prescribed by Chapter IV of the present decree for paying on: (1) Legal mortgages, as in the case of subrogation by the wife to this mortgage; and (2) annulled shares and privileges not inscribed, (Decree of Feb. 28, 1852, art. 8.) Article 19. When the borrower is a trustee of a minor or of an irresponsible person, he is held to have made the declaration in the contract for a loan. In this case the advice stated in article 21 folio vnng is made to the substituted guardian and to the judge of the peace of the family where the guardianship is open. Within 15 days from the date of this advice the judge of the peace calls together the family in the presence of the substitute guardian. The council dehberates on the question as to whether or not the signature oug to be taken. In case it is decided in the affirmative, it is taken within eight days of the date of- deliberation. PBANOE. 657' After the deliberation the substituted guardian is held responsible for carrying out the formalities pre- viously described. Article 28. Annuities not paid at the time they fall due may be charged the full legal interest. Moreover, the society can proceed to the foreclosure and sale of the mortgaged property under conditions and procedure prescribed by the following articles. Article 32. In the case of the nonpayment of an annuity, and at any time that, either because of the deterioration of the property or because of any other cause indicated in the constitution, the invested capital is found to be needed, the property can be sold. Should the sale be contested it is determined by the tribunal where the property is situated, in the same way as any other legal matter. There is no appeal from the judgment. Article 47. The mortgage inscriptions taken for the protection of land credit societies are dispensed with during the whole term of the loan from the 10-year renewal prescribed by article 2154 of the Civil Code. Article 17. Bondholders have no other course of action for the recovery of their capital and interest than that which they can enforce directly against the society. Article 18. No opposition may be made to the payment of capital and interest except in the case of the loss of the bond. Article 6. Land credit societies shall not make loans except on first mortgage. Loans are to be considered as made upon first mortgage up to an amount sufficient to reimburse all former creditors in both capital and interest. In this case the society holds within its hands an amount sufficient for its own reimbursement. Article 62. A default in a six-modths' payment renders the whole debt subject to requisition one month after the period of default. Article 64. The borrower is held as renouncing to the society, in the case of a month's delay, the total or partial alienationB that he has made. In case of failure to renounce these, or in the case of delay, the society can demand of him a complete reimbursement. It has the right, moreover, to the iademnity determined by the next to the last paragraph in article 63. This paragraph reads as follows: "Anticipated repayments are accompanied by a privilege to the society — that is, an indemnity which can not exceed 3 per cent of the capital repaid by anticipation." And a footnote adds this additional statement: "This indemnity is fixed at 50 centimes for 100 francs — that is, one-half per cent of the reimbursed capital." (Law of July 6, 1860, art. 9.) Article 58. The rate of interest on loans shall be fixed by the council of administration, and it shall not exceed 60 per cent of the rate of interest payable on the bonds in circulation at the time of fixing the rate of interest on the loans. Q. Is it the law of France or the constitution of the society which hmits loans to first-mortgage security ? A. This rule is imposed by the decree of February 28, 1852, article 6, page 34; it is reproduced iu the constitution, article 52. Q. If your bank holds a mortgage on a piece of property not suitably managed, or under any other cir- cumstance, can it demand a reimbursement before the mortgage is due ? A. Yes ; it can in a certain case. Q. In what case ? A. In the case laid down ia the constitution, articles 62 and 64. (See also decree of Feb. 28, 1852, art. 32, p. 39.) Q. How is the difiference determined between the rates of interest on the mortgage loan and on the bonds which are sold on the security of the mortgage ? A. The rate of interest on mortgages can not exceed by more than six-tenths of 1 per cent the rate of interest on the bonds. Q. Of this six-tenths of 1 per cent, how much serves as the amortizement of the debt and how much for the expenses of administration ? A. No part is used to repay the principal; this difference constitutes the profits of the bank, including the cost of administration or general expenses. The difference between the rate on mortgages and that on bonds is often less than six-tenths of 1 per cent. Q. In what case can the reserves of the bank be used to close up arrears in payments by borrowers ? A. To cover losses which result from the loans, especially in the case where, after foreclosure and sale of the lands that are mortgaged, the price of sale is insufficient to pay the debt of the Land Credit Bank; in that case there is each year withdrawn from the profits a sum which is held in reserve instead of beiag distributed to the shareholders. Q. How do you arrange for your short-term loans, and is there for these loans an amortization combination ? A. Short-term loans from 1 to 9 years; long-term loans from 10 to 75 years. Q. For the loans from 1 to 9 years, does there exist a form of amortization ? A. No, sir; not for the short-term loans. The short-term mortgage loans are not amortizable by annuities. They are only payable at the expiration of the time; but those made from 10 to 75 years are amortizable each year. 14174°— S. Doc. 214, 63-1 42 658 AGBIOULTURAL OOOPEBATION IN ETJEOPE. Q. When you lend money for a period of from 1 to 9 years, do you issue bonds to replace the sums ? A. There is no issue of special bonds for loans at short term. Q. That is to say, then, that when the bank makes loans on short term, it lends from its capital; is that the fact ? A. The society can employ in short-term loans the funds arising from its capital and from its reserves under the following provision of law: Article 8. Independently of the loans repayable by annuities, the society is authorized to employ its capital, which is realized from the use of its funds and profits, for mortgage loans on short time and without amortization. (Decree of July 6, 1854.) Q. Do the short-term loans offer the same security by bonds as the long-term loans ? A. The short-term loans are not made, as a matter of fact, on the basis of bonds. Q. What is the rate of interest for the long and the short term loans ? A. The rate of interest for both kinds of loans is 4.65 per cent on the date of July 6, 1913. At this moment (July 3) the rate of interest is 4.50 per cent. It has been raised a little by reason of the condition of the money market. Q. Please explain to us the system of lottery which the bank put in operation in relation to the sale of the bonds. A. There is no speculative or lottery element about the share bonds. They are capital stock; it is always repayable either at par in shares of 100, 250, 400, and 500 francs, according to the loan, or by lot. Moreover, it yields an annual interest of 2.60, 2.80, 3, and 3 50 per cent. The shares which" exercise a particular attraction for many subscribers are justly destined to assure the success of the issues. Q. Does the purchaser of a lottery share recover his 500 francs ? A. The bond is repayable at 500 francs or by a share of 1,000, 25,000, 50,000, 100,000, 250,000 francs. Q. What is the price of your paper if actually sold upon the market; that is to say, the shares at 4 per cent? A. There are none at 4 per cent; there are only stock at 3 and 3^ per cent. Q. Please indicate to us the price of shares at 3 and 3^ per cent. A. The 3i per cent sell at 487 francs — that is, the 3i per cent of 1913. The shares are for 500 francs and are sold at 487 francs, which is equivalent to 97.4 per cent. Q. What is the price of 3 per cent shares ? A. The 3 per cent 1903's sell at 453; that is equivalent to 90.6 per cent. Q. Do the shares of 1913 issue become payable in 1913 ? A. No, sir; they are issued in 1913 for 70 years. Q. Is the bank able to foreclose without submitting the case to a tribimal and without recourse to legal procedure ? A. In default of repayment, the sale of the property given in security can be made without notice in con- fomaity to article 5 of the same ordinance. It is one of the privileges of the Land Credit Bank accorded by article 32 of the decree law of February 28, 1852. The procedure is entirely special and very expeditious. Q. Does the French Government guarantee the land deeds ? When anyone requests a loan, how do you know that he owns the land ? A. The lender ought to assure himself that the person who desires to contract a loan is the real owner of the property; the borrower is then expected to send to the lender, or rather to his attorney, the proprietary deeds (purchases, exchanges, grants, divisions, etc.). The notary or attorney can require further evidence of ownership if it does not seem to him to be absolutely regular. The business is then transacted at the risk and danger of the lender (or of his attorney), for the holder of the mortgage is under no obligation to concern himself as to the validity of the rights and deeds of ownership. This is one of the inconveniences of the present mortgage system which is not met with in Tunis, where land records truly exist; but they have not yet been established in France. Q. Are there any other establishments besides this bank which can lend money for a longer period than 10 years? A. All credit establishments can do so; even all individuals can make loans on mortgages for longer periods than 10 years; but in that case the mortgage inscriptions have to be renewed every 10 years. The inscriptions that are taken by the Land Credit Bank are the only ones that do not have to be renewed every 10 years. This is one of the privileges of the society. Q. Have you authorized agents for estimating the value of properties 1 A. Yes, sir; we have special inspectors. Q. We have understood that no mortgages can run longer than 10 years except those of your society. A. The creditor, in order to assure the recovery of his money, to the extent of its entire repayment, mis have a record at the mortgage bureau concerning the property of his debtor. This record, since it can only for 10 years, must be renewed before its expiration; in case of default, it produces no other effect. It ^ 7BAN0B. 659 exact term. However, if the creditor perceives his error, he can renew his inscription after this period, but those who do so can only come in after the other creditors. As a consequence, such an omission may cause the loss of a part or even the whole amount of a debt. This is that formality, indispensable for the security of the lender, which is called the decennial renewal. The inscriptions which guarantee the loans on long term of the Credit Foncier are the only ones exempted from this formality. Table A. — Mortgage bonds. Date of maturity of coupons. Number of bonds. Date of lottery. Number of lots to be drawn. Description of loans. Number issued. July 6, 1913. Date of drawing for amortization. Amor- tized. Current. I-oan of 900,000,000, of 1879, in bonds of 500 francs at 3 per cent, repayable in 60 years at most. May 1; Nov. 1. 1,800,000 616,702 1,183,298 Jan. 6; Mar. 5; May 5; July 5; Sept. 5; Nov. 5. 2 of 100,000 francs; 1 of 25,000 francs; 2 of 10,000 francs; 6 of 5,000 francs; 90 of 1,000 francs. Mar. 6; Sept. 6. Same issue, of 1883, repayable in 98 years at most. Jan. 1; July 1. 1,800,000 63,247 1,746,753 As above. As above. Sept. 22. Loans of 500,000,000, of 1885, in bonds of 500 or 100 francs at 2.6 per cent repay- able in 95 years at most. 500 francs Apr. 1 and Oct. 1; 100 francs Oct. 1. 1,000,000 41,023 .958,977 As above. (1) 1 of 100,000 francs; 1 of 25,000 francs; 6 of 5,000 francs; 45 of 1,000 (2) bne-flfth of above. m May 5; Nov. 5. (2) Same dates. Loan of 250,000,000, of 1895, in bonds of 500 francs at 2.8 per cent, repayable in 76 years at most. June 1; Dec. 1. 500,000 41,771 458,229 Mar. 22; June 22: Sept. 22; Dec. 22. 1 of 100,000 francs; 1 of 25,000 francs; 1 of 10,000 francs; 3 of 6,000 francs; 60 of 1,000 francs. Mar. 22. Loan of 300,000,000, of 1903, in bonds of 500 francs at 3 per cent, repayable in 76 years at most. Feb. 1; Aug. 1. 600,000 6,320 594,680 (1) Jan. 11; July 11. (2) Apr. 11; Oct. 11. (1)1 of 150,000 francs! of 30,000 francs; 8 of 5,000 francs; 130 of 1,000 francs. (2) Same, only 1 of 100,000 instead of 150,000. July 11 (beginning 1914). Loan of 350,000,000, of 1909, in bonds of 260 francs at 3 per cent, repayable in 70 years at most. Feb. 1; Aug. 1. 1,400,000 3,888 1,396,112 SO first years. (1) 6th of February, April, June, August, October, December. (2) 6tli of January, March, etc. SO last years. (3) 6th of February, June, August, Decem- ber. (4) 5ih of April, Oc- tober. (1) 1 of 100,000 francs; 1 of 10,000 francs; 10 of 1,000 francs; 60 of 500 francs. (2) Same, only with 1 of 50,000 francs. (3) Same as (1). (4) Same as (2). Oct.6(begmningl920). Loan of 500,000,000, of 1913, in bonds of 500 francs at 3i per cent, repayable in 70 years at most.' May 1; Nov. 1. 1,000,000 162 999,838 (1) 5th of March, July, November. (2) 6th of May, Sep- tember, January. (1) 1 of 250,000 francs; 1 of 25,000 francs; 2 of 6,000 francs; 50 of 1,000 francs. (2) Same, only 1 of 100,000 francs. Jan. 5 (beginning 1924). ' These bonds are issued from the society's desk, at subscribers' option, either in certificates which are entirely paid off or in provisional certificates to bearer, which have marked on them the payments remaining to be made. The last falls due May 31, 1916. Table B. — Communal bonds.' Date of maturity of coupons. Number of bonds. Description of loans. Issued. July 6, 1913. Date of drawing for amortization. Amortized. Current. Loan of 500,000,000, 1879, bonds of 500 francs and 100 francs, at 2.6 per cent, repay- able in 60 years at most. (1) Mar. 1; Sept. 1. (2) Mar. 1. 1,000,000 350,708 649,292 June 5; Dec. 5. Loan of 500,000,000, 1880, in bonds of 500 francs, at 3 per cent, repayable in 60 years at most. Mar. 1; Sept 1. 1,000,000 342,499 657,501 June 6; Dec. 5. Loan of 400,000,000, 1891, in bonds of 400 francs, at 3 per cent, repayable in 76 years at most. Apr. 1; Oct. 1. 1,000,000 104,384 895,616 Feb. 6; Aug. 6. Loan of 250,000,000, 1892, in bonds of 600 francs, at 2.6 per cent, repayable in 75 years at most. Jan. 1; July 1. 600,000 43,583 456,417 Sept. 22. Loan of 250,000,000, 1899, in bonds of 500 francs, at 2.6 per cent, repayable in 75 years at most. June 1; Dec. 1. 500,000 32,956 467,044 Apr. 5. Loan of 600,000,000,1906, in bonds of 500 francs, at 3 per cent, repayable in 70 years at most. Mar. 1; Sept. 1. 1,200,000 4,510 1,195,490 June 22 (beginning 1918). Loan of 600,000,000, 1912, in bonds of 250 francs, at 3 per cent, repayable in 70 years at most.i June 1; Dec. 1. 2,000,000 1,824 1,998,176 Feb. 22 (beginning 1923). > See footnote to Table A. Closing date July 8, 1916. . , , , _,^. ^. , m vi » » There is a lottery system attached to these bonds, the details of which are not here reproduced, as they are almost identical with those given m iable A. 660 AGEICULTUBAL COOPERATION IN EUBOPE. CREDIT FONCIER AND THE FRENCH FARMER. Statement by M. Albert Viger, Senator; President National Federation Mutual Agricultural Cooperative AsBOciations. Paris. The Credit Foncier has been of great assistance to French agriculture. Before the Credit Foncier was established, a farmer or landowner who wanted money to improve his land or to meet serious losses had no recourse but to go to the small bank, which charged him high rates of interest, or to go to a notary and from him get out a mortgage bond, but this, too, was a very expensive method. He borrowed the money at 5 per cent under this system, but the costs were very high ; and it was not until after the Credit Foncier was founded that he could repay the loan on the amortization plan. To take a concrete case, a farmer may desire to borrow 50,000 francs to make permanent unprovements on his farm. If it were not for the Credit Foncier he would have to borrow the money from a banker, who would charge him a usurious rate of interest and even then would not let him have the money for a very long period of years. On the other hand he could go to a notary and there obtain money on a mortgage, or he could go to some private individual with money to invest and possibly secure the money on a mortgage, but in every case he would have to pay big interest and very high special fees and obtain the money only for 10 yeta. During those 10 years he pays 5 per cent interest, and at the end of the period he also has to repay the fuU sum of 50,000 francs. Now a farmer may go to the Credit Foncier and borrow 50,000 francs for 30 years and pay 4^ per cent interest and IJ per cent amortization, and at the end of the So years he will have repaid the entire sum of 50,000 francs. Under the old system there are cases where farm"6rs have paid 5 per cent interest all of their lives and at their death the only way to satisfy the mortgage has been to sell the estate over the heads of their families. The Credit Foncier compares favorably with the German land-mortgage banks. The rate of interest is no higher and the administration is as good, if not better. LAND CREDIT AND CHEAP DWELUNGS.^ Statement by M. Georges Risler, President Central Society for Real Estate Credit and Cheap Dwellings. Paris. In France we have large houses in the cities for workmen, but I will not speak of them, for you are inter- ested in agricultural things. I will only tell you of the little houses in the smaller towns and in the country. A law passed 10 years ago provided that 100,000,000 francs would be loaned to laborers who had some little property or who owned their own homes. This money is loaned through the Soci6t6 Credit Immobilier. For instance, a laborer may come to the society and ask it to build him a house. Before the society will aid him this man must give proof that he has tried to help himself. The Credit Immobilier Society requires that he must have at least one-fiith of theamount required to buUd his house and buy his garden. If the house is to cost 10,000 francs, the man must have already saved at least 2,000 francs before the society will give him the other four-fifths, or 8,000 francs. The loan is granted at a rate varying between 2 and 3 per cent. The Credit Immobilier Society receives the money thus loaned at 2 per cent and in turn loans it at 2J or 3 per cent. The amount added is kept by the society for expenses. * We also have a society that lends moneys as low as 2 per cent. This society charges 3 per cent to all laborers who have two children; 2f per cent to laborers who have three children; 2 J per cent to laborers who have four children, and 21 per cent to laborers with five children. These societies have also helped the laborers by furnishing them plans of comfortable homes and the services of competent architects free of cost. The way a laborer can acquire a little home under this system is very simple. After being selected the plans of the houses are submitted to a committee which determines if all conditions are quite healthy. The committee must see that all conditions of safety are in the new house. After the house is built and family has moved in, the amount which has been borrowed is repaid in from 20 to 25 years. ' Senator Albert Viger, the presiding officer of the meeting, in introducing M. Risler, made the following statement: "The question of cheap dwellings for agricultural laborers may seem somewhat disconnected with the problem of agricultural organ zation, but in reality it is a very vital agricultural question, for a labor supply is indispensable.' The best way to keep labor is to prope y house the laborers; not in the farmhouse, however, but to supply them with model houses of their own which will attach them to land. To own property makes a laborer a good worker and a good citizen. For this reason the French committee has invited the presi of the Central Society for Real Estate Credit and Dwelling Houses to address you." fBANCE. 661 Rents are so high in France that the price charged by the society is often less than what the rent of the house would be. The purchaser of one of these houses thus becomes a proprietor by paying the ground rent. Heads of families purchasing homes on this plan must insure their lives; and under the arrangement, if the head of the family should die before the property is paid up, it goes to his wife fully paid for. This system solves the problem of housing the families of laborers in sanitary houses, provides the laborer with insurance to the benefit of his widow, and gives the family a pension in their old age. A house is the best pension a man can have because the whole family has the benefit of it, and there remains something when he dies., I am sure houses for agricultural laborers in the United States are better than in France. In France they are bad, very unhealthy, and the mortality among the laborers of the country is greater even than among the laborers in the towns. French agricultural landowners are afraid to give too much independence to their laborers by helping them to own their homes and gardens. This is a mistake which we are striving to rectify, for the laborers who have their own houses will make the best laborers and are the ones who will remain with the farmer. AGRICULTURAL CREDIT IN FRANCE AS COMPARED WITH OTHER COUNTRIES. Address by M. Louis T)op, Delegate of France, and Vice President The International Institute of Agriculture at Rome. Paris. You have heard the eloquent statements, backed by facts and figures, which have been set before you these past few days in both Paris and in our Provinces, statements which have acquainted you with the theory and practice of agricultural credit and cooperation in France. I will, therefore, now limit myself to deducing the philosophy of these facts by briefly summarizing th« political, technical, economic, and social results obtained from the French systems of organization I will try to show you the material and moral benefits conferred on our rural democracy by the French system of agricultural credit. The fundamental principles which must always underlie every successful system of agricultural credit find their clearest expression in the French system. I therefore deem it desirable to deduce from the concrete facts which you have studied the principles which characterize our agricultural credit system. In republics like France and the United States, which are democracies based on high ideals, it is essential that the guiding principles underlying any reform be clearly understood — that the purpose which an organi- zation is to serve be steadily borne in qjind. It is, therefore, important that the members of the American Commission while in France should secure a clear knowledge of the characteristic features on which the French system is based. LIBERTY BASIS OF FRENCH SYSTEM. In a democratic republic, such as France, liberty alone can form the basis of an institution which aims at social betterment. Liberty is therefore the basis of the French system. The law of 1884 on professional syndicates, or trade-xmions, recognized the right of persons exercising the same calling to associate for the protection of their professional interests. The agricultural syndicates which arose spontaneously as the result of this law form the primitive cells from which is built up the whole organism of rural progress. The agricultural syndicate is, in the words of the statesman Waldeck Rousseau, the soul of the rural population of France; it has given rise to a "masterpiece of sociological organization" unparalleled in other countries. The syndicate owes its existence exclusively to private initiative It is the free initiative of the French farmer organized from below which insures the success of this system of agricultural credit. It is a system which has its roots firmly planted in the soil of rural democracy. SYSTEM FOR THE SMALL FARMERS. Another characteristic feature of the French system is that it is specialized. Recognizing the individual initiative of the French farmers, our legislators have provided a method of organizing agricultural credit in France along lines especially adapted to the requirements and needs of a rural democracy. The French agricultural credit system is an organism especially and exclusively built up for the use of the farmer — there is no middle man. Agricultural credit in France is not organized in the interests of bankers or financiers, nor in the interests of large landowners. It is organized in the interests of the real tillers of the soil — the small landowners, the tenant farmers, the crop-sharing farmers, and the agricultural laborers. It arose and has been developed so as to enable our rural democracy to till the soil of France imder conditions equally advantageous to those enjoyed by the large landowners. 662 AQBICULTUBAL COOPEBATION IN EUEOPB. Only farmers can be members of a French agricultural syndicate. Only farmers can be members of the local agricultural credit bank. Only local banks can form regional banks. Only regional banks can join the federation of regional banks. Only members of these several institutions which compose our organization can avail themselves of the credit which the Bank of France has placed at the service of French agriculture. Thus we have a complete adaptation of the organ to the function it is to perform, and as a result of speciali- zation the organ yields the maximum results. SIMPLICITY. The third characteristic feature of the French system is its extreme simplicity. The formation of an agricultural syndicate is attended with only a minimum of administrative formalities. In fact, the only formality required is that the by-laws and the list of members of the proposed syndicate be filed with the local administrative authorities. Thus there is complete freedom. The same simplicity characterizes the formation of a local bank which can be formed by the members of the agricultural syndicate after they have subscribed their shares. These banks also enjoy fiscal exemptions in the way of exemption from payment of personal taxes and stamp duties. The simplicity of the system is also due to its being a system of personal credit. Any farmer who is a member of a local bank can secure, on the guaranty of his own note of hand, loans with which to meet the requirements of his farm without having to comply with the further conditions usually required for aU other forms of credit. DEOENTKALIZATION. Agricultural credit in France is decentralized; this is another characteristic feature of the system. This feature is the natural result of the recognition of the principle of freedom underlying the entire system, and affords full scope to private initiative, unhindered by the administrative obstacles which would be placed in its way by a centralized system. One advantage under this plan is that the field of operation of agricultural credit can be indefinitely extended. FRENCH AGKICULTUHAL CREDIT CHEAP. Agricultural credit in France is cheap, and this, in my opinion, is one of its most important features. The problem of how to discount agricultural paper at the lowest possible rate is the real difficulty in any agricultural credit system. To rescue the farmer from the evils of mortgage credit — often from the bondage of usury — and to secure him loans at a lower rate of interest than is usually required by ordinary banks would seem to be a difficult and even an impossible task. Yet the problem has been solved in France in a most prac- tical and profitable maimer, as the rate of interest charged the farmer varies from 2 to 5 per cent, according to the length of time for which the loan is made. To organize agricultural credit so that it may be adaptable to all the requirements, to all the needs, to all the incidents which may arise in the complex business of the farming industry is an ideal which it would seem difficult to attain without derogating from basic principles and without weakening the very foundations on which the edifice of rural credit reposes. Yet this seeming impossibility has been rendered possible, thanks to the good will and the ability of our legislators, and thanlcs more especially to the suppleness of the organi- zation which they have built up to meet the varied needs of our farmers. SHORT AND LONG TIME PERSONAL AND COLLECTIVE CREDIT. Agricultural credit in France is available both for individuals and for collective bodies < It is granted both for short terms and for long terms. Individual borrowers can secure agricultural credit for both short and long terms, according to the purposes for which it is required. Collective credit can also be obtained either for short or for long periods. The French system adjusts itself to meet all requirements; it transforms itself in accordance with the needs of those it is to serve; in a word, it furnishes the most varied means to secure an increase of the agricultural wealth of the country and to increase the prosperity of our rural population. The French system can be viewed under a double aspect — the economic and the social. This would indicate that it is essentially a system adapted to the requirements of small holders. In fact, the social phase of tbe French system of agricultural credit is a distinctive feature and one which is peculiar to France. No other country can boast of so complete a system of agrarian legislation specially devised to further economic and social progress . PKANCE. 663 The French RepubUc is proud to put forward this claim that it has made its legislation on agricultural credit the basic factor in its agrarian policy and the prime factor in its economic and social progress. We are proud to look beyond the soil to the man who tills and fertilizes it. We are firmly convinced that economic prosperity is essentially a function of human factors. This is the only standard which a democracy inspired by the spirit of independence and progress can adopt. DEMOCRATIC AND INDEPENDENT. Our system is democratic, for in the organization and working of agricultural credit we strive to reserve that credit exclusively to the farmers, regardless of all political and rehgious considerations. The French system is independent, for no one could suggest that our national system could be enslaved to an economic or financial organization representative of private interests. The complete independence of its various organs is the axiom which guides our policy and is the secret of the success of our system. GOVERNMENT ONLY REGULATES PROCEEDINGS. The part played by Government intervention in our system is exclusively that of encouragement; its purpose is to assist the free developinent of organizations resulting from individual initiative. The State only' intervenes to control and regulate the proceedings and to give to the whole system that high guaranty of probity and disinterestedness which are the best patents of nobUity of all democracies striving to promote social progress. The intervention of the State may be described by the formula, "Help yourself and the State will help you." AGRICULTURAL MUTUALITY. There is another aspect of our system which should be brought out, and that is the mutual aid and active solidarity which biiids together all the members of the great agricultural family. All hands are joined, and agricultural mutuality unanimously proclaims the motto, "Each for all and all for each." It is therefore only natural that the fundamental principle recognized in the organization of the agricultural credit societies is that of free service. The cost of management is thus reduced to a minimum, and credit can be granted to the farmers on the most advantageous terms. Thus agricultural credit in France has become, thanks to its ready adaptabihty to the complex needs of the agricultural industry, the comer stone of the agrarian policy of the French Republic. AGRICULTURAL CREDIT INSTRUMENT OF SOCIAL PROGRESS. The laws of April 12, 1906, on cheap dwellings; of AprU 10, 1908, on small holdings; of July 12, 1909, on the homestead; of March 19, 1910, on individual long-term credit for the benefit of small farmers, are all laws which indicate a notable progress in the improvement of the economic and social conditions of the rural population and are the fruit of our agricultural credit system. The diversity of these social laws clearly shows what has been done in France and that the French system of agricultural credit is a highly effective instrument of social conservation. Services which it renders the rural population of France have made our agricultural credit system a prime factor in national consolidation. It is securing, day by day, the economic emancipation and the moral and social redemption of the agricultural laborer. It is for these reasons that we can with confidence declare the French system is essentially a progressive and democratic system which can and should afford inspiration to a democratic republic. In the course of the long journey of inquiry which you have made through Europe you may have come across and admired credit organizations which may have appeared to you more numerous, richer, and more powerful than those of France. You may perhaps think that the results obtained in France in the field of agricultural credit are very modest compared to those obtained abroad, especially in Germany, but allow me frankly and sincerely to draw your attention to deductions which you might draw from appearances which do not always represent the facts. In order to get an accurate idea of the situation you must ascertain what proportion of the business done by the societies you have studied is strictly for agricultural purposes, and what proportion represents business done with artisans, small tradesmen, and all the other classes who five in the country without being farmers. Nor must you forget, in making this critical examination, the very proper suggestions made by his excellency, the Amer- ican ambassador, when he called your attention to the fact that although there are countries which may offer admirable examples of a paternal and feudal system, you should carefully consider whether such a system would answer the feelings and aspirations of a great democracy, such as yours, based, as it is, on liberty and individualism. 664 AGRICULTUKAL GOOPEEATION IN ETTEOPE. Do you wish to establish in your great and free EepubUc a system of agricultural credit compatible -with the sentiment of independence inborn in the heart and mind of American citizens? Do you wish to safeguard the dignity of the American farmer ? Do you wish to enlarge the personality and the influence of your rural democracy ? If these are your wishes we trust that our simple, supple, and homogenous system, speciaUzed in its organi- zation, scientific and practical in its conceptions, may afford you valuable inspiration and suggestion in the accomplishment of the noble mission entrusted to you by your Government and your Nation. Allow me to express the hope that if the ideas and the writings of the French economists and philosophers of the eighteenth century contributed to the political emancipation of the United States, the ideas, conceptions and practical results secured by agricultural credit in France in the twentieth century may contribute to secure the economic and financial emancipation of the American farmer. The French RepubUc will be happy to applaud with enthusiasm the future success obtained in this field by her great sister Republic, the United States of America. COOPERATION IN FRENCH AGRICULTURE. Address by M. Louis Tardy, Chief Inspector for Agricultiiral Credit, Ministry of Agriculture. Paris. Modern philosophers and economists have particularly shown the importance of the idea of solidarity; the sociological society, and its general secretary in particular, have done much toward making sohdarity a veritable social doctrine of which cooperation is an immediate application. The development of cooperation in all its forms — consumption, production, credit — is, in all countries, one of the characteristic phenomena of our time. It is one of the best methods, as Mr. Gide has so well shown us, to immediately improve the material and moral situation of workers. It has been particularly in the second half of the nineteenth century that cooperation has developed among French farmers. The development of the means of communication and the progress in agronomic science have transformed the agriculture of our country. Association responds to a need, to an economic necessity. It has developed under the combined influence of private initiative, of the propaganda of professors of agriculture, and of the encouragement that it has received from the State. There already existed agricultural societies and agricultural "comices," but these were rather societies of . study and encouragement. There were also syndicate associations up to the number of nearly 7,000, but they were for special purposes: draining of marshes, drainage, irrigation, etc. Certain agricultural "comices," notably those of Rouen, Trevoux, etc., commenced to make purchases together for the members of the associ ation ; then, thanks to the initiative of two professors of agriculture, Messrs. de I'Ecluse and Tanviray, there were founded, from 1 881 to 1883, two associations having for object the purchase in common of manures in order to obtain them cheaper and to prevent fraud in the deliveries. Shortly after, Parhament voted the law of March 21, 1884, on professional syndicates. The agricultural syndicates already constituted immediately claimed the benefit of this law, for there was not then any other l^al form of association. It is thus that by apphcation of the law of 1884, more than 6,500 agricultural syndicates have been constituted in France, of which 4,000 at least make cooperative purchases. There are, besides, about 100 similar agricultural associations which utilized later on the law of July 1, 1901, on associations. In order to be able to make these purchasing operations more legally and with a more extended legal capac- ity, the syndicates have also constituted, most often adjointing them, veritable civil or limited cooperative societies, which now number more than 100 and some of which do a fairly large business. Finally, there are also, as consumers' cooperative societies scattered about the country, at least 700 cooperative rural bakeres selling bread to their members at cost price and often exchanging bread against the corn brought by the farmers. Some even have mUls to transform the corn of their members into flour. They hardly date back further than 1850 and they have particularly multipUed in the west, in Deux-Sevres and adjoining departments. There also exist a certain number of consumers' cooperative societies and little rural cooperative grocery stores. Cooperative societies for agricultural production are the oldest. Without speaking of old family com- munities nor of servants and yeomans communities which worked their lands in common, the fruiti^res or cheesemakers' cooperative societies of the East go back to the twelfth century. They make gruy&re, ^i"™®"' thai, and fromage bleu (blue cheese). The;f were also formed on account of the necessity of having 350 to o liters of milk to make a gruy^re cheese of 30 to 50 kilos, i. e., the daily production of 50 to 70 cows. IW PRANCE. , 665 are about 1,800 cheesemaking societies, sometimes successfully federated in syndicates, particularly in Haute- Savoie and Ain. The cooperative dairies for the sale of fresh milk partly supply Paris and some other towns. The cooperative butter makers are particularly prosperous in Poitou and Charente, where the central association of cooperative dairies of Charente and Poitou includes more than 130 societies, uniting 75,000 families of cultivators, possessing 200,000 milk cows. The proceeds of the sale of butter and of its by-products (casein, serum, etc.) amount to nearly 50,000,000 francs per annum and they supply nearly the half of the consumption of butter in Paris. They utilize to better and better advantage the skimmed mUk in the cooperative pig societies and casein fac- tories and they have created adjoining them societies for the sale of eggs, not yet very numerous but whicli wiU doubtless develop rapidly. Cooperation also commences to make more and more headway in connection with vine growing. It has overcome the independent spirit of the small vine growers. Cooperative cellars now make vintages in common with all the methods of winemaking and most up-to-date installations in the eastern Pyrenees, Var, Herault, etc. The cooperative cellars and distilleries apply the new methods of diffusion for the manu- facture of wine, as well as for the making of brandy from grape husks. Cooperative starch and farina works are particularly developed in the Vosges, cooperative oil refineries in Provence, where they bring back to favor the good olive oil. Cooperative societies for the distillation of sweet- smeUing plants, orange flowers, roses, etc., are found on the coast of the Mediterranean, for the sale of fruits and flowers (Toulouse violets), for thrashing, for steam labor (plowing) and agricultural implements, and for lighting and electric power are found everywhere in France. In the Landes, resin cooperatives distill resins and make essence of turpentine. There is even a cooperative railway, a cooperative sourkrout f actor}'^, a cooperative stable, breeding socie- ties, and societies for the making of tomato, vegetable, apricot, and caper preserves. In a word, association for the production, the transformation, and the sale in common of agricultural products is put into practice for all kinds of products. It is thus that there are at least 2,600 agricultural societies for cooperative produc- tion and sale, which have a tendency to increase more and more, since the law of December 29, 1906, has sup- plied them the means to procure more easUy the capital necessary for their installation, thanks to agricultural credit. It is thus that, by the combined action of the State and private initiative, agriculturists succeed in producing more, selling better, and consequently thereby improving their personal position, while at the same time enriching the country. Agricultural transformations, which become more and more intensive, demand larger working capital, which is sometimes lacking to agricultural workers. But they can now procure all the money necessary for good cultivation, thanks to the organization of the mutual and cooperative agricultural credit. The law of November 5, 1894, modified by those of January 14, 1908, July 20, 19Q9, February 15, 1910, and March 19, 1910, and completed by those of July 20, 1895, March 31, 1899, December 25, 1900, and December 20, 1910, permits farmers to procure short credit for the acquisition of small properties of a maximum value of 8,000 francs. Cooperative and mutual insurance societies can thus make short loans to the local agricultural credit societies, and cooperative societies can thus, thanks to the regional banks and to the advances of the State, have long loans for their installations, by application of the law of December 29, 1906. The advance of 40,000,000 francs made by the Bank of France to the State in favor of agricultural credit and its annual royalty places now at the disposal of agriculturers more than 100,000,000, of which 80,000,000 have already been used. There are 97 regional banks of agricultural credit, having about 4,000 local branches, with 100,000 mem- bers. There are in addition at least 700 independent rural banks of a confessional cliaracter, having about 30,000 members. Finally, agriculturists have had to think about guaranteeing themselves against all risks of every descrip- tion to which they and their property are exposed. The law of July 4, 1900, has greatly facilitated for them the creation of these mutual agricultural societies, and the bounties granted by the State to these societies, since 1898, have exceeded 10,000,000 francs. The results obtained justify these encouragements. There are nearly 12,000 mutual agricultural surance societies, comprising nearly 9,000 mutual cattle, with 65 resurance banks; 2,700 mutual fire, with 30 resurance banks; and a certain number of mutual societies against hail, particularly among tobacco planters; against personal accidents, sickness, and old age. Agriculturists have also formed mutual surance societies against agricultural labor accidents, not yet very numerous, but still very well organized in Indre-et-Loire. They have utilized also the law of 1898 on societies of mutual help, under which law have been founded no less than 6,000 of the rural mutual help societies out of the 25,000 which exist in the whole of our country. About 100 pension banks, exclusively agricultural, assure to aged workers of the soil a pension for their old age. 666 AGRIOtrLTCrRAL COOPBRATIOir IN EXIBOPE. These associations, of which the total exceeds 40,000, are federated in regional and national groups, of which the principal are the National Federation of Mutuality and of Agricultural Cooperation, presided over by Senator Viger, former minister, and the Central Union of Syndicates of the Agriculturists of France, presided over by Mr. Delalande. They show that agriculturists have renounced their isolation, that they recognize the usefulness and benefits of solidarity. There is understood more and more the r61e which the farmer himself can play in these associa- tions of which one appreciates better and better the triple r61e, economic, moral, and social. This short statement, although too summary, yet offers, as Mr. de Kocquigny has well said, "very encourag- ing perspectives to all those Who consider agricultural progress closely united with the development of private initiative by means of association." It also shows how useful may be the r6le of the State when it encourages the putting into practice of ideas of solidarity. Cooperative association is one of the best means of keeping the field workers on the land and of struggling against the desertion of the country. It can be safely stated that if the "return to the land" of which so much is said finally becomes a reality, it will be due to the development of cooperation and mutuality, when the "mutualist" village, which is the vUlage of the future, will exist at all points of our beautiful country of France. REGIONAL BANK AT ETAMPES. Report or a Subcommittee. Etampes (near Paris). Tbis regional bank was founded to furnish supplementary capital to farmers around Paris who do very intensified farming. As land here is limited and very valuable, they are obHged to use every foot of the soil. It is necessary for the farmer to have more money in the summer than in the winter, as during the summer he has to pay out more, and that is the first i-eason for the formation of the bank. When such a farmer had not enough money he was obliged to ask for a loan either from the grain merchant, the cattle dealer, or the buyer of his product. If he addressed himself to a bank he had to pay a very high rate of interest, and the loan could not be obtained for a short time — it must be taken for from 6 to 10 months. In case a farmer addressed himself to a merchant, he became a captive, as' one might call it, of the merchant, because he was obliged to take the money from certain merchants, as he was afraid to take it from anyone else, and, secondly, he had to pay far more than the real rate of the day. These were the reasons for forming the rural credit institute here. This association, which is a regional bank, was founded with capital paid in by the members who are farmers and associations of farmers. These associations of farmers form the local banks. As soon as the capital was paid in l)y the members, they asked for an advance from the State under the law of 1889. There are two ways in which the capital of the bank may be used. The first is to loan the capital of the bank and the money obtained from the State to the farmers. If all the money is not loaned out, the balance is put in bank at the current rate of interest. But this system is not a good one, because in the winter less money is loaned than in the summer and the bank pays ordy a small rate of interest. The second way is to invest all of the capital in bonds or obligations guaranteed by the French Government for rediscount — these bonds bring a higher interest. Let us suppose that we have a capital of 500,000 francs and we receive from the State 2,000,000 francs, this makes for the bank 2,500,000 francs. We can loan this money directly to the farmers, and during the winter deposit the unused part in the bank. This system, however, has the disadvantage of paying too low a rate of interest. The better system consists of employing the whole capital and so of depositing the entire capital in a large bank which rediscounts agricultural paper. The second system forces the farmers to have bills of exchange for three months at least, as the bank does not accept bills for a longer time. The farmer is obliged to renew these bills of exchange every three months. This institute, which is a regional bank, uses a mixed system— one-half of the first and one-half of the second. It has bought a sufficient amount of bonds in order to be'sure not to have part of the capital unused. Thus it rediscounts at the bank all of the capital it can not keep in use. In order to facilitate this rediscounting the regional banks have received from the Bank of France a special concession. It requires the local banks to sign the bills of exchange of the farmers for three months, and then leave these papers with the regional bank for three months, which enables it to rediscount these bills of exchange; for it remits to the Bank of France the bills of exchange signed by the farmer, which serve as a guaranty to the bank for the payment of the bills of exchange signed by the local banks. In this way the Bank of France secures the three signatures upon a note which the law requires it to have. This institute has created a branch office of the Bank of France and so they do all their business through the Bank of France, and in this way they never have even 10 francs idle. FBAiroE. 667 Commercial bank rates of interest are for the farmer 9 per cent and for the merchant 6 per cent, the reason being that the paper of the farmer is for a longer time. The rate of interest of the Bank of France is 3 per cent, and for the merchant they add an additional 3 per cent as commission, but for the farmer, whose paper is for a longer time, they add a commission of 6 per cent, and so the farmers pay 9 per cent and the merchants 6 per cent. Thus the farmer is at a great disadvantage as compared with the merchant. Further, when a merchant lends money to a farmer he charges 6 per cent and in addition a very high commission; also he insists that the farmer buy his products from him, so a farmer dealing with a merchant would not only pay 6 per cent but might pay as high as 15 per cent. This was the condition of the farmer before the cooperative banks were organized. By cooperation the farmers secure money from the Bank of France at 3 per cent, the rate of interest the bank gets on its bonds is 3J per cent, and the difference is used in paying the; running expenses of the bank. This difference usually amounts to from ten to twelve thousand francs a year. The part the local bank plays in this system of cooperative banks is only to be an information office upon the solvency of the prospective borrower. It asks for two signatures, one from the prospective borrower and the other from the surety, except when the farmer who desires to borrow has a life insurance polic}^ which he deposits with the bank, or has some other security, such as bonds, which may also serve as guaranty to the regional bank; in such cases one signature is sufficient. The local bank takes a small commission for the services rendered — the minimum amount is 9 centimes for 100 francs a yiaar and the maximum 90 centimes for 100 francs a year. In case the farmer brings two signatures the charge is 90 centimes ; in case he brings security of a life insurance policy or bonds it is only 9 centimes. If he brings six signatures the commission only amounts to 9 centimes. This is done to encourage cooperation. Thus they secure the same facilities for notes signed by six men as notes with collateral security. It happens from time to time that the bank loans upon a mortgage, but this is very seldom. It is an experiment that has not yet developed. In general the farmer or landowner in France does not like to mortgage his estate. The discount at the regional bank is at the same rate of interest as at the Bank of France, and therefore it does not have any benefit from discounting. The very great advantage is the advance made bj- the Bank of France free of charge. Every year the regional bank carries over a reserve fund equal to 3 per cent of the amount loaned it by the State through the Bank of France. The regional banks do not make any profit on their operations; it is the same to them whether they do a big or a small business. These regional banks usually work free of charge to the borrowers; they work only as middlemen between the local banks and the Bank of France, being the intermediary of the local banks which are the representatives of the farmers. A regional bank is simply the agent for the distribution of capital. At the same time it is the central organization of all the bookkeeping of the banks, in order to avoid mistakes. If each of the small banks was obliged to keep books, it would be necessary for the cashier to give bond, and he would be obHged to have a knowledge of bookkeeping. In our system the secretary of a local bank does not require any special knowledge. It is quite unimportant who is secretary. It is sometimes the sheriff, or a justice of the peace, or a baihff . The local banks do not pay much for the services rendered. All the employees in the 32 local banks do not receive more than 5,000 francs a year. The salary of the secretary is not fixed. He receives a commission according to the business he does, ranging from 200 up to 1,000 francs a year. So the expenses of the secretary are not paid by the bank, but are paid by a commission from the borrower. They find this to be the best way to avoid graft. So far they have been lucky enough not to have any loss by fraud, and not even a loss on account of the borrowers. The working capital of a regional bank is divided into shares, which is here fixed at 100 francs each. Every year a general assembly fixes the rate of interest for the following year. They pay here 3.66 a hundred a year on the capital. Nine-tenths of the working capital of the regional bank is furnished by the local banks, which wUl be explained now; the remaining one-tenth by the administrators of the bank. The capital of the local bank is also divided into shares at 20, 50, and 100 francs each. These shares are paid in either one-fourth or one-half, or as much as anyone hkes to pay in. In order to join such a local bank it is necessary to be a member of an agricultural sjTidicate or a ndember of a mutual insurance company. As soon as the capital is formed the local bank pays the capital to the regional bank, which gives the local bank shares amounting to the capital paid in by the local bank. The share>i are given in. exchange for the capital sent in. And so the capital of the regional bank is the united capital of the local banks belonging to the particular region. The local bank is strictly confined to the control of the solvency of the prospective borrower. There are many of these local banks, but really they are only information agents for the regional bank and responsible up to the hmit of their capital. In case the borrower does not pay, the local bank is the first party to lose. The capital of the local bank serves only to buy the shares of the regional bank, and the local bank assumes responsibility up to the Hmit of its deposits. Suppose a borrower recommended by the local bank, who owes 20,000 francs, fails and does not pay, and the local bank has paid lq here 15,000 668 AGRICULTUBAL COOPEBATION IN EUEOPE. francs, the local bank loses the 15,000 francs and the regional bank loses only 5,000 francs; that is to say, the importance of the local bank seems to be very small, but on the contrary it is very great, as its special service is to secure all its borrowers. The members of the local bank are liable only up to the limit of their shares. The local bank has no standing after the loss. It continues only with limited capital if part of the original capital is lost. The members have the right to replace the capital, but can not be required to do so. A local bank can only recommend a borrower up to ten times the amount of capital paid in. The first responsible party is the borrower, and in case he can not pay, the second man has to, and soon- but only in the case of being unable to get payment from the indorsers does the local bank lose, and the regional bank is finally liable. When the capital is limited the credit is also limited. Etampes has a population of 9,000 and the bulk of the inhabitants are rich, retired farmers who are living here and devoting their time to the interest of agriculture. The land is worth about 3,000 francs a hectare. Kent is paid in money from 60 to 80 francs a hectare. The tenant has to pay the taxes. The average size of a farm is 100 hectares, but there are many small farms of from 10 to 15 hectares. There are more small than large farmers. There are more tenants than landowners. Property here is equally divided between land- owners who rent land to farmers and farmers who own their land. The chief products are wheat and oats; the better crop this year is wheat. They raise about 2,500 kilos of wheat to the hectare; maximum yield is about 3,600 kUos.^ The small farmers require the most loans. The Government has instituted the rural system of lending to the farmers in order to make them satisfied and prevent revolution. Sugar beets are produced in large quantities. The farmer sells the beets direct to the factory, and the price is fixed according to the quality of the sugar; this is tested by machinery. The price of sugar is regulated by the exchange and is about 30^ francs per hundred kdograms, delivered on the docks. Private cooperative farmers bought the sugar factory. Beets are dehvered by the members to the cooperative factory, where they are paid according to the rates of exchange, and after deducting the general expenses the profits are divided among the members. The State advanced the sum of 100,000 francs to the industry. Residue of the beets is given to the cattle and contains 80 per cent water when sold. One factory can handle the products of 650 hectares. Income from 1 hectare is from 20,000 to 30,000 kilos of beets. The net profit is only in the improvement of the soil. QUESTIONS. Q. How are the officials in the regional banks paid ? A. They have three employees here — a director, who gets 3,000 francs a year; his first secretary gets 2,000 francs a year, and the second secretary gets 1,500 francs; and in addition they get a certain commission out of the business of the year. Q. Where does the money to pay the salaries of the officials come from? A. The Bank of France lends the regional bank a certain sum of money, without interest, according to the amount of its paid-in capital, and the interest that this bank makes on that money pays its expenses. It amoimts to about ten to twelve thousand francs a year, and this also pays the reserve fund. Q. The smaller bank sends the notes to this bank and it sends the money to the borrower ? A. Yes. The local bank is only the intermediary between the borrower and the regional bank. The local bank never deals direct with the Bank of France. Q. What is the relation between the capital of the regional bank and the amount advanced by the Bank of France ? A. Four times the amount of the paid-in capital. Q. What is the rate of discount with the Bank of France ? A. It amounts to one-haM of 1 per cent. Q. Is there any limitation on the amount of capital which the regional bank must have to start with ? A. Two thousand francs. Q. Must that be simply subscribed or paid in ? A. Only the local banks can start without capital. The regional banks must have capital, as they get only four times the amount paid in. The average amount is 50,000 capital. Q. Does the central inspect the books ? A. Yes; there is an inspection service for the books of all societies. Q. Do the local societies have any representation in the Southeast Union ? A. Only at the annual general meeting, when each society has five representatives. Q. What is the function of the subunions ? ' There are special farina for growing vegetables which are rented for 400 francs a hectare. FEANOE. 669 A. They are used only for meetings and as study centers. They have no business offices. Q. AVhat has been the effect of these societies, especially the purchasing societies ? A. The benefits are incalculable. They have given the farmer confidence in himself and in the power of organization. They have provided scientific instruction to the members. They have brought about a great reduction in the price of farming requisites; for example, when the sjTidicates were formed "engrais" phosphate was sold at 14 francs per 100 kilos, and now it is sold at 5 francs. The cost of machinery has also been reduced; a mower which formerly cost 500 francs can now be bought for 300 francs. In short, these organizations have brought about a new era in French agriculture. Q. What class of farmers belong to these organizations ? A. Most of them are landowners, but a few are tenants. Nearly all of the small farmers in France are members. UNION OF THE AGRICULTURAL SYNDICATES OF THE SOUTHEAST PROVINCES, Statement Submitted to the Commissions. Lyons. The purpose of the agricultural syndicates and affiliated associations is to organize agricultural business so as to render it more profitable, more stable, and more agreeable to pursue. They are grouped either in unions of syndicates themselves of the affiliated associations or united in regional groups. Far be it from us to claim that the syndicates have created everything in our beautiful country of France, for a strong race of farmers and workmen have been, for a considerable period, bringing the farms into their present prosperous condition. However, it may be fairly conceded that there is progress to be made in over- coining routine prejudice (antiquated methods), unnecessary expenses, and in obtaining the most profitable results generally. The isolated farmer is in a helpless situation. He can not protest successfully against overcharges of duties and taxes; he can not defend himself against the exploitation to which he is frequently subjected by merchants and intermediaries; he can not assure himself against frauds; he can not understand perfected methods of increasing the production in proportion to the rising expense of operation — in short, he is unable to enjoy the advantages provided by the law for insurance against agricultural risks and for such borrowing facilities as he may require. Association provides the power which is lacking in its individual members, and by it the progress of agri- culture must be effected. The results obtained may be used as a gauge indicating what may be expected in the future, and it is with certainty that the farmers are being conducted in the road of progress through their agricultural organizations and the multiplication of their syndicates and the several mutual associations sub- sidiary thereto. Services rendered. — The considerable advantages which the syndicates have procured for their members are well demonstrated by a few figures which follow. La Cooperative Agricole du Sud-Est (federation of syndicates), which, by the way, does not handle all the business of the syndicates, has from 1893 to 1912 realized total sales in excess of 44,000,000 francs and returned to the syndicates 895,101.25 francs, which but for them would have been lost to the farmers. The credit and mutual insurance associations render analogous services. Thus the insured members of our mutual fire insurance societies have paid a premium of less than 20 per cent, but they have put aside reserves which for the first 10 years since their estabishment have not fallen below 500,000 francs, thus per- mitting the fortunate members to do away with their premium payments in course of time. These reserves, in their turn, serve as a source of credit and the above figures show conclusively that the syndicates and their affiliated associations are helpful to farming and render more profitable its pursuit. One might cite other advantages which, though not capable of being translated in money value are none the less eloquent. Why should not these simplifications of progressive methods of cultivation and this technical knowledge have resulted profitably ? They have been introduced by means of conferences and the distribution of pam- phlets, by the 50,000 copies of the Bulletin du Sud-Est distributed monthly, and the 10,000 Bulletin du Beaujolais, and still others, by the 200,000 copies of the Annual Almanac, and by the numerous institutes, under the auspices of the syndicates, in which the scholars have obtained in 15 years nearly 15,000 certificates and 3,300 diplomas. One ought not to forget either the effect upon the authorities and the public which is exercised by the syndi- cates and the unions, as well as by the chambers of agriculture, and the beneficent effect of bringing together men who, except for these institutions, would never have come in contact with one another. 670 AGMCULTUEAL OOOPBBATION IN EUEOPE. In a,ci!omplishing all this and many other things besides the syndicates have fulfilled their program, which consists in organizing the farmers in such a way as to render more fruitful, more stable, and more agreeable their calling. They have done it, too, without violence and without injustice, with the constant watchword "d'atteindre, " as recommended in the last wUl and testament of EmUe Duport — " avec I'aide de Dieu la paix sociale" (the attainment, with the aid of the Almighty, of social well-being). They have paved the way for influential men to aid in the development of the future of their country. It is to such men that we address ourselves, presenting to them the fundamental principle that both local and regional associations should be created. The local syndicates should be communal as far as possible, and it is absolutely essential that they be coordinated, supported, and federated under regional associations. Syndicates. These associations are the centers of rural life around which are grouped the aflSliated associations which it may be necessary to create. They are authorized by the law of the 21st of March, 1884. Foundation. — Three copies of the constitution adopted by the general assembly and three copies of the list of members of each syndicat are required to be deposited with the mayor. These documents have to be certified and signed by the president and the mayor is required to deliver a receipt. Composition. — The syndicates must be made up exclusively from persons engaged in the pursuit of agri- culture as agriculturists, farm proprietors, those enjoying the use of farms, farm superintendents, those owning and operating farms, renters and share tenants, farm laborers, etc. Oiject. — The syndicats have for their general purpose the study and defense of the interests of agricul- ture and for their special object: (1) To encourage and favor improved methods of farm cultivation by means of fertilization, by the use of carefully selected seed, perfected farm implements, and all other means proper for facilitating farm labor, increas- ing production, diminishing the cost of operation, and reducing as much as possible the cost of living in the country. (2) To encourage instruction in agriculture and to disseminate agricultural knowledge by means df con- ferences and such other means as may be recognized as useful. (3) To facilitate the purchase of fertilizers, farm implements, animals, seeds, and aU materials, whether raw or manufactured, which are useful in agriculture. (4) To acquire agricultural machinery and implements for the purpose of renting them for the exclusiye use to their members. (5) To provide for the sale of farm products. (6) To give advice and consultation on subjects which concern agriculture, furnish quotations of the sale price of farm products in the markets, and to furnish arbiters and experts to solve legal questions. (7) Finally to encourage agricultural operations by the organization of conventions, the creation of bureaus of ioformation, and in general to occupy themselves with everything that may be useful to the interests of agriculture, such as provision against the risks due to accidents to workmen, animals, and buUdings through fire, etc., and institutions for mutual aid, pensioning of infirm people and those too old to work, institutions for agricultural credit, and cooperative associations, etc. Ways and Means. — As a means of attaining these several ends the syndicates have a fund provided by fees, dues, membership assessments, etc. The Bulletin is sent specially to each if they desire, but ordiaarily aU the members of each syndicate receive a reduced rate of 50 centimes a year (10 cents), entitling them to the Bulletin de I'Union du Sud-Est, which appears once a month. The Almanack of the union is provided for the members of all affiliated syndicats. Reunions and conferences are held as frequently as possible, sometimes once a month, without counting the general assemblies. Agricultural instruction is also used as a means for promoting progress. Every syndicate has an office, through which the commands of the members may be transmitted, and the policies against accident to workmen may be taken out there and sent to the department of thrift. Agricultural machinery, such as thrashing machines, reapers, and rollers, for the use of the members, are kept in the depot of the syndicates. The syndicate establishes affiliated societies for those who are unable to work, for agricultural credit, for insurance against fire risk, accidents, and death to workmen or to animals, and against damage to the crops by hail, etc. PRANCE. 671 UNIONS. The syndicates when isolated are powerless. They are in need of common services for instruction and counsel. It is therefore indispensable that they shall attach themselves to a union sufficiently powerful in its organization to furnish them the services, the information, and the counsel which they require. In our locality, and for that matter throughout all France, thereis no more powerful coordinating institu- tion than the South Eastern Union, having its office at Lyon, 21 Rue d'Algerie. This Union has affiliated its syndicates to The Central Union of Agriculturists of France, which renders many services of a general character; and the isolated syndicates could never get along without it. A number of subunions have been formed, such as the Union a Drome and Ardeche, one of the oldest unions in France, and the Union of the Loire, so active in propagating agricultural instruction, and the Union of Beaujolaix. which is specially concerned with viticulture. Although these subunions voluntarily limit their activity to special purposes, they do not dispense by any means with their adherence to the South Eastern Union. SOUTHEASTERN UNION. This association covers 10 departments: I'Ain, L'Ardeche, la Drome, I'lsere, la Loire, la Haute-Loire, le Rhone, Saone-et-Loire, Savoie, Haute-Savoie, and has some syndicates in four others: les Hautes-Alpes, le Jura, le Puy-de-Dome. It has been in existence foi 25 years, having been founded in 1888, and has grown up xmder the impulse of its eminent president, Emile Duport, till in 1913 it includes 500 subsidiary sundicates. AFFILIATION TO THE UNION. The application to be sent to the president of the union includes — (a) A request to be admitted as an affihated association. (&) A copy of the minutes of the committee of the syndicate authorizing the request for affiliation. (c) A sample of the constitution with a list of the members of the committee of the syndicate. (d) A copy of the receipt delivered by the mayor. AU these documents certified and signed by the president. The syndicates affiliated to the union pay for each season dues amounting to 10 centimes per member, with a minimum of 3 francs, the season beginning October 1. SERVICES OF THE UNION. The union places at the disposition of the syndicates — (1) Its technical services, agricultural engineers, chemists, accountants, and inspectors. (2) Its committee of arbitration and legislation. (3) Its Bulletin. (4) Its Almanack. (5) Its library. (6) Its pamphlets, tracts, and printed constitutions. (7) Its agricultural instruction organization. (8) Its agent and its cooperative service. BULLETIN. The union publishes a monthly journal of 32 pages, with a circulation of 50,000 copies. It advises most strenuously that its affiliated syndicates shall subscribe for enough copies for each member; for' it has been noted that only those associations which provide the Bulletin for their members remain prosperous. The price of subscription is 50 centimes per year to those syndicates who subscribe for enough copies for all their members at once, and 2 francs for nonmembers. Subscriptions are due every three months. A rebate of 10 francs per year is allowed to those syndicates which subscribe or pay for at least 100 sub- scriptions, and the title of their association is printed on the outside cover, and they are given one and one-half pages of free space for their local communications during the year. This serves as an inducement to subscribe for the publication. The syndicates which have fallen below the 100 yearly subscriptions stiU have the right to one and one-half to two pages at the rate of a franc and a half per half page. 672 AGBICULTUBAL COOfEKATION IN BUKOPE. AGRICXn^TtTBAL INSTRUCTION. The union encourages agricultural and domestic science instruction in the primary schools as well as in the secondary establishments. By its normal course in household science, both during the school year and during the vacation period which, in six years, has had 272 pupils. By its secondary instruction by correspondence for boys, which permits groups from the syndicate courses of evening study, and manual training classes, to be given instruction by competent teachers employed by the union. By the publication of books and manuals. By the deliverance to the teachers of diplomas and medals for distribution among the pupUs, by the granting of certificates of the first grade (14,362 in 15 years), and of diplomas of the second grade (3,286 in 15 years). There was created in 1912 for the young girls a prize for practical studies in domestic science (agricole), including sewing, laundry work, cooking, hygiene, gardening, care of the house, care of milk, etc. A committee of women has undertaken to encourage the promotion of good housekeepers and good mothers of famiUes. In 1913 prizes have also been provided for studies in practical agriculture for the boys, following their instruction in the correspondence courses. AGENT. An agent, who is under the supervision of the union, is at the disposition of the members to furnish them with such merchandise as is not handled by the agricultural cooperative societies, and he is also in charge (and this is his principal r6le) of f acihtating the sale of such agricultural products as wheat, hay, straw, oats, wine, etc., and of bringing together producers and consumers. He is especially charged with arranging for the purchase of wheat and oats of the members by the authorities in charge of the garrisons of the army. COOPERATIVE SOCIETY. "The Cooperative" is a limited liability society which enjoys the greatest commercial latitude. Itdelivers to the affiliated syndicates of the Union and their members, the fertilizers, cattle feed, agricultural machinery and implements, etc., which they require. It delivers also, directly to the members adherent to it, such pro- visions as groceries for example, with which the rigorous judicial ruling of the court does not permit the syndi- cate to deal. In every case the Cooperative secures for its members, through its powerful organization, products at low price and of guaranteed quality. The Cooperative never gives anything to its stockholders other than the interest on their shares; if there are profits after the setting aside of the reserve fund or the funds for agricultural purposes, these are distributed in the form of a rebate to the syndicates, thus forming an important source of revenue. Since the formation of the syndicates these rebates have amounted to more than a million francs. REQUIREMENTS FOR ADMISSION TO THE COOPERATIVE. All syndicates desiring to have their members admitted as adherents to the Cooperative must first be them- selves admitted to membership in the Union. Letter of application. — The president of the syndicate is required to make application for membership to the president of the Cooperative upon a blank form furnished for that purpose, which only needs to be signed and returned in order to request membership. Shares of the Cooperative. — Each syndicate must subscribe, at the moment of its admission, to at least one share of the Cooperative; this subscription is really only a formaUty because, for a long time, there have been no shares for sale. Requirements for admission. — Besides the subscription of one or more shares the syndicate must turn in for each one of its members an entrance fee of 2 francs, either taking these 2 francs from the account of eftcb member, or requiring each one to advance it. This entrance fee remains the possession of the one who turns it in, and it is returned in case of exclusion or dismissal. In case of the death of a member his fee remains with the Cooperative, to be turned into the reserve. In order to aid the syndicates when they are first established, the Cooperative, instead of requiring them w turn in these 2-franc entrance fees, may consent to advance this money for them at 5 per cent, and to repay itself by retaining, either entirely or partially, such profits as would revert to the syndicate at the end of eac'' season because of the purchases which it makes through the Cooperative. FBANOB. 673 lAst of members. — Finally there must be sent in at the same time with a request for membership a list of all the members of the syndicate making the application. (See notes on the Cooperative Agricole du Sud-Est.) Insurance against accident. — The Cooperative has made an advantageous arrangement with the "La Prov- idence" insurance company for guaranteeing its members against farm accident. The premium is calculated per hectare and varies from 60 centimes to 1 franc 10 centimes, according to the kind of farming and the amount which is to be paid to the workman each day that he may be incapacitated for work. The indemnity is paid promptly after the eleventh day from the accident, or not at all. The guaranty against legal responsibility ranges from seven to twenty-five thousand francs per victim, the premium being slightly augmented as the hmit is increased. ADDITIONAL SERVICES. The syndicates are unable to do everything for themselves and they are frequently obliged to create annexed oi^anizations legally distinct but closely connected just the same. It may be noted that for each local organiza- tion of this kind there is a corresponding regional organization created under the Southeastern Union in a manner parallel to the relationship between the local annexed association and its syndicat. It is indispensable that such a regional institution shall be allied to the union if it is to work to the advantage and for the security of its members. MXTTTJAL SOCIETIES FOR CARE OF THE INFIRM OR DISABLED. It is very useful to create in connection with the syndicates mutual associations for the care of the infirm and disabled, in conformity with the law of April 1, 1898. These societies assure to their members, optionally, care in case of sickness (doctor, druggist, indemnity for loss of wages, and funeral expenses), or a guaranteed home for the individual with a possible pension from the common fund in case of disability. Foundation. — There must be deposited at the prefecture four copies of the by-laws and four copies of the list of board of directors' membership. Union. — ^In attaching themselves to the union these societies assure themselves of support, of advice, and even of subsidies, such for example as is given by Frenchwomen's Insurance Union (southeastern branch) for women and for children. MUTUAL FIRE INSURANCE ASSOCIATIONS. Regional societies. — These mutual insurance associations, created in conformity with the law of July 4, 1900, and managed gratuitously, are exempt from taxation. The local mutual associations secure for their members an economy of 20 per cent upon the rates of the outside companies, and also perfectly fair settlements in case of loss by fire. With these reductions in rate and the economies which they make the societies accumulate reserves which enable them finally to dispense with premiums from their members. They receive subsidies. Experience has proven that these societies offer absolute security, but with the essential condition that the greater part of their policies must be reinsured. As a rule the amount so reinsured should be equal to nine-tenths of the total, but when the totai exceeds 30,000 francs a smaller proportion may be allowed. The regional society of the southeast directs the insurance societies adhering to it and reinsures them. It also returns to them the greater part of the profits which it makes. Foundation. — The establishment of these societies is accomplished in the same manner and with the same formality as that of a syndicate. Affiliation to the regional reinsurance association. — A document containing the following is required : (a) A request for affiliation. (&) List of members on the governing board. (c) Certified copy of the constitution countersigned by the president. {d) Statistics of the premiums and the claims paid and poHcies. (e) Copy of the "receipt" delivered by the mayor. All these documents are provided in blank form by the regional and only have to be filled in, signed, and returned. MUTUAL LIVE STOCK INSURANCE ASSOCIATIONS. Regional reinsurance associations. — The same laws covering fire insurance associations are applicable to these, and the same formality is required for establishing them. They only have a right to subsidy from the State when they are reinsured, as indicated in a circular published by the Minister of Agriculture. 14174°— S. Doc. 214, 63-1 43 674 \ AGEICULTURAL COOPERATION IN EUROPE. LOCAL SOCIETIES FOB MUTUAL AGEICULTURAL CREDIT. Regional societies. — It is well to establish, in connection with the syndicate, credit associations for the purpose of providing facilities to their members for savings and for loans. They will have as a basis local societies covering a limited area established either on the Eaiffeisen-Durand principle or according to the law of November 5, 1894, either with limited or unlimited liability. In the second place, the regional credit association created in accordance with the law of March 31, 1899, discounts the paper of the locals, makes advances to them, and provides long-term loans on advantageous terms through the gratuitous advances made by the State, which on the 31st of last March had reached the sum of 1,335,000 francs. CONCLUSION. We have not exhausted all the activities of the syndicates; we have not m.ade any mention of the societies for the protection of damage to crops by haU, nor of the live stock breeders' associations, but we hope that we have said enough to persuade oui readers that the work of the syndicates has produced fruitful results, and, with the example of the 500 syndicates already in existence, the thing to do is to keep on establishing more, based upon the experience of those which are operating so successfully. QUESTIONS.! Q. When was the Union of the Southeast Agricultural Syndicates organized ? A. Twenty-five years ago. Q. How much territory does it cover ? A. Ten French departments — about one-eighth of France. Q. How many such unions are there in France ? A. About 12. Q. How many local syndicates are affiliated with this union ? A. Five hundred and two. Q. Are the local syndicates in turn made up of smaller organized units ? A. Yes. We try to form small syndicates, for they are more effective and render greater service to the individual communities than the larger ones. Q. What is the size of the membership of the local syndicates ? A. From 100 to 4,000, representing altogether approximately 130,000 members. Q. What is the average number of members ? A. About 200 to 300 members. A. Are the local syndicates gathered into smaller independent unions ? A. Yes; there are four smaller unions in the southeast which depend upon this one. Q. What name is given to these smaller unions ? A. Branch unions. The southeast union itseK forms part of a central union which has its headquarters at Paris, and is called the Central Union of Syndicates of the Agriculturists of France. Q. What is the nature of the local syndicate in this union; that is, what different kinds of organizations are there ? A. The objects for which the local syndicates are organized are to encourage the use of manures and fer- tilizers and modern farm implements; to increase production; to facilitate the sale of products; to furnish the farmer expert advice; to maintain an employment bureau; to provide Hve stock, fire, and accident insurance; to provide credit for the farmer; and in all other ways to work for the general welfare of the farmer. Q. Wnat, for example, does the Southeast Union do ? A. It acts as general agent for the local syndicates and as a protection for agricultural improvement — it is an organized advocate of rural betterment in general. Q. How would a local syndicate buy fertilizer through a district union ? A. The local syndicate would simply order the fertilizer from the union. Ihe Southeast Union, for example, keeps a supply of fertilizer on hand which it ships on order to the local syndicates. It charges only the very lowest prices. Q. Is the fertilizer sold to the local at cost ? A. No ; a profit to cover expenses is added ; but as it is an operation in the interest of the local syndicates an exorbitant price is not charged. To give an idea of the economical administration of this union, our gen- eral operating expenses are only 3.7 per cent. At the end of the year the surplus profits are divided among the affiliated syndicates. ' Report of a subcommittee. FEANOE. ' 675 Q. Does the local syndicate pay cash for the fertilizer ? A. Generally, yes; the local members are supposed to pay cash on receipt of the goods; but if they can not the credit bank loans them the money. Q. Suppose, for instance, that a local society that did not have sufficient money wanted to buy a large machine from this union, where would it get the money to do it ? Would the union advance the money ? A. No; the local would get an advance in cash from a local credit bank. Q. Does the Southeast Union sell on time ? A. No. We allow, however, 30 to 60 days for collection, a small discount being allowed for cash. An individual member can not deal direct with a central union, but must transact his business through the local syndicates. Q. Does the union ever have trouble in making collections ? A. Very seldom. Q. If a member does not pay, is the local syndicate responsible ? A. Absolutely. Q. Does the central union handle anything else besides fertilizers in the way of farm equipment or clothes, food, etc. ? A. Only agricultural necessities and animal food. Q. Are such supplies kept in storage ? A. The Southeast Union and the subunions have 21 stores. In general each syndicate has its store. Q. Are the other centrals or subunions just mentioned branches of this union ? A. Yes. Q. Where is it stated what steps a local syndicate must take to become a member of the Southeast Union ? A. In the statutes. The subscription for each member of the syndicate is very small; generally 2 francs; 3 francs per annum is the maximum. The central syndicates in selling to the local syndicates make a small profit, which goes to pay the general expenses. The statutes are usually given to a syndicate when established, but they may be changed, if desired. Q. Does the central union help the local syndicates to organize ? A. Yes; the Southeast Union sends out lecturers. We have a special service for that purpose. Each Sunday throughout the year conferences are held in the country to explain to the people the best way to manage their syndicates and to organize their forces. Q. How many persons are employed in this service ? A. Four or five are sent out every Sunday, and at each annual general meeting of any local society a rep- resentative of the Southeast Union is present to give instruction. Q. Do the locals have a uniform set of accounts ? A. Yes. REGIONAL BANK OF THE RHONE. Report of a Subcommittee. Lyons. The operations of the bank are confined to the Department of the Rhone. The local credit societies organ- ized under its direction are limited to one in each commune. Out of the 260 communes in the Department 100 are organized. The capital of the bank is composed of (a) advances supplied by the Government, amounting to 650,000 francs, and (6) the capital paid in by the members, amounting to 230,000 francs, a total capital of 880,000 francs. The bank was founded five years ago for the purpose of making loans to farmers through the medium of local banks. Loans are made on personal notes for three months and may be renewed three times, each renewal not to exceed three months. QUESTIONS. Q. How many individual members has the bank ? A. Two thousand eight hundred. Q. What is the composition of the membership ? A. It is composed of 100 local syndicates. There is a deposit account for the members of the local syndicates. Q. Can the individual members of a local society deposit with this bank in their own names ? A. Yes; but most of the business is done through the local syndicates. The deposit accounts amount to 106,000 francs. Of the 106,000 francs 90,000 francs are deposited by the societies, and the remainder by individual members. The loans which are made average about 300 francs. 676 AGKICULTUEAL COOPEKATION" IN EUEOPE. Q. What is the purpose of the regional bank ? A. It is twofold : First, to receive deposits from local syndicates or from individual members of local syndi- cates, and, second, to make loans to the local credit banks. Q. What interest is paid on deposits ? A. Three per cent on open account, and slightly more on time deposits. Q. What interest is charged on loans made to the societies ? A. On loans to the locals 3 per cent is charged, which is reloaned by the local societies at 3^ per cent. Q. Then how does the regional bank pay expenses ? A. The society is enabled to pay expenses by reason of the advances secured from the Government on which no interest is charged. The Government loans this bank, free of interest, 550,000 francs for short-term credit (5 years) and 100,000 francs for long-term credit (15 years). The working capital of the bank may be stated as follows : Franca. Deposits 106, 000 Short-term loans from the Government 550, 000 Long-term loans from the Government 100, 000 756, 000 Membership subscriptions 230, 000 Total '... 986,000 The Government advance of 550,000 francs can be renewed for five years by curtailing the loan at least 10 per cent or 55,000 francs. Q. The 550,000 francs wiU be loaned the bank by the Government for another five years minus at least 55,000 francs ? A. Yes. Q. State the amount loaned by the regional bank from each fund. A. Against the 550,000-franc loan, there are 530,000 francs loaned, and against the 100,000-franc fund 77,000 francs are loaned. Part of the 986,000 francs is invested in order to have a steady income. Five hundred and thirty-seven thousand francs are invested in various bonds and stocks, whUe a reserve of 22,000 francs is kept. When there is no further cash available at the regional bank the notes of the local societies are discounted at the Bank of France. The Bank of France in such cases is secured by the guarantee of the regional bank and by the securities of the local banks. The Bank of France discounts the bUIs of the regional bank direct. Formerly the Bank of France would not accept these bills, but required two signatures in addition to that of the farmer. In the case of loss the local bank is first responsible. The liability of the local bank may be limited or unlimited. All the 100 local societies affiliated with this regional bank are organized on the plan under which the liability is limited to the amount of the capital subscribed by the members. Q. Has this bank had any losses ? A. Loans made by this bank exceed 4,000,000 francs, and our losses do not amount to more than 1,500 francs. These losses have been borne jointly by the regional and by the local societies responsible for the loss. Q. What fund has the loss been charged to in the regional bank ? A. To the reserve fund, which is increased every year. According to the law three-fourths of the profits must be placed in the reserve fund. Q. Are loans made for other than specific agricultural purposes ? A. No; only for strictly agricultural purposes. Q. Has this bank sufficient funds to meet aU demands for loans ? A. In principle, yes, for the Government makes advances up to a maximum of four times the subscribed capital. This thus far has sufficed to meet the demand for loans. Q. If the bank should have more demands, how would you meet them ? A. By rediscounting at the Bank of France. When the maximum of four times the capital is reached and more money is required for the loans we may rediscount the paper of the local societies at the Bank of France. Q. What is the rate of discount 1 A. The Bank of France charges in proportion to the money rate, which fluctuates according to the curren market. At this particular time the rate is 4 per cent. Q. Does this system meet with opposition from other banks not so assisted by the Government? A. No ; because only these banks have the right to deal with the Bank of France. Q. How does a local bank become a member of the regional bank ? A. They assemble the shares of their subscribers and turn them over to the regional bank. FEANCE. 677 ORGANIZATION OF THE ARLES REGIONAL BANK. Statement Submitted to the Commissions. brief history. Aeles. Established April 30, 1910, with a capital of 110,000 francs, under the privileges of the laws of Noyember 5, 1894, and March 31, 1899, and through the efforts of some proprietors of the district, the Aries Regional Bank of Mutual Agricultural Credit has progressed very rapidly and from its origin has been able to undertake very important operations. This bank has been permitted to receive from the Government during its first year an advance without interest of 100,000 francs; and at the present time its advances from the Government have reached the sum of 400,000 francs. It has resources amounting in all to 730,332 francs. It discounts agricultural paper at the rate of 4 per cent for the Province of Aries, through the medium of 13 local banks to which are affiliated some 800 members. The examination of the requests for loans is made entirely by the board of directors of the local banks where the requests are made and is passed upon by the council of the regional bank which is the court of last resort. A regulation under date of April 28, 1911, reads as follows: 1. As a general principle every request for a loan must be guaranteed either by a security or by a deposit of agricultural warrants, mortgage, receipts of warehouse deposits, or any other guaranty which can be examined by the council. 2. At the request of the minister of agriculture all bills of exchange or notes presented for discount by the local affiliated banks must be indorsed by two directors. WORK ACCOMPLISHED. The bank has rendered a considerable number of important services since its origin in the Province of Aries. These are set forth in a presentation of the general results at the close of this paper. The business carried on in 1912 amounted to 2,024,621 francs. In addition to these personal services rendered to the members, the bank has been the means of bringing together into a union all the different agricultural groups in the Province of Aries in the form of agricultural associations. FINANCIAL ORGANIZATION. The financial organization of our bank is very much simplified because of our connection with the Bank of France, the latter being our real bank. All the loans which we grant are realized under a check from the Bank of France. In exceptional cases local banks in remote districts receive their funds by post only. By this means we have been able to reduce to the minimum the bank expenses in all our local banks, and even in our own district bank. The last payment at the bank, according to the last financial statement, amounted to only 230.80 francs. ADMINISTRATION. The bank is administered by a council consisting of 16 members and the presidents of the affiliated local banks ; from it is composed a council of supervision consisting of 4 members and a comptroller general. In fact, a committee consisting of a president, vice president, secretary, director, and five representative administrators makes all the regulations, which are finaUy approved by the administrative council, which meets together regularly once every three months. SPECIAL POINTS. 1. The business conducted since its origin has been very important when it is considered that the bank has only been recently established. (See the following table.) 2. Any project proposed by our district bank to which legal sanction was necessary was passed upon by a committee of the Chamber of Deputies, December 13, 1911, authorizing agricultural associations to be admitted to the privileges of Government advances, provided for under the law of December 29, 1906, relating to agri- cultural cooperative societies. 678 AGKICULTUEAL COOPEEATION IN EUROPE. GENERAL RESULTS. Short-term loans. Capital. Invested. At its foundation, Apr. 30, 1910 On Jan. 1, 1911 , Advances from the Government. Sight deposits Notes discounted On Jan. 1, 1912 Advances from the Government. Sight deposits Notes discounted Reserve On Jan. 1, 1913 Advances from the Government. Sight deposits Notes discounted. Francs. 110, 000 116, 000 127, 300 131, 500 Francs. 102,450 107,550 100,000 12,800 286, 532 118, 250 300, 000 187,279 1,168,492 360,249 122,450 400,000 257,780 2,024,621 Long-term loans. [In application of the law of Mar. 19, 1910.] On Jan. 1, 1912, advances from the Government. On Jan. 1, 1913, advances from the Government.. Francs, 50,000 100,000 ' t3 OJ ^ tD ^ 3 O |°5 MH .-a .„ ^ TO _Q "5 b is . 3"" SPECIMEN BLANK FORMS. Warrant. Date , 191.. $.-. On next, I will pay to the Bank of Agricultural Credit of or to its order the sum of |. Value received. Warrant No. M. Payable to the General Society at No No Francs Note signed by . M Due. Date. Request for a loan made by Amount requested. Due. Personal note. Local Bank of Mutual Agricultural Credit of No Date , 191.. ? On I will pay to the order of the Local Bank of Mutual Agricul- tural Credit of the sum of Value received with interest. Payable at the District Bank of Mutual Agricultural Credit at (Signature) Memorandum to he sent to regional ianlc. Local Bank of Mutual Agricultural Credit of Request for a loan made by Amount, requested. Nature of the opera- tion. Date of re- payment. Guaranty offered. Remarks, (Name) .. (Address) (Date) FBANCE. 679 QUESTIONS. Q. Does the regional bank loan to individuals or only to the local banks ? A. Only to local banks. Q. Does it receive deposits ? A. Yes; deposits are received from both landowners and other individual members of the local banks, on which 2 per cent interest is paid. Q. Does it receive deposits from nonmembers ? A. No. Q. What interest is charged on loans to local banks ? A. Four per cent, and the local bank in turn charges its members from 4 to 5 per cent. Q. How does a local bank become a member of a regional bank ? A. By subscribing for one share valued at 100 francs, one-fourth of which must be paid at once. The balance is usually only called for in tinie of unusual need. Q. Does the size of the local bank affect the number of shares which must be paid to the regional bank ? A. No. Q. Does the local bank pav annual fees or dues to the regional bank ? A. No. Q. If the capital of the regional bank advanced by the Government, and supplied from other sources is not sufficient for all demands, how'is more money obtained ? A. From the Bank of France through the rediscount of bills. Q. What rate of rediscount does the Bank of France charge ? A. Three to 4 per cent; at present 4 per cent. LOCAL RURAL BANKS. Q. What is the average number of members of a local bank ? A. Seven is the minimum required; they vary in this district from 13 members to 800 members. Q. What is the value of a share in a local bank ? A. Usually 20 francs, one-fourth of which must be paid in immediately. In some cases the shares are smaller. Q. Can the local bank call for the remaining payment on the shares at any time? A. Only at the end of the year, when the general meeting decides such matters. Q. Do the local banks receive deposits ? A. No, except to receive money temporarily which is passed on to the r^ional bank. Q. Does the local bank loan money ? A. Yes, it acts as agent for the regional bank. It make recommendations for loans which the regional bank may accept or. reject. Q. What are the steps which a rnember of a local bank must take to get a loan? A. The member comes to the local bank and makes an application for a loan on the regional bank which requires that the loans must not be for more than three months and that the security given may be personal indorsement or personal property liability. If the local bank accepts the application, the borrower signs the note which is indorsed by the local bank and forwarded with the application to the regional bank. If the regional bank accepts the loan, the amount asked for, less the interest, which is usually 4 per cent, is sent to the local bank to be given to the borrower. Q. What is the average size of loans ? A. One thousand to one thousand five hundred francs; the minimum being 100 francs, while the maximum is 2,500 francs. Q. Have there been any losses ? A. No. COOPERATIVE IRRIGATION POWER PLANTS IN THE VICINITY OF ARLES. Report of a Stjbcommittee. Arles. In the Aries district there are about 15 syndicates for irrigation purposes. The irrigation power plant situated at Bremont, 7 kUometers from Aries, on the Rhone, visited by the subcommittee was the first plant built by an agricultural syndicate in this district and supplies 3,000 hectares of land, requiring two special pumping stations. The length of the canal is 15 kilometers. The cost of the plant was about 200,000 francs, of which one-third was paid by the Department (political division), one-third by the Government, and one-third by the syndicate. 680 AGEICXTLTTJBAL COOPEEATION IN EUROPE. Another plant, located at Salbuc, was established 12 years ago at a cost of about 350,000 francs. The central pumping station is sufficient to supply 2,000 hectares of vineyards with water. At present only about half its capacity is employed. The canal of this plant, built of cement, is elevated, which is considered a great advantage over the canals which are not elevated and which necessitate small private pumps on the various properties which are supplied. The development of this irrigation system has increased the value of land in the district more than 100 per cent. In the district there are also several private irrigation plants. The syndicates are authorized to take as much water from the Rhone as they may require, for which privi- lege a nominal sum of 50 francs per annum is charged by the Government. The number of pumps vary according to the importance of the syndicate, from 1 to 10 pumps each. It is required that If three-fourths of the landowners in the district own half of the land, or one-half own three-fourths of the land, they must all belong to an irrigation syndicate where such are organized and there- fore the right to construct the canal lines wherever most suitable is never contested. COOPERATIVE WINE CELLAR AT FRONTIGNAN. Report of a Subcommittee. Aeles. This cellar, situated about 22 kilometers from Aries, is operated by the Cooperative Wine Society, and consumes the production of 600 hectares of vineyards, representing a membership of about 500 wine pro- ducers. The members of this cellar produced 1,000 hectoliters of wine in the past year. The cooperative society was formed in order to systematize and finance the wine production of the dis- trict. Before the organization was formed the grape growers were unable to hold their wine the three years necessary to perfect its quality. Members of this society bring their grapes to the central plant, where they are weighed and proper credit given to each grower. Its membership includes many very small producers, as well as the owners of the large plantations. The wine is manufactured according to the most improved methods; each year's vintage is stored separately and kept three years before it is placed on the market. Benefits which have accrued from this organization are shown, for instance, in the fact that the prices which are now secured for the wine have increased from 25 francs to 50 francs per hectoliter within the four years of its existence. In addition to the services which the society renders in manufacturing and selling wine, it makes itself very useful in its fight against mildew and in the expert advice which it gives to its members. The product of this plant is sold exclusively in bottles, and their label is well known all over the world. It may be of further interest to state that the Department of Herault, in which this organization is situated, pro- duces one-fifth of the wine produced in the whole of France. ST. GEORGES COOPERATIVE WINE PRODUCERS' SOCIETY. Statement Submitted to the Commissions.' St. Georges (near Montpeliee). This society was formed from among the vineyardists of St. Georges in the form of a cooperative corporation, with capital and membership unlimited. Its purpose was to manufacture and sell principal and by-products of the vineyards belonging to the members at wholesale. It constructed wine cellars, warehouses, pressing estabhshments, etc . , which were necessary, and acts as agent for its members in selling either for cash or on credit with references and through agreements. The life of the society was fixed at 12 years, but provision was made for dissolution in case of necessity, and the principal offices of the society were estabhshed at St. Georges. CAPITAL AND MEMBERSHIP. The initial capital, amounting to 13,250 francs, was divided into 530 shares of 25 francs each, bearing no interest and entitled to no dividend. Provision was made for increasing this capital by additional subscnptioi from the charter members and by subscriptions by such new members as the annual meeting of stockholders mig) vote to admit. It might also be reduced through the retiring or exclusion of members. Every time that ' This statement is an abstract of the by-laws of the society. FKANCE. 681 member retired, either voluntarily or involuntarily, he was only entitled to withdraw the amount which he had paid in, and a limit to withdrawals was placed at one-half the capital stock. No matter what the reason for withdrawing, a member could claim no part of the reserves, nor could he even withdraw without the consent of the board of managers, who act as the sole judges of the sufficiency of his motives. One-half the initial capital subscribed by each member had to be paid up in the beginning, the other half falling due in the month of November following the founding of the society. Each member was required to sub- scribe for as many shares as he furnished hectoliters of wine, divided by 25. Shares could only be transferred with the consent of the board of managers, and then only to persons fulfilling the requirements above mentioned. Shares could not be divided; the society does not recognize more than one proprietor to each share. All members of the society agree to conform to the constitution. ADMISSIONS, WITHDRAWALS, ANl5 EXCLUSIONS. A majority vote of the board of managers is necessary for admission, and only proprietors of vineyards having their buildings, equipment, and storage cellars at St. Georges, or who agree to deliver their entire crop to the. society, are ehgible. The decision of the board of 'managers as to admission is without appeal. Whenever a member withdraws voluntarily or is forced to withdraw for cause, the society shall reimburse him within six months for the amount of his share capital and the wine he has furnished. Any losses suffered by the society are assessed against the members in the same proportion as profits would be distributed among them. In case of the death of a member the society wiU reimburse his heirs or assignees within the period of one year. In case of the collective retirement of more than 10 members (which is always permissible), the society is not required to make settlement in less than a year. A member who ceases to belong to the society remains beholden to his associates for his proportion of one-third of the debts, and all the obhgations of the society contracted before his withdrawal, for a period of five years thereafter. In case of the voluntary of forced retirement, decease, or failure of a member, the society can not be dis- solved; it continues its full rights and obligations with its other members, and in no case may a receiver be appointed. A special agreement proposed by the board of managers and approved by the annual meeting of stockholders shall determine the extra conditions for admission, retirement, or exclusion of old or new members. MANAGEMENT OF THE SOCIETY. The society is managed by a board of managers elected from among the members at an annual meeting by ballot. "WTien two candidates receive the same number of votes the elder shall be elected, except when they are both of the same age; and vacancies shall be supplied in the board of managers from three substitutes elected for this purpose at the general assembly. These substitutes fill vacancies as they occur, the one being chosen first who receives the highest vote, or in order of their age if each receives the same vote. The term of such substitute director shall expire at the date when the one whom he replaces will have finished his term. When all the substitutes shall have been promoted to fill vacancies, it is necessary to call a general meeting of the stockholders to provide others. The members of the board of managers are elected for three years, two members retiring each year, so that each director will serve for three years, but the terms 'of the managers will overlap. Reelection is per- missible. To be eligible to the board a member should (1) hold at least 4 shares of stock; (2) have made all the payments required on this stock; (3) and when not a charter member, have been in the society for at least two years. No one may hold a position on the board of managers for the advisory board (1) if he is carrying on any business opposed to the interest of the society; (2) if he is under suspension; (3) or if there is employed by the society any member of his family, even though the relationship be of the fourth degree. " Every year the board of managers appoints from among its members a secretary, a subsecretary, if need be, a treasurer, by whom the operations of the credit department shall be carried on, to be verified, every three months at least, by two members of the board of managers and by one member of the advisory board. The advisory board has, besides, the right to make such verifications as may appear necessary at any time. The board of managers shall meet at least twice a month, or as often as the necessity may arise, and a majority must be present, and a vahd excuse is necessary for absence of a member. After three consecutive failures to appear without proper excuse, the dehnquent member shall be replaced by one of the substitutes. A majority of the members present must vote in favor of any matter to pass it, and the vote of the chairman 682 AGRICULTURAL COOPERATION IN EUROPE. will determine a tie. The minutes of the meetings shall be kept in the special register and signed by the presi- dent and secretary. Copies and extracts are delivered and signed by two members of the board of managers. The board of managers has the most extended powers of operation over the affairs of the society, within the constitution. They will provide for the maintenance and receipt for the products and by-products of the wine producers which are to be sold, in the manner which appears to them most suitable. They will regulate the manner, the condition and prices of purchases and sales, following the internal agreements of the society which permit of the determination of the nature, quality, and value, respectively, of the several kinds of wine gathered. They will proceed to the establishment, the operation, and the equipment and supplying of the warehouses. They may contract, countersign, compromise, abandon claims, release with or without payment, and accept all legacies or donations which may be made over to the society. They call together meetings of stockholders and submit to them the accounts. They represent the society before the law, in the nature of defendant or plaintiflf. They have the exclusive management and choose the personnel. They also name, according to the conditions to be determined between the contracting parties, a commercial agent who may not be a member of the society. They make arrangements with dealers for purchases, sales, and contracts which may be approved by the assembly ; that is to say, by the joint session of the board of managers and the advisory board, pro- vided the sum involved is in excess of 1,000 francs. For these operations or purchases the preference is always, wherever convenient, to local dealers. The board of managers may delegate a part or all of its powers to one or more agents chosen from among its members. A commercial agent may receive this appointment. The acting manager is empowered to sign for the society. The board of managers has the power to arrange the interior rules with the approval of the regular general assembly. This interior arrangement defines all rights and obHgations and commercial affairs not specified in the constitution, and which may be agreed to by the society. The available funds have to be deposited in the credit estabhshment chosen by the board of managers. All officers have to serve without pay; even the weekly managers. The employees are paid salaries fixed by the managers, and no allowance can be made or indemnity given except with the consent of the board of managers. For all acts and operations having a commercial nature, the bookkeeping shall be performed according to the commercial code and the special instructions of the ministry of commerce. THE ADVISORY BOARD. The advisory board is appointed in the same manner as the board oi managers, and has to be reelected in its entirety every year. Its duty is to supervise as prescribed by law, and is composed of five members, who have the same requirements for ehgibiUty as the members of the board of managers, except as to the number of shares which they must hold. The advisory board must meet at least once a month or as often as the needs of the society demand, and has a right whenever it feels disposed to look over the books and documents and examine into the operations of the society. It may, in case of emergency, call a general meeting of stockholders, and perform such other acts as the stockholders may direct. At the end of each season the advisory board makes a report to the general meeting of the stockholders, in which a balance sheet of the accounts and the general situation of the society is set forth. It must submit this report at least two days in advance of the annual meeting. ANNUAL MEETINGS. The annual meeting, regularly called, represents the interest of all the stockholders. They should all be present. They must be individually notified by letter and by advertisement in the newspapers published in Montpellier. The order of the day, place, and date must be pubHshed. The date is ordinarily the first week in September, and the first general meeting took place in 1907. Extraordinary meetings may be called in cases of necessity at any time by the board of managers, or when- ever the advisory board deems necessary A general meeting may be considered to have a quorum when the members present represent at least one-quarter of the capital stock, and when this limit is not reached anotner meeting must be called two weeks afterwards, and whatever action is taken at that time shall be vahd, regard- less of the amount of stock represented, but provided that the decisions relate only to subjects set forth in tne order of the day published for the former meeting. A list containing the names and addresses of all the members must be certified at the office and may °^ received on request. Each member has half as many votes as he holds shares, and a member holdmg only one share is allowed one vote. Voting by proxy is admissible and voting is determined by a majority. FEANCE. 683 A regular or extraordinary meeting is presided over by one of the members of the board of managers selected by it. Two members chosen in the meeting act as censors, and the secretary is chosen by the chairman. The order of the day is arranged by the board of managers. All propositions supported by stocldiolders, representing at least 40 shares, must be placed upon the order of the day. The regular meeting (1) considers the report of the board of managers and of the adAdsory board concerning the condition of the society and its accounts and annual statement (balance sheet) ; (2) discusses and, if there is occasion, it approves the accounts; (3) authorizes all loans with or without mortgage, all investment of funds, and fixes the condition for such operations; (4) elects a new advisory board for the following season; (5) passes upon and decides all questions which are before the board, such as the suspension of members, recommended by the board, and it confines to the board all additional powers which are considered necessary; (6) can amend the constitution provided a notice is made in the order of the day to that effect, and it has the right to exclude any member by a majority vote within the provisions previously cited. Voting shall be done by raising the hands, except that concerning paragraph 4 and voting to exclude a mem- ber, in which case a secret ballot may be called for, and the meeting may appoint four poll clerks, who count the votes, together with one member "of the board of managers and one member of the advisory board. A general meeting of the stockholders may modify the constitution; may prolong or dissolve the society; increase or reduce the share capital; unite or fuse the society with other societies; it has, in a word, the most extended powers. In such cases there should be present members enough to represent at least three-fourths of the capital stock. Any modification of the constitution must be communicated to the regional bank " of the South." The pro- ceedings of the general meeting, whether regular or extraordinary, are ascertained by "official minutes," and inscribed in a special register and signed by the members present, or a majority of them at least. The copies or extracts of these " official minutes " must be produced whenever necessary and shall be signed by two members of the board. INVENTORY AND COLLECTIONS. The fiscal year begins on Septeinber 1, and there shall be an annual inventory on August 30, at which all the employees must be present to assist the board of managers, and the result is presented at the annual meeting. Any member may obtain a copy in advance. The balance in the treasury, less deductions for general expenses, reserve fund, and other expenses of the society, is distributed in proportion to the quantity and the value of the wine furnished by each member during the season. If there is a loss each member must be assessed in the same proportion. General expenses include all ordinary expenditures of the society, plus amortization on property and deduction of funds reserved for improvements. RESERVE FUND. One-twentieth of the net profits of the season are set aside for a reserve fund to provide for unforeseen circumstances, until it shall reach an amount equal to one-half of the capital stock, after which the funds shall be turned into the treasury to develop the enterprise. The deductions will continue to be made from the profits, provided the reserve fund becomes depleted. At the expiration of the society and after the liquidation of its obligations, the reserve fund will be divided pro rata according to the amount each member has contributed to the business of the society during its entire operations. DISSOLUTION AND LIQUIDATION. , In case of maximum loss determined upon (10 francs per hectoliter), the board of managers may call a general meeting of all the members to consider the question of dissolving the society, which if decided in the affirmative must in any case be done publicly. All members who at the time have fulfilled their obligations, that is to say, paid in the amount of their subscription and settled the losses incumbent upon them, shall be free to retire. At the expiration of the society or in case of premature dissolution the general meeting shall arrange the manner of dissolving it, and elect one or more friendly receivers. During the receivership the powers of the genera] meeting shall continue in vogue. All the property of the society must be turned into cash by the receivers, who have the most extended powers, and the balance on hand after the deduction of the expenses of liquidation shall be distributed pro rata among the members. The receivers may, with the authorization of the general meeting, make a transfer to another society or to an individual of all the property, rights, and obligations, both active and passive, of the dissolved society. 684 AGKICULTUKAL COOPERATION IN EUBOPE. CONTROVEKSIES. All disputes between members of the society shall be arbitrated as peaceably as can be or else carried to the courts of Montpellier, and all members must agree to having the trial at St. Georges. All actions must be filed with the office of the public prosecutor, attached to the civil court of Montpellier. ESTABLISHMENT OF THE SOCIETY. The present society was not definitely founded until after the share capital was entirely subscribed and until a general meeting of all the subscribers had been called to establish the bona fide nature of the subscriptions and to collect the amounts required and to elect the first set of officers, and finally to approve these statutes. This was on the date of July 29, 1906. MODIFICATIONS IN CONSTITUTION. At an extraordinary meeting on July 27, 1908, some minor amendments were made to the constitution. INTERNAL AGREEMENT. Article I. Wine shall be bought by the society from all its members according to the degree of alcohol which it contains. In order to obtain a constant improvement in the quality of wine, a half a centime extra shall be paid for each extra tenth of a degree. Thus if wine containing 8° of alcohol is worth 1.35 per degree, that of 8.2° will be worth 1.36, that of 9° worth 1.4, that of 9.2° worth 1.41, and so on, increasing 1 centime for every 0.2°. Since the alcoholic degree of the wines of St. Georges varies between 9^° and 11°, according to the season, the local society which furnishes it, etc., the Society of St. Georges, in order to favor the small proprietors, will accept wines having a minimum of 8°, but such wine being a drag upon the society, there shall be established annually an average alcoholic limit to all the wine supplied during the season by each member. The average degree of alcohol in the wine of each member being known, there shall be retained upon the price of each hectoliter net the sum of 10 centimes for every one-tenth of 1° by which the wine falls below the average of the harvest for the season. Thus with an average of 10°, a wine testing 9i° will be docked 50 centimes. Art. II. The degree shall be determined by the testing apparatus of the society (au Malligand), and shall be weighed at the moment of testing and also when removed. Art. III. The rating shall be made by the board of managers, who will decide whether the wines are merchantable or not. In case of protest, the advisory board shall be called in to confer with the board of managers, to decide the rating, even though the wine may belong to a member of the board. An uimierchantable wine is understood to be one which is musty, acid, turned, and generally deteriorated. In such case the proprietor shall be required to distill the wine himself, unless it be convenient for the society to perform the operation for him. The resulting liquor shall remain the property of the member, but the society may help him to sell it. Art. IV. Monthly settlement shall be made to each member in part, a payment of 1 franc per hectoliter between November 1 and June 30 shall be made. The balance shall be distributed on a pro rata basis after the inventory held annually at the general meeting of the stockholders on August 31. The society may increase the amount paid on account monthly in case the members need the money and provided they are wilUng to pay 4 per cent interest on the amounts paid before they are due. Members who do not call for the amounta to which they are entitled monthly will receive interest at 4 per cent thereon. Art. V. Members are required to do the drawing off of their wine (racking) at the proper time, and under the supervision of the so- ciety, as well as to perform all other manipulation which may be considered necessary by the board of managers. Members will be allowed the sum of 5 centimes per hectoliter for each "racking" operation, except that made in the month of November, and in order to take advantage of this indemnity the members must perform the "racking" at the times fixed upon by the board of managers, and in their proper turn; and they must notify the management the day before that fixed upon for the operation, so that the board of managers may be prepared to see that it is done in the required manner. All other extra operations shall be done at the expense of the society. Art. VI. The cartage of the wine shall be done at the expense and under the care of the society. The board of managers shall contract with a truckman, preferably a member of the society from the locality. Art. VII. Up until the 1st of January of each year each member shall be required to make up the shrinkage in his wine at his own expense. Those members whose wine has not been removed at that date shall enjoy an indemnity for shrinkage amountii^ to a quarter of a liter per hectoliter for each month up to the date when their wine finally shall be removed. Art. VIII. Whenever the society wishes to make a collection from a member, he should be advised at least 48 hours in advance, so as to be prepared. A trip should be made as frequently as possible for the collection of the grapes of each farmer. The board of managers shall take into account and favor the collections from the smallest farmers and those whose grapes are the most mature and on the point of deterioration. Art. IX. All farmers who ship their product to the society shall have the same responsibility for delivering their entire crop as th» other members. However, with previous declaration of intention, farmers who ship may, on entering the society, retain the right to dispose of the total amount of their product, reserving the right at the end of the season to market all or a part of their wine in any other manner which may be stipulated. A farmer who ships may also retain any necessary quantity of wine from the shipment, upon declaration of the amount or proportion, and once established such amount can not be increased afterwards. The wine retained shall be set apart in the storage cellar of the mem- ber in the manner agreed upon with the board of managers, and lacking such an agreement said member will be required to deliver the entire amount stored in his cellar. Whenever a member of the society who ships his wine to market shall have a deficiency, he shall make application to the societyi which will deliver to him a uniform wine at the price which it is receiving and without including commission. FEANCE. , 685 A member reserving tte right to market all of Ms own wine shall have no right to a share in the profits of the society until such time as he shall again bring wine into the society. As to a member who retains a part of his harvest, he shall only have a right to a part of the profits proportionate to the quantity of wine which he has brought into the society. Art. X. All members who may wish to draw any quantity of wine from the society shall receive the same attention in delivery which is accorded to the regular agents. Art. XI. No person may be a member of the society — 1. Unless he is accepted by the board of managers. 2. Unless he is already a member of the local society for agricultural credit. 3. Unless he subscribes to as many shares as he has hectoliters of wine divided by 25, and which he must agree to increase in propor- tion to the wine he turns in. 4. Unless he offers a guaranty in proportion to the number of hectoliters of wine which he brings into the society, the minimum limit being 10 francs per hectoliter. 5. Unless he turns into the reserve the amounts indicated by the board of managers, according to article 10. 6. Unless he agrees to do his borrowing at the local credit society and with the sanction of the board of managers. 7. Unless he agrees, when selling grapes, including those for table use, not to misbrand them. Art XII. The board of managers shall retain each year and add to the reserve fund the amount of initiation fees required of each member, at least 10 francs per hectoliter of wine furnished, and each new member shall only be entitled to one-half the sum due, after deduction of the monthly payments, for the three succeeding years. Entrance fees shall only be required after September 1, 1906. Art. XIII. Members who may be guilty of censurable conduct or who perform acts prejudicial to the society shall be temporarily suspended by the board of managers, and such cases brought before the next regular or special meeting of the storkholders, as provided for in article 39 of the constitution. Art. XIV. The board of managers shall appoint each week one of its members to supervise the business of the society. He shall act in addition to the acting manager (who is chosen from outside). Either the acting manager or the weekly appointed manager must be present at the time of the arrival and departure of the mails, must be in charge of the office and the storehouse, and see that the society is operated to the best interest of its members. The acting manager is authorized to make signatures far the society, and it is his duty to call the board of managers together for consultation as often as circumstances may require — at least once a month. Art. XV. The meetings of the board of managers shall be presided over by the acting manager. Art. XVI. In order that all classes of members may be represented, two members of the advisory board must be chosen from among farmers who produce less than 100 hectoliters of wine. This advisory board is made up in this way to aid and assist at all meetings of the board of managers in addition to their other duties. Art. XVII. Until the board of managers shall have chosen an acting manager a provisional manager may be appointed to represent the iociety, and when the permanent acting manager is chosen he shall be endowed with full powers to represent thesociety in a legal manner. FEDERATION FARMERS' MUTUAL FIRE INSURANCE ASSOCIATIONS OF BASSES-PYRENEES. Statement Submitted to the Commissions. ' Pau. This is the third time that we have come together, and on each occasion you have become more numerous, and the number of our societies has been greater. We ought to be happy, because this increase is not only caused by the natural development of our association, but is more particularly the result of the attention which you are giving to the management. Presidents of the local societies, you are the true foundation upon which to rest the successful operation of our organization; the future of the federation is in your hands. It is because you have realized this, and thanks to your hearty cooperation, that we have succeeded so well. I am sure I interpret your sentiments in saying that we have been very fortunate and greatly honored in having among you the sympathetic and eminent prefect; certainly, if he were absent from Pau at this moment we could not help but thank him just the same for the kindly iuterest which he never ceases to show in caring for our association. We cannot be surprised at his solicitude for us, for he is always generously interested in all works which may contribute to the progress and well-being of the agricultural classes, and we do not forget that he is the ardent supporter of the work which we are pursuing. His good intentions toward us are con- stant, and if we have been able to obtain some favors from the Government it is to his active intervention that we owe them, and also, may I add — ^for we must do justice to everyone — to the support of our devoted represent- atives M. Barthou et Berard. In your name I shall also address, to M. Hoo-Paris, whose absence we deplore to-day, your appreciation for the very assiduous interest which he has shown in all the operations of this society. We may see in him with the Regional Bank the true protector of our finances, besides which he is our counselor in all circumstances of difficult3^ I must also thank M. Breil, the most excellent professor of the department of agriculture, who has made it a rule to faithfully attend all our reunions, to which he brings on each occasion the most useful knowledge. Finally, I wish to render homage to the inteUigence and the activity of our young manager, M. Malere, whose method and regularity have resulted in a most perfect management. ' At the annual meeting of the association on March 24, 1913, M. de Dufourcq, the president, delivered this address which has been translated from the French for the Commissions. Out of 234 subsidiary societies, 74 were represented, constituting a quorum. 686 ' AGEICULTUBAL COOPEBATION IN EUROPE. I will now endeavor, gentlemen, to indicate to you as clearly as possible the naoral and financial situation of our society. The progress accomplished in the course of the last season may not have foUowed the alluring rapidity which it took on in the beginning; this has been due to various circumstances, such as sickness and other causes, which have prevented M. Malere and myself from continuing the establishment of new local societies. It must be well recognized that unfortunately local initiative with few exceptions does not manifest itself spontaneously; it is almost always necessary to go and arouse interest in each locality and to force the people to take action. In this way the actions of presidents of local societies may exert a valuable influence if they wiU give attention to the community adjacent, for in this way their example will serve to stimulate their neighbors to imitate them. It will suffice, I think, to point out to you the possibility and the efficacy of this propaganda, and I am certain that many of you will respond to the appeal which I am making for your service in this respect. It is this inter- est of each one of us in working for the extension of our societies that will tend to add to its success, for the more it becomes extended the greater wiU be the security. Even though the extension accomplished during our present season is far from negligible, the older societies having become stronger and the general situation of the federation more solid, still we must put forth more effort in the year to come. At the present time we have 1,758 policies corresponding to a capital of 16,624,535 francs value property insured; whereas in February, 1912, there were only 1,252 policies representing 11,150,000 francs insured. This 16,624,535 francs of capital insured gives us at the present time 20,332.75 francs of annual income from premiums. We have an approximate number of applications amounting to 2,645, representing a capital insured of about 32,575,000 francs. The society embraces, in fact, about 4,380 members, representing 48,800,000 francs of capital, insured or to be insured, whereas, the membership was only 3,847 with 41,800,000 capital in February, 1912. You see that considerable progress has been made. Our locals have received in the com-se of the year numerous subsidies totaling 19,300 francs, and we have obtained for the federation another subsidy of 5,000 francs, which I shall teU you presently is due to the good offices of M. Coggia, assisted by M. Barthou ct Berard. They may be depended upon to continue helping us and we should be extremely grateful to them. Although we have been very lucky in this way we have been less so in others, for the season has been especi- ally inauspicious for us from the point of view of fire losses. Eleven of our societies have had to pay losses, the total valuation of which has reached 17,142.45 francs, as may be seen from the following list: On February 29, at Aincille, 70 francs; April 25, at Lys, 32 francs; April 25, at Saint Pe sur Nivelle, 1,250 francs; May 31, at Pontacq, 1,531.65 francs; July 22, at Hegetaubin, 65 francs; August 1, at Ogeu, 11,439.30 francs; September 17, at Asasp, 4.50 francs; September 23, at Cosledaa, 60 francs; September 17, at Caro, 100 francs; November 26, at Arthez-d'Asson, 10 francs; and January 20, 1913, at Urdes, 2,580 francs. ' Although this is a very gruesome record to look at, still w6 may see the advantages of our organization and its superiority over other systems of mutual fire insurance. If we consider one of the local societies, as an example, the "Societe d'Ogeu," if you please, which is the one which has been most sorely afflicted mth loss, and the claim paid to which amounted to 11,439.30 francs, we shall see what its present situation is compared to what it would been under the mutual reinsurance system. By applying the system of the federation, its loss has been paid without causing it any sacrifice or necessity of borrowing funds from its members, for it simply has been debited with one-half the amount of its loss — that is, 5,519.60 francs. wSince it has a reserve of 1,004.30 francs it remains in debt for the sum of 4,715.30 francs, which it will pay off little by little with the accumulation of its annual premiums, without having to pay any interest. One-half of its premium, 320 francs, is placed to its credit annually, and with the progressive increase in the amount of its premium and the annual funds for aid and subsidy, which it wiU surely obtain, it wiU be liberated from debt, unless it suffers further losses by fire within seven or eight years. With the reinsurance system it would have retained two-tenths of the risk, and would only have had to payi it is true, 2,287.90 francs for its part of the loss, but only being able to collect two-tenths of the premiums, it would have had in reserve only 206.60 francs. Adding the subsidy of 400 to 606.60 francs, it would there- fore have had to borrow the difference between 2,287.90 francs and 606.60 francs, or 1,681.30 francs, in order to pay its proportion for the loss. This difference would have had to come out of the pockets of its members and the interest on it, amounting to 64.45 francs, its part of the premium only being 128 francs, there wouK only have remained annually 63.55 francs with which to extinguish a debt of 1 ,681.30 francs requiring 25 years or more. FRANCE. 687 The following table shows the situation of the afflicted societies, among which only four find themselves in debt — Saint Pe sur Nivelle, Ogeu, Pontacq, and Urdes: "~ Financial situation of the societies which have suffered loss by fire since Feb. 15, 1912. Societies. Amount of loss paid. Share of loss charged to local. Credit. Debit bal- ance. Credit bal- ance. Aincille Francs. 70.00 1, 250. 00 32.00 1, 513. 70 11,439.25 65.00 100. 00 60.00 10.00 4.60 2, 580. 00 Francs. 35.00 625. 00 16.00 765. 85 5, 719. 60 32.60 50.00 30.00 5.00 2.25 1,290.00 Francs. 560. 00 517. 60 1, 947. 30 365. 00 1, 004. 30 781. 55 378. 35 681. 00 498. 85 1, 225. 15 94.15 Francs. Francs. 525. 00 Saint Pe (Nivelle) 107. 40 Lvs . 1, 931. 30 Pontacq 400. 85 4,715.30 Ogeu Hagetaubin 749. 05 Caro ' 328. 35 651. 00 Arthez d'AsBon 493. 85 1, 222. 90 Urdes 1, 194. 85 Total 17, 124. 55 8, 571. 30 I have still to present to you the statement of operations for the year from February 15, 1912, to February 15, 1913, showiag the receipts and expenditures: Total. Charged to — Common fund. Local fund. KBCEIPTS. Paid-up premiums Premiums due on Feb. 15, 1913 Subsidies received Interest on share capital Total receipts EXPENDITURES Initial expenditures General expenses Expense for experts Losses paid Interest on loans Total expenditures Excess of receipts Francs. 13, 056. 60 9, 310. 05 24, 251. 70 1, 562. 05 Francs. 6, 725. 65 4, 654. 20 5, 000. 00 147. 20 Francs. 6, 528. 95 4, 655. 85 19, 251. 70 1, 414. 25 48, 180. 40 16, 523. 05 31, 850. 75 575. 00 4, 306. 00 140. 00 17, 142. 45 116. 15 575. 00 4, 306. 00 140. 00 8, 571. 25 116.15 8, 571. 20 22, 279. 60 13, 708. 40 8, 571. 20 25, 900. 80 2, 714. 65 23, 279. 55 The balance on hand is added to the reserve which existed on February 15, 1912, and gives a total on February 15, 1913, of 72,553.73 francs, of which 7,266.78 was charged to the account of the common fund and 65,286.95 to the account of the local fund. Such, gentlemen, is the financial situation of our society, which, I beheve, you will agree with me, is fairly satisfactory, considering that we have had to pay a series of heavy losses. I may also say that all losses were settled very amicably, with no difficulty, and with perfect satisfaction to all concerned ; without in any way sacrificing the interest of the federation, we have interpreted the losses in a liberal manner and fairly, and we have encountered on the part of the losers by fire and the presidents of the locals, too, the most evident good will and most sincere impartiality. One other observation should be made. You have certainly observed the amount of premiums still pay- able on February 15; it is far too high. All premiums ought to be paid within the limits established, and it would be well that the presidents of the locals should keep this matter in hand in the future. They ought to make their members understand that the interest of the society requires prompt payment, and that it will not do to extend the time. Should a fire loss occur to any member whose payments are in arrears, he would lose the benefit of his insurance. 688 AQBIOXJLTURAL COOPERATION IN EUHOPE. I have to advise you that under the decision which you have taken under the last regular meeting, pro- viding a provident fund, we have opened an account for this purpose. The common fund on February 15, 1912, of 4,692.63 francs, has had the sum of 5 per cent, or 234.65 francs, deducted from it for the provident fund. This has enabled us to pay an amount of 23.50 francs to each of the two societies of Arthez-d'Asson and Gabaston, which were in arrears; the fund, diminished by these two amounts, has thus become 187.65 francs. We ought to add to it at this time 5 per cent of the increase in the common fund of this season — that is, 131.95 francs— which will bring it up to 318.70 francs. We may in this way credit each of the societies of Pontacq, Ogeu, St. Pe-sur-Nivelle at Urdes, with a sum of 31.85 francs to diminish their deficit. I beUeve, gentlemen, that I have told you something of everything which is important, to enlighten you as to the condition of our society, and I thank you for the very patient and kindly attention with which you have Ustened, which shows the great interest which you have in its operation, and I give place to M. Malere; who will explain to you the annual balance sheet of the society. Annual Balance Sheet of the Federation (Fire Insurance), Feb. 15, 1913. ASSETS. Francs. Reserves on Feb. 15, 1912 4, 692. 53 Subsidy due 5, 000. 00 Proportion of premiums paid in 6, 527. 65 Proportion of premiums due 4, 654. 20 Interest collected 1, 562. 05 Total 22, 436. 43 Balance in favor of the federation, 7,266.78 francs. liabilities. Francs. Office expenses 575. 00 General expenses 4, 306. 00 Interest paid to locals 1, 414. 25 Interest paid on loans 116. 15 Settlement for losses 8, 571. 25 Expert services 140. 00 Provident fund 47. 00 Total 15, 169. 65 Local societies. Francs. Proportion of premiums paid in 16, 549. 05 Premiums due 4, 655. 85 Provident fund 47. 00 Subsidies with interest 46, 719. 95 Subsidies due 6, 400. 00 Total 74,371.85 Balance in favor of the locals, 65,276.95 francs. liabilities. Franca. Payment of losses 8, 571. 20 Payments to be made for losses in 1911 and I9I2 523. 70 Total 9,094.90 Capital stock of the society (72,552.93 francs). Represented by — Franca. Premiums outstanding 50, 700. 00 Premiums due (from locals) 4, 655. 05 Premiums due on account of the common fund 4, 654. 20 Subsidies due: For account of the locals 6, 400. 00 For account of common fund 5, 000. 00 Balance in the treasury 1, 143. 68 Total 72, 562^ 93 TRAVELING SCHOOL OF DOMESTIC SCIENCE. Statement SuBMnrED to the Commissions. [Translated from the French.] Pau. The purpose of the Traveling Agricultural Domestic Science School is to give in a relatively short period of time such instruction to young girls as to enable them to make the best use of the several products of the farm. Three months' time has been considered necessary for the theoretical and practical studies which the farmer s young daughter pursues in order to become a proper housekeeper. Instruction is given to the pupils — 1 . In house management, cooking, sewing, laundry work, etc. 2. Milk testing for the determination of quality as well as the amount of butter; cream separating, butter making, and cheese manufacturing. FBANCB. 689 Courses are also given in the keeping of farm accounts, domestic economy and family hygiene, and the care of animals and the best methods of feeding them. Several lessons are also devoted to the raising of plants and the use of fertilizer. Special courses are given in poultry raising, including the operation of incubators and brooders. LOCATING THE SCHOOLS. The professor of the department, together with the presidents of the agricultural societies, decide upon the location where the school shall be opened. They find out what buUdings are available and choose the one in the most convenient locality which will provide a classroom, a kitchen, a large room for the installation of the necessary equipment, a cellar for the provisions and the seasoning of cheese, and at least two private rooms for the teachers to live in. Such quarters are required to be furnished free, with light and heat, by the commune. EQUIPMENT. Equipment must be obtained and bonds voted by the general council and from State subsidies, made up as follows : 1 . Centrifugal cream separators, and mechanical churns and butter-working apparatus. 2. All the apparatus necessary for the receiving, storage, and analysis of the milk or cream, and presses and other utensils which are indispensable for the manufacture of cheese. 3. Ranges, cooking utensils, and all the crockery necessary for the table at which the teachers and the pupils have to eat the midday meal. 4. All the apparatus necessary for washing and ironing the clothing worn by the pupils. 5. The furnishing includes- table, chairs, blackboards, etc., of a simple character, suitable for a schoolroom. 6. A bookcase. These furnishings are carried from one locality to another, and are looked after by the teachers, who are held responsible for them. The purchase of these materials is generally made by the pr6fet, and an inventory is made of them annually. TEACHERS. The teaching staff is appointed by the pr6fet. In order to insure unity of method, the school is placed under the direction of the professor of agriculture for the department. He or the special professor who may be provided in some localities is required to deliver 12 lessons bearing upon animal husbandry, elementary agricultural science, beekeepii]^, gardening, as well as several discussions of agricultural society organization. The special professor sees that the pupils follow their course in a regular manner, and he has to facilitate the arrangement between the teachers and the families, and to advise with the professor of the department, pointing out anything which may be of advantage to include in the work of the school or which may be of bene- fit to the agricultural community. There should be two teachers who have been prepared in special school for this service. The principal is in charge of the management and domestic economy course of the school, as well as everything which concerns the practical and theoretical instruction in dairying and cheese making, cookiag, etc. She is assisted by an underteacher, who aids the principal in the dairy course and that of cheese making, domestic economy, etc. The respective relationship between the principal and her assistant is determined by the departmental professor of agriculture. Finally, in almost all localities, it is easy to obtain the gratuitous services of a medi- cal man, who will give a few lectures on family hygiene as well as farm sanitation and proper care of children. PUPILS. » The school receives pupils of 15 years of age and under, whose parents must promise to send them regu- larly. The young girls must take part in the manual work as well as in the theoretical instruction. To start up a school ui a community 15 subscriptions are required; if the number amounts to more than 25, resort will be had to elimination by means of examination, or by excluding those who have applied last. LENGTH OF COURSE. Each session ought to last for three months. The courses are free and attendance daily except Saturday, Sunday, and holidays; Saturdays generally bemg days of leave. The manual operations are performed in the mornmg session; two hours in the afternoon are reserved for theoretical instruction. The pupils prepare the midday meal and may partake of it with the teachers; the expenses are divided among the persons who enjoy the meal. Pupils return in time to have dinner with their parents or wherever they happen to live. However, when the school buUding can provide accommodations, some pupils may board there. 14174'— S. Doc. 214, 63-1 44 690 AGBICULTUBAL COOPERATIOH' IN EtTEOPB. GKADUATING EXAMINATIONS. The end of the session is preceded by examination for graduation held in the presence of a jury appomted by the pr6fet, including thu school board, two general counselors, and the president of agricultural societies or syndicats, which have contributed to the support of the school. A diploma is given to those pupils who have passed over 50 per cent on the several subjects of the course. ADVANTAGES OF THE TKAVELING SCHOOL. There are in France stationary domestic science and dairy schools, but the duration of the studies is of less than a year. They are attended by pupils who have shown the greatest aptitude in the traveling schools, which have the advantage of allowing the pupils to live at home without additional expense at the same time that they are gaining instruction ia agriculture. The pupils continue to live with their parents, and in this way the young girls are able to help their mothers both before and after school. The knowledge acquired in these short courses is very important, for after the age of 15 pupils appreciate very much more the advantage of instruction and are able to get a great deal more out of the lessons. The greater part of them have already been able to give a good account of what they have learned con- cerning the details of house management, dairy and cheese-making operations; and one may see that the awakening of their interest in these matters will result in a valuable aid to the prosperity of our dairies. The analysis from the cows belonging to the parents of the pupils, or their neighbors, results ia improvement in the race of the cattle, as well as in better methods of feeding the Uvestock, which are shown to increase the yield of milk. The traveUng school, from every viewpoint, possesses still other advantages over the school in a fixed place. It permits of giving agricultural instruction to a greater number of pupils. A fixed school would only be able to provide for 15 or 20 pupils a year, whereas, a traveling school may provide for 60 or 80, with the result that agricultural knowledge will be diffused much more rapidly. EMPLOTMENT OF TIME. Every day in the week, except Saturday, Sunday, and holidays, the pupils are drilled from 8 to 8.30 and from 11 to 11.30 in the morning in the regular daily farm duties. House management includes cooking, laundry work, sewing and mending, etc. ; and the dairy construction includes care and analysis of milk, butter, and cheese making; agriculture includes incubator and brooder management; the care of fowls. Part of the pupils are required to assist in the preparation of luncheon each day, but they may go home to luncheon every day in the week except one, on which they are required to eat with their comrades and teachers. Each one has to contribute to the expense, which usually amounts to about 60 centimes (12 cents) for each person. The culinary instruction gives them an idea of how to make preserves, including fruits and vegetables. The pupils are divided into sections and each section devotes itself to one of the subjects of instruction for at least a week, passing successively through the different courses of instruction, so that each may have a chance to learn of the practical work in every department. In the afternoon from 1.30 to 4 o'clock, except leave days, the theoretical instruction is given. One day each week the public is allowed to visit the school; and the farmers' wives of the locahty, as well as of the commune, may also join in on the manual training and practical housekeeping practice, so as to learn about it as weU as the young girls do. COimSE OF INSTRUCTION. The several parts of the program are arranged and adapted to the general needs of all the pupils, but m all the sessions, hygiene, domestic economy, cooking, cutting and dressmaking, and laundry work, always constitute the basis of the instruction. HYGIENE — DOMESTIC ECONOMY — EDUCATION. Elementary principles of digestion. Alimentation: Nutritive value of principal foods. Preparation: Alteration and preservation of food. Provisions: Choice, purchasing, and care of food. Habitation: Sanitary arrangements, ornamentation, care of house, ventilation, cleaning, disinfection o rooms and of clothing. House heating and advice on the purchase of storage of fuels and the care of stoves. FBANCE. 691 Artificial lighting: Instruction and practical advice on purchasing, the care and operation of lamps, oil, etc. ; and precautions to be observed. Choice and purchase of dry goods and clothing. Instruction in matters of the toilet, personal hygiene. Care and management of children. DAIRY AND CHEESE MAKING. 1. Description and composition of milk; alteration, adulteration; description of the mUk-testing appa- ratus for determining the richness of milk; thermometer cream meters, centrifugal separators, measuring acidity, straining, aeration, pasturization, sterilization, cooling, weight, and measuring. 2. Establishment of a creamery, situation, water supply, etc. 3. Sale and transportation of milk. 4. Manufacture of butter, quaUty of milk to be applied, separation of milk, different systems and descrip- tion of each; cream and churning; dispatch of butter; utility of by-products — skim milk, whipped mUk, and whey. 5. Manufacture of cheese — milks to be used; pressure and coagulation; theoretical and practical aspects of the production of different kinds of French and foreign cheeses. 6. Advantages of cooperation in the dairy business. ZOOTEOHNY. Ideas on anatomy and physiology which are necessary for the study of the feeding of domestic animals; composition of foodstuffs; part played by nutritive elements; digestibility of foodstuffs; their nutritive value; the method of life of cattle and poultry; secretion of milk and milking. Ideas on the choice of a milking cow and the procedure for improving the breed of cattle, herd books, breeding associations, etc. General hygiene of domestic animals. POULTRY KEEPING. Definition and economic importance. Choice and improvement of breeds. Natural and artificial incubation and rearing. Hygiene. Feeding. Utilization of products. IDEAS ON AGRICULTURE AND GARDENING. Elementary ideas of soil and climate; fertilization. Pasture; foodstuffs; intelligent production; choice of crops ; conservation. Upkeep of the garden; fruit trees; cultivation of principal vegetables; cultivation of some flowers. HYGIENE OF THE FAMILY. General ideas of hygiene; part played by the woman in the application of rules of family hygiene. Hygiene in the house, in the kitchen, in the dining room, in the drawing room, and the bedroom. Individual hygiene; hygiene of the body; baths; shower baths; etc.; mouth; hair; etc. Hygiene of children. The woman's part as nurse in infectious and other diseases; her relations with the doctors concerned; isolation; fumigation; different methods of fumigation. First precautions in cases of accident or poison. Usefulness and danger of household medicines. SEWING AND CUTTING OUT. Principal stitches ; use of the sewing machine. Utilization of old clothes ; making them over. Lingerie; making and mending. Knitting, crocheting, and embroidering. General ideas on cutting out; measurements. 692 AGHICULTTTKAL COOPEEATIOW IN EUROPE. Clothes for children ; tracing of patterns ; cutttag and fitting. Corsage; pattern of the sleeves. Measurements ; trying on the model. Blouses; princess robes. Skirts, jackets, petticoats, and peignoir. DETAILED WORKING OF THE CREDIT AGRICOLE IN THE GIRONDE. Documents Submitted to the Commissions. [Translations fiom the French.] GENERAL ORGANIZATION. Bordeaux. There are three kinds of loans : First. Loans on security which may amount to 15,000 francs on one harvest or 25,000 on more. Second. Loans on notes proportional to the credit of the member and the reasons for the loan. Third. Long-time loans on mortgage (15 years, repayable by installments). The interest on loans is from 4^ to 5 per cent, payable in a.dvance on loans on notes and warrants, and 2 per cent on long-time loans. The length of loans on notes or warrants is one year, renewable for periods of three months (or six months in the case of cattle) . Application should be made either to the local or regional agricultural credit bank, according to which is nearest. Any small farmer of known integrity who is in an insolvent condition may become a borrower. The following formaUties must be gone through: First. For loans on notes, appUcation should be addressed to the secretary of the local bank nearest to the borrower, who will collect the note and forward the money in eight days at the most. Every borrower who is married must furnish the signature of his wife and personal security of a third person known to be solvent. Members of a bank who have been on the register for at least six months may be dispensed from the necessity of providing a security if they do not borrow a sum exceeding the amount of their paid-up sub- scription. Second. For loans on warrants, application should be made to the secretary of the local bank, who will furnish the proper forms and take charge of the warrant. Third. For long-time loans special forms are put at the disposal of the borrowers, who must have them filled in by their lawyer. Loans may be made up to half the value of the security. The following goods may be taken in pledge on a warrant, namely: AU agricultural harvest products, grain, straw, wine, etc., and in certain cases live stock. The cost of the warrant is 1 franc for every 1,000 francs borrowed, and 50 centimes on the same amount for the legal stamp. The borrower is obHged to keep the security hx his own possession and in good condition imtil he pays back his loan; he may sell it on condition that he immediately pays off the warrant held by the bank and gives notice to the bank before delivering up the goods. FOUNDATION OF A LOCAL AGRICULTURAL CREDIT BANK. First. The farmers of one community or one Canton meet together and elect a president and secretary. Second. They form an initial capital with the help of a share of 20 francs taken by the ofl&cers and carrying interest at 4 per cent. Third. They deposit the sum thus received with the regional bank, which sends the money required for loans by the local bank, in due proportion to the demands made, against the receipt of notes and warrants. DEPOSITS ON CURRENT ACCOUNT. The regional banks receive any cash which anyone wishes to dispose of without hmit or maximum. These fimds bear interest at 3 per cent and may be withdrawn at sight, and in case of need loans may be made on notes in excess of the amount deposited. B-BANCB. FORM OF REGISTER OF ATTENDANCE AT ORIGINAL MEETING OF A LOCAL BANK. AQBiCTJiynjBAL Bank. General assembly (date) of. LIST 01' ATTENDANCE. 698 Number Signatures. Name, Christian name, residence. Syndicate to which affiliated. Capital. • Number of entry. Subscribed. Deposited. of votes. Brought forward ] 2 3 FORM OF RESOLUTION TO BE ADOPTED AT INITIAL MEETING OF A LOCAL BANK. -th day of - .19—. The original members of the agricultural bank registered under the law of the 5th of November, 1894, met on this date in general assembly to draw up a constitution. The assembly, after consultation, chose the officers. The following were elected: President, M. ; auditors, MM. , ; secretary, M. — — ; all of whom accepted office. The president announced that the general assembly had a quorum and could properly pass resolutions. He laid on the table a list of subscriptions for shares in the society and of payments made, which payment must be at least one-fourth of each share subscribed for. These lists showed that there had been subscribed by members shares amounting to francs, on which sum franca had been paid up. The subscribers present at the meeting were in number — — — and had subscribed — shares toward the capital of the society. Thereupon, the president submitted for the approval of the members a draft of the rules, and after discussion these rules were adopted. According to the rules the bank must be managed by a committee composed of at least 4 members and not more than 25. The presi- dent proposed to the meeting that for the present year the number of this committee should be limited to ; the proposal was accepted. The election was held; as a result the following directors were appointed, namely, MM. The assembly next proceeded to choose three members of the committee of supervision in the same way, namely, MM. ■ The assembly fixed the rate of interest on shares at 4 per cent. The maximum of deposits which can be received on current account for the first business year was fixed at 1,000 francs per depositor. The number of depositors must not exceed 100. The maximum rate of interest to be paid on deposits ia fixed at 3 per cent. The maximum of individual credit must not exceed half of the subscribed capital at the moment when the loan is aaked for. The bank will only grant loans on papers presented by a member and bearing his signature. The committee of management has full power to increase the capital of the bank and for this purpose to receive new members. There being nothing more on the order of the day, the president announced that the committee of management should elect its officers and take the final steps necessary for the opening of the bank for business. The meeting adjourned at o'clock. (Signed) ■ 1 Auditors. , Secretary. , President. 694 AGBICULTURAL COOPERATION IN EUEOPE. FORM OF RESOLUTION FOR COMMITTEE OF MANAGEMENT. On the aame day the members of the committee of management whose election is recorded above met at the headquarters of the society at — and proceeded to elect their officers. The following were named: President, M. ; vice president, M. ; secretary, M. . The committee chose as its accountant M. , reserving to itself the right to fix the terms of his remuneration at a later date. In no case shall M. have any claim against them under this head. The committee appointed special members of its staff to act as committee of credit, whose duty will be to pass upon the solvency of members who demand loans and who sign either collectively or individually for all sums received, to take into their charge all assete 'and rediscount them at the regional bank. The committee fixed the rate of discount for loans at per cent per annum. The com- mittee decided to aflaliate the local bank under its management with the regional bank of the Gironde, to which it decided to subscribe a number of shares equal to its paid-up capital and its subsequent increase. The rate on deposits is fixed at 3 per cent until further notice, subject to deduction of 10 days from the date of deposit and 10 days preceding the withdrawal. Of all of which this signed statement is the official record. (Signed) , Prmdent. , Secretary. FORM OF RULES FOR A LOCAL BANK. I. NAME, OBJECT, HEADQTJAKTERS, AND DTJRATION. Abticle 1. A mutual society for agricultural credit, which shall be governed by the law of the 5th of November, 1894, and by the present rules, is hereby formed between the agricultural syndicates and the members of this syndicate and any other members of agri- cultural syndicates who will obey the rules either now or at a futuTv; date. Abt. 2. The name of this society shall be "The Rural Bank of ." Art 3. Its aim is to secure for its members the credit which is necessary for them in order to facilitate or even to guarantee their agricultural operations or the personal needs attached to these operations. Art. 4. The headquarters shall be at . It may be moved to any other place in the same district by resolution of the com- mittee of management. Art. 5. The duration of the society is fixed at 50 years, reckoned from the date of its actual constitution, except in the case of pro- rogation or of previous dissolution as provided for in these rules. n. SOCIAL CAPITAL, SHARES, AND INTEREST. Art 6. The foundation capital is fixed at the sum of , divided into shares of francs ; each member may own several shares. Art. 7. It may be increased by the addition of new members or the subscription of new shares. On the other hand, it may be reduced by means of withdrawals resulting from the resignation from the society, the exclusion, or the death of members; but the society's capital can never be reduced below the simi of the foundation capital. Art. 8. One-fcurth of the shares is payable on subscription; the other three-fourths are payable at times and in sums to be fixed by the committee of management. The installments may be paid in advance. Sums due are liable to a valid claim on the part of the Bociety for 4 per cent. Art. 9. The society, besides taking personal action against a member who is behind with Ms payments, may address to Mm a notice of expulsion by an ordinary registered letter, on receipt of wMch the defaulting member may be considered to have retired from the society. All cash payments which had been made by him should be restored to Mm and Ms shares canceled. Art. 10. Shares are nominal; after they are entirely paid up, they are represented by papers taken from the memorandum book, numbered, and signed by two directors. They may be transferred, but only on the following conditions: First, that the transferrer does not owe the society any debt of any kind; second, that the transferee is a member of an agricultural syndicate; and third, that the transfer is agreed to by the committee of management. The transfer is carried out by means of an entry made in a special register and signed by the parties concerned. Art. 11. The members are collectively responsible for the undertakings of the society and for the restoration to subscribers of the amount of their shares making up the society's capital. But this collective liability is limited to 1,000 francs per member, and no demand for payment may be made for more than 1,000 francs, or for more than the difference between the paid-up sum of their shares in the social capital and the said sum of 1,000 francs. ADMISSION AND WITHDRAWALS OP MEMBERS. Art. 12. Every person of age who is a member of an agricultural syndicate may be received to membersMp. The candidate must make his request in writing, stating Ms surname, Christian names, profession, place of residence, and the number of shares for wbch he wishes to subscribe. In any case where the member having to sign is ilhterate, he makes a mark wMch is held to be his signature. Art. 13. Admission is pronounced upon by the committee of management, wMch is not bound to give the reasons for its decisions. Any candidate who is not admitted may appeal to the general assembly, whose final decision is binding. His admission is conaaere not tp be taken up if he does not make Ms first payment witMn a fortnight after he is notified of his election. 1 Some societies adopt tlie following alternative rule: ^^ " Aet. 11. Memtiers are liable for the undertakings of the society only in proportion to shares subscribed for and only up to the limit of the amount of Scrlptlon; if this subscription is entirely paid up they are released from all liability. TiLAKca. 695 Art. 14. A person ceases to be a member: First. By voluntary withdrawal. The member must first pay off all debts which he may have contracted with respect to the society. The withdrawal does not take effect until after the general assembly has approved the annual accounts. Second. By death. Third. By ceasing to fulfill the conditions requisite for membership of the society. Fourth. If the member does not carry out his obligations to the society and if he obliges the society to take legal proceedings against him. Fifth. If the member is fined for falsifying the product of his harvest. Sixth. If he is condemned on any criminal charge. Seventh. If he is legally declared to be bankrupt or in liquidation. Eighth. If he does not direct the funds borrowed by him to the purposes which he indicated on his signed demand for a loan. Art. 15. In case of the withdrawal, expulsion, or death of a member, the society is absolved from all claims on his part and continues its business with the other members without any reason under any circumstances for affixing of seals or the taking of a special inventory. It is admissible, however, for the widow and the heirs of a member to take his place, with the consent of the committee of management, if they become members of the agricultural syndicate. As each share is indivisible as far as the society is concerned, unless the com- mittee decides otherwise, the representatives of a deceased member must be represented by one of their number. The repayments due by the society to a member who ceased to belong to a society or to his representatives consist solely in the amount of the sums paid by him on his canceled shares; he has no claim against the balance of the society's active funds. This repayment only takes place after deduction from the share of the member's proportional share in the loss of the society and after compensation has been exacted for any sum which he may owe the society. The withdrawing member or his representatives are not finally free from their under- takings imtil after all business done before this withdrawal has been closed. OPERATIONS OP THE SOCIETY. Art. 16. The society especially carries on the following business in the interest of its members: First. It grants loans on securities; that is to say, personal security, collateral, agricultural pledges or warrants, pledges, open credits with mortgage attached, or mortgages on the conditions advised upon by its committee of management. Second. It discounts and rediscounts papers subscribed or indorsed by its members, on condition that their object is entirely agricul- tural ; it receives moneys for deposit and makes cash payments. It receives deposits on call or for a fixed period. It carries on all biisiness conformable with its object, not limited by the preceding enumeration. Third. It guarantees without requiring any security the operations carried out by the members of agricultural syndicates in the pur- chase of fertilizers and implements intended for farm properties. MANAGEMENT. Art. 17. The society is managed by a committee composed of 4 members at least and 25 at the most, chosen from the members of the society and appointed by the general assembly. One-third of the committee shall retire each year. In the first two years this shall be determined by lot and afterwards by seniority. The directors are always eligible for reelection. Art. 18. The committee chooses from among its members a president, a vice president, and a secretary. Art. 19. The committee meets at the headquarters of the society as often as the interests of the society require. The presence of three members is necessary to the validity of its resolutions. These resolutions are passed by a majority of the members present. In case oi equal division, the president has the casting vote. Art. 20. Every member of the committee who misses three consecutive sessions without good reason shall be considered to have resigned. In case of a vacancy, the committee of management will proceed to fill the place provisionally; this appointment must be ratified by the first general assembly. Art. 21. The resolutions of the committee are recorded by official minutes in a special register and signed by the president and the secretary. Copies of abstracts must be signed by the president of the committee. Art. 22. The committee has the most extensive powers to carry on all business coming within the scope of the society and particularly the following: First. It makes advances to members for the purpose of their agricultural operations; it guarantees such operations as they may make; it carries out payments and recovers all money on their behalf; it discounts drafts, security papers, and warrants, and accepts or refuses personal securities; it accepts deposits on current account with or without interest; and fixes the rates of interest to be charged or paid. Second. It admits or refuses new members and applications fornew shares made by old members; it accepts resignations and passes sen- tence of expulsion; it makes all cancellations of appointments of all employees and fixes their salaries and commissions; it handles all moneys due to the society and determines the use to be made of the funds at the society's disposal. It authorizes all withdrawals and transfers of the stock belonging to the society; it may make all loans with or without security which are needed for the proceedings of the society or to increase its circulating capital. It closes the accounts and submits them to the general assembly; it ratifies the order of the day and authorizes all legal action whether as prosecutor or defendant. It may bargain, treat, or compromise, and give all stays of execution or warrants for seizures before or after payment. It decides on affiliation to regional banks. Art. 23. The committee may delegate to one of its members or to a director who is not a member of the committee such powers as it thinks necessary to the current daily administration of the society's affairs. Art. 24. The directors are unpaid; they have only a claim for expenses incurred by them in the interest of the society and in discharge of their duties. Art. 25. The directors do not undertake any collective or individual liability; they are responsible only for the carrying out of their duties. committee op supervision. Art. 26. The committee of supervision is composed of at least one member and not more than three members appointed by the gen- eral assembly. They hold office for one year and are eligible for reelection. They watch over the carrying out of the rules and of the rulings and resolutions of the general aasembly: they check the cash, the books, »nd the accounts. In fact they supervise all the interests of the society. They pas? upon demands for loans put forward by the director! 696 AGBICULTTJBAL COOPERATION IN EUROPE. and also upon their admission as securities. They may, aa often as the needs of the society require or they themselves think necessary, .draw up a report of their proceedings, which is submitted to the committee of management. They present to each ordinary general assem- bly a written report on the operations of the preceding business year. They have power, if they think fit, to call the general assembly. GENERAL ASSEMBLY. Art. 27. The general assembly regularly constituted represents all the members of the society. Its decisions are binding on all, even on those who are absent. It meets each year in the month of March. It can also be called together in the case of emergency by the com- mittee of supervision or on a written demand carrying the signatures of one-fifth of the members and stating the objects of the meeting. Art. 28. The members are called by an ordinary letter, which must be sent at least eight days in advance. Art. 29. The general assembly is composed of all the members without any exception. No one may be represented by a person other than a member. Art. 30. The general assembly is presided over by the president of the committee of management, assisted by the two strongest mem- bers. In the case of these latter, as between equality of shares, the decision goes by seniority. Art. 31. The ordinary general assembly has a quorum when one-fourth of the members and capital is present or represented. Failing this a second call is issued the next day in accordance with the conditions of article 28, and this time the decisions are valid whatever may be the number of members present or the amount of capital represented. A register of attendance is kept which contains the names and residence of the members; this register is signed by the officers. Art. 31. Resolutions are passed by a majority of the members present. Every member has a right to as many votes as he possesses shares, provided always that he may not have more than 25 votes. Art. 33. The general assembly has the report of the conunittee of management and that of the committee of supervision on the busi- ness of the society; it discusses and, if agreeable, approves the books. It chooses the committee of management and also the committee of supervision, determines the maximum amount of deposits which may be received, and the rate of interest on these deposits. It is the last court of appeals on the subject of expulsion or admission of members. It passes resolutions and gives binding decisions on the question of the order of the day and on all the business of the society. Art. 34. The general assembly may make all alterations in the rules; particularly, it may decide upon, first, the increase or reduction of the capital other than the ordinary increase or reduction resulting from the admission or expulsion of members; second, the prorogation or dissolution of the society; third, its amalgamation with other similar societies. Art. 35. Its resolutions are recorded in the oflBcial minutes entered in the special register and signed by the officers. Copies of abstracte to be given out must be signed by the president and the secretary. Art. 36. The accounting carries out the decision of the committee of management. He is charged with the bookkeeping and the cash; he prepares the balance sheet and inventories to be submitted to the general assembly; he is responsible for all the documents, bonds, and specie intrusted to him. He may be called to fulfill the duties of secretary to the committee of management. He does fulfill these duties at the meetings of the general assembly; he may give advice at the meetings of the committee of management, and may vote if he is a member of this committee; he makes entries each day of the demands for loans and of the withdrawals of deposits by members. He may be called upon to put up collateral or furnish personal security for a sum which may be fixed every year, if necessary, by the committee of management. His salary is fixed by the committee. INVENTORY, PROITTS , AND RESERVE FUNDS. Art. 37. The year begins on the 1st of January and ends on the 31st of December. In exceptional circumstances the first business year may include the time which elapses between the definite foundation of the society and the Slst of December, 1909. Art. 38. At the end of each year of the society's existence, an inventory of the acti e and passive account of the society must be drawn up. The inventory, the balance sheet, and the profit and loss account are put at the disposal of the committee of supervision at least a week before the general assembly. Forty-eight hours before the general assembly any member may obtain from the headquarters of the society a copy of the inventory and of the report of the committee of supervision. Art. 39. The profits of the society consist of the commissions taken on operations carried out by it. The members have a right to an interest of 4 per cent on the profits on the sum of the payments made on their shares. The net profits, after paying the general expenses and interests on loans and on deposits on current account shall be turned over to the formation of a reserve fund, up to three-fourths of their amount. The other one-fourth shall remain for the society's members, to be divided in proportion to the commission taken on business done by them, but only until the reserve fund "has reached 50,000 francs and one-half of the society's capital. Art. 40. When the reserve fund has reached 50,000 francs and one-half of the society's capital, the profits shall be divided at the end of the year between the members who have done business with the society during the year and in proportion to the commissions levied on their business. Art. 41. AU sums proceeding from interest on shares, on loans, or on current account deposits, and all proportional payments as specified in articles 39 and 40 which have not been claimed within five years, become the property of the society and are paid into the reserve fund. MISCELLANEOUS BUSINESS. Art. 42. Unless tlie committee of management decides otherwise, the society shall make advances to its members under tlie form of loans and on simple paper up to the amoimt of the shares which they subscribe for and which are fully paid up, and that at the same rate as the society gets on them, together with 10 days' interest. FRANCE. 697 DISSOLUTION AND LIQUIDATION OF THE SOCIETY. Art. 43. In case of loss of one-half of the society's capital, the directors must call together the general assembly in order to vote on the continuation or dissolution of the society. Akt. 44. At the end of the society's term, or in case of a premature dissolution, the general assembly adopts a method of liquidation and chooses one or more receivers to whom it gives the necessary powers. Art. 45. After all debts and charges have been paid oft the balance is divided among the members in proportion to their shares. FOUNDATION OF THE SOCIETY. Art. 46. The present society shall not be considered legally constituted until: First. The shares necessary to make up the society's capital have been subscribed for and one-fourth has been paid on them; all of which shall be certified by a declaration on the part of the founders, to which shall be annexed the list of subscribers and payments. Second. The general assembly shall have acknowledged the genuine nature of this certificate, elected the first directors and the officers and received their acceptance of office. Art. 47. The society's formation shall be published in accordance with article 5 of the law of the 5th of November, 1894, before it does any business. Full power is given to the holders of the present rules to make the necessary deposits. JUDICIAL- headquarters. Art. 48. All difficulties which may arise on the occasion of the carrying out of these rules shall be brought before the court of the town where the society has its headquarters. The same shall be done in the case of all judicial proceedings which shall be taken against members for nonpayment of their debts to the society. The members, by the mere fact that they discount their warrants at the agricultural bank, dispense the discounting bank and all sub- sequent rediscounters from giving to the legal officers the notice required by the law of the 30th of April, 1906. In consequence all expense for deposit, and so on, which they cause, will be charged against them except in the case when, after they have given the accountant 14 days' notice in advance Ijy registered letter of their intention to free themselves from obligation, the said accountant at the end of this period is not able to produce the warrant and return it to them against payment. FORM OF APPLICATION FOR SHARES.' I, the undersigned, , living at , member of the Agricultural Syndicate of hereby declare that I wish to subscribe for shares of in the rural bank, whose rides, a copy of which has been sent to me, are attached to this form. I will pay the whole of my share immediately upon demand. In no case shall I be held liable for a sum greater than one thousand francs. (Dated, marked "Read and approved," and signed.) I, the undersigned, , living at , member of the Agricultural Syndicate of , hereby declare that I subscribe for shares of 20 francs in the agricultural bank of , whose rules, a copy of which has been sent to me, are attached to this form. I will pay one-fourth of my subscription immediately, upon demand, and the balance according to the decision of the committee of management. In no case shall I be held liable for any payments other than the total amount of my subscription as above. (Signed.) FORM OF OFFICIAL REPORT OF ALTERATION OF THE RULES OF A LOCAL BANK. On the day of , 1910, at o'clock, an extraordinary general meeting of the members of the agricultural bank above was held at headquarters. The order of the day read: "Alteration of the rules, operation of the law regarding long-time credit." The meeting was opened by the president, supported by the two largest shareholders, namely, Messrs , The officers stated that the meeting had a quorum and might validly pass resolutions, one-fourth of the members and the subscribed capital being present or represented. This statement was made after an inspection of the register of attendance signed by all the members present. This register, in which all members are entered in alphabetical order, with a statement of the share capital held by each, shows that the actual amount of the society's capital was francs, of which francs had been paid up; that the number of members was , and that there were present at the meeting members, representing a capital of francs. After this formality the president made the preUminary statement: "The society was founded on day with a capital of francs, held by members. "Two copies of the rules with a complete list of the managers or directors and the members, giving their names, profession, resi- dence, and the amount of shares held by each, were deposited with the clerk of the magistrate in the Canton of on day." (Here the official report should include either one or the other of the following paragraphs.) "1. Since then this society has deposited during the first fortnight of February every year with the magistrate's clerk a duplicate statement of its members and its directors, and the business carried on during the preceding year." Or— "2. This society has not regularly deposited with the clerk of the magistrate, in the first fortnight of February, a duplicate statement of its members, directors, and business done during the year; in 1909 this statement was not deposited until and the president hereby undertakes that he will take great care in the future that the deposit shall be made at the proper time. I Second form to be used by jooieties adopting the alternative form of Article 11. 698 AGEICULTUBAL COOPBKATION IN- BUHOPE. "The head office possesses a book of official reports, an account book or cash record, and a book for the annual statement for tte year. These two last are initialed by the mayor. " The society is affiliated with the Regional Bank of the Gironde, of which it had on December 31, 1909, fully paid-up shares to the amount of francs. At this same date it had at the regional bank a sum to its debit or credit, according to the account fuTDished to it, amounting to francs, which sum is admitted to be correct. "The members of the committee of management at the present time are (here follows a list of the officers). ' ' Mr has received from the committee of management power to handle and place in the treasury all sums due to or intended for the society, to discharge such sums, to indorse all shares in the name of the society and to discount them with the regional bank. "As the law of March 19, 1910, on long-time individual credit has opened up a new field of activity, by allowing local banks which conform to the law and to the by-laws to lend up to an amount of 8,000 francs to their members for a period not exceeding 15 years on special demand, the committee of management determined to call together the members for this day and hour in order to make a necessary addition to the rules." After making this statement, the president moved to add to article 16 of the rules the following clause: " Clause 4. The bank may carry out all operations provided for in the law of March 19, 1910, concerning individual long-time credit." This proposal being put to the vote, was passed by a majority of votes. The total number of votes cast was Consequently, the addition was incorporated in the rules of the society. The assembly thereby made valid all statements made by the president in his preliminary remarks, and extended an exemption to the directors for any irregularities which may have been committed with reference to the depositing of the paper with the clerk of the magistrate. NEW BY-LAWS. The society thereupon accepted the new by-laws of the regional bank, in accordance with the first clause of the law of March 26, 1910, providing that the approval of the ministry is obtained, and that the committee on management has power to agree to all changes which may be required by the ministry. These by-laws run as follows: I. LONG-TIME LOANS. Article 1. Every request for a long-time loan must be made in writing on the form submitted to the society by the regional bank. It must offer as security a mortgage on landed property, and the loan may not exceed 60 per cent of the minimum value of such property. If the mortgage given can not be considered as a first claim, the amount loaned may not be more than the difference between the existing mortgages and the maximum amount of 8,000 francs; but it may be only in exceptional cases that the bank shall lend otherwise than on first mortgages. In estimating the value of the property, account is to be taken of the surplus value which may result from buildings, improvements, or plantations, made with the help of the funds borrowed. Until the committee of management shall fix another rate, the interest to be paid by borrowers shall be 2 per cent. The loan shall be repayable either by annuities running from 5 to 15 years, or by annual installments fixed in advance by the borrower covering a period of not more than 15 years. Art. 2. This request must be addressed to the president, who calls the committee of management. Art. 3. If the committee advises unfavorably, the demand is not followed up at all; but in the other case it is forwarded to the regional bank with a copy of the resolution of the committee. Art. 4. The regional bank determines whether to take up the loan or not. Art. 5. Long-time loans which are asked for against other security than mortgage shall be passed upon by the annual general assembly of the members of the local bank, or by a general assembly called for this special purpose. Art. 6. In case the demands for long-time loans exceed the resources of the bank, the smallest ones shall be granted first. short-time loans. Art. 7. The local banks must carefully keep copies of all memoranda sent by them to the regional bank, and must number all their papers. The counterfoil of these papers should be filled in by them in red ink. They should classify all letters, memoranda, and notes received from the regional bank. Art. 8. All loans should fall due on the first day of the fourth month following the signing of the security, not including the present month — which means to say, that all loans made on the 2d of July must be paid on the 1st of November. Renewals are thereupon granted hr one, two, or three months at the option of the debtor. This ruling does not apply to drafts, which may be drawn for all dates. Art. 9. Each new loan must be accompanied by a request for discount signed by the wife if the borrower is married, except in the cise of exceptional circumstances, such as separation or mental trouble. Art. 10. Demands for cash must be accompanied by the security which they are intended to discount. No funds will be sent out m the future by the regional bank except against security, as the conduct of its business has been criticized by the auditor on this account. Art. 11. If a short-time loan is granted by the local bank for a sum greater than its paid-up capital, it must be countersigned by a director, and he will be personally responsible for the loan in so far as it exceeds the capital and reserve of the local bank, it this bank is constituted with liability limited to the amount of its capital. This clause does not apply to long-time loans, which the regional bank is authorized to make without regard to the capital of the local bank. Art. 12. All expenses on account of the forwarding of cash and of securities are charged against the forwarder in each case; the sams principle holds good for receipt stamps. Art. 13. The regional bank never guarantees the presenting of papers at the correct date. Art. 14. Securities not paid oft or renewed when they fall due must be foreclosed. The secretaries should show the greatest diligent in sending out their papers, in order that the regional bank may not have to write the members to warn them of threatened foreclosuw when they have really acted quite properly. Art. 15, The financial situation of the local bank for the month, together with the rate of interest and the cash in hand, shoulo be communicated to the regional bank on the 1st of every month. , Art. 16. Each year a copy of the official proceedings of the ordinary assembly of the local bank is communicated to the regional ba before the 31st of March. This official report should contain the balance sheet of the society on the 31st of December preceding, with statement of its reserve funds. FBANOB. 699 DEPOSIT OF PAPERS. 1. Two copies of the present official minute must be deposited with the clerk of the magistrate in the canton, who shall be required to furnish two receipts on stamped paper of 60 centimes each. 2. Two other copies of the said official report shall be sent to the regional bank with one of the certificates of receipt given by the clerk of the magistrate, a copy of the attendance sheet of the meeting, and two copies of the rules as they now stand after the alterations which have been made in them. All these papers, with the exception of the clerk's receipt, shall be signed and certified by the president and secretary. The present minute, copied on the register of rules of the society and signed by the president and his assistants, has been read in the presence of the general assembly, which certifies its approval of the entire contents. , Secretary. (Signed) , President. RULES OF THE REGIONAL BANK OF COOPERATIVE AGRICULTURAL CREDIT OF THE GIRONDE." FOUNDATION AND CONSTITUTION OF BANE. Abticlb 1. On December 2, 1901, a regional bank of cooperative agricultural credit, under the name of "Regional Bank of Cooperative Credit of the Gironde," was founded by members of the local banks of the agricultural professional syndicates, and by individual members of these syndicates living within the district chosen who have been, or may be, prepared to observe these rules. This society is registered with variable capital under the law of November 5, 1894, and the law of March 31, 1899. Art. 2. The territory covered by this act is the department of the Gironde. Art. 3. The headquarters of the society are at 27 Riie Bsprit-des-Loia, Bordeaux, and may be changed to any other situation in the same town on the simple resolution of the committee of management. Its duration is fixed at 50 years. Art. 4. The society shall only be considered founded after one-fourth of the subscribed capital has been paid up. Art. 5. Before any business is done, the rules, with a complete list of directors, or other officials, and the members, giving their names, professions, residences, and the sum of each subscription, must be deposited, in duplicate, in the office of the magistrate of the canton in which the regional bank has its headquarters and in the ministry of agriculture. SOCLAL CAPrrAL. Art. 6. The foundation capital is fixed at the sum of 50,000 francs. It is divided into shares of 50 francs of equal value. One-fourth must be paid up at the moment of subscription. Art. 7. The society's capital may be increased by resolution of the general assembly; each of these increases must not exceed 200,000 francs; The capital may also be increased by means of admission of new members and the subscription of new shares made by the members, up to a sum of 100,000 francs on a ruling of the committee of management; and above this sum on the ruling of the general assembly. The capital must not be reduced below the sum which serves as a basis for the allocation of the advances granted to these banks by the State, nor below the amoimt of the foundation capital. Art. 8. Two-thirds of the shares must be reserved until the time when the shares are redivided, preferably for local cooperative credit societies within the territorial district of the regional bank. In case of increase in capital, the same ruling holds good. Art. 9. The interest on the shares is fixed for the first year at 4 per cent, and should be annually fixed by the general assembly, pro- vided that it never exceeds 5 per cent on the paid-up capital. Art. 10. The shares are nominal. Property in these shares is established by an inscription in a special register and by the return of a certificate signed by two directors stating the number of shares held and carrying a reference number. Giving up of shares is carried out by a declaration of the transfer entered on the special register and signed by the member giving up the shares and by the member receiving them, or by their representative and a person appointed by the committee of management. Art. 11. The paying off of shares can only be executed by the authority of the general assembly. MEMBERS. Art. 12. All members are liable up to the sum of the amount of shares subscribed for by them. New members may be admitted by the committee of management. Art. 13. Members who resign or are expelled may not be freed from their undertakings until after the close of all business undertak ngs made by the society previous to their withdrawal. Art. 14. Members are expelled from the regional bank: 1. If they have not paid off their shares three months after the formal request for payment, which must be made to them by registered letter with their receipt form inclosed. 2. Who have been declared in the state of bankruptcy or judicial liquidation. Art. 15. In case of resignation, expulsion, or death, the members or their heirs have a right to repayment of their shares within the limits fixed by article 7 of these rules. This repayment can not be made until after the general assembly following such resignation, expul- sion, or death, and until such assembly has passed the accounts for the business year. They have no claim for anything except repay- ment of the sums actually paid up and any interest falling due to them. In case of the death of a member, his heirs appoint one of their number to represent him. Such representative must be agreed to by the committee of management. business and control. Art. 16. The regional bank may: (a) With the object of facilitating business operations affecting agriculture, discount all papers signed by members of the local bank in the district and indorsed by these banks. (b) Make advances to these societies in order to make up their proper capital. ^ I Headquarters at 27 Rue Esprlt-des-Lois, Bordeaux. 700 AGBICTTLTUBAL COOPERATION IN EUROPE. (e) Receive deposits on current accounts and issue bonds, provided the total amount shall not exceed three-fourths of the assets held by them. (d) Rediscount in part or in entirety any papers held by them. (e) Invest such sums as are temporarily idle. (/) Supervise the proceedings of local credit banks with which they have business relations. COMMITTEE OF MANAGEMENT. Art. 17. The regional bank is directed by a committee of management, composed of 16 members at least and 30 membere at moat chosen by the general assembly. Art. 18. The committee names its president every year, also its vice president and secretary. The directors who are appointed for special business, the secretary, and the minor employees are the only officials who may be paid. Art. 19. The committee may delegate all or part of its powers to one director, to its officers, or to its secretary, in order to carry out the rulings of the general assembly and the committee of management. Art. 20. The officers are only liable to the extent of carrying out such orders as they receive. They do not undertake by reason of their acts any individual or collective liability for any of the undertakings of the society. The officers must be owners of two shares which should be inalienable and deposited with the bank as a security. Art. 21. The committee meets on all occasions of necessity and at least once a month. Rulings of the committee are made by a majority vote of the members present. In case of equality, the president has the casting vote. The committee may pass valid decisions when the number of the members present equals one-fourth of those holding office at the time. Art. 22. In case of the resignation or death of a member of the committee his place may be provisionally filled by the committee until the next general assembly, which must ratify this choice. The director so chosen finishes the term of the one whom he replaces; he is eligible for reelection. Art. 23. In case of the loss of one-fourth of the society's capital, the directors are bound to call a meeting of the general assembly of all shareholders. Art. 24. The committee is charged with the duty of investing the fund at its disposal in State secured stocks, treasury bonds, or other securities issued or guaranteed by the State; in shares of the Bank of France; in bonds of the departments, the communes, the Credit Foncier, or the French Railway Companies, which have a minimum interest guaranteed by the State. The funds at their disposal may also be deposited in the savings banks, in the Bank of France, or in such regional banks of the Credit Agricole as have received subsidies from the State. The committee gives orders as to the sale of the securities which it is necessary to realize in the interest of the workings of the bank. The committee can also deposit stocks and notes belonging to the regional bank, either with the Bank of France or with any other society, and have open in the regional bank on advance accounts the maximum credit which the deposit bank is willing to grant in proportion to the face value of the papers deposited. For this purpose it may authorize a transfer to order or on security, and receive the sums coming from this open credit in one or more installments, pay them back, and draw on them again, sign checks, receipts, and undertakings, and accept without restrictions all rules in use at the Bank of France or at the society which is giving the credit. These cash operations are intrusted to the president of the regional bank, and if he does not wish to undertake these duties, to one of the directors, who will account for the movements of the bank's funds at each meeting of the committee of management. Art. 25. The committee looks after the deposits in the bank, the issue of bonds, and the fixing of rates of discount and loans. It also fixes the maximum discount or credit to be given to the local banks. Art. 26. The books must be kept in conformity with the rules of the commercial code. The regional bank must submit to such control and supervision as is laid down by the ministry of agriculture. Art. 27. Every year during the first two weeks of Febriiary one of the directors or officials of the regional bank must deposit, in duplicate, with the clerk of the magistrate of the canton, together with a list of the members belonging to the regional bank at this date, a summary of the receipts and expenditures of the bank and also of the business carried on during the preceding year. Art. 28. All alterations made in the rules should be called to the attention of the ministry of agriculture. Art. 29. The committee calls the ordinary and extraordinary meetings of the general assembly, passes upon the admission of members, and examines the requests for expulsions and repayments which are submitted for the approval of the general assembly. The committee may place in the treasury all sums due to the regional bank on any account whatever and give receipts for such sums, may plead at law, do business, make compromises, enter into arbitrations, appoint and recall all directors, employees, and agents, fix their respective functions and their salaries, and generally decide upon and carry out all business which is within the scope of the society and which is not specially given over to the general assembly by the law or by-laws. Art. 30. Abstracts or copies of rules of the general assembly or the committee of management are to be signed by the president and the secretary. GENERAL ASSEMBLY. Art. 31. The general assembly is composed of all the shareholders and members who have been members for one month. When it u fully met, it represents the whole of the members. Its decisions are binding on all members, even those who are absent. Art. 32. The general assembly meets each year during February, and is presided over by the president of the committee of manage- ment. If not by him, by the eldest member. Two secretaries are chosen by the assembly. Its rulings are entered in a book of official reports signed by the president and the secretary. Rulings of the assembly are passed by a majority vote of the members present. In case of equality the president has the casting vote. Art. 33. Every member has a right to as many votes as he has shares, provided that he may not have more than 5 votes. He may be represented by another member through a written proxy. Art. 34. The circular calling together the general assembly must contain the order of the day and be sent to the parties interested at least a week before the meetiag. Art. 35. The general assembly, in order to pass valid resolutions, should be composed of a number of shareholders representing « least one-fourth of the subscribed capital. If this number does not assemble, a new meeting is called, and on this occasion its decuw are valid, whatever may be the amount of capital represented by the shareholders present. FEAKCE. 701 Art. 26. Extraordinary meetings of the general assembly are held particularly to discuss alterations of the rules or proposals for the dissolution of the society. The proceedings of these assemblies are not valid unless one-half the share capital is represented by the memberi present. Art. 37, The general assembly proceeds to the election and the renewal of one-third of the committee of management every year. The retiring members are chosen by lot, and all retiring members are eligible for reelection. Art. 38. The annual general assembly chooses two officers charged with the duty of making a report to the general assembly during the following year on the situation of the regional bank. Art. 39. At the end of the business year the general assembly fixes the interest on the shares and passes upon the question of expulsions orrepayment of shares. It fixes the value of these shares, provided that they must not exceed the amount of the paid-up sums. It passes upon the payments which are to be made out of .the reserve fund, discusses and approves the books of the society, and decide* upon increases in capital. inventory — PROMTS — RESERVE FUND. Art. 40. The society's year begins on the Ist of January and ends on the 31st of December. The first business year should begin on the date of the foimdation of the regional bank. On the 31st of December an inventory is drawn up. Art. 41. After paying oft general expenses, all interest, bonds issued, sums deposited on current accounts and shares, the profits, up to at least three-fourths of their amount, must be first directed to the building up of a reserve fund, unless such fund has reached at least one-half of the paid-up capital of the society. The balance, by decision of the general assembly, may be partly deposited in a special reserve fund with a view to paying off the advances of the State, and the surplus over and above these payments may be divided among the local banks in proportion to the com- missions levied on business done with them. Art. 42. If as a result of losses the capital of the society is reduced to three-fourths of its paid-up capital, the committee of manage- ment calls together the general assembly in order to determine whether the society shall be carried on or dissolved. Art. 43. In case of any dispute arising every shareholder must acknowledge Bordeaux as his judicial headquarters, and the difference of opinion will be passed upon by the Board of Trade of Bordeaux. Art. 44. The regional bank can not be dissolved by reason of the death, resignation, bankruptcy, excommunication, or other embar- rassment of a shareholder. It will continue to do business without impaired power as regards its other shareholders. Art. 45. In case of the dissolution of the regional bank the general assembly, by a majority vote, will appoint one or more receivers charged with the realization of the society's capital, which, after repaying the advances from the State and the debts of the society, may be either divided among the shareholders or turned over to some agricultiu-al object. SPECIMEN AGRICULTURAL WARRANT. {Face ol the vrarrant.] Agriculturai, Warrant.' CANTON of M. hereby states that he wishes to obtain from the agricultural bank of a credit of and as security for this credit, on the harvest of 19 , on a total of hectoliters, he offers a claim on. Special conditioru: 1st. Payments of sums advanced to be made at the head office at Bordeaux. 2nd. In default of payment, 5% interest will be charged from the date of maturity. 3rd. The holder of the warrant can certify himself of the existence of the products secured as often as he wishes to, and if they seem to be insufficiently looked after he can have a man appointed by the justice of the peace to take care of them; the resulting costs to be paid by a claim on the sale price. 4th. In case of judicial execution the holder of the war- rant can choose the secured products from among the best of their kind on the whole estate. 5th. The warrant shall be indivisible within the terms of articles 1222 and 1223 of the Civil Code. 6th. Within 24 hours, all sale of secured product must be brought to the notice of the first discounter, with statement of the day fixed for delivery, on penalty of immediate foreclosure. 7th. The discounter and the subsequent rediscounters are dispensed from giving the clerk the notice prescribed by article 10, section 3 of the law of April 30th, 1906. 8th. For all difficulties arising out of the execution of this warrant the court of jurisdiction is understood to be the mayor's office in the capital city of the Canton where the secured property is located. 9th. In case of expiration of the insurance before the date fixed for payment, it shall be renewed or prolonged at his own expense by the holder of the warrant with any company which he chooses. 10th. The issuer of the warrant expressly undertakes not to move his harvest as long as the warrant holds good without the consent of the first 1 The form of renewal of a warrant is essentially similar to this, but is printed on blue paper and varies in certain obvious details. 702 AGRICULTURAL COOPERATION IN EUROPE. discounter; and the holder of the warrant may oppose, by force if necessary, all removal of the harvest from the place of its production. 11th. The return of this warrant duly paid oft does not authorize the clerk to cancel his copy without the express authority of the regional bank, as this entry holds good for all loans which may subsequently be rediscounted by the said society on the whole or part of the samo property for a sum equal to or less than that of the said warrant. Declarations. — The borrower declares that he is ?^'^\ of the property where the secured products were raised, and that they are not burdened with any previous warrant Insurance. — ^The secured goods are declared insured against fire for the sum of francs until. the Co., Number Agency , dated of this policy, bearing No and dated , contracted for a period of by a policy with ., and by an extension Given at , Date. (Signed) Copy. — ^This warrant has been copied by the magistrate's clerk of Date , volume number. The harvest mentioned in the preceding warrant is already burdened with the following entries: Date, volume, number, and sum, if any. (Signed) , Cleric to the Magietrate. [Back of Bgrlcaltnral warrant.] The law provides a penalty of from 2 months to 2 years' impris- onment for: 1st, false declarations; 2nd, for delivery to a purchaser without previous payment or authorization; 3rd, the making out of a new warrant on the same harvest without previous notice given the new borrower. 5 cent stamp. Cancel with great care with same date as war- rant. TRANSFER. Good for transfer of the warrant upon the other side, to the order of the Agricultural Bank of Security for the sum of Value received Payable the th day of , 19 including interest. Place Date (Marked: Good for Signed.) Pay to the order of the Regional Bank of Cooperative Agricul- tural Credit of the Gironde with headquarters at 27 Rue Esprit- des-Lois, Bordeaux, value on account, in accordance with it! general rules. Place Signed on behalf of the officers. Date. Secretary of the local hank. SUMMARY OP SBCURrriES. hectolitres, or tuns of wine 19 vintage. hectolitres, or tuns of wine 19 vintage. hectolitres, or tims of wine 19 vintage. Valued at| francs per ton Francs. 60% of total value Francs. Sum advanced Francs. I, the undersigned, Name Christian name Profession Resident of FRAJJOB. 703 SPECIMEN REQUEST FOR CURRENT CREDIT ACCOUNT BY AN INDIVIDUAL. Request for Current Account. After having studied the conditions under which current accounts are operated by the Regional Bank of Cooperative Agricultural Credit of the Gironde, as presented hereafter, request the opening in my name of a current account, and I deposit for my first payment the sum of ,19- (Signature) The undersigned, secretary of the local bank of certifies that the above signature was made in his presence. (Signature) (This request must be drawn up in duplicate and the two copies sent to the regional bank with the first payment.) RULES GOVERNING A CURRENT ACCOUNT AT 3 PER CENT. 1. The current account is conducted imder the security of the Regional Bank of Cooperative Agricultural Credit of the Gironde. 2. The sums paid for the current account bear interest at the rate fixed by the committee of management, which will be 3 per cent until further notice. This interest is counted from the first day of the fortnight following the deposit or preceding the withdrawal. 3. All payments to the credit of the account in order to be valid and accepted as such by the regional bank must be certified by a receipt detached from the loose-leaf register of the regional bank. Receipts given by the local banks for funds received by them for deposit in the regional bank are good for 10 days only. Consequently, the depositor should receive within a week from making his deposit in a local bank a receipt from the regional bank, and, failing this, he should write for it. If he does not do this, his accoimt is liable to be reckoned only in accordance with the old entries on the books of the regional bank from the tenth day following his deposit, as his receipt then expires. 4. The current account must never show a deficit, but the holder of this account may pay in to its credit the amount of the papers which are being discounted for him by local banks and of which he has not the use at the time. 5. The interest is only made up at the end of the year, unless the holder of the account asks for an account of it in order that he may draw the cash within the course of the year. 6. The holder of current accounts may carry out payments in Bordeaux and in all of the districts where there are local banks affiliated with the Regional Bank of the Gironde by means of a receipt form taken from a memorandurn book. 7. Requests for payment must be made at least five days in advance if the payment is to be made at the office of a local bank. 8. The regional bank sends money by post to any holder of a current account who requests it to do so without any other deduction than the cost of postage. 9. Every local bank determines the mininium nimiber of shares for which the holder of a current account may subscribe, in order to entitle him to have an account opened through the medium of the local bank. 10. In case the rate of interest is to be reduced below 3 per cent, the decision of the committee of management wiU be communicated to the holders of accounts a fortnight before it goes into effect. 11. If, on account of a state of war, the regional bank is embarrassed in the execution of its duties, every holder of a current account may demand that his credit be guaranteed by means of a security (either a note, a draft, a warrant, or a State. bond) to his order, the regional bank being held responsible for this security. 12. The maximum amount of deposits carried on current account must not exceed three-fourths of the negotiable assets held by the regional bank. (Signed) , President of the Regional Bank. , Acting Director. SPECIMEN REQUEST FOR A SPECIAL CREDIT ACCOUNT. LOANS ON SPECIAL ACCOUNT. We, the undersigned, — , being husband and wife, the wife being empowered to sign with her husband,- living together at , hereby declare that we require from the Regional Bank of Cooperative Agricultural Credit of the Gironde, through the local bank affiliated with this regional bank, called the "Agricultural Bank of ," a loan of — •, to be charged against a special account, as provided for in the decree of December 31, 1910. We xmdertake, collectively, to repay this sum, or, failing that, the total amount of what has been paid to us, by the 1st of March, 1912. Article 1. In case at that date our wine of the vintage of 1911 has not been sold, we shall have the privilege of waiting for this sale by signing an agricultural warrant binding on the holder of this vintage, such warrant to be negotiated by the local bank on its ordinary terms. Art. 2. But if after the sale a quarter of the vintage of 1911 is not enough to pay off the sum of our loan, we shall be allowed the privilege of only paying oft a sum equivalent to this quarter, and the rest of our debt shall be carried on to the 1st of March, 1913. 704 AGKIOULTTJEAL OOOPEBATIOW IN EUBOPE. Art. 3. On this last date, again, if our vintage of 1912 has not been sold we shall give a new warrant against the vintage of 1912, and if after this sale a quarter of the proceeds is not suflScient to pay off the balance of our loan, a new delay of a year will be allowed to us for the balance over and above this quarter paid. But on the 1st of March, 1914, at the latest, this debt must be completely paid off whatever circumstances may arise. Art. 4. In case of the sale or gift of even part of our property, we shall lose the profits of this delay; the same holds good incase either of us becomes a retailer. Art. 5. By our loan we bind our vintage, and we undertake jointly not to sell this without freeing ourselves from this loan, on penalty of immediate foreclosure, unless the regional bank, after being advised of the sale, gives its acquiescence to a delay, granted in accord- ance with articles 1, 2, and 3. Art. 6. We may pay oft our debt in advance, in which case the 3 per cent interest collected in advance will be restored to us for the time which the loan still had to run. Art. 7. The payment of the loan will be acknowledged b receipts signed by the husband alone, the wife hereby giving hirn authority to receive all payments on the loan. Art. 8. Interest at 3 per cent, reckoned until March, 1912, shall be collected on our payments; and after this date, imtil March 1, 1913, interest at per cent ^ will be calculated for one year on the remainder due and will be paid in advance. Art. 9. We admit that our loan must be reduced in proportion to the funds at the disposal of the regional bank, and that the cash may be sent in form of a quittance against a tradesman or mortgage debtor named by us. Art. 10. Collective liability. — We declare ourselves to be collectively liable, with all other borrowers admitted by the regional bank to the advantage of a loan on special account (as provided in the law quoted), for the repayment of the sums the loaned under this act, and that up to the time when the said special account is completely cleared off, without any question as to whether the capital account of the regional bank may have increased four or five fold. But it is understood that this collective liability of the borrower will not be called upon except in the case when the amount of the debts not paid up exceeds 330,000 francs, and only for the amount owing in excess of this sum. We allow the regional bank to use its discretion in the choice of persons to whom it makes loans, and we undertake to accept its decision in this matter. We give to this document the character of a formal certificate, and the regional bank, in order to enforce its claim of unpaid debts has only to present a foreclosure warrant, which can not be executed until March 1, 1914. Art. 11. The present undertaking will not be liberated until after the special account is paid oft. Any payment which we may make shall be certified by receipts from the regional bank on leaves torn from its memorandum book. Art. 12. All our payments shall take place at Bordeaux, at the headquarters of the regional bank, either at 27 Rue Esprit-deB-Lois, or at its new office, if it changes. This place of payment carries with it the place of jurisdiction, and all legal actions must be executed by the proper magistrate in the district in which the headquarters of the society are situated. Given at , the 19 — . (Husband and wife must both write: "Good for a loan on the above-stated conditions," and sogn.) The local credit bank of is security for the above-mentioned loan. At , the . — , The President. , The Secretary. SPECIMEN REQUEST FOR A LONG-TIME LOAN.^ M. Number - Sum to be paid each year to pay off a loan of 1 ,000 francs at I per cent. Length of loan. 5 years. 6 years. 7 years. 8 years. 9 years. 10 years. 11 years. 12 years, 13 years. 14 years. 15 years. 212—45839 178—62581 154—51195 136—50980 122—51544 111—32653 102—17794 94—55960 88—11835 82-60197 77-82H7 To the president of the Agricultural Bank of I. method of repayment. I, the undersigned, -, husband of , beg you to be good enough to lend me — equal annual payments of francs, one to be made on - following ways: Either by — ments of francs, payable each year on the date of stallment to be paid on . II. JUSTIFICATION FOR THE REQUEST. This request is justified by the following circumstances: ■ francs, to be repayable in one of the - at the end of each year or by install- -, with interest at 2 per cent on the amount remaining due, the first in- in. DESIGNATION OF THE PROPERTIES TO BE MORTGAGED. The following properties are offered as security for this loan: (This description must include, besides all the usual statements, a very strict account of the description of the property on the land registry and all of the gross revenue on each part of it, and also the amount of crops and the nature of them to be accepted each part of the property.) 1 The amount of percentage was obliterated in the original document, and can not be verified. 2 Mazimum, 8,000 francs. FEANCB. 705 IV. SBTTLKMBNT OF THE PEOPBRTT. V. INSUBANCB AOAIMST FIRE AND DEATH OP LIVE STOCK. VI. DECLARATIONS. The undersigned declares: FiiBt. That he is married to Mme. , who is his (first, second, etc., wife), who has given her consent to undertake col- lective liability for the payment of the mortgage if the contract for loan has been made. Second. That their marriage waa preceded by a certificate, drawn up by M. , lawyer of , accepting the jurisdiction of . Third. That neither he nor his wife are burdened with any trusts. Fourth. That the properties mentioned above are not burdened with any mortgage other than those here mentioned. Kfth. That he has not given anyone any claim against these properties, and that he will not allow himself to do so in the future; that he has no intention of tying up the property by an entail, and that if he should change his mind and do this, the loan shall become immediately repayable. , Sixth. That the taxes levied on this property amount for the present year to francs. Seventh. That the gross revenue from the property, taking into accotmt the improvement whidh he hopes to make from the funds obtained from this loan, should amount to francs, and that he has a further income derived from work done for other people which amounts to francs, the total being francs. Against which must be set: First. Taxes, frangs. Second. The annual amortization of the debt, about francs. Third. Expenses of cultivation, francs. Foiuth. Personal needs of himself and family, francs. Total, francs, which appears to leave him a net profit of francs. (Signed) (Dated) RESOLUTION OP THE COMMITTEE OP MANAGEMENT. ' The meeting of the committee of management of the agricultural bank of on th, , 19 . Present, Messrs. The committee examined the preceding demand, and submits that, as the character of the person making the demand is excellent and he is accounted a good worker and pimctual in the carrying out of his imdertakingB, therefore the value of the property offered as security may be estimated in cash, on the basis of the last sale made in the district, and taking everything into consideration, at at least francs. The committee by a majority of votes decided to authorize the loan and request the regional bank to undertake the realiza- tion of it on the security of the local society. (Signed) , President. , Secretary. SPECIMEN REQUEST FOR SPECIAL LOANS TO WINE GROWERS. [Interest at 3 per cent; maximum of loans, 8,000 francs.] I, the undersigned (name. Christian name, etc.), , having children, residing at , married to under the jurisdiction of the commtmity or of the family of , request a loan to be granted me on special account as provided by law of the 31st of December, 1910. To justify my claim I make the following declaration (which must be strictly accurate under penalty of the demand being canceled): My vintages in red and white wine, as appears from the declaration made by me to the offices of the mayors in the respective districts, have been: In 1910, tuns, which I sold for francs. , In 1909, — tuns, which I sold for francs. In 1908, tuns, which I sold for francs. The deficit in 1910 below my regular income put me in a great state of embarrassment as regards carrying out the vintage of 1911. In fact, my debts on mortgages or the purchase price of property amount to a total of francs. All the lands possessed by my wife and myself cover a total area of hectares, spread over the communes of — ■ ; of those hectares are planted in wines. The total value of this property being hardly more than francs, it would be difficult, or at any rate very costly, for me to find means of borrowing the money which is absolutely necessary for me, both in order to pay off the interest on my mortgage debts and allow me to face the needs of life and my farm, as shown by the following table: First. Interest which is due immediately to my mortgage creditors, francs. 14174°— S. Doc. 214, 63-1 45 706 AGBICULTtTRAL COOPEEATIOSr IN EUROPE, Second. Amounts to be paid to small tradesmen, such as the baker, green grocer, and butcher, both for accounts now due and those to come due on the Ist of January, 1912, francs. Third. Purchaaes to be made of materials necessary for the growing of grapes, salaries to agricultural laborers, and daily expenses francs. Total, francs. I will free myself from my obligations on the 1st of March, 1912, either by a cash payment or by signing an agricultural warrant bind- ing on my vintage of 1911. In case I pay ofi by means of a warrant, this warrant shall be negotiated by the local bank to which I belong at its ordinary rate of interest. But if the sale of one-fourth of my vintage in 1911 is not sufficient to pay off my loan, I shall be allowed only to pay off an amoimt equivalent to one-fourth of this loan and the remainder of my debt will be carried on to the 1st of March, 1913. On this date the same privilege may be granted for another year, but the debt must be completely paid up by the 1st of March, 1914 at the latest, whatever may happen. The sale of the whole or even a part of my property will make me liable to lose all privileges for the term granted. I bind my future harvests as security for my loans, and hereby undertake not to sell them without freeing myself from this loan, and that on penalty of immediate foreclosure, unless the regional bank shall have already consented to an alteration of the terms. I have been advised in advance, first, that the loan can not be granted to me, if I am married, without the joint undertaking of my wife; secondly, that I must undertake collective liability, together with all borrowers from the Regional Bank of the Gironde who may be admitted like me to the privilege of a loan on ' 'special account, " to repay to the State all sums which may be owing on this special account when it is cleared off in accordance with the terms of the law quoted above.' As I am not already a member of any local bank, I request to be admitted to tiiat of . I will take a share of 20 francs in it as soon as I recrave the first installment from the loan hereby requested. (Signed) Favorably passed upon by the local bank of - (Dated) ■ -, President. SPECIMEN MEMORANDA ADDRESSED TO REGIONAL BANK BY A LOCAL BANK. Agkicultural Bank of . request foe cash — dispatch of papers. The accountant-secretary of the local agricultural' bank of Requests the Regional Cooperative Credit Bank of the Gironde at 27 Esprit-des-Lois at Bordeaux to send him in such way that it will reach him by. the sum of francs. At the same time he is dispatching various papers as stated on the back of this note, which are to be carried to the credit of hk society, which society, on the other hand, is to be debited with the interest until the date of repayment. Signed. Dated. N. B. — Please do not count on receiving the money until 5 days after this request is posted New Loans. No. of memorandum. At the local bank At the regional bank. This memorandum should be made in duplicate, one copy to be kept in the archives of the local bank. Memorandum of assets addressed to the Regional Bank of the Gironde the — 19- • • WAEEANTS. NOTES. No. of Name of debtor. Amount. Datfi when due. Gen. information as to debtor's property— ap- proximately. Acres, Value. Mortgage. No. of order. Name of debtor. Amount. Date when due. Name of security. Gen. information as to debtor's' property-ap- proximately. Acres. Val. Mortgage. _^ . N. B. — Information as to the solvency of the debtor is naturally liable to error, but nevertheless such information must be given when the member makes a new loan. Only renewals are free from this obligation. The condition of a member's affairs may change considerably from one year to another. 1 As the sum of 330,000 francs has been deposited with the regional bank In security for " special loans " to vine growers, the collective liability so spoken of wlU '"' come Into play until the loans ol the special account amount to more than 330,000 francs. JPBANCE. General iNSTftucTldNS. 707 DATE OF PAYiyiENT. All papers must be made payable on one of the two following dates, never on any other, namely, the first and fifteenth of the month. At the time when they are sent to the regional bank they must not have more than 105 days to run. Renewals must not be made for more than 90 days. SECtJEITIES. We beg our correspondents to let us have the papers at the same time they request the cash. They will thus avoid the expense and trouble of sending them subsequently. KENEWAliS. In the case where a security is not going to be paid oft when it falls due, the renewal should arrive at the regional bank at least 48 hours in advance. INTEREST. For warrants and demand notes the interest will be calculated at the end of the year at a rate of interest which may vary, but which is, asarule, made at Si%. This interest will be i% for papers remaining unsecured at the end of the month for the following month. So that local banks have a great interest in renewing regularly. The Bank of France also charges 4^ on all unsecured advances, while it charges only 3% for discount papers. For drafts, on the other hand, the interest must be calculated on the memorandutn according to the number of days remaining to run before maturity. WARRANTS AND SBCTJBITY ON NOTES. Loans on warrants are, as a general rule, made by means of an advance up to 50^ of the value of the security pledged. Loans on notes should not be granted for sums in excess of 1,000 francs, except in exceptional cases, and they must be secured by another signature. In exceptional cases, where the local bank does not require a personal security, it must send to the regional bank the form called "Request for discount,'' carefully filled in and signed by the husband and wife, showing the reasons why this decision was made. It should also be signed by the president and secretary of the bank. SIGNATURE OF WIVES. The married borrowers must furnish a joint undertaking on the part of their wives up to the total amount of the sum borrowed unless they are separated. This undertaking is made on the form called "Request for discount," which avoids the necessity for a repetition of the wife's signature in case of renewal. The wife's signatiure on notes does not, in any way, take the place of a personal security. No loan should ever be made to a man if his wife will not sign with him, even if he is a millionaire. CANCELLATION OF STAMPS. If a stamp is badly cancelled the Bank of France rejects it. A model for the cancellation of stamp and signature is given. STATEMENT OS MORTGAGE. Every borrower must make a statement as to how he stands with regard to mortgages. The lawyers require him to give not only a declaration, but also a certified statement from the commissioner, and their costs are infinitely greater than ours. As for borrowers who do not dare fill in the "Request for discount," giving detailed information as to their situation, let them go elsewhere; we do not require their patronage. No. of memorandum. This memorandum should be made in duplicate, one copy to be kept in the archives of the local bank. At the local bank At the regional bank ... Memorandum of drafts {checks or papers originating outside of Bordeaux) presented to the regional hank of the Gironde, ih, ,19 , by the rural banh of No. Name of person drawn upon. Place of payment. Amount. No. days to run. , Interest at 3i%. Commissions. Postal expenses. Total costs of negotiation. The rural bank of asks that on discount of the above papers it shall be forwarded by post the sum of francs. 708 AGBICULTURAL COOPERATION IN EUEOPE. TABLES AND EXTRACT FROM REPORT OF ANNUAL GENERAL MEETING OF REGIONAL BANK, FEBRUARY, 1913. GENERAL STATEMENT. DECEMBER 31, 1912. ACTIVE. Francs. Cash in hand 7, 423. 85 Advances to locals 6, 400. 00 Furniture 1. 00 Lawsuits 14,350.00 Securities held 2, 603, 366. 70 Bonds deposited in the Bank of France 513, 700. 65 Securities to be recovered 1,040. 00 Long-time loans 328, 095. 29 Special loans, first series 633, 265. 00 Special loans, second series 11, 730. 00 Cash owing from Bank of France 115, 254. 58 Cash owing from locals 16, 265. 40 Interest not due yet 2, 406. 75 Security deposits 31, 524. 00 Central Syndicate of Vine Growers 15, 000. 00 Advance withdrawals 39, 600. 00 Shares of society ' Interest due to members Deposits on current account Advances from the State (law of 1899) 2, Advances from the State (law of 1910) Reserve fund Liquidation of special loans Long-time account Officials Secured deposits 1 Profits for 1912 931, 24, 147, 524, 343, 145, 125, 1, 1, 30, 63, Francs. 450.00 704.85 915.30 700. 00 139.35 474. 56 977.90 000. 00 200.00 624. 00 237.26 4, 339, 423. 22 Profit and loss account. 4,339,423.22 Francs. To discount, payment to local banks for losses made in 1911 10, no. 50 To reserve fund, profits 1911 34. 272. 72 To cash fund, by error of 9th of April 100. 00 To interest on shares at 4 per cent, 1912 23, 729. 25 lo current accounts, interest at 3 per cent, 1912 4, 308. 95 To general expenses: A. Stamps and taxes 473. 40 B. Rent, insurance, etc 739. 75 C. Light, heat, etc 219. 70 D. Staff 11,997.80 E. Lawyersfees 282.10 F. Federation, travehng, propaganda, congress, banquet 1, 757. 20 G. Office 4, 321. 10 H. Furniture 119. 00 I. Verification of papers 619. 50 Balance 63, 237. 26 156, 288. 23 CREDITOE. Francs. Balance, brought forward 43, 959. 37 Cash, cash sent from Rigeade .' ■ 60. 00 Cash, error repaired 100. 00 Various securities, profit on sale of 5,550 francs at 3 per cent 3, 067. 75 Profit on sale of 7,050 francs at 3 per cent 1, 316. 85 Bank of France, exchange 1. 60 Interest on long-term loans 3, 320. 34 Interest on special loans 9, 092. 15 Revenue from various securities 19, 747. 68 Interest and discount 75,622.47 156,288.23 LONG-TIME LOANS. The results of long-time loans have been excellent. Only three debtors are behind-hand with the payment of their installments. One of these is bankrupt and we would rather that his prosecution be carried out by another creditor than by us. Another has not been as successful as could have been wished. He has just been trying to sell some properties in order to free himself from his embarassment. He is very much overloaded by the purchase of a Ufe annuity. The third is M. Malecot, and we wish to say a few words to you about this gentlemen. He and his wife had nine children of whom eight are stiU living, five boys and three girls, and the oldest is only 16. These people bought a piece of waste land in the district of Bazadais without having any capital whatever. They were pointed out to us as people of great spirit and intelhgence and on this account we allowed them the advantage of our credit not only for a long time (for we are not afraid of losing the capital of the 8,000 francs lent on these terms), but also on short term for the purchase of cattle and of agricultural implements, without requiring the securities which are as a rule considered necessary. FEANCE. 709 The Ministry had recommended us to make some carefully chosen experiments in order to discover what results could be obtained by conscientious work backed by all the necessary capital. M. and Mme. Malecot represent the only experiment we have made along those lines, but we pushed it as far as possible. It can not be denied that i f they were to sell out now even on very favorable terms their total assets would not balance their debts. The fact is that, cultivating only wheat, they have passed through two years, during which they have never had more than one-half to two-thirds of the returns on which they might reasonably depend. Such a situation, so numerous, so fine, and so courageous a family deserve some special favors and the prefect of the Gironde was good enough at our request to ask the director of the Tobacco Industry to obtain for M. Malecot a large tobacco plantation. If he is allowed 60 ares, as with a little good-will he may be, this wUl assure the future of his household, unless everything goes against him. Whatever may come of it, we have said again and again to M. Malecot that we consider him as our prot6g6, and that he on his part must consider himself in this light; and in a visit made to him by our director durii^ July he welcomed us not as one would welcome a creditor, but as a pro- tector and friend. If we mention his name in this public report it is because all of his neighbors are perfectly famihar with the condition of affairs between him and the bank. Since the end of our last business year we have not made any more of these long-time loans. We think that a recent request which we made to the State wiU be well received. As soon as this has been effective we will advise all the local banks and will communicate to them any new rulings which we may find convenient to estabhsh. SPECIAL LOANS SECOND SERIES. Although we stiU have 507,287 francs outstanding on the special loans of the first series, it is obvious that we have in the deposit of 330,000 francs, made by the central syndicate of vine growers of the Gironde a security infinitely greater than the amount of any loans which we are likely to make on this account. By virtue of author- ity given us by the syndicate in May, 1912, we have made special loans on the second series to vine growers from the 1st of June onward, these loans being secured against the saviifgs which we shall make on the 330,000 francs. These loans are special in the sense that they are made only in favor of vine growers and are not subject to the necessity of a second signature. The total amount of such loans is now 135,800 francs. Of this figure there only remain due on the 31st of December, 1912, 11,730 francs; the greater part should be paid on the 1st of March, and the rest, namely, 4,200 francs, lent to two proprietors whose harvests were destroyed by hail and payable on the 1st of March, 1913, does not seem to offer any prospect of serious risk. LITIGATION. All legal cases which were running on the 31st of December, 1911, have been wiped off during the course of the year 1912. For various reasons we have been obliged to bring into court during 1912 various debts which can without doubt be recovered; but there remain three debts which we propose to write off as irrecoverable without further delay. Two of these are papers for 1,500 francs, representing loans made by the Bank of Podensac to brothers. These debtors, although their loans are not of long standing, have been made the object of several law- suits. Their properties have been burdened for several months with judgments, including mortgages, for sums very much in excess of their value. Here we find ourselves in the presence of one of those accidents of which even careful banks may sometimes be the victims. The third is a debt for 3,000 francs lent against a warrant by the Agricultural Bank of the Gironde. The debtor made away with the wine. He was summoned in the police court on the 7th of February, but could not be judged by reason of the number of cases in the court, and the case was adjourned to the 7th of March. ' He does not deserve any leniency and will be prosecuted with all severity, and we are fully determined to have him put in prison in addition to any fine which may be inflicted upon him. BANK OF ST. FOY. The liquidation of this bank is proceeding in due course, and only a few debts remain to be recovered. We still have to collect a debt of 21,448 francs 35 centimes from the family of the secretary, but it is secured by a perfectly safe mortgage, which can not be called in until the end of the year. 710 AQEICULTUEAL OOOPEBATION IN ETJEOPE. BOOKEEEFING. The misfortunes which have befallen the Bank of St. Foy during the last year have at least had this happy result — that they have given us an excuse for demanding from all the local banks a strict care in their book- keeping. Except for three or four banks which have not yet quite grasped the simplified mechanism by which this bookkeeping is governed, all secretaries keep their accounts with great regularity. The committee of management at its meeting on the 18th of November, 1912, decided to distribute premiums among the secretaries of local banks whose books are best kept. These premiums are of 100 francs, 75 francs, and 50 francs. The committee will proceed to distribute them at its next meeting. Candidates are invited to put in their claims, and they will be given notice of the meeting in order that they may be able to produce their books at it. In conclusion, we propose to set against the profits of the business year three-fourths of the losses made on the three loans we mentioned, provided always that we will not neglect any efforts to obtain payments of these loans, and if by some chance we succeed in this we wiU insert three-fourths of the sums obtained m our profit-and-loss account to our account. Our gross profits being 63,237.26 francs, by deducting this sum of 4,500 francs we have 58,737.26 francs to add to the reserve fund. The reserve was previously 145,474 francs; it is now, therefore, 204,211 francs. We give you, as usual, a table showing the progress in our business, and we can not do better than express the hope that this progress will continue in the future as it has in the past; we can not really reasonably enter- tain this hope, for it is manifest that we are approaching a point in our affairs when we can no longer expect to increase our business by more than a small amount, with ups and downs which will depend on an infinite variety of circumstances. Table shovdng progress. Description. Securities, discounted: Amount francs . Number do . . . Seciuities, rediscounted: Amount do. .. Number do. . . Cash do. -. Turnover do . . . Capital do. . . Advances from the State do . . . New notes and drafts do. . . New warrants do.. . Current accounts do. . . Reserve funds do... Interest paid on rediscounts do . . . Affiliated local banks do. . . 1902 101, 725 75 152, 589. 33 409, 392. 07 50, 000 41, 562 5,000 100, 000 1903 297, 855 124 5,000 3 243, 397. 96 783, 904. 11 55, 800 173, 340 10, 000 225, 000 2, 748. 14 19.10 18 1904 1, 621, 630. 45 733 480, 828. 60 191 699, 214. 65 4,891,066.07 96, 400 246, 540 70, 000 620, 000 10,000 4, 453. 55 2, 748. 14 21 1905 2, 761, 982. 70 2,018 738, 891. 50 305 1, 363, 322. 50 9, 669, 802. 05 169, 800 639, 200 315, 000 820, 000 9,663.15 8, 689. 95 4, 453. 35 41 1906 4, 405, 199. 10 3,446 1,589,669.20 819 2, 087, 802. 95 15, 029, 994. 74 225, 300 729, 500 397, 290. 60 1, 385, 806 171,651.30 15,718.20 8, 689. 95 46 1907 6,115,493.65 5,063 2,324,811.40 1,343 2, 811, 518 20,825,834.13 311,100 1, 143, 848 418,189.30 1,692,884.85 287,067.70 32,088.05 13,529.65 47 Description. Securities, discounted: Amount francs. Number do.. . Securities, rediscounted; Amount do... Number do... Cash do... Turnover do... Capital do. . . Advances from the State dp. .. New notes and drafts do... New warrants do. . . Current accounts do... Reserve funds do... Interest paid on rediscounts do. . . Affiliated local banks do. .. Long time loans do... Special loans: First series do... Second series do. . . 1908 6, 756, 419. 06 5,685 1, 664, 508. 35 1,028 1, 823, 280. 35 20, 322, 340. 20 354, 150 1, 368, 460 794, 539 1, 220, 336. 15 202, 990. 45 51, 511. 09 7, 722. 46 56 1909 7, 739, 999. 55 6,226 1,332,477.75 878 1, 901, 722. 30 22, 809, 192. 64 417, 000 1, 697, 660 873, 890. 70 1,266,489.40 219, 217 80, 407. 74 6, 439. 10 56 1910 7, 531, 896. 80 6,320 183, 229. 80 491 2, 118, 873. 05 23, 017, 220. 50 517, 350 1, 655, 200 973, 104. 25 1, 321, 099. 30 346, 941. 80 111, 201. 84 407.40 67 123, 700 1911 8, 136, 306. 80 6,359 810, 015 282 4,993,729.45 32, 310, 108. 89 887, 000 2, 670, 700 795, 402. 10 1, 385, 706. 75 462, 830. 15 146, 474. 56 4,681.40 6l 347, 300 . 834,955 1912 8,726,251.45 6,729 343,605.30 205 3,835,723.36 31,962,726.87 931,460 2,867,839.35 864,019.60 1,423,604.30 476,275.16 204,211.82 2,829.05 59 328,095.29 .,.-507,287.10 135,800 PEAlSrGB. 711 CIRCULARS ADDRESSED BY REGIONAL TO LOCAL BANKS. CIRCULAR NO. 1, MAT, 1906. Promulgation of the law. — ^The new law on agricultural securities is now promulgated and in execution. Blarik forms. — We provide our secretaries of local banks with forms for drawing up security againat wine. Wlien the moment arrives we will furnish a form for security against cattle and other goods, such as grains, tobacco, etc. By reason of the facilities offered by the new law, we beg secretaries of local banks not to receive any demand notes unless they are signed by a neighbor, a relation, or a friend in the following terms: "Valid for security with dispensation from execution durmg one fortnight after the loan falls due." Warrants, on the other hand, do not need to be signed by a security except in the case where there is some suspicion as to the solvency of the borrower. All new loans or renewals, either by warrant or simple paper, must be backed by the wife on the back of the special form which is called "demand for cash." For having neglected this preliminary measure of pre- caution, one of our banks was for some time in fear that it had lost 5,000 francs, a sum which had been lent on warrant to a landholder who had sold the property which was pledged and had been left by his wife. The drawing up of a warrant. — To execute a warrant there is nothing to be done except to fill in one of our forms. But the side of the warrant and that part in the middle of the page which reads as follows: "To sum up : hectoliters or tuns of wine , 190 . , , etc.," must be written in red ink in very well-formed handwriting. We beg those of our secretaries whose handwriting is bad to abstain from filling in these two parts of the warrants. We will write them ourselves at the regional bank. We append a model to each warrant sent out. In every warrant it is well to state the place named by the borrower as the situation of his property. Insurance. — All goods secured on warrant must be insured for a sum at least equal to the value of the share on which security is taken and for a time at least as long as the period for which the loan is granted. This is an absolutely unbreakable rule. When the borrower does not fulfill these conditions, steps must be taken to cause him to do so. The practice of insurance companies does not accord well with the requirements of law. We have made polite approaches to them but without noticeable results. To avoid delay and unending discussions, we beg our secretaries to make all necessary insurance on objects secured with them at the old insurance society in Calvados, of which we are the general agent. A special note to this effect accompanies the proposal for in- surance which we will send them shortly. Stamps. — The warrants must be stamped with a 5-centime stamp, as also must the paper. These stamps must be canceled with the greatest possible care. A warrant for 1,700 francs should be stamped with a stamp of 50 centimes and with another stamp of 35 centimes. Each of them must be canceled separately. When there is occasion to put several stamps on a paper, it will be a good thing to affix one on the left-hand side and the other on the right hand at the bottom of the page in order to avoid a cancellation running across the two, which would not be adequate. Declaration. — ^When the harvest has already been given as security, this fact must be declared in accordance with the pattern furnished. Memoranda. — That part of our memoranda bearing on insurance ceases to have any object, but, as in the past, it is necessary to indicate on the memoranda the statement of the fortune of every borrower, and as well as this to furnish this statement on the demand for cash. Tariff. — You must collect, as well as for the interest and for the stamps, on every new warrant one-tenth of 1 per cent as commission for the regular officer and 30 centimes for correspondence. These claims are not due on renewals. Copies. — Secretaries living in the capital of a canton are requested to have all new warrants (but not renewals) copied by the clerk of the magistrate. Those who do not live in the capital are dispensed from this formality. We fulfill this formality directly, but we debit the bank with one-tenth of 1 per cent commis- sion for the clerk and 30 centimes for correspondence. Drafts. — In the future we will discount all drafts drawn by landholders on their tenants. The following tariff will be applied: (1) For towns in which there are banks (the list of these may be found in certain calendars), 3i per cent interest on the exact number of days to run, with a minimum of 25 centimes on each draft. (2) Towns where there are no banks, interest at 3i per cent on the number of days to run, increased by 15 days, together with the following commissions: 712 AGEIOTJLTtJBAL COOFEEAHON IN E0BOPB. In the neighborhood of Paris, four- tenths per cent, minimum 60 centimes; subdivisions and capitals of cantons, five- tenths per cent, minimum 50 centimes; other places, six- tenths per cent, minimum 65 centimes. In certain rare cases postage wiU be charged. This tariff will be that charged to local banks, who wiU establish their own tariff as seems best to them. Memoranda of interest. — ^We keep at the disposition of the local banks memoranda which are intended to show the payments of interest. This ought always to be mentioned on the paper in the following manner: "Payment of interest for the business year of 19 — at 4 per cent francs." CIRCULAR NO. 2, JUNE, 1906. Demand for advance. — The regional bank, having to make a new demand to the State for an advance before the 12th of June, 1906, at the latest, seeing that it has to prepare the necessary paper demanded by the Min- istry, begs the local banks to be good enough to send it by the 10th of June at the latest: (1) Subscriptions for aU shares which may have been collected and not paid in to the regional bank; (2) AU renewed securities which may now be out on suffrance. Form for papers of security and drafts. — We shall shortly provide the local banks with forms intended for the drawing up of order papers and drafts. These papers must be stamped in the same way as correspondence. We beg our secretaries not to use any other paper from the day when they receive these new forms, in order to make our classification more easy. CIRCULAR NO. 3, JULY, 1906. Material forwarded. — We are sending to the local banks to-day blank forms for the following: (1) For drafts. As the majority of banks do not discount drafts, we send only one specimen. On request we wiU send the desired number. (2) Demand notes for bachelors. (3) Demand notes for married people. We recommend for preference that the bachelor demand notes should be used and the wife should sign a demand for cash once and for aU. (4) Agricultural warrants. The previous warrants should be destroyed, as the paper tears and some of the spaces are not properly arranged. Finally, we send a copy of the law govemmg agricultural warrants, together with some envelopes and insurance policies. Drafts. — Drafts should be sent to the regional bank at least a fortnight before maturity. Advantage of warrants. — The warrants present the following great advantages over the demand notes: (1) There is no need to obtain a judgment in order to carry out an execution on the borrower's property; (2) The borrower is much more easily pinned down than in the case of demand notes. Demand notes signed by security. — In the future all notes must bear the signature of a seciu-ity. We can not risk losses; apart from all other inconveniences we should be the laughing stock of the public. An experi- ence has shown that to make cash loans on one signature is simply to tempt Providence. But there is no reason why two borrowers who have confidence in one another should not sign mutually for one another's loans. In exceptional cases, when the local bank thinks that it may legitimately make a loan without security, we beg that it wiU make a brief report on the financial condition of the borrower. Let us not be afraid of having too few creditors, but rather try and avoid having doubtful ones. Policies. — Entries on warrants relative to policies should be fully written out. The insurance should be for at least as long a time as the loan runs for, and the amount insured should be at least equal to the amount of the loan. Failing these necessary conditions, no entry should be made; we will fill in the form at the office and carry all our own insurance. Wax. — It is a good thing to employ good wax; wax which is too cheap hardens and does not take effect on smooth paper. Drawing up of warrants. — If there are any words scratched out, they must be ratified. No scratching or surcharging must be done. If any mistakes are made, a new form must be used. The quantity of wine given on the warrant should represent a round number of barrels and a round sum of francs per barrel. A form which speaks of 101 hectoliters valued at 1,100 francs is bad, for this corresponds to 11.22 tuns valued at 98.019 francs per tun, which is ridiculous. On the other hand, an entry of 99 hectoliters valued at 990 francs is good, for this represents 1 1 tuns with a value of 90 francs a tun. Which means to say that no warrant is drawn up for one-third or one-quarter of a barrel, and that a tun of wine is not valued a so many francs and a certain amount of centimes. This mistake is common enough, because people want to make a round sum of 100 francs for the value of the product given as security. FEANCE. 713 Warrants on various products. — ^We have established forms for securities on every kind of agricultural products, particularly for application to cattle. These kinds of securities may give place to the most unexpected difficulties. We will adjust the form of warrant at the regional bank as the secretary becomes familiar with the method of filling them in. We beg secretaries not to use ordinary stamped paper any longer. CIBCULAB NO. 6, JANUABY, 1907. In order to comply with the requirements of the ministry of agriculture, the Regional Bank of Coopera- tive Agricultural Credit of the Gironde finds itseK compelled to introduce the following important modifications into its rules, to which it calls the attention of the members and secretaries of the local banks: 1. Dating from the 15th of January, 1907, the regional bank will consider as due for payment at the date of their maturity — that is to say, on the 1st or 15th of each month — all securities which have not been renewed in good time, and no delayed renewals will be accepted in the future. When a debtor demands renewal, the new securities must be sent to the secretary of the local bank by the 10th or 25th, at latest, preceding the date of maturity, and the secretary himself must insure that they arrive at the regional bank two days before the loan falls due. Until they are covered either by renewal or by cash payment the regional bank will not part with securi- ties in future, but will be obhged to have them claimed by the legal officer. This method of business is that which is already adopted by other regional banks and is the only one which permits the necessary control over the operations of rural credit. The secretaries of local banks will use the forms with which they are already provided as counterfoils for securities sent back for renewal before the loan falls due. 2. Demands for loans for important sums are becoming more and more frequent, and the credit commit- tee, being desirous of preserving the balance between the capital stock and the loans made, has established a by-law fiixing the sum of share capital above which no loan will be granted. At the same time this by-law is only applicable to banks which are employing all their money — that is to say, have loans current at the moment exceeding five times the total of their subscribed shares in the regional bank. Insurance. — ^We repeat again that insurance on warrants should be made for a length of time at least equal to the length of the loan. Without further notice we shall insure at our office for three or four months, according to the circumstances, all securities whose insurance we find inadequate, and we shall charge up this insurance against the local bank. Insurance thus made in the dark often costs a greater sum than is necessary. For this reason we can not insist too strongly that insurance should receive the most careful attention from the secretaries of local banks. CIRCULAR NO. 7, NOV. 20, 1907. Rise in the rate of discount to 4 P^i" cent. — By a resolution passed on the 18th of November the committee of management of the regional bank has decided to raise to 4 per cent the discount rate on securities presented to it after the 21st of November. This rate wiU follow the fluctuations of the rate of the Bank of France without any resolution being' nec- essary, but local banks wiU be given notice of alteration. The regional bank commands the banks affiliated with it to raise the rate of interest on their loans at once to 5 per cent, unless it is already as high as this, and to keep it always at least 1 per cent above the rate at which they themselves have to pay. Reasons for this rise. — ^Financial unrest, which is disturbing the United States and having a reaction in France. The rate of the Bank of England is already 7 per cent, and the German rate has risen to 9 per cent. By the play of financial combinations which govern the economic relations of the whole world there seems some danger of all our cash passing into the hands of foreign countries. To obviate this danger, the Bank of France raised its discount rate, first, to 3^ per cent and, afterwards, to 4 per cent. The Regional Bank of Gironde, with 1,145,500 francs of money advanced by the State, could hardly claim to do better than the Bank of France can do with its 6,000,000,000 francs worth of bonds in circulation. On the other hand, as its business is constantly growing, it finds itself in the situation that the more loans it makes the more it loses. Would it be right, then, to limit its scope and decide that new loans would no longer be granted except in proportion to the receipts of the bank? The committee of management thought not. They thought it would be better that everybody should pay a higher rate than that some people should be refused service. At any rate, those lucky people who find themselves able to borrow cheaply from their neighbors may profit by it. They will find that they are not less heartily welcomed in the future by the agricultural credit banks. 714 AGBICULTUBAL COOPEEATIOlir IN BTTBOPE. This rise in the rate is only temporary; but still it may last for a long time by reason of the stringency of money on the m&rket of all the countries of the world. Renewed of uxirrants. — Nearly all the warrants on our books which are secured on wines of the vintage of 1906 are running for a year, which is the maximum length, for after they have been running niae months the Bank of France does not receive them any longer. We request the secretaries of local banks not to accept any more warrants on this harvest which have already had two renewals effected without very serious reason and we request them also to resecure those loans whose debtors can not pay them back on wines of the harvest of 1907, taking note in the quantities for which they give the warrants of the difference in quality; otherwise we shall be very much embarrassed when the debts fall due. There is reason to be very careful about the harvest of 1907, for many of the vines are subject to disease. After the end of March all of the wine must either be in barrels or half fermented or no renewals wiU be allowed. CIRCULAR NO. 9, JANUARY, 1908. Securities on demand notes. — Having regard to the representation of the local banks which only lend on warrants or notes when they are signed by securities, the regional bank wUl not in the future accept demand notes unless they are signed by securities. It goes without saying that if the wives of the principal debtors are obliged, as has been the case in the past, to undertake joint liability with their husbands, their signatm-e can not in any case be considered as sufficient security. But all notes received before the 15th of July without security must be paid back at the latest by the 1st of May, unless security is furnished at the date of renewal. This measure, although it may be annoying, is put on as the result of observation of the fact that all banks which are accustomed to make loans on one signature invariably go bankrupt at the end of 10 or 15 years, and we do not wish this to be the fate of the credit agricole. There are only two alternatives : Either the note presented to the regional bank for discoxmt is signed by a person whose solvency is not open to the shadow of a doubt, in which case there will always be found amoi^ the committee of management some high-minded and generous man who will answer for the loan, or else the solvency of the debtor is the subject of a certain amount of anxiety, and in that case we would not want his paper. Security may also be jointly furnished by separate signature of the three members of the society who are on the committee of management for all loans of the society; in this case, we will supply a special form. But we prefer individual security for each transaction, as it leaves less room for unexpected catastrophes. Interest. — As the Bank of France reduced its rate to 3^ per cent, interest wUl only be reckoned at this reduced rate after the 1st of January, 1908. New method of presenting stock. — By reason of the modifications which the regional bank has introduced into its account keeping since the 1st of January, it is now unnecessary to enter on the memorandum the cal- culation of interest. This is not true of drafts, on which subject nothing has been changed. Some of the correspondents confuse drafts with notes. Notes are securities given for cash payments, which, on maturity, we return to the local banks in order that they may be held for their cash balance. Drafts are securities drawn for the purchase of goods against buyers, who must pay them when they fall due on penalty of legal procedure against them. The recovery of money is made outside the local bank, which is the reason why these drafts have to be drawn up in a different manner. We shall shortly furnish to every local bank the sum of its account, and the statement of its imdertakings with us on December 31 , 1907. Drafts will not be shown on this statement. The amount of the account added to the total of the undertakings, or deducted from it, will show the point from which interest wiU be calculated for 1908 on the whole amount for the whole year. During the course of the business year aU moneys sent to a local bank or received from it wiU bear interest, the balance of which wiU be placed either to its credit or to its debit on the 31st of December, 1908. In other ways the local banks must continue to keep their own accounts as seems best to them. But it is most important that they should forward receipts for money received to the regional bank immediately; failing to do so, they wiU lose the interest due them. When the money sent is intended to buy shares, this fact must be stated. Anmial audit. — (1) We request local banks to retm-n to us before the 1st of February, after having filled it in, an account of their annual audit. (2) The list of their members who entered during the year 1907. (3) On the back of the same sheet a list of those retiring in the course of the same year. (4) The names of the members of the committee of management, with the statement of their position, such as president, vice president, etc. FRANCE. 715 CIBCULAB NO. 10, MAY 4, 1908. By a resolution of this date, the committee of management made the following decision: Loans on notes with single signature. — ^The regional bank wiU not accept any new loans on single signature, except in the following manner: AbticIjB I. All demands for discount shall be signed by the borrower and his wife, if he is married. This demand must be filled in with the greatest possible care on penalty of rejection of loan. Art. II. It should be addressed to the regional bank together with (1) the note, (2) a certificate of mortgages from the commissioner of the district in which the property is situated. Art. III. The loan will not be renewed for more than one year from the date when it was first made. Art. IV. It must not exceed five times the sum of the subscriptions paid up by the borrower .during at least six months. Art. V. The property of the borrower must be free from mortgage, but he may be able, in spite of mortgages, on the signed request of the three officers, the president, the vice president, the secretary, to secure a loan so long as the sum of the mortgages does not reach one-tenth of the minimum value of the property. Art. VI. The official entry showing a purchase price which can not be demanded at law will not be considered as a mortgage. Art. VII. Outside of these limits no new notes will be accepted for discount at the regional bank, and all loans which fall due after October 15, 1908, must either be paid oft or secured by the signature of three persons, or covered by agricultural warrants.. Dispensation from these formalities. — Local banks which desire to continue as in the past to present notes with one signature only can do it on condition that at least three of their members, chosen from among the most solvent, sign an undertaking drawn up in the following terms : We, the undersigned (name, chidstian name, and residence) — — — , hereby declare that we hold ourselves personally and collectively liable for the payment, when it falls due, of the notes on single signature presented to the Regional Bank of Gironde by the Agricultural Credit Bank of , and indorsed in the name of this society by Mr. and that tip to a total sum of . This binding and collective undertaking will be effective as against the undersigned up to the total amount of the sums of the papers offered by the debtors when they fall due, not only in the interest of the regional bank and its rediscounting agents, but also in the interest of the local bank which is understood to be our first creditor. We give to this undertaking the value of a certificate of collective liability, and we here- with dispense all those who hold the notes of these borrowers from any necessity of taking or threatening legal action against them for nonpayment. Our liability is sufficiently established by the immediate presentation of the notes when they fall due. In order to avoid expense, the undersigned hereby declare that they accept in the most formal manner thejurisdiction of the Board of Trade of Bordeaux for all disputes or legal proceedings which may take place, and for this object they choose as their headquarters the mayor's house in Bordeaux. (Signed; — — — Given at (date) These signatures must be indorsed at the mayor's house. Note. — ^This undertaking is a copy of that which the Regional Bank of the Midi has had signed by nearly all of its members. It does not allow of any possible misunderstanding. The officers of the local banks who feel that they are quite'justified in granting the loan have nothing to do but to have this certificate properly drawn up on a stamped paper, with a 60-centime stamp, and nothing in the busi- ness of their own bank will he changed. CIRCULAR NO. 11, SEPT. 10, 1909. LETTER FROM THE DIRECTOR. Mt Dear Colleagues : As a result of the abuses which are conxmitted from titae to time, the ministry of agriculture has come to atta'ch great importance to the principle that local banks should never have an account owing to the regional bank without some form of security. It would be unreasonable for us to complain of this suggestion; it is obvious that the staff of the regional bank could very easily conceal any kind of misconduct on their part if they merely had to present for audit accounts which showed a balance effected by means of book debts owing from the local banks; and, on the other hand, the secretaries of local banks might be suspected of concealing from them sums which they were keeping in their own treasuries. Up to this time, when payments fell due, we have sent back to you the securities which were due for pay- ment without regard to whether or not they were paid. You have made good as weU as you possibly could, and we have had no reason to regret this method of procedure. Owing to the new but perfectly reasonable demand of the ministry, we can no longer proceed in this way; are obliged to keep the securities in our hands until they are either paid off or renewed; this will mean a great increase of work for everybody concerned. The good will which you show in the discharge- of your very difficult duties must have some limit, and we at the regional bank must endeavor to do aU that we can to lighten your difficult tasks. Some of you told us that there would not be much more work involved in preparing a big form than in preparing a small one, and asked that the regional bank should in the future have only one day for repayment, namely, the first day of each month. 716 AGEICULTITRAL COOPEEATION IN EUEOPE. Debtors must be informed that they must pay or renew their loans before the end of the month; on the last day of the month the local banks would send the renewed securities with a statement of those which were neither paid off nor renewed, and these would be kept at the regional bank, which would advise the debtors that they must make good on them within 48 hours under penalty of foreclosure. This method of procedure, although rather embarrassing for the regional bank, where it wiU be difficult to fiU in the memorandum of withdrawal in less than three days, nevertheless seems best to us and we shall put it into practice. Consequently, we beg you in the future not to accept any notes or warrants to fall due on any date except the 1st day of each month. On the other hand, no change wiU be made as regards drafts. On the last day of the month you wiU send us the securities which faU due, with a statement of those which have been neither paid off nor renewed, and for this purpose you will make use of printed forms, which we shall forward to you without delay. The chief inspector of the regional bank is due to come to Bordeaux during the first few days in October to examine the steps which we have taken to put ourselves in harmony with the desires of the ministry. We hope that by tha-t time we shall be able to present him with an account of the situation of the local banks which will give him the greatest possible satisfaction. At the same time we beg you not to wait imtil the end of the month of September before sending us the renewals of the securities falling due on the 15th of September, although we ask you to make them payable on the 1st of January, 1910, for the closing up of our accoimts always takes a very long time to carry out. As far as those local banks are concerned which make loans on warrants, we beg them always to make a rough copy of the original form and to keep this, in order not to have to ask us for information on the subject of it at the moment when they wish to execute a renewal, for if we have negotiated the warrant we shall ourselves be unable to give this information. We would remind them that the initial warrant must never be returned to the debtor until he has paid off his loan. We would repeat our pressing request to the secretaries of the local banks always to keep and classify carefully — (1) AH duplicates of memoranda of all securities which they send us. (2) The memoranda of returned securities which we send them. These two classes of documents, with the addition of a bank book in which from day to day they record their cash receipts and expenses, without any exception at all, constitute the whole of their necessary book- keeping. In the majority of the local banks this is perfectly sufficient, and furnishes all information necessary to make up their balance sheet at the end of the year. Believe me to be, my dear colleague, etc., C. CotJiNAUD, Director. CIRCULAR NO. 12, 1910. NOTES ON THE GRANTING OF SPECIAL LOANS. It has been stipulated as a condition of the payment to the regional bank of the 330,000 francs to act as a guaranty fund for special loans that the local banks should consent to make such loans on more easy terms than the Credit Agricole is accustomed to give. These loans, therefore, will be as a general rule granted simply on the signature of husband and wife, although this need not prevent the local bank from demanding a further security if it considers that there is a necessity for doing so. It wiU be a good thing, in particular, to demand the security of 'the parents who have made a deed of gift of their property, for they have the power of recalling this deed, which action might release the debtor from any legal proceedings that we might have occasion to take against him. The local banks should be very generous in view of the situation, but they should not at the same time make special loans except to people of good character, who they think wiU be sure to pay them back without legal proceedings. If the borrower is already in debt to the local bank, his old debt should be merged in the new one, unless it is secured by a warrant. The notes for these loans will be valid for one year. If the total demand exceeds the resources at our disposal there wiU have to be a reduction, which will be effected in proportion to the number of hectoliters of vines possessed, without taking into account the sum demanded. The payment of the money will probably take place in two installments on the day after the date of the special advance made by the State, and handed over to the regional bank. No demands can be received which will interfere with the ordinary course of business. FEANCB. 717 After his signature the secretary will indicate the solvency or otherwise of the debtor by the entry of a clear figure; the figure "1" will stand for "no risk"; "2" for "a good loan"; and "3" for "a moderately good loan." The local banks will profit on these loans by an interest of 1 per cent, but, on the other hand, as an offset to the sanction given to their decisions, they will be taxed 10 per cent on all losses made on loans granted on their recommendation. CIRCULAK NO. 13, MAY, 1910. Demand for discount — In the future no new loan will be granted unless it is accompanied by a demand for discount signed by the borrower and his wife if he is married. This demand for discount should be signed by the president and the secretary. It constitutes proof that the president gives his consent to the loan. If the president live^ a long way from the secretary, the committee of management of the society can appoint a director to miake the signature. This formality has been established at the order of the ministry of agriculture to hmit abuses which have sprung up outside the Gironde, abuses which we have not had the annoyance of remarking among our own banks. Destruction of Tnaterial. — The secretaries of local banks are requested to destroy all the demands for dis- count which they have on hand and which were forwarded to them before this, which do not bear the signature of the president, in order to avoid confusion. Long-time loans. — We are making no more long-time loans, either large or smaU. We were instructed by the Federation of Regional Banks to present our report on the subject of this kind of loan to the congress which will take place at Evian in September next. At this congress we shall discuss the means to be employed for resuming these loans, but probably a new law will be necessary, and it is certain that the rate of interest will be greatly altered (it will be at least 4 per cent). It is not sufficient to wish to lend money cheaply; it is necessary to be able to do it. Special loaTis.— These loans will continue to be executed until the harvest of the wine of the 1911 vintage, when they will be closed in order to be liquidated in proportion as is possible. We shall shortly be given, probably during the month of May, an advance of 1,000,000 francs. On the day when we receive this large sum, we shall forward to the local banks the balance of the money remaining to be paid on the special loans which have been granted. It is not necessary to write and demand this money from us; we will send it without being asked as soon as we are in a position to do so. The discharge of special loans. — Local banks which were imder the impression that they ought to keep forms of discharge for special loans are requested to send them to us immediately, and in the future to return them to us as soon as they are signed. CENTRAL COOPERATIVE DAIRY ASSOCIATION OF CHARENTES AND POITOU. Statement Submitted to the Commissions. [Translated from the French.] NiORT. The first cooperative dairy of Charentes was established at ChaiUe, 3 kilometers distant from Surgdres in 1888. The following year seven new associations were founded and in 1893 there were 40 of them in the region. The central association of these dairies was founded in 1893. To-day, it counts 129 subsidiary societies, distributed over the several Departments of the West, included within the territory of Nantes, Tours, Limoges, and Bordeaux. In 1912 the syndicated dairy societies had a total membership of 77,265, the total number of cows belonging to these members being 205,557, an average of 2§ cows per member. Our Farmers' Accident Insurance pro- vides for an average of 10 hectares per member. This area evidently does not correspond to an average of 2§ cows per member, so we must conclude that the majority of the very small farmers owning one or two cows are not yet covered by accident insurance. The syndicated dairies have received 332,000,000 liters of milk in 1912, making an average of 1,614 liters per cow, the production of butter being 15,350,000 kilos. This represents a yield of 21.63 liters and an average production of 75 kilos per cow annually. This quantity of butter brings in an annual income of 45,750,000 francs annually; this price being based upon an average of 2.98 francs per kUo. The skim mUk, valued at 0.4 cents per liter, amounts to $1,328,000 more, or a total annual income of nearly $10,400,000. The average cost of manufacture amounts to 11 per cent of the receipts, or 0.303 cents per liter of milk. The expense varies in the several creameries from 0.12 to 0.54 cents. 718 AGEICULTXJRAL COOPERATION IlST EUROPE. There are several different breeds of cows in this region. In Deux-Sfevres they have the Parthenaise breed remarkable for their butter-producing qualities, certain dairies producing a kilo of butter from 18.85 liters of mUk. The average for a year is 1,566 liters per cow of this breed. In the district of Vendue they have a variety of Parthenaise called "Vend6anne," which is also a butter- producing race, and in this Department the dairy which has the highest yield, amounting to 1 kilo of butter from 20.89 liters of milk, also has a production of 2,000 liters of milk per cow annually. In the other Departments, notably in that of Charente-Inf&ieure, the milch cows are of all breeds, the predominating breeds being Normande and Durham. Here the quantity, of milk per cow is very much greater. At Surgdres, for example, we find an average of 2,546 liters, but the butter production is only a kilo for 23 Uters. At Sainte Soulle, near La Rochelle, we find an average annual production of 2,245 quarts of milk per cow and 1 pound of butter for each 9.18 quarts of milk. Our association has had to organize various Departments in order to fulfill its object, namely, to perfect the manufacture of butter. It has had to improve the equipment of its factories and also to occupy itself with the general interest of the dairymen, notably as to the transportation of butter to the Central Market of Paris (Halles Centrales), which is the principal outlet for our production. As to technical services the society has an inspector in control and in charge of the manufacture and equip- ment of the dairy plants. This inspector is at the same time director of an experiment station and a dairy school, the latter being installed on the property acquired by the association and placed at the disposition of the minister of agriculture for a State establishment, having the double function of dairy school and experiment station. The whole is completed by the union of the 129 syndicated societies, the cooperative creamery of Surgeres, created in 1894 and which at the present time handles 16,000 to 18,000 liters of milk per day during the summer. The pupils of the school number from 20 to 30, the number being sufficient to perform all the necessary opera- tions. They remain one year in the school, but their theoretical study is completed during the first six months, after which they go out and serve an apprenticeship among the 129 syndicated dairies, where their service is valuable, for they fill vacancies temporarily caused by the sickness of regular employees and those who are away on vacations. In this way a close relationship is created between the dairies and the scientific central dairy department, insuring a general diffusion of progressive methods. Besides the persormel, notably the head of the laboratory department, gives such advice and information to the creameries as they may be in need of in order to improve their manufacturing methods. Besides the general inspector of creameries there is a master mechanic, a special- ist in creamery equipment, such as centrifugal cream separators and refrigerating machinery. The business between the creameries is provided for by automobiles, which are at the disposition of the personnel. The transportation of butter has been carried on since 1898 in refrigerator cars, of which the association has 18. It also has special employees in charge of receiving and loading the packages of butter, and at Paris a general agent in charge of transporting the butter from the station to the central market. The cars are distinguished by being painted white on the outside, provided with double doors and com- partments to hold 600 kUos of ice per car. The temperature on arrival rarely exceeds 10 or 12° C. In order to supply these cars, the association has created at Surgdres an ice plant, the installation of which cost 80,000 francs and which is capable of producing 7i tons of ice per 24 hours. Only 4 or 5 tons are required for the refrigerator cars, the balance being sold to the creameries at 25 francs per ton. In a general way the association is divided into three sections: 1 . The central credit department, including such general services as insurance of the employees of the creameries, arrangements for expositions, purchasing of such raw materials as coal, other fuel, etc., pension to old employees, encouragement of butter-making competition, and treatment and transformation of residuary products. 2. Mutual agricultural accident insurance societies, of which two special ones have been created two and a half years ago showing results for the year 1912 as foUows: Farm proprietors insured, 10,164; area included m this insurance, 151,775 hectares, being an average of 10 hectares per farmer; number of accidents during the year 1912, 908; receipts (premiums paid in), 75,741.59 francs; expenditures (including settlements), 77,241.59 francs; deficit of 1,500 francs. The premium, which amounted to 50 centimes per hectare, has been raised to 60 centimes on January 1; 1913, which will increase the receipts by 13,000 francs. 3. The casein department, created only about eight months ago, to permit the creameries to carry theu' manufacturing process into the second stage of producing casein as a by-product, and to do away with the intermediaries, who formerly did this work in an inferior manner and paid the creamery less than it can maKe by the direct manufacture. The attached table of creamery commissions gives a good idea of the exact mterio organization of the association from the latter viewpoint. PBANOB. 719 The cooperative creameries have been the salvation of all that region where the phyloxeta (disease of the grapevines) had brought ruin in 1881-^82. To-day the degree of prosperity in this region is second to no Other in France, no matter what the nature of their culti\ration. The most riStnarkable thing is that here the small farms are in predominance, and it is the proprietors who possess two or three cows who have b^en saved from ruin and enriched by the cooperative creameries. SUMMART OF BALANCE SHEET FOR 1912. The quantity of milk taken to the creameries was 4,04S,3'04 liters; that taken by milkmen in the town, 171,722 liters; milk by-products, 6,669 liters; cream sold outside of Surgeres (which would have produced 110 kilos of butter), 2,291^ liters; butter manufactured, 173,920i kilos, at 2.98 francs per kUo, with an average of 23.28 liters of milk per pound of butter. Number of cows insured, 2,100; number which died during the year, 44; estimated value, 18,320 francs; average estimated value per cow, 416.36 francs; and insurance paid per head, 6i francs. Average price paid per liter of milk, 13.36 centimes; average number of cows per creamery, 1,660; average annual production per head, 2,546 liters. Each cow produced an income of 340 francs in 1912, 354 francs in 1911, 318 francs in 1910, and 303 francs in 1909. Balance sheet for 191S of the cooperative eteainery of Swrgetes. RECEIPTS. From the sale of: Francs. • Milk to the town 33, 750. 70 Cream outside of Suigeres 371. 56 By-products and cream at retail 1, 448. 20 Skim milk and residue from casein 62, 538. 10 Butter 518, 752. 88 Miscellaneous revenue, entrance fees, etc 7, 228. 40 Total receipts 624, 089. 83 Sum set aside, account of general expense 2, 677. 42 Amounts due for rent, entrance fees, etc =. 505. 15 Balance forward on Jan. 1, 1912 813. 59 628, 085. 99 BXPHNBITtTRBS. Amounts paid to members for 'their mUk 564, 845. 64 Expended for new material 2, 910. 00 Repaid to five members amounts due them from 1904 3, 181. 75 Sum set aside, account of general expense 2, 677. 42 GENERAL EXPENSES. 1. Sums paid 49, 221. 91 2. Amounts due 2, 014. 85 51,236.71 (Amounting to 0.0121 per liter of milk.) Total - 625, 320. 47 Profits of the society 2, 765. 52 628, 085. 99 REGIONAL BANK OF BEAUCE AND LE PERCHE. Evidence of M. Egassb, President. Chartres. Q. What is the official name and address of this bank ? , A. Caisse Regionale de Credit Mutuel Agricole de Beauce et du Perche, located at No. 4 Place St. Michel, Chartres. Q. When was the bank organized ? • A. On the 24th of August, 1899. Q. How many stockholders did the bank have at the beginning ? A. There were 118 subscribing 155,000 francs. Now, the bank has 143 stockholders holding 1,015,800 francs in stock. Q. What is the purchase price of the stock ? A. A share is equal to 50 francs. 720 AGEICTJLTUEAL COOPEEATION IN EUEOPE. Q. How is the bank managed ? A. By a president and a board of administration, composed of 12 members, who are elected annually. Q. What is the amount of the total annual salaries paid ? A. Last year the bank paid three employees a total of 6,000 francs. Q. To what employees were these salaries paid ? A. To the manager, the cashier, and the assistant cashier. Q. What dividends are paid on the stock? A. Interest at 5 per cent is paid, and no dividends are declared. Q. What is the total number of depositors ? A. The bank has at present 130 depositors. Q. What is the total amount of the bank's deposits ? A. On December 31, 1912, the deposits amounted to 120,000 francs, and on June 15, 1913, they had increased to 780,497 francs. • Q. What is the total number of borrowers ? A. Last year 4,621 individuals borrowed from this bank through the intermediary of the local banks. Q. What is the total amount of the loans which the bank has made to date ? A. The total amount is 3,515,552 francs. Q. What commissions are charged by the bank ? A. None. Q. What is the usual term for which the loans are granted ? A. Loans are made for periods of three, six, and nine months, very seldom for as long as one year. One or two renewals of three months each are allowed; sometimes, however, for a part only of the loan. Q. Are large deposits essential to the successful operation of the bank ? A. The operations of the bank do not depend on the deposits, but on the capital and State advance. Under the Kaiffeisen system everything depends on the deposits. The French system is quite different. When the regional bank has not sufficient capital in hand it discounts at the Bank of France. The Agricul- tural Syndicate of Chartres and the Cooperative Agricultural Society, however, are the two largest depositors ,of this bank. Q. Is interest paid on deposits ? A. Yes; the bank pays the local banks 2^ per cent on all deposits. Q. When a loan is applied for, must the purpose for which it is to be used be stated ? A. Yes; always. Q. What is the usual size of the loans which the bank makes ? A. Loans average about 1,000 francs, but the maximum is 8,000 francs. Q. What rates of interest are charged on loans ? A. The Bank of France charges the regional bank 4 per cent, the regional bank charges the local banks 4J per cent, and the local bank charges the individual borrower 5J per cent. The local banks loan to the individual the money supphed by the regional bank which discounts the local banks' paper. Q. Are loans guaranteed by indorsement or by a collateral deposit? A. The local bank indorses to the regional bank. The regional bank seldom demands a second signature from the borrower. Q. Are loans made on real estate ? A. No short-term loans, but loans for long periods are made on the security of real estate. Q. What are the total assets of the bank? A. On January 1, 1913, they were 4,879,302 francs. Q. What were the total liabilities on the same date ? A. They amounted to 4,763,023 francs. Q. What were the gross profits of the bank during the year 1912? A. They were 116,280 francs. Q. The expenses for 1912 amounted to what? A. General expenses were 11,260 francs. Q. What were the net profits for the same year ? A. They aggregated 79,140 francs. Q. Has this bank ever suffered any losses ? A. The regional banks can not lose. Local banks are the responsible institutions and can alone mcu losses. Q. How often is this bank examined ? FEANCE. 721 A. The Government makes examination once a year. In addition to this the bank has to send in a quarterly- financial statement. The Government notifies the bank only the day before the examination is to be made. The banks, of which this institution is one, undertake an annual examination of the affiliated local banks. Q. By whom are these examinations made ? A. By an inspector from the ministry of agriculture. The local banks are examined by an inspector sent from the regional banks. Q. What was the total capital of the bank on January 1, 1913 ? A. It was 938,350 francs. Q. Are the regional banks only composed of local banks, or may individuals be shareholders also ? A. The regional banks are composed of both individuals and local banks. Both are shareholders. In the membership of this bank there are 25 local banks. Q. Have any of these regional banks ever been dissolved ? A. No. Q. What is the total number of outstanding shares of this bank ? A. A total of 18,767, of which the local banks hold 13,365 and individual members 5,402. Q. How many individual farmers are affiliated with this bank through the local banks ? A. The total number of borrowers through the local banks is 4,621. About 100 direct ihdividual members are in this bank. Q. How are profits of this bank divided ? A. Three-quarters of the net profits go to the reserve fund; the other quarter is divided among the local banks in proportion to the amount of the business they transact with this institution. Q. Is this division of profits regulated by law ? A. Yes. Q. How would a group of farmers borrow money to develop their crops. A. Credit is granted by this bank in three ways, i. e., short-term individual credit; long-term credit; and collective long-term credit. A group of farmers can thus get a collective loan from the local banks. Q. Must individual loans be used only for the purposes of agricultural production ? A. Yes; only for production; never for speculation. Q. Is this bank operated on a limited or an unlimited liability ? A. Limited. Q. To what extent is the liability limited ? A. The shareholder's liability is limited to the amount of the shares held. Q. Are the shareholders of the affiliated local banks responsible for more than the value of their stock ? A. No. Liability is limited to the amount of the stock subscribed. Q. Are there any regional banks in France organized on the basis of unlimited liability ? A. Yes; in the south of France. Q. Are there any other banks in this department which the farmers patronize ? A. No; for the farmers are generally exploited by the commercial banks, which sometimes charge them as much as 12 per cent interest on loans. Q. Can the small farmers borrow from the other banks ? A. Yes; but they receive no special considerations. Q. How many commercial banks are there in Chartres ? A. There are at present six, being chiefly branches of large banking institutions like the Bank of Paris. Small private banks are fast disappearing. Q. Is there any business connection between this bank and the Credit Foncier ? A. No; the regional banks have no connection with the Credit Foncier. AGRICULTURAL SYNDICATE FOR CHARTRES. CHATEAUDUN, AND NOGENT-LE-ROTROU. Statement Submitted to the Commissions. (Translated from the French.] Chartres. The Agricultural Syndicate of Chartres was founded on July 1 , 1886, by 10 farmers, at the head of whom was Senator Vinet, president of the association. At this time the trade in commercial fertilizer, the employment of which had become indispensable, was in- the hands of unscrupulous dealers, who- profited by the ignorance of the countrymen to seU mferior products having a minimum of fertUizing value at high prices. Many farmers who had never used fertihzers of any other kind stopped using them entirely because of the poor results obtained. 14174°— S. Doc. 214, 63-1 46 722 A.GBICULTURA.L COOPEBATION IN EUROPE. The origin of the syndicate was therefore due to the unfortunate situation in relation to fertilizers, and the original territory covered was limited to the surroundings of Chartres. This territory was progressively extended as the utility of the association became known to the farmers, and to-day, through having united with the syn- dicate of Chateaudun and Nogent-le-Kotrou and several adjacent cantons, it has attained its present proportions. The syndicate purchases fertilizers according to semiannual estimates at the seasons corresponding to seed- time in the spring and fall. A contract imposing special conditions upon the fertilizer dealers is accepted without reserve by aU responsible dealers, and it guarantees to the members of the syndicate the composition of the fer- tilizers and that they shaU be delivered in good condition and with dispatch. The agricultural station of the Department also makes analyses of the fertiUzers on delivery, and whenever there is a just reason the fertilizer dealers are required to pay a fine to the syndicate. In 1912 the operating expenses reached the sum of 5,000 francs, and were advanced by the credit depart- ment of the syndicate. The syndicate also serves as an exchange for seeds and agricultural products between its members. Its resources are composed of an annual fee, 2 francs, paid by each member, a rebate of 2 per cent paid back by the fertilizer dealers for cash settlement, and amoimted on December 31, 1912, to 173,529 francs 65 centimes. The importance of its operations is shown by the movement of funds which was attained in 1912: Receipts, 2,607,281.05 francs, and expenditures, 2,583,165.10 francs. The following table will bring out the continual growth of the operations of the syndicate since its creation: Year. Memberahip Fertilizers de- Value of ferti- of syndicat. livered. lizers. Kilos. Francs. 1886 54 240, 875 2A, 157. 80 1888 506 2, 687, 830 291, 148. 05 1890 1,290 3, 761, 407 393, 799. 29 1895 2,668 6, 195, 313 516, 503. 94 1900 3,543 6, 761, 883 577, 770. 78 1905 4,398 8, 099, 432 620, 467. 10 1910 5,915 11, 336, 015 1, 042, 651. 75 1912 7,027 14, 317, 891 1, 346, 454. 20 At the present time the membership (Jlily 1, 1913) is 7,305. Fertilizers ordered in amounts of 5,000 kilos are delivered directly to the railroad station nearest the members uniting in the order, and distributed through the 25 depots placed at the different community centers for the receipt and distribution of the detailed orders. These depots render the very greatest service to the small farm, because farmers who use only one sack of fertilizer enjoy the same guaranties and proportionate price as those using one or two hundred sacks. In order to instruct the members in the judicious use of fertilizers, the syndicat has imdertaken for the last 15 years the preparation of agronomic charts, on which the character of the soil in each commuHe and the corre- sponding fertilizers most advantageous for each are clearly indicated. At the present time 230 commimes are provided with these charts, the expense of this important work hav- ing been more than 75,000 francs. The syndicate has not been unmindful of the moral interests of its membership, for it has from the first pro- vided gratituously a monthly periodical entitled The Agricultural Bulletin of the West, the official organ of a number of syndicates in this region. Since 1904 it has replaced this bulletin by a semimonthly publication, The Defense of Agriculture, which is published directly by the syndicate and furnished free to its membere. There is also a fuUy equipped library, in which the members may seek instruction during their leisure time' The syndicate does not wish to limit its scope entirely to the purchase and control of chemical fertilizers. Subsequent to the promulgation of the law of November 5, 1894, on agricultural credit, the syndicate has been occupied in inducing its members to profit by this institution, and has created at Chartres, not without great difficulty, a Cooperative Agricultural Credit Society. As soon as the law of 1900 instituted regional banks for agricultural credit, one was founded for Beauce and Le Perche, and there was created in each of the sur- rounding cantons, with the grouping together of the farmers in each locality, a local credit society similar o that at Chartres. , More recently, since the adoption of the law covering agricultural cooperation, the syndicate has responde vigorously to the appeal from the progressive farmers who have requested it to aid them in profiting by FEANOE. 728 provisions of this law. We have thus contributed to the creation of the societies of Sancheville, Gault-Saint- Denis and Fresnay-l'Eveque, as well as of several dairy syndicates. Each year the syndicate has organized a course of agricultural instruction through the institutes. The work is examined by a jury composed of the inspector of the academy and the primary inspectors and five members of the board of directors of the syndicate. Prizes are given to the teachers as well as to the pupils who are adjudged most worthy. The winter school of agriculture created by the General Council of Eure-et-Loir, at the Lyc6e de Chartres, as well as the domestic science school which was also established by the Departmental Council, are subsidized by the syndicate. It brings within its scope, therefore, the study and correction of all questions affecting the prosperity of the national agriculture. MUTUAL AGRICULTURAL SOCIETY OF CHARTRES. Statement Submitted to the Commissions. [Translated from the French.) Chartres. The Mutual Agricultural Society of Chartres (Eure et Loir) was founded on March 21, 1896, upon the instance of M. Egasse, who is now its president, under the auspices of the Agricultural Syndicate of Chartres. M. Egasse was able, at the congress of syndicates held at Lyon in 1894, and following a report by M. Milcent, president of the Caisse de Poligny (Jura), to appreciate the advantages which mutual agricultural credit would bring to the farmers of Eure et Loir. At this moment the agriculture of this section was passing through a crisis and there was pressing need of money. In the month of May, 1895, the establishment of a mutual agricultural society conforming to the law of November 5, 1894, was established at Chartres, and a constitution was adopted. M. Egasse, vice president of the syndicate, set forth in a circular letter in careful detail, to the 2,635 members of his association, the advantages of the new proposed societj^. In spite of the limited response in subscription (79 members only having answered the call), the local credit society of Chartres was founded. The Agricultural Syndicate of Chartres had subscribed a sum of 20,000 francs, which, with the private subscription, amounted to an initial capital of 35,500 francs on the day of the annual meeting of stockholders, at which time the credit society was established. The general association of Chartres advanced (the share capital having been paid in) a credit of 65,000 francs, since raised to 100,000 francs and again to 150,000 francs, and the new association has been able to furnish to its members the amounts which they have been entitled to. The discount of the notes of the members has been assured by the General Society up to 1900, the time at which the regional bank for agricultural credit of Beauce and Le Perche commenced its operations. Operations. — The Mutual Agricultural Society of Chartres loans to reliable and well recommended farmers, industrious and thrifty, and who live in the Cantons of Chartres and the adjacent communes, such sums as they may be in need of for the purchase of live stock, seeds, fertilizers, agricultural machinery, and in general for all the needs of their farm operations. Requests for loans are received by the director of the association, and they must be accompanied by state- ment of the use for which they are required, as well as the guarantees which are offered. Serious investigations are conducted directly to enlighten the managers (for the responsibility of the members the association is linuted), and the council, which has a meeting twice a month, as to whether it is advisable to grant the requests for loans. The member demanding a loan often gives his note which is discounted at the regional bank so that the party interested may enter into possession of the advance required. Each borrower must have previously subscribed to the share capital one or more shares, and the council has fixed upon 400 francs as the maximum amount which may be loaned to the holder of each 20 francs' subscription. The duration of the loan varies according to the character of the operations to which the loan is applied, but the period is ordinarily 3, 6, or 9 months. The Local Credit Society of Chartres also provides, according to the law of March 19, 1910, long-time loans for the purpose of aiding in the acquisition of and building improvements upon land, for its transformation and replantation, particularly for small farms. It also grants loans to the Agricultural Syndicate of Chartres, which are important in permitting to enjoy the benefits of purchasing goods at wholesale for cash. 724 AGRICULTUEAL COOPEBATION IN EUKOPE. Service rendered. — The succeeding table will bring out more forcibly than any commentary the services rendered to agriculture in the section Beauceronne by the Agricultural Mutual Credit Society of Chartres : Year. Membership. Number of loans. Amount of loans. 1896 1900 1906 1912 414 583 933 931 69 445 997 1,002 Francs. 47, 853. 55 326, 985. 90 1,736,620.85 2. 295, 968. 15 Financial organization. — All the funds available are employed in the purchase of capital stock of the regional bank of Beauce and Le Perche, and in discounting the notes, provided the rate of the regional bank surpasses the rate of discount of the Bank of France. Conclusion. — The Mutual Agricultural Society of Chartres continues its onward march upward and renders services more appreciated by the farmers of Beauce. The borrowers on their side have the honor of fulfilling their engagements with the result that the reserve fund, which at present amounts to 50,000 francs, has never had to be used for the payment of bad debts, and cases of insolvency have been fortunately extremely rare. COOPERATIVE AGRICULTURAL SOCIETY OF DREUX-SUD. Statement by M. Fabbe, President. Chartres. When the society was founded in 1910 it had 16 members and 380 francs capital. To-day there are 20 members and a capital of 580 francs. It is under the control of the regional bank of the Credit Agricole. PURPOSE. (a) To secure for its members the greatest number and variety of such agricultural machinery as may be used collectively to advantage, but which would be too expensive for individual farmers to possess, because it would tie up too much of their capital and only be of use for a few days during the year. Also to avoid the necessity of renting such machinery from contractors at high prices. Collective possession only requires the expense of repair and amortization. (&) To encourage the production of the several kinds of grain that they use for cereal foods and which may be easily cultivated, thus doing away with the necessity of buying these breakfast foods for local consumption from intermediaries. (c) To organize a service for the sale of farm products, based upon the same principle as set forth in pre- ceding paragraphs. (d) To create a service for the collective purchase of materials required by the members, and, in a word, for all operations of a commercial nature which relate to agriculture. It may be here remarked that the objects sought appear difficult to accompHsh for a single society of, say, 20 members, but these cooperative societies in the vicinity of Dreux, all of which are for the same purpose, are federated together to the number of 24. AGRICULTURAL MACHINERY OWNED COLLECTIVELY. The local society at Dreux owns the following machinery: A thrashing machine, which operates at a cost of 10 centimes per bag of grain, whereas 50 centimes was formerly paid to contractors; a grain drill, operatmg at 3 francs per hectare instead of 4 francs, formerly paid; a fertihzer distributer, operating at 10 centimes per liundred kilo sack, instead of 40 centimes, as formerly; and a disk harrow, which saves 1 franc per hectare over former operating cost. RESULTS. General expenses of cultivation have been reduced very greatly by this collective use of machinery, and the price of seed grain has been reduced; the purchases and the selling price of the grain raised by the farmers has been raised because of the ehmination of excessive profits to intermediaries. Finally there has been a marked moral development tending to social sohdarity, a slow but certain develop- ment which contrasts with the ultra-individuahsm which has been characteristic of our farmers and whicn may be summed up by the unhappy phrase so often repeated, "Each for himself, the Lord for all." ^^® farmer of to-day is led by the force of conditions to take for his motto the noble device, "Each for » i all for each." FRANCE. 725 COOPERATIVE CREAMERY OF GAULT ST. DENIS. Statement Submitted to the Commissions. [Translated from the French.] Chartees. The Cooperative Agricultural Society of Gault St. Denis was founded on May 5, 1910, in response to an urgent need, for up to that time milk produced in this region was sold to private parties in Baris at the ridiculously low prices of 10, 9, and even 8 centimes per liter. The milk dealers, masters of the situation, established the price and collected the milk, for which collection they frequently charged in case the farms were considered too far distant from the station. Nothing could be done against such exploitation, for the power of the milk dealers rendered vain all individual protest and resistance. In 1910, following the conference held by M. Garola, professor from the department of agriculture of Eure et Loire, th* milk producers of Gault St. Denis and adjacent communities united and formed a plan for estab- lishing a coopera,tive dairy plant. Thanks to the zeal displayed by the organizers, chief among whom we must cite M. Trubault Cyrus, now president of the society, they were able to raise an additional capital of 30,000 francs, and the society was founded with 152 members (farmers). The new society took as its title "Soci6t6 Cooperative Agricole du Gault St. Denis," incorporated with both capital and membership variable, in conformity with the law of July 24, 1867, and that of August 1, 1893, and of December 29, 1906. The service for the amelioration of farm conditions, operating under the ministry of agriculture, was charged with planning the construction of the butter-making plant, the installation of the machinery, etc., and the installation M'as made in a manner thoroughly up to date, and began operation on April 30, 1911. OPERATION OF THE SOCIETY. The society is managed by a council, composed of nine members, chosen from among the stockholders and elected at the general assembly. A manager is in charge of the business operations of the cooperative society under the direction of the board of directors. He looks after the collection of the milk from the several farms, the manufacture of the butter, and business of shipping it. MUk is collected from a radius of 12 kilometers, payment being made according to the distance traveled by the collector, who receives an additional compensation proportional to the quantity of milk collected. The milk received from each section is pasteurized and treated separately. It is not mixed. Tho factory is equipped with apparatus for pasteurization of the milk, separation of the cream, and the manufacture of butter. However, it is also equipped to prepare the milk for sale directly, and only such por- tions as are in excess of the demands for direct sale are transformed into butter. The skimmed milk is used for the manufacture of casein and the residue, together with the buttermilk, is employed for fatting hogs. The pasteurized milk or the manufactured butter are shipped each day to Paris from the station of Gault St. Denis, near by the creamery. FINANCIAL ORGANIZATION. The funds necessary for the installation of the factory, and the marketing provisions of the cooperative society proceeded from: (1) The share capital, amounting to 37,000 francs; (2) a long-term loan, at 2 per cent, amounting to 60,000 francs; (3) a state subsidy, amounting to 8,875 francs; and (4) the profits realized from operation. The milk is sold to the Union des Cremiers, a creamery association in Paris with which a contract has been entered into, of which the principal clause is as follows: "The cooperative creamery of Gault St. Denis agrees to furnish to the Union de Cremiers its entire milk production at a price of 17 centimes per liter in summer, from May 1 to October 31, and at 19| centimes per liter during winter time, from November 1 to April 30. The milk is to be delivered f. o. b , station Paris, and shipments to be made in the jars of the Union des Cremiers, and the safe return of these jars is required of the cooperative society. "The creamery of Gault St. Denis is prohibited from selling its milk to wholesale or retail milk dealers at present existing in the Department of Seine and of Seine et Gise. It is also prohibited from installing a depot for the sale of creamery products, either wholesale or retail." The members are paid for their milk on the second Monday of each month, according to the prices in the above-mentioned contract, less an amount of 3 centinies per liter, which is retained for the purpose of oblig- atory reserve and amortization of the capital invested in the factory. 726 AQEIOULTTJEAL COOPEBATION IN ETJEOPB. ADVANTAGES OBTAINED. In 1911, during the first season that the creamery of Gault St. Denis operated, the members were paid for their milk at the average rate of 13^ centimes per liter, whereas outside individuals received around 11 centimes. In 1912 the average price reached 14 centimes, and the outsiders had no reason to complain of the oper- ation of the coopejative because the prices paid for their milk were raised to a price only 2 centimes less (aver- age of 12 centimes per liter for outsiders). The whole community was benefited, for the reason that the inde- pendent company had to raise their prices to the noncooperators in order to attract sufHcient milk to enable them to continue the operation of their factories. Thanks to the creamery its members have now been able to receive a remunerative price for their milk and they have become at the same time coproprietors in a factory which shovdd very soon be increased in size because the quantity of milk produced is being increased and the amount treated each day keeps augmenting. On June 15, 1913, more than 9,000 liters of milk were received daily at the creamery and the number of members adhering to it had reached 375. REPRODUCTION OF POCKET TALLY BOOK OF MEMBERS.' REGULATIONS FOE HANDLING, CONSERVATION, AND DELIVERY OF MILK. Article I. Each member must agree to furnish the society with all the milk which he produced, with the exception of the quantity required by his own family and that of his neighbors, who may buy from him with the consent of the creamery management. The society sells butter at retail, either to its members or to outsiders, and manufactures both butter and cheese, exclusively tor sale, but the purchase of calves for fatting is prohibited. Art. II. Sanitation in dairying being a condition indispensable to success, the milk must be delivered in a perfectly clean state; in order t6 insure this it must be strained immediately after milking. Art. III. Inordertoproduceaproper quantity of good butter the milk must be handled in a good state of preservation; so care should be taken, as soon as it has been strained, to put it in a clean place, free from dust and offensive odor, as cool as possible, especially in sum- mer, BO that it may be cooled rapidly. Those who have no place sufficiently cool must install a cooling tank, either of wood or stone. Art. IV. Earthenware containers are insanitary, for they are likely to retain impurities in their pores, so that milk should only be kept in tin cans, and care taken to see that they are clean and well tinned. Art.V. The mixture of hot milk with cold milk is likely to make it curdle, especially in summer, so each milking should be kept in a separate set of vessels, and mixing avoided. Art. VI. All unclean, spoiled, or curdled milk, or that from diseased cows, toU be refused, and no milk will be accepted during the first eight days after a cow freshens. Art. VII. Members must, when advised by the milk collector that he is unable to stop for it, cart the milk to such a station as may be decided upon. Art. VIII. All delays in delivery of milk through the fault of a member shall subject him to a fine. Art, IX. Any attempt at bribery of the milk collector on the part of members will render them liable to fine. Art. X. All members believing themselves to be discriminated against by a manager, director, or other official of the society may demand retribution. On the other hand, any functionary of the society who may be wronged or insulted by a member is entitled to retri- bution. (This retribution to take the form of a fine.) Art. XI. Any member convicted of having attempted to injure the society by acts or words or through interfering with its operation shall be liable to a fine of at least 20 francs, or as much more as the board of managers may decide. Art. XII. All members, when requested by the manager, by the board, or by the inspector, must produce samples of their milk or exhibit it without touching or replacing and allow a sample to be taken, weighed, or examined with a microscope, in the manner and accord- ing to the tests established by special rule. Art. XIII. Each milk collector shall be provided with a complaint register. Members who have knowledge of frauds, irregularities, lack of precision, or who wish to make other objections, are invited to write them in this register, which the milk collector must maintain at their disposition. All complaints which do not reach the office in this way or through the inspector shall be considered null and void, and if unintentional no fine will be imposed. Art. XIV. Any member who may have adulterated his milk, either by adding water or any other material, or removing the cream, shall not only be excluded from the society, but required to pay a fine ranging from 100 to 1,000 francs. In case he refuses to pay he shall be prosecuted, fined, and even imprisoned, and will have to pay for the publication of the legal process in the newspapers of the bcality. (See Art. 423 of the Penal Code, law of Mar. 27, 1851.) Art. XV. All infringements of the above rules shall be punished by the following fines: Against rules Nos. 2-13, inclusive, by a fine of from 1 to 10 francs, according to the seriousness of the offense. > Each member is provided with one of these booklets, on the outside cover of which ia inscribed the route, the name of the milk collector, and the name and resi- dence ol the member. It contains blank pages providing for a record ol the quantity oj milk delivered, both morning and evening, and the skim milk returned to every day in the year. FBANOE. SAMPLE BLANK PAGE. 727 Month ot. . , 191—. Date. Milk. Skim milk. Date. Milk. Skim Morning. Evening. Morning. Evening. milk. 1 Fwd. 2J 22 23 24 25 26 27 28 29 30 31 Morn- ings' milk. Nights' milk. Total ■) 3 4 5 6 7 8 « 9 10 11 , 12 13 14 \ 15 Ifl / 17 18 19 Deduct " ' on I tor sKim miiK ) 20 Fwd. FARMERS' COOPERATIVE ELECTRICAL SOCIETY OF PROUAIS-ROSAY. Statement Submittbd to the Commissions. [Translated from the French.) Chartees. This society was founded on January 16, 1912, as a cooperative corporation with capital and membership variable, and has for its object the securing of the electric power necessary for the farm operations and electric lighting of the villages of Prouais-Kosay and Beauchene and surrounding territory. These three villages, inhabited by only 400 persons, are purely agricultural, there being about 1,100 hectares of good land comprised in 80 farms, the average area amounting to 13 or 14 hectares (35 acres). The village of Prouais, the largest village of the commune, is situated between the other two, being IJ kilometers from Rosay and 2^ kilometers from Beauchene. The electric plant is situated between Prouais and Eosay at 150 meters from the latter village, which has been the cradle of the enterprise. Thanks to the good laws of the Republic, which at present favor agriculture, the society is occupied in improving agricultural conditions, and has appUed to the minister of agriculture to obtain the technical services from that department, which have been furnished gratuitously, for the carrying out of the plans of this project, which includes the construction of a special factory, the installation of the necessary electrical generators, the 728 AGBICULTUEAL COOPEBATION IN EUEOPE. transmission lines, the operating motors, such as those used for operating thrashing machines and gristmills. The electric meters and the installation of the first two electric lamps are free to each of the cooperators. It was decided to make an expenditure of 150,000 francs, but this was reduced by 10 per cent through the omission of several features which were not absolutely necessary at the beginning of the enterprise. In order to secure the 135,000 francs necessary, the society which only had an initial capital of 33,400 francs, formed by 25-franc shares, in order that all might be able to subscribe to them, raised its capital to 56,000 francs, borrowed for the cooperators at an interest rate of 4 per cent annually. With the aid of the service provided for agricultural betterment, a subvention of one-tenth of the capital was obtained from the State. That is to say, 1,500 francs could be obtained provided 150,000 francs were to be expended. An additional advance was secured from the regional bank of Chartres on long term at 2 per cent interest, and amounting to 65,000 francs. Alas! this had to be repaid in 15 years by annuities of about 5,000 francs each. The capital of 135,000 francs was expended in the following manner: For acquiring the land on which the factory is built, 2,000 francs^. Eequired for the expenses for taking out the mortgages and the expense of forming the society, 3,000 francs. For the construction of the electric plant which contains the dynamo room, the storage battery accumu- lators, the crushing mill, the ofhce, a house for lodging the operator and manager of the plant, for wells and for a public laundry supplied with hot water during the winter, 30,000 francs. For the mechanical and electrical apparatus consisting of two generator sets, provided with gas engine, type BoUincks, by the firm of Salmson of Paris, rated at 35 and 40 horsepower, and driving electric generators pro- ducing 60 amperes, and delivering 440 volts, 100,000 francs. A battery of storage accumulators consisting of 262 cells. The transmission lines necessary to carry the electricity a distance of about 5 kilometers on the main line and at least as much farther on the secondary line, and for the connections to the farms of the cooperators. The installation of a pump and reinforced concrete water reservoir of 45,000 liters capacity. A gristmill, and a machine for rolling oats. Two large thrashing sets, provided with electric motors. The watt meters for recording the amount of electricity used for power and lighting. The gratuitous installation of the two first lamps in the home of each cooperator. This work was begun toward the end of May and had to be pushed vigorously in order that the thrashing machine might be ready to operate from the 8th of August and that the lighting system for the three villages might begin on the 13th of October, at which time a festival was celebrated which wiU long be remembered in the locality. The society was only established for the purpose of supplying the needs of cooperators, and it has already caused them a saving of 25 per cent in thrashing and milling. It was a great advantage to replace the manual labor by electric energy and. an enormous satisfaction to enjoy the excellent lighting service, to say nothing of the profit which has resulted. In 15 years, when the society shall have paid back to the State the 65,000 francs which it loaned, the profits which it already enjoys will naturally be greatly increased. The thrashing sets, which are fuU size and turn out as much as 10 quintals of wheat to the hour, are furnished to the cooperators at 3 francs per hour. The mill will roU one bag of oats for 50 centimes and wiU do coarse grinding, such as that for cattle feed, at 1 franc per hundred kilos, and for 30 cents it wiU grind barley into flour for hogs and poultry. The price of electric light is 80 centimes per kilowatt, which results in the cost of 3 centimes per hour for each 25 candlepower lamp, or even less. Power is paid for at the rate of 40 cents a kilowatt with a decreasing scale for amounts in excess of 500 kilowatts annually, falling to 25 centimes at the limit of 2,000 kilowatts. At a cost of 40 centimes an electric motor will operate a root cutter at an expense of 5 centimes for power necessary to cut a cubic meter of beets. Approrimate estimated eipense/or the annual operation of the society. Interest at 4 per cent on 56,000 francs from the cooperators 2,240 Interest at 2 per cent and amortization in 15 years for the 65,000 francs advanced by the State ^^^^ Salary of the manager operating the plant 2, OOiJ Salary of an additional mechanic for 6 months 1| "''" 300 Salary of an accountant Cost of coat for gas producer, and oil for machinery ^™ T 500 Insurance . Taxes . Estimated cost of repairs __^^ Total '^ FRANCE. 729 Estimated annnalineome. Francs. Rental on thrashing machines, 2,500 hours at S francs T, 500 Income from 800 electric lamps, at 5 francs 4, 000 Income from grinding at the mill 1, 500 Income from the sale of electric power (extra) 2, 000 Total 15,000 REGIONAL BANK OF LE MANS. Evidence of M. Dalmagne, President. Le Mans. Q. What is the official name of this bank 1 A. Caisse Regionale de Credit Mutuel Agricole du Mans, located at Le Mans. Q. What is the date of organization of the bank ? A. 1901. Q. What is the number of original stockholders ? A. A total of 527, including 3 local banks. Q. What is the purchase price of the stock 1 A. Twenty francs a share. Q. What officials has the bank ? A. A president and 9 directors, none of whom receive any salary. Q. Are there any salaried employees ? A. Yes; a cashier and clerks, who receive together 7,000 francs in salaries a year. Q. What is the present number of stockholders ? A. At present 4,137, including 56 local banks. The liability of the stockholders is limited to par value of subscribed stock. Q. What is the total number of depositors ? A. Seventy-six. Q. Give the total amount of deposits at this date. A. On January 1, 1913, 15,610 francs. Q. What is the total number of borrowers ? A. There were 3,954 on January 1, 1913. Q. What is the total amount of loans which the bank has made to date ? A. About 1,526,677 francs, averaging about 1,000 francs each. Q. Loans are granted for what length of time ? A. A maximum of 18 months. Q. About what is the size of deposits ? A. Never more than 1,200 francs. Q. What interest is paid on deposits 'i A. Three per cent. Q. Must the purpose of loan be stated ? A. Yes. Q. What is the rate of interest charged on loans ? A. Four per cent. Q. Does the bank make real-estate loans? A. No. Q. What are the total assets of the bank ? A. On January 1, 1913, they amounted to 2,931,968 francs; the liabilities of the bank were the same. Q. How often are examinations made ? A. Once a year by the Government under the ministry of agriculture. Q. What was the total capital of the bank on January 1, 1913 ? A. It was 563,675 francs. Q. Will you describe the method by which this bank avails itself of the aid of the Government? A. The State loans the bank a sum amounting to four times its paid-up capital without interest, which must be repaid in 1920. Loans are granted to farmers through the local banks at 4 per cent. This interest is used to build up our reserve fund, which now amounts to 174,000 francs. Any additional money which the bank may 730 AGBIOULTXJRAL COOPERATION IN EUEOPB. need can be borrowed at the current interest rate from the Bank of France. The bank now borrows at 4 per cent and loans at 4 per cent. Q. In what form is the loan from the State bank made ? A. In gold. Never in paper. Q. Does the bank make mortgage loans on personal property? A. Very few. All the long-term loans are made on land-mortgage security to the value of one-half of the land. The regional banks very rarely have to sue for debt. The farming population is, as a whole, very honest. If a farmer does not pay, it is usually because of some misfortune. All business is transacted through the local banks. Q. How is the value of the land determined ? A. Land is valued on the legal papers through which purchases are transacted. Loans are made only to small farmers — to those who possess less than 20,000 francs. The object of the banks is to help the small farmers. Q. Is there any limit to the number of local banks which can affiliate with a regional bank ? A. No; there is no limit. This bank began with three, and only loans to members of the local banks. Anyone who is a member of the agricultral syndicate can become a member of a local bank by payment of 5 francs. Q. What is the agricultural sjoidicate ? A. It is a society for providing farmers with fertilizers. AU farmers must become members of the syndicat before they can borrow from the local banks. This is a guarantee that they are reaUy agriculturists. Q. How does this bank secure information regarding the farmers before making loans to them ? A. That is the business of the local banks. They are in small communities where people know one another, and this bank, for instance, holds the aflBliated local banks responsible for determining the solvency of borrowers. Q. Do the farmers in this district borrow money to handle their crops ? A. Yes; that is the principal object for which loans are made. This bank loans for three or six months, twice renewable for another three or six months. Q. In the United States the great need for agricultural credit is to enable the farmers to hold their crops until the market is favorable. Does the French system accomplish that ? A. Precisely. The French farmer used to have to sell his crops as soon as gathered at any price.obtainable. Now he can hold them until a more opportune time for disposing of them. Q. In the United States the farmers pay more interest than commercial borrowers. Do the French agricultural banks encounter much opposition from commercial bankers ? A. No. The farmers were not able to borrow at aU before the establishment of the rural banks, so the com- mercial banks have not been injured. The farmers under the old system were compelled to buy goods on credit. The law of 1884, framed by Waldeck-Rousseau, provided for the agricultural syndicates which have created the spirit of association in France. Q. In the United States the mobile nature of the rural population is pronoimced ; is this true in France ? A. No. In France the rural people are much attached to their homes. Q. Have credit facilities had the effect of keeping the rural population on the land ? A. To a certain extent, but there is still a great movement toward the towns, and it is chiefly to stop this that these credit societies have been formed. Q. Have they had the desired effect ? A. They are having a good effect. FARMERS' SYNDICATE OF SARTHE. Statement Submitted to the Commissions. [Translation from the French.] Le Mans. The syndicate of the farmers of Sarthe was created by the society of farmers after the passage of the law of April 5, 1884. Its purpose is to furnish to the members: The materials necessary for the fertilization of their land; products for feeding cattle; insecticides for the protection of crops; selected and tested seeds; and perfected farm implements. The adherent niembeis each pay an annual fee of 1 franc, and receive each week the bulletin of the syndicate, a paper entitled "rAgriculteur Sarthois." We attach great importance to the publication of this weekly pa]:)er of which our farmers are very fond. We publish a very sunple discussion upon current agn- cultural practice each week, and consider this publication as one of the best means of effecting agricultura progress among the farmers. It is by this paper and by conferences, that we have implanted a knowledge o FEANOE. 731 the several associations of mutuality, founded by the farmers' syndicate, such as agricultural credit, insurance against accident to workmen, mutual cattle iasurancfe, and mutual insurance of horses. The syndicat has extended over all these associations its fatherly protection and developed them from their beguming, furnishing and keeping open to them a guaranty for their operations; but not one of them has had recourse to this financial support because each has been able to live upon its own resources. OflBce accommodations on the premises of the syndicate have been accorded these societies, all of which have remained aflBliated to it. We consider that the syndicate is the foundation of all mutual agricultural organizations. It is the mutual establishment, the duty of which is to act as arbiter among these institutions of credit and the several mutual associations under their varying forms and in their several applications. SOCIAL PURPOSE AND SCOPE OF THE SYNDICAT. As a material service the farmers' syndicat of Sarthe is occupied in furnishing to its members the fertilizing materials required upon their farms. Chemical fertilizers are being more and more employed, and the syndicat delivers these fertilizers after having had them analyzed; that is to say, that it gives to its members guaranteed materials at their true value. This sale of analyzed fertilizers is of much imjiortance in our Department. The farming is very diversified, each cultivator only needing a few sacks of fertilizer and as a rule he accepts them without requiring analysis. Numerous frauds have resulted which not only occasion a useless expense to the farmers but, what is still more serious, these fertilizers give no beneficial results, thus discour- aging the farmers from using them and in this way hindering the upward march of progress. Generally the fertilizers are delivered ready mixed and guaranteed as to analysis and proportion, directly to the farmer. On large plantations the farmers themselves perfoixn the mixing of fertUizens, varying the quantities of phosphates, nitrate, and potash, according to the richness of the soil and the requirements of the plants cultivated. Sint.'e in our Department the farming is so extremely cut up in small parcels we have had to prepare in our own warehouses the fertilizer mixtures corresponding to the needs of the several crops, taking into account the nature of the soil. These arrangements made by us have prevented fraud which inevitabl}^ and above all would be perpetrated against the small farmers. Besides, the syndicate were established to overcome these very frauds and the control th-y exercise has inspired confidence among the farmers, and thus favored the development of these useful institutions. The fertilizers handled for the farmers are given .to them either at the central depot at Mans, or in the sub- depots, of which 112 are established throughout the Department. The orders of the farmers in each region are registered and grouped together, thus simplifying the shipments and reducing the expense. The agricultural syndicats are, in their action, ths soul of all progress which has been realized in France in the last quarter of a century in all that concerns agriculture. The table shows the operation of the Syndi- cat des Agriculteurs de la Sarthe, from its establishment to date. 8yndicat des Agriculteurs de la Sarthe.^ Years. Number of members in the society. Metric tons of goods handled. Value of goods handled. Francs. 1901 8,300 6,270 582, 000 1902 8,750 6,430 630, 000 1903 9,400 7,520 792, 500 1904 11, 320 9,500 1, 120, 000 1905 11, 500 10, 650 1, 225, 700 1906 12, 730 11, 860 1, 384, 000 1907 12, 975 13, 630 1, 703, 000 1908 13, 140 13, 812 1, 809, 000 1909 13, 192 14, 950 1, 764, 000 1910 13, 520 16, 070 1, 846, 000 1911 13, 600 18, 949 2, 253, 000 1912 14, 160 21, 329 2, 588, 000 During the year 1912 the business amounted to .1517,600; business per member, $36,554; price per ton, S24.26; tons per member, 1.506. ' The progress of this syndicat has been steady throughout the life of the society, becoming more noticeable within the last two years. 732 AGEICULTUKAL COOPEEATION IN BUHOPE. AGRICULTURAL CREDIT IN THE DEPARTMENT OF SARTHE. Statement Submitted to the Commissions. [Translation from the French.] Le Ma\s. Agricultural credit was established in the Department of Sarthe on December 21, 1900. It was the syndicate which took the initiative while the local societies were being established. A credit society was created covering the whole department. The initial capital amounted to 74,000 francs, of which 64,000 francs was furnished by individuals, and 10,000 francs by the credit society, and only 29,500 francs were paid in. The capital at the end of 1912 had mounted to 563,675 francs; this considerable increase in capital being due to the contribution of societies from the several localities since the foundation of the regional banks. The "credit agricole system" has for its base a local credit society; the territory covered by it being restricted as much as possible, the ideal condition would be to have a local in each commune, so that the organi- zation could be under the hands of its directors, and so that they might be able to perform the operations necessary without much trouble. At the present time we have established credit societies in all the principal parts of the canton, and in the more important communes, in important marketing centers, etc., but we recog- nize that this is not enough, that the farmers are put to inconvenience and expense, which augment the price of money. In a well-organized system there ought to be in each commune: First, an agricultural syndicate between the members of which there should be created a credit society, and other mutual institutions for insurance of cattle and horses, against accidents to workmen, and against fire, etc. All these economic organizations centralized under the protection of the syndicat render an important service to the farmers, and insure to them the profit of such service. It is equally necessary that a credit society shall operate o\'er a limited territory, in order that each borrower may be known personally to the man- agement, and the extent of his reliabilily and his method of conducting his operations should also be familiar to those in charge of the local. The local societies have unlimited capital, which is furnished by the farmers who form the membership. This capital is in the form of shares which ought to be of as small denomination as convenient, in order to invite modest subscription, so that every borrower may be able to hold shares. In our credit societies the shares are valued at 20 francs, of which one quarter, or 5 francs, is required to be paid in; however, the sub- scribers are allowed to pay in one-half or three-quarters of the amount subscribed. The responsibility of each member is limited in proportion to the amount of his subscription. The interest on the share capital ought to be at a little higher rate than that ]iaid by the saviiig.s baiib, for it must not be forgotten that there is some risk, for if a society should make unsuccessful operations its members might have to suffer an assessment to make up the deficit, and this risk must be paid for. Our rate of interest is fixed at 1 per cent, whereas deposits in the local savings bank receive only 3 per cent interest. Credit societies ought notr to serve only for making loans, but they should be utilized by their members like savings banks; that is to say, that they should serve as depositories for funds on cm-rent account. That is another consideration why their territory should be limited. In order to establish a local society it is first necessary to unite the farmers, point out to them the ad- vantages of agricultural credit, and the profits which they may thus retain. Such a demonstration is easy and generally very well understood. In order to induce the hearers to subscribe to the share it is only neces- sary to secure seven charter members, the others may come in afterwards. The initial capital may be very limited, and it will increase in amount as the farmers become better acquainted with the working of the society; each new member who joins will subscribe, and the subscription of members will be increased in proportion to the amount they desire to borrow. As the funds come in they are sent immediately to the regional bank, which converts them into shares, which insure the payment of interest to their holders. This detail is important; if the local societies should hold their funds they would be unable to meet the 4 per cent interest rate required by the subscribers, and at the end o'i the year they would have a fatal deficit which their profits would be insufficient to meet. Ac- cording to our manner of proceeding the local societies run absolutely no risk. Besides having no funds at their disposition, the local societies are unable to perform any operations with- out the knowledge of the regional bank; therefore, in proportion as new funds come into the locals they are immediately transi'en-cd to the regional and eom-erted into shares. In order to provide fui' tJie e\i)t>nses and the super\ision whichit is indispensable to exercise over the loca the regional bank supervises the l)ookkoepiiig of all its affiliated locals. These in turn simply have 'memo randum books," in which they fill in the amount and date and the sum and date of issue. Under these co FRANCE. 733 ditions the work of the locals is made very light — a very important feature — since it is not always possible to find in the country managers whose knowledge of regular bookkeeping is adequate. The local societies are managed by a council of nine or more members, who are appointed each year, and composed of a president, vice president, secretary-treasurer, and a manager who signs documents. REGIONAL BANK. The capital of the regional bank is made up of subscriptions from individuals, and by the capital turned in by the local societies, the value of each share being 100 francs, one quarter of which has to be paid in, although any other proportion or all of it may be paid in and the interest rate is 4 per cent. The regional bank receives in addition advances from the State in proportion to the amount of its paid-up capital, and may reach a sum equal to four times such capital. These advances are made by the State free of interest for a period of five years, renewable at the end of that period. The regional bank is managed by a board of directors composed of nine members, three being reelected each year. Every year it appoints its executive board, composed of the president, vice president, and manager, who does the signing for the society and passes upon the notes presented for discount by the locals. INVESTMENT OF FUNDS OF THE REGIONAL BANK. This is a very delicate question. The loans are extremely irregular; there are seasons when very little busi- ness is done, when the regional may have large sums at its disposition. How should these funds be employed? The responsible local banks may receive funds on current account, but the interest which they pay rarely exceeds li per cent, which is very little. The best plan we believe would be to convert the capital partially — one- third for example — into reliable securities which are subject to slight fluctuations. Such securities deposited with the Bank of France would serve as a guarantee for the discount which may be made. The "balance," that is to say, the two-thirds which remain available, may be allowed to remain in operation in such a manner as to make a profit through discount operations. RELATIONS BETWEEN THE REGIONAL BANKS AND THE LOCALS. The borrowers can not have any direct relation with the regional bank. Whenever a farmer wants to make a loan he makes the request of the local society of his locality, and his application is examined by the management of the society, and if his responsibility is sufficiently well known to make him good for the loan which he desires to take out, a note is drawn up for the amount to which is added the expenses ; that is to say, the interest, the cost of the stamped paper, and other similar expense. This note is then signed by the borrower and his wife, and if the amount is very considerable, by a guarantor acceptable to the management of the local society. The loan may also be guaranteed by a warrant taken on live stock or harvested crops, in conformity with the law. The note thus made out, signed by the local manager, is sent for discount to the regional bank where, if accepted, it is discounted and the funds are sent to the local society to be turned over to the borrower. The borrowers pay 4 per cent on the sums loaned. The discount at the regional bank is made at 3 per cent, thus leaving a profit of 1 per cent to the local. These profits make up the reserve of the locals and this reserve is also increased by the rebates made each year by the regional bank, from one quarter of the profits which it realizes, which is divided among the locals in proportion to the amounts presented for discount by each of them. The relation between the regional bank and the locals is thus very regular, and in order to avoid the pos- sibility of frauds which might result, for example, from a borrower addressing himself to several local societies, there is established for each regional bank a system of vouchers for each subscriber to a note. And from the time when a note arrives for discount at the regional bank the managing director consults the vouchers of the borrower and assures himself in this way that there are no other loans outstanding. This simple and easy checking method enables us to avoid abuses and perhaps even deceptions. The amount of discount which may be made to the society is extremely variable. In principal it is four times the capital paid in, but it may be raised to a sum greater according to the value of the notes which have been discounted — if, for example, a local society presents an amount of notes for discount perhaps greater than four times its paid-up capital. If, on the contrary, there are a great many small notes, and in consequence a considerable dividing up of the risk, the discounts may be increased. The regional bank centralizes the notes of all the borrowers and keeps them in a portfolio until the exhaustion of the funds available. When these funds are exhausted they are discounted at the Bank of France as the need arises, the notes still having a duration of less than three months. The notes presented for discount at the Bank of France are signed by the managing director of the regional bank. These notes, countersigned by three signatures (that of the borrower, that of the manager of the local society, and that of the managing director of the regional bank), are bankable. 734 AGMOULTTJBAL OOOPERATIOIT IN EtTEOPE. In order to avoid the expenses of recovery, which are very onerous for the countrymen, all the notes are payable at Mans, at the office of the regional bank. LONG-TEEM CREDIT. This service provided for by the law of March 19, 1910, has been applied in the Department of Sarthe through the care of the regional bank since 1910. The number of loans granted up to the end of 1912 was 63, the amount totaling 303,670 francs. The regional bank of Maine was inspired for the purpose of providing credit on long term for young farmers without much money, but burdened with large families and having the ardent desire to remain upon the land and become farm owners. LA SARTHOISE FARM LABORERS' ACCIDENT INSURANCE SOCIETY. Statement Submitted to the Commissions. [Translation from the rrenoh.) Le Mans. La Sarthoise, a mutual society for insuring workmen against accidents, was created by the farmers' syndicate of Sarthe, for the benefit of its members. Agricultural insurance, even though it be not obligatory, has become nevertheless a necessity for farmers. The small operators need a personal guaranty against accidents of which they may become victims in the course of their agricultural labors; there is also an equal need of protecting the workmen who are employed; in a word, farmers would be insured against all risks which may cause them damage, either personal or otherwise. It is this purpose that has been undertaken by La Sarthoise which, by means of a premium regulated accord- ing to the number of hectares operated, guarantees to its members a daily indemnity in case of temporary injury, and a fully paid-up indemnity for permanent injury or in case of death. The society also provides for medical aid and drugs. The premiums are variable according to the nature of the farm operations and are payable in advance. Each year the accounts of the society are balanced on December 31, and whatever profits there are divided into two equal parts, one going to the reserve fund, the other distributed among the members proportionately to the amount of their premiums. Since the establishment of the society, on March 1, 1905, La Sarthoise lias realized profits amounting to 30 to 40 per cent of the paid-up premiums, therefore each year the premiums of the people insured are diminished by from 15 to 20 per cent. This institution has enjoyed a success surpassing our expectation; the ai:)plication of the principles of mutuality having an excellent moral effect upon those insured, for knowing that they are interested in the profits, they take every occasion to keep down the expenses. They bring in new members and increase the strength of the society automatically, and finally in this association we have realized the following ideal: "Giving to the people insured the maximum of guaranty at the minimum cost (premium) ." La Sarthoise is administered by a council made up from the officers of the syndicat and of nine members chosen from among those who are insured. Table showing the annual progress of the association: Year. Number of members. Paid-up premiums. Claims for loss paid . Profits of the society. Area in- sured. Individ- uals insured. Francs. Francs. Francs. Hectnrfs. 1 1905 212 6, 786 6,026 760 3,500 1. 272 1906 765 27, 000 18,512 8,488 16, 500 4.590 1907 1,084 30, 500 17,435 13, 065 22, 550 6,504 1908 1.347 42,100 25, 480 16, 620 28, 000 8,082 1909 1,651 50. 480 35,810 14, 670 31, 650 9.906 1910 1,972 59, 9.30 36. 370 23, 560 36, 400 11, 832 1911 2,231 66. 016 44, 896 21, 120 41. 520 12, 386 1912 2,480 72, 045 51.493 20, 552 47, 160 14, 880 Premiums: francs. Average per farm, 32 francs; average per hectare, 1.5 francs; average per person insured, o.i FRANCE. 735 BY-LAWS OF LA SARTHOISE.' Section I. — Formation of the company, its name, office, and duration. Akticle 1. In accordance with, the law of March 21,' 1884, and that of July 4, 1900, there has been formed among the proprietors, farmers, and metayers of the department of the Sarthe and, provisionally, of neighboring departments who agree or will agree to the present by-laws, a company of mutual insurance against agricultural accidents, under the title of "La Sarthoise." Art. 2. The home office of the company is at Le Mans, office of the Farmers' Syndicate of Sarthe, 30 Rue de Gue-de-Maulny. It may be transferred to any other place in the same town by the vote of the administrative council. Aet. 3. The Ufe of the company is fixed at 50 years from the day the by-laws are legally accepted at the mayor's office of the town, except in case of prorogation or of anticipated dissolution, as provided for in the present by-laws. Section II. — Object of insurance. Art. 4. Accidents which may be insured for a money equivalent by La Sarthoise are bodily accidents received directly or indi- rectly because of agricultural labor necessitated by the working of land, as described in the policy. Any work executed at a neighbor's of the insured can only be insured if this neighbor is one of his day laborers, or there is habituul exchange of farm services with him. Akt. 5. By extension, accidents incurred in the course of all work ordered by the insured from his servants, or executed by him, can also be insured if this labor is not foreign to the regular work of the land. Akt. 6. Accidents can be insured in different ways: 1. Individual and collective insurance, the regulations of which are determined under section 40 below, and can be paid in the following method: (a) For medical expenses and medicines. (b) By an allowance by forfeiture, because of accidents suffered by — (1) The insured, his wife, or his children; (2) his servants or day laborers. 2. Insurance against the employer's liability, according to section 5. The payment to the insured, up to a certain sum, of damages which he may owe, according to the actual terms of the civil code, either to his servants and day laborers, or to a third party, because of accidents caused by his own deed or that of his children, of his servants, or of his animals. Art. 7. These risks or any of them can be reinsured by the company. Art. 8. The following are excluded from insurance: 1. Accidents which come under the acts of April 9, 1898, and of June 30, 1899 (accidents due to machinery not in motion). 2. Those caused in the working of sand pits, clay pits, and quarries of all kinds. Section III. — -Nature and duration of engagements. Art. 9. Adhesion to the present by-laws and the contract of mutual insurance are stated in a policy signed, on the one part, by the insured, or, if he can not sign, by two witnesses attesting his engagement; and on the other part by the president of the company or his delegate, as well as another member of the administration. Art. 10. The insurance contract creates no other legal obligation between the company and the insured. Art. 11. The insurance will take effect at noon the day after the signature of the policy, after payment of the assessment of the current year and the price of the policy. The first premium is calculated pro rata to the 31st of the following December. Art. 12. The insurance contract is for the life of the company, with the right to surrender it at the end of each period of five years, terminating on the Slst of December, after six months' notice has been given reciprocally. It is understood that this quinquennial period is made up of five complete financial years, from January 1 to December 31 , without reckoning the incomplete period, if there should be any, of the first year. Declaration of surrender of the policy must be made by registered letter or extrajudicially (or without recourse to legal proceedings). The letter of the insured should be addressed to the home office, with the signature vouched for by the mayor. A receipt will then be given for it. Art. 13. At any time the company will have the right to cancel the insurance: 1. If the insured already holds a policy or has insured himself in any other company or society. 2. After any accident. (In this case the company will reimburse the insured pro rata for what he has paid on his premium for the time remaining in the current year.) Art. 14. The decease of the insured does not annul the policy, which continues for the profit of his widow or his heirs, if they con- tinue to work the land. In case they do not continue this work the policy may be canceled if the office is notified three months in advance. Art. 15. The amount of the premium to be paid on the policy, as calculated according to the classified table of risks and charges, in proportion to the capacity and quality of the land cultivated, is indicated in a declaration signed by the insured, which also states, at the same time, the risks which he desires to cover by insurance. Fields which are seeded down, or at other times cultivated, are reckoned as arable land. The insured is responsible for his statements, and any dissimulation or reticence made with the object of diminishing the premium may bring about the lapse of the insurance. In such case, the company will have the right to retain the premium already paid. Art. 16. All increase or diminution or changes in the manner of working the land must be declared, under pain of lapse of insurance, in the course of three months, and the policy modified accordingly. Art. 17. The table of classified risks and charges annexed to the j-resent by-laws may be revised by the general assembly. This revision shall not be considered as a modification of the by-laws. The revision applies to all contracts of the following year. Art. 18. The assessment on the policy may, in any year, according to the decision of the administrative council, be diminished because of a bonus, or increased because of the establishment of a supplementary premium as stated in section 15. Each insured is at once insurer and insured, according to the proportion of his ordinary assessment, and shall share in all the expenses, debts, and engagements of the company. 1 Formed according to the Laws of Mar. 21, 1884, and July 4, 1900. 736 AGRICULTURAL COOPERATION IN EUROPE. Art. 19. The premiums of each financial year are payable to the home office on March 1, within two months of the beginning of the year. A receipt will then be given. After March 8 payment shall be collected by post at the expense of the insured. Nonpayment after March 15 causes the lapse of the policy, without withdrawing the right which the company has to obtain by legal means the pay- ment of the premiums due from the insured. Art. 20. All persons insured must be ready to receive visits from inspectors of the company and to give them all information demanded. In case the inspectors find in the method of work, tools employed, or ownership of dangerous animals, any abnormal increase in risks and if the insured fails to carry out the reforms recommended in the above conditions, he will be liable to an increase of his premium up to 25 per cent, or the company may simply cancel the policy. Section IV. — Individual and collective insurance. Art. 21. Not only accidents mentioned in articles 4, 5, and 8 are noninsurable, but also all those which are caused either through the person to whom the accident befalls or through the insured or the persons for whom he is responsible. These are caused as follows: 1. Accidents willfully incurred either through gross negligence or disobedionce to the laws and regulations concerning the safety of individuals and the care of horses and carriages. 2. Drunkenness, delirium, insanity, epilepsy, hysteria, blindness, deafness, paralysis, etc. 3. Quarrels, strife, gambling, or betting. Art. 22. Also, the following are noninsurable. 1. Accidents befalling persons less than 12 years old or more than 70. 2. Ordinary maladies, even if they are contracted while working, or appear at the time of the accident, such as: Rheumatism, con- gestion, aneurisms, varicose veins, and phlebitis, hernia, and consequent strangulation, strains, lumbagoes, inflamed callosities, boils, etc. 3. Anything that may come from a violent, sudden, exterior, and involuntary cause. Art. 23. Also, there are excluded from insurance, accidents caused by lightning, earthquakes, inundations, conflagrations, and those caused by war, riots, aggression, or crime. Art. 24. The preexistent affections and infirmities of the injured, which may have aggravated the consequence of the accident, are always taken into consideration in regulating the demand. Payments of the company can not exceed those due for an accident received by a person who is neither sick nor infirm. Art. 25. In the employees covered by insurance are not included workmen or day laborers who work by the job, or who have one or more workmen under their orders paid by them. Also, anyone pruning trees, even if working alone. Art. 26. A written description of all accidents must be made by the insured or by some other person in his name, and should reach the home office not later than 48 hours after the accident. This declaration should give: (1) Surname, Christian name, age, profession, domicile, and civil condition of the injured person. (2) The date, hour, place, and cause of the accident. It must be accompanied by a medical certificate stating the gravity of the accident and indicating its probable consequences. Should the injured delay to make the declaration within the time above stated , the allowance may be reduced one-fourth by the administrative council, and if two weeks after the accident no declaration is made, all right to the allowance will cease, exceptwhenithas been absolutely impossible to send it. The allowance will lapse equally if the delay, however slight, in sending in the declaration prevents the company from finding out certainly the true cause and responsibility for the accident. Art. 27. The insured must see that the injured person is cared for as soon as possible by the doctor, to whom he will take him whenever it can be done without prejudice to theinjured man. The nearest doctor must be chosen. Another one may serve equally well, but the company will not pay for the extra expense resulting from the greater distance which he has come. Art. 28. The prescribed dressings and medicines must be strictly observed, and, if the doctors in the course of their visits should report that the injured does not conform to their orders with the idea of prolonging the period of inability to work, the right to the allowance may cease. Art. 29. As soon as the injured can return to his work his cure shall be vouched for by a certificate given by the attending doctor, which certificate shall be sent in the course of 48 hours to the home office of the company. The same routine shall be followed if, at the end of the treatment, the injured person remains afflicted with permanent infirmity. Art. 30. The regulations concerning accidents which are not totally excluded from insurance, or the allowance for which is partly or wholly forfeited as enumerated above, are made much according to the individual agreements and corresponding assessment of each insured on the following lines: The company will pay all legitimate medical and pharmaceutical expenses. It will not pay the expenses of what are called major surgical operations. The company will always have the right to submit the beneficiary's bill to the arbitration of the doctors' syndicate of the Sarthe. As to the allowances, they are calculated as follows: 1. In case of temporary incapacity to work lasting more than three days, including the day of (he accident, the daily allowances are reckoned from the day after the accident, and are as follows: (a) Two francs per day for employers; (b) 1.25 francs per day for wives of employers; (c) 1.50 francs per day for men servants above 16 years of age; (d) 1 franc per day for women servants above 16 years ol age, (e) 1 franc per day for men servants less than 16 years of age; (f) 75 centimes for women servants less than 16 years of age. In every case, after 90 days the daily allowance shall be reduced by one-half, and shall cease after the one hundred and eightieth day. 2. In case of permanent incapacity or death the amount of allowance shall be paid in one sum, as follows: (a) For the loss of an eye, three fingers, three toes, or two fingers including the thumb, or two toes including the big toe, or for stiffness of shoulder, elbow, niPi knee, ankle, or wrist; also, in the case of an unhealed fracture of the jaw, or the kneecap, or, if lower limb shall be shortened as much as centimeters, 500 francs shall be paid; (b) in case of complete loss of the use of a leg, arm, foot, hand, or the lower jaw, 1,000 francs shall e paid; (c) in case of total and absolute permanent incapacity to work, or in case of death, 2,000 francs shall be paid. , In case of death the allowance shall be reduced one-half if the victim is a woman, unless she should be acting as superintendent, an also, when she is more than 60 years of age or less than 16 years. The sum allowed, in case of death, shall be distributed without confusion as follows: One-half to husband or wife if not divorce separated; the other half to children who are legitimate or recognized as such before the accident, and are at least 16 years old. ^ In case the distribution can not be thus made, the parents, if they are in need, shall receive one-half the sum which otherwise w be paid to the husband or the wife and children together. FRAnrcE. 737 Id any otter case, the company shall only pay for the expenses of the funeral, a sum not exceeding 100 francs: Art. 31. The infirmities not provided for above shall be considered as similar to those described which result in the same kind of incapacity for work. In doubtful cases they shall be classed in the category of accidents demanding the smallest allowance. Art. 32. No more than one allowance can be demanded for one accident, either the daily payment, or the whole sum in case of infirmity. In this last case any money which shall have been paid as part of the daily payment shall be deducted from the total amount. Art. 33. When the injured servant or day laborer has not shared in the payment of the assessment (by deductions from wages) the company reserves the right, if the administrative council judges it more favorable to the interests of the beneficiary, to pay the sum due with a Government bond, or shares of French railway stock of an equivalent value, according to the market price, made nontransferable and unattachable up to a certain date. Art. 34. Allowances shall be paid at the home office to the insured or to the beneficiaries under the insurance on condition that they shall take no part in any appeal or any action on the part of the person who has caused the accident against the insured or against the company; also, on condition of supporting the company in all its rights and appeals against all persons responsible for the accident. In case of temporary incapacity to work the allowance shall be paid before recovery. If the company pays the hospital expenses the daily allowance will be diminished one-half. Sectign V. — Of insurance and dvil responsHnlity. Art. 35. In regard to servants and day laborers the liability of the employer as of the insured is only insured by the company in cases where there exists the right for forfeiture of indenmity according to the rules established in Section IV. Art. 36. As to the employer's liability toward a third party, it is only assured by the company on condition that the accident is not due to any of the causes indicated in section 21 on the part of the insured or of persons for whom he is responsible; on condition also that it is not included in the lists of special risks provided for in section 23. It is also necessary, as in individual and collective insurance, that the accident should be due directly or indirectly to agricultural labor as explained in article 4, or according to the individual conditions of the policy, to the class of labor as provided for in article 5. Art. 37. The guaranty of the company is expressly limited in all cases to the payment to the insured of a sum not exceeding the fol- lowing amounts: For accidents to servants or day laborers, 5,000 francs per victim, or 7,000 francs following a supplement to the assessment. For accidents to a third party, 5,000 francs per accident, whatever may be the number of victims. In any case, even when the estimates for the employer's liability are inferior to the above sums, the company will not be responsible for any other charges except for the expense of procedure and for the fees incurred during the suit which the company has taken in its charge. If some payment has been made, whether as forfeiture of indemnity or for medical and pharmaceutical expenses, the sum due for insurance of civil employer's liability responsibility will be reduced accordingly. In any case, the company will not reimburse the insured for the fines which may have been charged to him. Art. 38. In the case where the insured has been adjudged to a life payment the company will not be held to continue the annual pay- ments after the total sum of these payments equals the guaranteed capital. Art. 39. In making the contract the insured gives to the company all necessary powers to conduct law suits relative to the accidents which come under the responsibility of the insured and the guaranty of the company. Under pain of lapse of his policy the insured must in these cases: 1. Send to the home office in the course of 48 hours all notifications of legal or extra-judicial acts which have come to his knowledge, and furnish all information and useful documents. 2. Abstain either from interfering in the course of the suit carried on in his name or from appealing to the company as a guaranty, or from bringing the company into a law suit, or from making known his contract. 3. He should not consent to any transaction without being so authorized in writing. Section VI. — Administration. Art. 40. The company is administered by a council invested with full powers of administration, composed of from 9 to 15 members, who serve gratuitously. Under the present statutes the following persons are appointed to act as members of the administrative council until January 1, 1908: MM. Caillaux, deputy, president; Richard, general councillor, vice president; Terouanne, former paymaster general, vice president; Boutti6, general councillor, in Mans, treasmer; Brifere, director of the agricultural syndicate of the Sarthe, administrateur d61%u6 (execu- tive officer). Members of the council: A delegate from the syndicate of doctors of the Sarthe; MM. Avice, proprietor, at AUonnes; Siu^nont, pro- prietor, at Mans; Boutti^, of St. Symphorien; Leroux Henri, of Ballon; Desjouis, mayor of St.-Aignan; Gaulard, mayor of Avez6; Sarrazin, mayor of Euille-sur-Loir; Chevallier, mayor of St. Vincent-du-Lorouer; Vilfeu, mayor of Villaines-sous-Malicome. Art. 41. After this date the council will be chosen by the general assembly. One-third will be reelected' every three years, the two first retiring series being designated by lot. The retiring members are re-eligible. Art. 42. If there are vacancies in the council because of retirement or death of one or several members, the place will be provisionally filled by the administrative council, and nominations will be submitted for approval at the next general assembly. The member thus nominated will exercise the functions of the member whom he replaces during the remainder of the term. Art. 43. The council will elect every year its executive board (bureau) composed of a president, two vice presidents, a treasurer, and an executive officer. Art. 44. The members of the council have no more responsibility than other members of the society, except in cases of gross negli- gence of duty. Art. 45. The president oversees and insures the carrying out of the by-laws. Each year he presents to the general assembly an account of the operations of the preceding year. He is charged with the policy of the meetings. Art. 46. The charges for accidents are settled by the council, except those under 100 francs which give rise to no difficulties, and which are settled by the executive officer who submits them later for the council to ratify. Art. 47. All transactions shall be recorded by reports entered in a special register. These reports shall be signed by the members present. Copies or extracts of transactions to be produced in court or elsewhere are certified to by the president, and in his absence by bis substitute. 14174°— S. Doc. 214, 63-1 47 738 agmcultural coopebatiok lis exjeope. Art. 48. A commission of control and supervision, composed of two members at least, shall be nominated by the constitutional assem- bly, and each year by the general assembly. It shall be made up outside of the administrative council, and its mission shall be to verity the accounts of the office and to make a report to the general assembly the following year of the condition of the treasury, of the balance on hand, and of the accounts presented by the administrative council. It has the right to examine the books and operations of the office during the three months preceding the general assembly. In case it finds any irregularities in the accounts of the administrative council it will call a meeting of the members of the company. Section VII. — Financial year — Use of funds — Expenses of administration — Employment of surplus. Art. 49. The first year will begin with the adoption of the constitution of the company and terminate the following December. The other years begin with the calendar year. Art. 50. The accounts of each year will include in the assets the premiums belonging to this year and in the liabilities the expenses of administration and the sums already paid and to be paid for accidents arising in the course of the year. If there is a surplus, it shall be divided in the following manner: Fifty per cent for the sinking fund and for reserves and 50 per cent for the members whose premium will be diminished accordingly. If, on the contrary, the probable expenses exceed the total of the premiums of the year, it must be provided for in the following manner: 1. By taking from the reserve funds a sum not more than one-half of the amount of these funds at the close of the year. 2. In case this proves insufficient, by supplementary premiums on the members calculated, pro rata, from their premiums. When the necessity of the supplementary premiums has' been recognized by the administrative council, they shall be collected with the ordinary premium. Art. 51. The reserve funds shall be made up as follows: 1. Of whatever part due to it from the surplus of the company's year. 2. From grants which the company may receive. 3. From sums placed with the company by the agricultural syndicate of the Sarthe. Art. 52. Invested funds should be placed in the savings bank or in the current accounts of a rural-credit company. Section VIII. — General assemblies. Art. 53. The company shall meet every year in general assembly on the call of the president, some time during the first three months which follow the close of the year. A report of the administrative council will be read on the financial condition of the company and on the operations of the past year. The general assembly may also be called whenever the administrative council judges it necessary, or on the collective demand of one-fifth of the members, or on the call of the members of the committee, according to article 48. Art. 54. The general assembly can only deliberate when at least one-fourth of the members are present or represented. When they consider a loan, modification of the by-laws, dissolution, or prorogation, at least one-half of the members must be present or represented. These meetings must be called by letters sent to each member giving the subjects to be considered. If there are not a sufficient numher present, personally or by proxy, the assembly shall be again called a week later, and at this meeting all action will be legal, no matter what number of people are present. Section IX. — Dissolution — Liquidation. Art. 55. The company may be dissolved, if the administrative council so asks, by a majority vote of the members of the general assembly. If, on the contrary, the council is opposed to it, a three-fourths vote is required. From the assets on hand after liquidation the members of the society shall be reimbursed for their premiums for the remainder of the year, or if the funds are not sufficient to do this the money will be divided pro rata. If, on the contrary, after they have been paid there still remains some money in the treasury, it will be given, according to the decision of the general assembly, to some agricultural work of interest in the department. RISKS AND CHARGES OF LA SARTHOISE. MINIMUM INSURANCE. Minimum insurance gives the right for accidents to the servants of the insured: 1. To medical and pharmaceutical expenses. 2. To indemnity subject to forfeiture in case of permanent infirmity or death only (consequently, without daily allowance in case of temporary incapacity to work) . It insures, at the same time, up to 5,000 francs, the personal liability of the policy holder, in the conditions provided tor in the by-laws, in case any accidents should befall the servants or a third party. The minimum insurance is as follows: Per hectare of arable land, 80 centimes; vineyards, 90 centimes; fields, 45 centimes; woods and waste lands, 60 centimes, with the following minimum prices: Up to 6 hectares 10 francs; from 6 to 12 hectares, 13 francs; more than 12 hectares, 16 francs. SUPPLEMENTS. To minimum insurance may be added one or more of the following supplements: 1. Supplement covering accidents incurred by the employer, his wife, or his children without any grant lor daily allowance. 2. Supplement giving the right to daily allowance for accidents incurred by servants or day laborers. 3. Supplement givimg the rigM to daily allowance for accidents incurred by the employer, his wife, or his children : For each of these three insurance supplements the following charges should be added to the minimum insurance: For each hectare of arable land, 30 centimes; vineyards, 35 centimes; fields, 15 centimes; wood and waste land, 20 centimes, with the following minimum increase: Up to 6 hectares, 3 francs; from 6 to 12 hectares, 4 francs; above 12 hectares, 6 francs. 4. Supplement covering accidents incurred by servants or day laborers in the course of aU work done under orders. (See Article 5 in the by-laws.) 5. Supplement covering accidents by the employer, his wife, or his children in the course of any work (article 5 of the by-laws). For each of these two supplements of insurance (Nos. 4 and 5) there is added to the charges: Per hectare of arable lands, 20 centimes; vineyards, 25 centimes; fields, 15 centimes; woods and waste lands, 15 centimes, with the following minimum increase: Up to 6 hectares, 2 francs; from 6 to 12 hectares, 3 francs; above 12 hectares, 4 francs. 6. Supplement for insurance of employers' liability as to servants is raised to a maximum of 7,000 francs: Per hectare of arable lands, 15 centimes; vineyards, 20 centimes; fields, 10 centimes; woods and waste lands, 10 centimes, with the foUovidng minimum increase: Up to 6 hectares, 1.50 francs; from 6 to 12 hectares, 2 francs; above 12 hectares, 3 francs. PRACTICAL EXAMPLE. According to the risks against which the policyholder wishes to insure himself, his ordinary premium will be calculated on the basis herein established. For example, if he wishes to take extra insurance, as noted in Nos. 1, 2, and 3, there will be added to the charges for minimum insurance three times the supplementary charges named in these insurance allowances, and his premium will be calculated thus: For hectare of arable land, 1.70 francs; vineyards, 1 .95 francs; fields, 90 centimes; woods and waste lands, 1.20 francs, with the following minimum increase: Up to 6 hectares, 19 francs; from 6 to 12 hectares, 25 francs; above 12 hectares, 34 francs. MUTUAL INSURANCE ASSOCIATIONS AGAINST DEATH OF ANIMALS. Statement of Officials of Farmers' Syndioat of Sarthe. Le Mans. The farmers' syndicat of Sarthe has also taken the initiative in establishing mutual live-stock insurance associations for protection against the death of cattle. They are communal and intercommunal, each coverirg a restricted area, so that all the people insured in any one of these societies may know one another personally, thus being in a better position to supervise the operations. All the societies are federated and the seat of the federation is in the same oflice with that of the syndicat. All the animals on a single farm are insured individually with their special mark and value. It is upon the insured value that the premium to be paid each year is calculated, and indemnity to be paid in case of accident or loss is estimated upon the same valuation. The premium is calculated at 1.04 francs per year, and pay- ments are made every sijc months, each person insured paying in at the commencement of the semester se^ev.- tenths of 1 per cent of the value of the animals which he has insured. The premiums which are collected in the local societies of each commune are sent promptly to the office of the federation, from whence the claims for loss are attended to as they come in. These settlements are made at the rate of 70 per cent of the insured value (a reduction being made for the hide, the meat and carcass), that is to say, upon the net loss suffered by the farmer. There is an especial account open with the federation for each local society in which there is kept: An account of the premiums paid in, the expenses, and the indemnities satisfied. The accounts of each society are balanced every six months, thus permitting the condition of each to be known so that the federation may be kept informed as to the mutual obligations existing between it and each of the subsidiary societies. A division of profits is made in proportion to the individual profits resulting from the operation of each local society : Example, one society may turn into the society 200 francs in premiums and if the indemnity required to be paid out for losses in that same society during the semester should amount to 200 francs it would have no right to any part of the general profits distributed for the operation of that semester. If, on the contrary, the indemnity paid out should amount to only 100 francs, leaving a profit of a hundred francs to the federation, this 100 francs would serve as the basis for calculating the rebate to be made to that local society. 740 AGKtCULOTUBAL COOPERATION iTSt EtTEOPB. The accounts of the federated society are carried on in this way three years, and if at the end of that time any local society has not been able to satisfy all of its indemnities with the premiums which it has paid in, it is held responsible for the difference, and a supplementary premium will be required of it. The amount of this supplementary premium must be sufficient to cover the excess of its losses. We have been forced to take these precautionary measures after a long experience, and we have learned that certain societies are much more responsible than others and that some of them are a constant drag upon the federation. We have imdertaken, therefore, to offset this lagging tendency by increasing the rate of premium, so as to equalize. The future of the federation is assured and its operation during the two years of its existence has given us entire satisfaction. SPECIMEN BY-LAWS FOR MUTUAL CATTLE INSURANCE SOCIETY. > FOUNDATION. Article 1. There is formed between the proprietors or farmers of the commune of and of neighboring communes, who subscribe or will subscribe to this constitution, an association governed by the law of March 21, 1884 (art. 3), on professional syndicates. This association is named "The Mutual Cattle Insurance Co." Its oflBce is at the mayor's office of . The duration of the society is unlimited. Aet. 2. All cattle owners living in these communes who are not cattle traders may belong to it. Any proprietor or farmer who pastures only a few cattle shall not be considered as a cittle trader, and may be a member of the society. He must either increase the stated valuation of these cattle in pasture every month of May, describing them on his record, or tie may make a special declaration that they are not to be included on his policy; that is to say, that he can not be reimbursed in case of their death. In case pastured animals are included in the insurance, the pasture must be situated in the communes included in the society, so that all the insured may be able to verify their value and their description. Art. 3. Applications to join the society will be received by the board before the 1st of May and the 1st of November each year. The farmer who is accepted will sign his name on the society's register, which will be equivalent to a contract. Art. 4. Members are pledged for not less than a year. The society will be legally constituted when it has at least 20 members, rep- resenting a minimum insured value of 20,000 francs. Art. 5. The half years wiU begin the 1st of May and the 1st of November of each year coinciding with the beginning and the end of the farm season. objects op the SOaETY. Art. 6. The object of the society is to guarantee its members against losses which they may experience from the death of insured animals, with its limits and conditions stated below. * Art. 7. Insurance will be paid in case of natural or accidental death of insured animals, including drowning, and in case of killmg when this has been recognized as necessary by a graduate veterinarian. No insurance will be paid: 1. For accidents due to major causes, such as lightning, floods, conflagrations, etc. 2. For accidents incurred in transportation by railroad. 3. For accidents occasioned by neglect. The following are excluded from insurance: Sick animals, and, in a general way, all stables infected with tuberculosis. When a contagious malady appears in any stable, the policyholder must conform to the laws and regulations as laid out in the sanitary policy under pain of losing his rights of indemnity for future accidents. Animals recognized as suspected, after having been tested for tuberculosis, must be fattened and sold as soon as possible, otherwise they will not be covered by insurance. No insurance will be paid for an animal within one month of the declaration except for accidents occasioned by calving, which may receive insurance the day after the declaration. FUNCTIONS OF THE SOCIETY. Art. 8. Each member will receive a register in which he will write all the animals more than 3 months old, with a description which must be concise but sufficiently full to designate the animal clearly and prevent all possible confusion. This description will be followed by the price of the animal. A register where each insured animal has its particular place, will be kept at the office of the society, and will contain all the informa- tion of the individual record. The valuations will be made by the insured himself every sixth month ; his premium will be calculated from this valuation as well as the indemnity to be paid in case of accident. The valuations will be under the control of the society council, and they may require a revision of valuations whenever it seems to them that the value of the insured animals does not concur with the valuations of the society. Art. 9. The individual record books will remain in possession of the policyholders. The valuations for each animal will date from the commencement of the current term. Art. 10. As soon as any member brings a new animal into his stable he must at once send a declaration of it to the office of the society. The animal must be recorded with a description and value, and a premium in proportion to his price must be paid for the whole current half year. , . If any member sells an animal and replaces it with another, he must give notice of this change to the office of the society. The anun sold will be crossed off from the register and the animal which replaces it will be entered, with its description and its price, but the premiu to be paid must be calculated according to the highest price. No allowance w.ll be made in case of loss of any animal which has not been declared. 1 Recommended by the Agricultural Syndicate of Sarthe. FRANCE. . 741 I All members are required to ineure all animals owned ■with, the exception of calves less than 3 months old. When calves have reached the minimum age of 3 months, they Tnll be specially declared and ■will be allowed immediate insurajice unless they are entered at the end of a half year, and in that case they can not be insured until the next half year. VBRIPICATIONS AND RBGtTLATIONS CONCBRNINa DEATHS. Art. 11. When an animal has just died on a member's farm, before burying or taking it away he must notify the president of the society or two members of th.e board, who will ■visit the animal and verify the description made of it in the record. Art. 12. If, through any intrigues whatever, a member should make a false declaration, or if he should try to substitute one animal for another, he ■will lose all right to any iudenmity due to him and will be dismissed from the society. The same penalties are applicable to members of the board convicted of corruption. Art. 13. In order that the members may be interested iu caring well for the animals, and that no abuses shall be committed, the society pays, in case of accident, an indemnity of 70 per cent only of the value of the animal lost. From the valuation of the animal will be deducted whatever the farmer may have received for his remains: meat or hide or any indem- nity which may have been paid to him for any reason, and it is on the value thus reduced that the 70 per cent will be calculated. A calf will be considered as remains, and its value ■will be determined by one or more persons charged to make the declaration of its death, unless the price for it is less than 30 francs. If any insured animal, killed for food or sold for breeding, is tuberculous, and if through this fact its owner suffers loss because of partial or total confiscation, the society ■will indemnify the seller in proportion of 70 per cent of the dead loss incurred, as verified by some one in authority, a deduction being mad6 of any indemnity allowed by the State in this case. Art. 14. Notice of loss should be immediately sent, care of the president, to the office of the federation of communal societies, where the accident policies are payable. ! These must be settled in not less than two weeks; exception may be made in losses due to tuberculosis, which shall not be paid until it is known what allowance the State will grant. But part payment may be made in advance. Art. 15. All policyholders who receive any indemnity for loss incurred become by this active members of the society for a period of five years, except in case of decease, or departure from the commune, or ■withdrawal from agricultural work. Art. 16. The stock held by the policyholders is fixed at 14 francs per thousand, by year, of the insured value. It may vary, as is stated in article 19 of the rules of the federation. Art. 17. The expenses of veterinaries, medicines, and other charges occasioned by the sickness of the animals will be charged to the insured. Each one is free to care for his animals as seems best to him. The killing of any animal can be decided in case of emergency by the board of the society conferring with the owner of the animal, but the society can not reimburse anyone for an animal which has died as the result of an operation if this operation was not performed by a graduate veterinary. rights and obligations of t^e members. Art. 18. The pecuniary obligation of each of the members of the society is: To pay, at the beginning of the half year, a premium of seven-tenths of 1 per cent of the value of their herds. This premium ■will go to the federation of the local societies and will form a common fund from which are drawn the amounts necessary for the reimbuisement of losses. Art. 19. In order that the members may be encouraged to care well for their animals and be interested in the well-doing of the society, payments ■will be made from any surplus realized by the federation according to the conditions pro^vided for by its rules. These surplus funds will be divided among the members pro rata, according to the value insured by each. Art. 20. The board has the right to order certain hygienic measures to improve the healthtulness of the stables and any prophylactic measures calculated to stop epidemics. All members will be required to conform to these under pain of being dismissed. A member who sees that he has an animal suffering from hematuria (bloody urine) must immediately notify the board of the society under pain of losing the indemnity due to him in case of loss.> The board will also take all suitable means to safeguard the interests of the society. resources op the society. Art. 21. The local society has no private budget. The total of the premiums collected ■will be immediately turned over to the treas- ury of the federation, whose absolute control is accepted by the society. Art. 22. All functions and services are absolutely gratuitous. administration op the society. Art. 23. The society is managed by a council of administration composed of a president, a ■vice president, a secretary, and a treasurer, and of from 9 to 12 administrators. Art. 24. The president convenes the administrative council whenever he judges it necessary and, in accordance with the majority of the members present, takes the initiative of all measures for the interests of the society. He can delegate his powers to the other mem- bers of the board. Art. 25. The administrative council receives the resignation of the members of the society if they have fulfilled all the requirements. The administrative council is the sovereign judge in difficulties arising with the pohcyholders. Art. 26. All the transactions of the administrative council are decided by a majority of the members present. Art. 27. The administrators only are responsible for the execution of their orders. . Art. 28. In case of decease or ■withdrawal of one of the administrators, his place must be filled at the first reunion of the general assembly. 742 AGRICULTUBAL COOPBEATION IN EUEOPE. OENEBAL ASSEMBLIES. Art. 29. The society will hold two general aesemblies each year, one during the first two weeks in May, the other during the first two weeks of November, for the payment of premiums. The general assemblies discuss all questions of interest to the society, give certificates in case of applications for dismissal, and, after consultation with the administrative council, act on the expulsion of members. A detailed report of the work of the society will be prepared by the secretary and read by him to the general assembly. Art. 30. The president, in case of emergency, can convoke an extraordinary meeting of the members of the general assembly. Art. 31. At each general assembly a report is read of the proceedings of the last meeting. Art. 32. The administrative council of the society is chosen by a majority of votes of the general assembly for one year. Its powers are indefinitely continued. At the first meeting which follows the general assembly the administrative council elects the members of the board. Art. 33. All decisions of the general assembly must receive a majority of votes of the members present. DISSOLUTION OP THE SOOIBTY. Art. 34. Dissolution of the society can only be decided by a two-thirds vote of the members. BY-LAWS OP THE FEDERATION OF MUTUAL CATTLE INSURANCE COMPANIES OF SARTHE. Article 1. There is formed, under the patronage of the syndicate of farmers of La Sarthe, a departmental federation of the mutual cattle insurance companies for the benefit of the farmers belonging to the communal societies. In order to have power to act, the federation must be made up of at least 10 aflSliated societies. The office is at Le Mans; syndicate headquarters, 30 rue Paul-LigneiU. Art. 2. All communal societies which accept the constitution recommended by the farmers' syndicate and accept the rules and regulations of the federation may belong to it. The council of the federation will decide as to their admission. Art. 3. The aim of the federation is to group together the communal societies formed in accordance with conditions stated in article 2, so as to assure the payment of all accident policies at the rate of 70 per cent, regulating the charges belonging to each. RESOURCES. Art. 4. The resources of the federation are as follows: 1. All the premiums paid into each society on the annual base of 1 franc on 40 per cent of the insured value. Payment of these pre- miums must be made in advance every half year, and not later than the 3l8t of May and the 30th of November of each year. 2. Any subsidies which may be paid, either by the Department or the State, to the affiliated societies, these having formally promised, when joining the federation, to place all subsidies received By them in the common treasury of the federation. 3. All subsidies and gifts which the federation may have itself received. 4. All interest on invested funds and reserve funds. REGULATIONS — DIVISION OF PROFITS. Art. 5. The premiums paid into the treasury of the federation will form a common fund, from which will be drawn the necessary sums for payment of losses as they occur in each society. There will be no charges for payments made within two weeks after the loss. Art. 6. At the end of each term of six months 10 per cent of the profits realized will be withdrawn to add to a reserve fund common to all the societies. The surplus will be divided among all the societies which have contributed to make this profit. The part apportioned to them will be according to the amount of profits given by them to the federation. Art. 7. In order to follow the operations of each society, a separate account will be opened with each, on which will be entered the premiums deposited and the allowances made for losses. Each term of six mpnths the accounts shall be balanced. Art. 8. To assure a little more justice and equality among the societies, those whose accounts show a loss shall not share in the profits. They suall only share in them again when their accounts show a balance to their credit. Art. 9. Any society which for three years has not succeedea in balancing its losses with the amount of premiums paid io will bp asked to withdraw from the federation, or a new premium rate will be arranged for it, calculated on the average amount of losses during the last three years, and this rate of premium will be continued until the accounts of the society are approved by the auditors. After this the same rights will be accorded to this society as to the others. Art. 10. This society is administered by a committee made up as follows: 1. Of the board of directors of the farmers' syndicate of La Sarthe, who also form that of the federation. 2. Of the presidents of all the local societies. This committee meets at least twice a year in general assembly, at the commencement of each term of six months. The presMent of any local society who may be unable to be present may be represented by one of the members of the board. A majority of the members present shall decide all questions. Art. 11. The committee has charge of the treasury of the federation, looks after the management of the local societies, seeks new methods likely to improve their condition, and approves settlements for accidents which have been properly reported. The members Of the committee may make no engagements, individually or collectively, because of their office, and are responsible only for the execution of their official duties. All services are gratuitous. REVISION OP the STATUTES — DISSOLUTION. Art. 12. Revision of the statutes and dissolution can only be carried by the majority of the committee. In case of dissolution the general assembly shall vote on the appropriation of the reserve funds which shall be devoted to agricultural work of general utility- PKANCE. 743 INSURANCE FOR HORSES IN SARTHE. Statement by Officials of Farmers' Syndicate op Sarthe. Le Mans. In order to complete its organization in agricultural mutuality, the farmers' syndicate of Sarthe established on April 1, 1909, a mutual insurance association for animals of the equine species. This new organization was based upon mutuality, and the premium amounts to 2J per cent of the insured value for work horses and 3^ per cent for brood mares. The premiums are payable in advance, and claims for loss are satisfied as soon as proven to the amount of 75 per cent of the insured value, the carcasses remaining the property of the owner. The accounts are balanced yearly on the 31st of December, and whatever profits result are equally divided between the reserve and the members in proportion to the premiums which each has paid in. This organization is very simple and has given excellent results. It covers the whole Department, but we would have preferred to have separate societies for each commune federated under it in the same manner as the cattle insurance associations. But this has not been possible because there was not business enough in each commune to warrant it, and this is why we have just one society established at first for the whole Department. Statistical statement shovAng development of the society. Number of members insured Number of animals insured Value for wHch insured francs. . Premiums paid in do Claims for loss paid do Rebates allowed (profits distributed) per cent. . Reserve fund (including two subventions from the State of 3,000 francs each) francs. . 1910 102 72, 650 , 638. 30 525 30 938. 85 1911 103 152 108, 900 2, 766. 25 2,175 12 4, 591. 20 1912 136 198 144, 200 3, 938. 85 1,725 20 8, 070. 65 BY-LAWS OF MUTUAL HORSE INSURANCE SOCIETY IN SARTHE. Section 1. — Formation of the company; its name, place, and duration. Article 1. Conformably to the law of March 21, ]884, concerning professional sjmdicates, and that of July 4, 1900, concerning mutual agricultural insurances, there has been formed among all the proprietors, farmers, and m6tayers of the Department of the Sarthe, who adhere or will to the present by-laws, a mutual horse insurance company under the title of "La Mutuelle Ghevaline de la Sarthe." Art. 2. The company has its office in Le Mans, in the Bureau of the Farmers' Syndicate of the Sarthe, 30 Rue Paul-Ligneul. It may may be transferred to any other place in the same town by vote of the administrative counciL Art. 3. The duration of the company is fixed at 50 years from the date when the constitution is deposited in the mayor's office in the town where the company is situated, except in the case of prorogation or dissolution as provided for in the present by-laws. Art. 4. The company will be actually constituted when there are at least 60 adherents, representing an insured value of at least 60,000 francs. Section II. — Object of the company. Art. 5. The object of the company is to guarantee its members against loss which they may experience by the death of insured animals, subject to such limitations and conditions as are hereinafter described. Art, 6. The following animals are insiu-able: Draft horses used for agricultural work in cultivating ground, in transporting crops and other necessary produce on the farm, or in going to markets or fairs; also those animals which are raised with this aim. In no case will the company insure horses used for teaming business, either continually or during a part of the year, it being under- stood that this exception does not apply to exchange of labor between neighboring farmers on special occasions of work, harvesting, or other labor. Art. 7. Insurance is paid: In case of natural death or accident of insured animals, including drowning, and in case of an animal 1 eing killed when this has been judged necessary by a graduate veterinary surgeon, the animal being no longer fit for service through illness or injuries. Art. 8. No insurance will be paid: 1. In case of accidents due to major causes, such as war, riots, inundations, conflagrations, or lightning. 2. In case of accident caused by want of care, abuse, or in general by grave fault of the insured or of persons for whom he is re- sponsible. 3. For accidents received during railroad transportation. Art. 9. No premium will be paid for losses due directly or indirectly to the castration of horses or breeding of mares unless the insured is covered against this risk by a supplementary premium, as stated in article 26. Art. 10. The following are excluded from insurance: 1. Stallions. 2. Colts and fillies of the current year, They can only be insured from the 1st of January following their birth, 744 AGEICULTUBAL COOPERATION IN EUROPE. 3. Horses and mares more than 12 years of age at the time of the contract. Insurance will lapse for others when they have reached the age of 20 years. 4. Animals having any acute or chronic malady or any latent defects. Nevertheless, the farmers may insiu*e new-bom animals for a fixed sum of 8 francs per head for females and 12 francs for males. In consequence of the payment of this premium for colts declared before the 15th of July who died between the 1st of August and the 1st of January a forfeiture indemnity will be paid of 200 francs net for the females and of 300 francs net for the males. Insurance will not be paid for the colt if he is sold before the end of the year; it will lapse from the day of the sale. Art. 11. The company will not insure animals having a value of less than 200 francs, and they will not insure animals, no matter what their value, for more than 1,200 francs if they are 3 years old or more and for more than 800 francs if they are less than 3 years old. Aet. 12. Reimbursements in case of loss shall be made at the rate of 75 per cent of the insured value. In order to interest the policy- holders to keep their animals in good health and care well for them the company thus allows them to make their own valuation for one- fourth of the estimated price. Art. 13. In case of epizootic distemper an extraordinary meeting of the general assembly may be called, at which, if judged advis- able, the insurance to be paid for accidents may be reduced, and a majority vote may decide what measures shall be taken to safeguard the interests of the company. Section III. — Nature and duration ofamtraets. Art. 14. Adhesion to the present by-laws and contract of mutual insurance are stated in a policy signed, on one part, by the policy- holder or, it he can not sign it, by two witnesses attesting his agreement, and on the other part by the president of the company or Ws delegate as well as another member of the administrative council. Art. 15. All policyholders are required to insure all the animals which are insurable according to the provisions of the by-laws. Art. 16. Request for membership to the society made to a director of the company must be accompanied — 1. By a complete description (name, age, sex, height, coat, and individual marks) of the animals to be insured, and a statement indicating their value. 2. By a certificate given by a veterinary, stating that all are healthy and have none of the vices or maladies described in article 10. Art. 17. Estimation of the value of the animals shall be made per contra by the insured and by the delegates of the company, who will base their valuations on the purchasing price of the animals and their commercial value at the moment of writing. Any false declaration as to their value or as to their health may bring about the lapse of the rights of the policyholder. Art. 18. These estimates will be annually revised on the 1st of January. The company reserves the right of visiting the animals insured at any moment and, if necessary, requiring a new valuation. The insured can always ask for a new valuation of his animals. In case of an increase in insurance valuation during the course of the business year, he must pay a supplementary premium calculated on this increase and on the time remaining in the current year. Art. 19. All changes, either in the number or the value of insured animals, must be declared in the course of 10 days to the home office. Diminutions will not give a right to any reductions in premium for the current year unless they are in consequence of an accident or a sickness. No allowance will be due in case of accident to animals recently bought and not declared. The insured, who has acquired an animal in place of another animal sold, must declare it at the home office also during the 10 days which follow the purchase, giving his description and his actual value. If this animal is of a value superior to that of the one which it replaces he must pay a premium according to the difference in price for the rest of the current year. Art. 20. Modifications made at the time of the annual valuations and any change or differences likely to come about in the course of the year shall be mentioned in a duplicate record book given to the policyholder with the policy. At each change he will fill out a leaf of this register and send it to the home office of the company for its information. Art. 21. The insurance will take effect at noon the day after the policy is signed, the premium for the current year having been paid. The first premium is calculated, pro rata, from the time remaining, to run from the day of adhesion to the 31st of the following December. Art. 22. The insurance is contracted during the continuance of the company with the right for the company and the insured to with- draw at the end of each period of five years, notice being given reciprocally six months in advance. It is understood that the quinquennial period is composed of five whole business years, from the 1st of January to the 31st of December, without reckoning the first year if it is incompleted. Declarations of withdrawals shall be made by the policyholder by a registered letter addressed to the home office. Art. 23. At any time the company will have the right to cancel the insiuance — 1. For nonobservation of the by-laws, nonhygienic care of the animals, insufficient food or housing, or ill treatment. 2. After any settlement for accident. In this last case the company will reimburse the subscriber with part of his premium as calculated for the time remaining to the close of the current year. Art. 24. The decease of the policyholder does not annul the policy, which continues to run for the benefit of the widow or his hem if they continue to cultivate the land. The policy may be canceled when the land is no longer cultivated, and therefore the animals are sold. Art. 25. The annual premium is calculated according to the value of the animals insured in proportion to 2.5 per cent of this value. It may be changed every year as stated in article 43. The price of the policy is 2 francs. Art. 26. A special rate will be made of one-half of 1 per cent for animals to be castrated when the policyholder wishes to cover the nsk of this operation and notifies the company before proceeding to it, on condition that this operation is performed by a graduate veterinary. However, the company will not be responsible for operations on cryptorchid animals. Suppplementary premiums of 1 per cent will be required for the risk of breeding mares. The policyholders may make a special declara- tion in regard to this during the annual revision of valuation in the first fortnight of January, so that their premium may be tea consequently. ., Art. 27. Premiums of each year are payable not later than the 1st of March at the home office. After this date the money not pu" by the policyholders wUl be collected by the post at their expense. Those who refuse to pay will by this act lose all right to insurance in case of accident. This will not deprive the company of the right to take legal measures to recover premiums due by these policyholders. FRANCE. 745 Section IV. — Aeddents— Formalities — Rules. Art. 28. Policyholders must give their animals all the care necessary to keep them in good condition. As soon as an animal is seriously ill they must, under penalty of losing their rights to insurance, inform the doctor of the company, who will appoint, if necessary, a con- sulting veterinary at the expense of the company. Art. 29. 11 in spite of the care received the animal dies, a statement must be made by the veterinary, who will give to the owner a certificate giving a description of the animal and the nature of the malady which caused its death. This certificate will be sent at once to the company and at the same time a report taken from a duplicate register and given to the insured. The society has the right to have the accident formally investigated before burial. Art. 30. Each person is free to care for his animals as he thinks best, but only a veterinary or a delegate of the company can decide when an animal should be killed. Art. 31. The charges for the veterinary, certificate, medicines, and other expenses caused by the illness and death of the animals shall be paid by the insured. The skin of the dead animal belongs to the policyholder, as well as his body, except when the killing has not been ordered and the meat has been sold to the butcher. In this case the policyholder will receive the price of the meat, and it will be deducted from the indemnity allowed him. Art. 32. The insurance is payable in not more than 30 days at the home oflRce of the company, according to the estimated value ol the animal as described in the policy or in the latest statement. The payment having been made, the company by this fact takes the place of the insured in all claims which he may have against a third party. Section V. — Administration. Art. 33. Affairs of the company are administered by a council invested with full powers, composed of 9 to 15 members, whose func- tions are gratuitous. The administrative council nominates the director. The members of the board of the farmers' syndicate of Sarthe form part of the council of administration, and will nominate the first administrators. Art. 34. From January 1, 1911, the council will be elected by the general assembly. One-third will then be reelected every year, the two first retiring series being designated by lot. The retiring members are reeligible. Art. 35. If there are any vacancies in the council as a result of retirement or decease of one or more members, the place will be pro- visionally filled by the council of administration, and its nominations submitted for the approval of the next general assembly. The member thus nominated exercises his functions during the remainder of the term of the member whom he replaces. Art. 36. The council will elect each year the board composed of a president, two vice presidents, a treasurer, and a manager. Art. 37. The members of the council will have no other responsibility than that of all other policyholders except in some gross neglect of duty. Art. 38. The president will call the meetings of the administrative council and will oversee and be responsible for the execution of the by-laws. He will render each year to the general assembly an account of the operations of the preceding year. He is charged with the policy of the meetings. Art. 39. Regulations concerning accidents are drawn by the executive officer, who has charge of submitting them later for ratification to the council, which alone has the right to settle cases brought to law. Art. 40. All the meetings are recorded by reports entered on a special register and signed by the president and the executive officer. Copies or extracts of the deliberations to be offered at cotu:t or elsewhere, are certified by the president, or in his absence, by his substitute. Art. 41. A commission of control and supervision, composed of two members at least, are named each year by the general assembly. It shall be made up outside of the administrative council, and its duties are to audit the accounts and to make a report to the general assembly the following year on the condition of the treasury, of the balance, and of the accounts presented by the administrative council. It has the right to examine the books and the methods of bookkeeping during the quarter preceding the meeting of the general assembly. This committee may call a general assembly of members in case they find irregularities in the accounts of the administrative council. Section VI. — Financial year — Investment of funds — Expenses of administration — Surplus funds. Art. 42. The fiist business year will begin the day the constitution of the company is accepted, and terminate the 31st day of the following December; the other years will commence with the calendar year. Art. 43. The accounts of each year will include: Assets, the premiums belonging to this year, and liabilities, the expenses of adminis- tration and sums paid and to be paid for accidents happening in the course of the year. If there is a surplus it shall be divided in the following manner: Fifty per cent for the sinking fund and for reserves, and 50 per cent for the members whose premium will be diminished accordingly. Canceling of the insurance will be deducted from the premiimi due the following year. If, on the contrary, the probable expenses exceed the total of the premiums of the year, it must be provided for in the following manner: 1. By taking from the reserve funds a sum not more than one-half of the amount of these funds at the close of the last year. 2. In case this proves insufficient, by supplementary premiums on the members calculated, pro rata, from their insured values. When the necessity of the supplementary premiums has been recognized by the administrative council, they shall be collected with the ordinary premiums. Art. 44. The reserve fimd shall be made up as follows: 1. Of whatever is due it from the surplus of the company's year. 2. Of gifts and grants to the company. 3. Of grants accorded by the State, the Department, the agricultural syndicate of the Sarthe, or others. Art. 45. Invested funds should be placed in the savings bank or deposited with a rural credit company. 746 AGBICULTUBAL COOPERATION IN EUROPE. Section VII. — Oeneral assemblies. Art. 46. The company ahall meet every year in general assembly, on the call of the president, some time during the first three monthB which follow the close of the year. A report of the administrative council will be read on the financial condition of the company and on the operations of the past year. The general assembly may also be called whenever the administrative council judges best, or at the request of the committee of control according to article 41. Art. 47. The general assembly can only deliberate when at least one-fourth of the members are present or represented. When a loan, modification of the by-laws, dissolution, or prorogation is to be considered, at least one-half of the members must be present or represented. These meetings must be called by letters sent to each member giving the subjects to be considered. If there are not a sufficient number present, either personally or by proxy, the assembly is again called a week later, and at this meeting all action will be legal, no matter what number of members are present. Section VIII. — Dissolution — Liquidation. Art. 48. The dissolution of the company, if asked for by the administrative council, can be settled by a vote of a majority of the members of the general assembly. If, on the contrary, the council opposes the dissolution, it will require a three-fourths vote. From the funds remaining after the liquidation, the members will be reimbursed for their premiums according to the number of monthfl remaining in the current year, or if complete payment can be made they will be reimbursed pro rata. If, on the contrary, after this reimbursement, there are still funds left, they will be given according to the decision of the general assembly, to some agricultural work of interest in the Department. REGIONAL BANK OF INDRE-ET-LOIRE. Evidence op the Officiai,.s. Tours. Q. What is the name of .this bank '. A. Caisse Regionale de Credit Mutuel Agricok' d'lndre-et-Loire, located at Tours. Q. When was the bank organized ? A. On December 27, 1901. Q. How many original stockholders were there ? A. Two locals and 15 individuals. Q. What is the purchase price of the stock ? A. One hundred francs. Q. What officers has the bank ? A. A board of administration, consisting of the presidents of each of the affiliated local banks, a president, a vice president, a treasurer, and a secretary. Q. What is the amount of salaries paid annually ? A. Twenty-two himdred francs. Q. What is the present number of stockholders ? A. Fifty-seven; 42 local banks and 15 individual members. Q. Are dividends paid on stock ? A. No; interest at 3 per cent is paid. Q. Has the bank any depositors ? A. No. Q. What is the total number of borrowers '( A. About 1,000. Q. What is the total amount of loans to date ? A. There are 470,000 francs, averaging about 470 francs per loan. Q. Does the bank charge commissions ? A. No. Q. What is the usual term for which loans are made ? A. Three months to one year; average, six months. Q. Must the purpose for which the loan is to be used be stated ? A. Always. Q. What interest is paid on loans ? A. The farmers pay the local banks 4 per cent, and the local banks pay the regional bank 3 per cent. Q. Are loans required to be guaranteed by indorsement or by collateral ? A. They must always have two signatures. The local banks must also indorse the paper, Q. Does the bank make real-estate loans ? FKANCS. 747 A. The bank has two funds: One for making short-term loans and the other for granting long-term loans on real-estate security. No loans on real estate are granted for a larger amount than 8,000 francs. Q. What are the total assets of the bank? A. They are 1,706,898 francs. The liabilities are the same. Q. What were the total expenses of the bank in 1912 ? A. They were 5,305 francs. Q. What were the net profits for the same year ? A. They were 20,958 francs. Q. How often is the bank examined ? A. Once a year. Q. By whom is it examined ? A. By the Government. A financial statement also has to be sent to the ministry of agriculture four times annually. Q. What is the present capital of the bank ? A. It is 373,370 francs. Q. What is the amount of the reserve fund ? A. It is 84,560 francs. The bank has advances from the Bank of France as follows: Francs. Short-time loans 820, 000 Collective long-term loans 246, 550 Individual long-term loans 173, 715 LOCAL AGRICULTURAL CREDIT BANK OF LANGEAIS. Evidence of M. Gosmler, Treasurer. TOUKS. The farmer, to explain the difference between the local and the regional banks, goes to the local bank when he wishes to obtain a loan. The treasurer of the local bank pays him the. money required, taking the note as security. The treasurer, in turn, deposits the note at the regional bank, which returns to the local bank the money loaned to the farmer. The individual farmer must begin by taking a certain number of shares in the local bank. This makes him a member; only members can borrow. In the case of small loans the local bank will allow twenty times the amount of stock held; for large loans only ten times the amount of stock is allowed. AH members of the local banks, in turn, are first required to be members of the agricul- tural syndicate. For instance, the treasurer of a local bank is not able to borrow, as he is engaged in com- merce and is not a farmer. Q. How often is the local bank office opened ? A. It is open only once a month. Loans are only granted at the end of the month. Q. Suppose a farmer wanted to make a deposit during the month, what could he do ? A. He could make a deposit at any time. The office of the local bank is situated in the treasurer's house, and some member of his family is always to be found at home who would receive the deposit and give a receipt for it. Q. What interest i§ allowed on deposits ? A. There are no deposits in the sense of a savings bank. In speaking of deposits of the local banks, the initial deposits or shares of the members is meant. On these interest at 3 per cent is paid. As there appears to be some confusion on this point, due to the different terms used in English and French, it may be well to again call attention to the statement made by M. Decharmes, head of the department of credit and cooperation of the ministry of agriculture, to the American commission, when he said: "The French farmer when he makes deposits makes them as a permanent investment and requires a higher rate of interest than the 2i or 3 per cent which the credit banks can give. The system of loaning money on current accounts to farmers by cooperative banks is not practiced in France. In these two respects the French system differs radically from the German Raiffeisen banks." Q. Have stockholders of a local bank a vote in the management of the regional bank in proportion to the amount of stock held ? A. Each local bank has one vote, regardless of the number of shares it owns. It is an entirely demo- cratic institution. Q. Has this local bank (local bank of Langeais) incurred any serious losses during its period of operation ? A. Only 400 francs in eight years. This has reduced the profits from 1,500 to 1,100 francs. 748 AGEICTJLTUBAL COOPBBATION IN EUEOPE. Q. Are loans granted on real estate ? A. Yes ; long-term loans are made on real estate. Q. What length of time are these loans allowed to run ? A. Ten and fifteen years. Q. What interest is charged on such loans ? A. Two per cent. Q. Is the borrower able to amortize the loan ? A. Yes ; if the loan is for a term of 15 years, the borrower can repay one-fifteenth of the amount borrowed, plus 2 per cent interest, per annum, or one-tenth annually, plus the interest on 10-year term loans. Fifteen years is the limit for long-term loans. Q. Are loans granted to men who possess nothing but their good reputation and productive power in order to enable them to buy land ? A. The borrower must in aU cases be worth one-third of the value of the land he wishes to buy before the loan can be granted for its purchase. Long-term loans are frequently granted to men with families. Q. What evidence is there of benefits accruing to the agricultural classes from this credit system ? A. The benefits are very evident. Before this system was organized the farmers were unable to acquire the fertihzers and other necessary materials for carrying on their farms, or they had to purchase inferior or adulterated goods on credit and pay very high prices. Q. Has this system tended to keep the people on the land 1 A. Unfortunately, not so much as is desired. It has had some influence, but less than was hoped for. Q. Are there any special reasons why the people wish to leave the land ? A. They think they can better themselves. The city offers them more comfort, so thej- think, more amuse- ment, more possibilities of improvement, more luxuries. The countryman who goes to the city and fails there always tries to conceal the truth; he will never admit of failure in his village; and so the idea of failure in the towns is not presented to the minds of the agricultural population. Q. Would higher agricultural education improve matters ? A. It might keep a few individuals on the land, but the tendency is that when a farmer does well on his farm he sends his sons to town for education and his ambition is for them to get urban positions. Q. Is a safe for keeping the deposits of the local bank provided in the treasurer's home ? A. In the case of the local bank of Langeais, no. The treasurer simply keeps the money in his pocket until he can take it to the regional bank, which in Tours is quite near. Q. In the case of a local bank situated out in the country, is not a safe necessary ? A. Yes; local banks in the country districts have safes. The local bank of Langeais has 13,000 francs which it deposits with the regional bank. The regional bank pays 3 per cent interest on the capital paid in by the local; the local bank then deposits its notes with the regional which returns the money paid out by the local at 2 per cent interest. The local bank is thus able to invest any money it has in hand in a savings bank. The borrowers go direct to the local for their loans and there sign the necessary notes. These papers are discounted at the regional bank. The regional bank will only discount three times the amount of the capital held by the local. The capital of the local bank is in a savings bank. In case demands for loans require it, the funds in the savings bank are drawn upon to meet the demand. Q. Why does not the regional bank itself deposit this money with the savings bank ? A. Because the savings banks only recognize the treasurers of the local banks; they have no connection with the regional banks. FARMERS' MUTUAL ACCIDENT INSURANCE IN INDRE-ET-LOIRE. Statement by M. T. B. Martin, President of the Association for Reinsiirance. TOUKS. This kind of insurance is to indemnify the members and personnel of their families for such injuries as may result from accidents occurring during their pursuit of farm work; and also to protect the insured members against the rigorous provisions of article 1382 and the following articles of the civil code; that is to say, to cover their responsibility in respect to their assistants, day laborers, domestics, or outsiders. OPERATIONS. Local societies are provided, their membership being made up from among the farmers and farm operators inhabiting a single commune or a unit composed of contiguous communes, thus grouping together persons mutually acquainted and operating under the immediate observation of their members. In this way abuses and frauds, which might occur with private insurance companies, are avoided. GUAEANTBE. Each local society is required to maintain a guarantee fund of 1,500 francs. PREMIUM. The premium required to be paid in by each person insured is determined by the area of land which he represents and the character of his agricultural operations. It is fixed for cultivated fields and meadows at 1 franc per hectare (not to exceed 20 hectares) ; for vineyard and hemp land at 1 franc 30 centimes per hectare (not to exceed 15 hectares); for market gardens and nurseries at 60 centimes per hectare (limit 2 hectares); and for woods and waste land at 50 centimes per hectare. No policy for less than 10 francs. Provision is made for traveling insurance at rates of 4 to 7 francs, according to the locaUty and area included. INDEMNITY. Through the payment of this annual payment each person insured enjoys the following: In case of light injuries not followed by disability or only temporary disability, 2 francs a day is allowed for men and 1 franc 25 centimes for women from March to October, and 1 franc 25 centimes for men and 75 centimes for women from November to February, inclusive. AU the members of a family working on the same farm are insured and two- thirds of the doctor's bills and the cost of medicine paid by the society, the remaining third by party insured. If the accident is serious and followed by death or permanent disability, 500 to 2,100 francs indemnity, is paid, according to the gravity of the injury. In cases concerning workmen or domestics or outsiders not con- nected with the farm, the daily indemnity is the same as for members, unless the accidents are very serious, when the indemnity may be as much as 1,000 to 4,500 francs. Large as these last figures appear there are cases so serious as to oblige the member to pay more even than above mentioned for accidents to his employees or to outsiders, in which case he has to pay the additional amount out of his own pocket. By paying 25 per cent greater premium he may enjoy what is known as insurance of the second class, which safeguards him up to an unlimited amount. Through reinsurance, which is chosen by a majority of our members, with payment of 25 per cent additional premium, they are absolutely protected, regardless of the gravity of accidents. REINSURANCE. Each local insures itself for 10 per cent, retaining 10 per cent of the premiums, turning in nine-tenths to the reinsurance society, this latter being governed by a council elected by the presidents of the local. Our mutual accident insurance organized in 1910 is greatly appreciated by the farmers around Tours, and on December 31, 1911, there were 33 locals, the membership increasing to 40 in 1912, and the reserve fund amounting to 38,950 francs. At present there are 51 locals, representing a membership of 1,500 persons insured. COOPERATIVE CREAMERIES IN INDRE-ET-LOIRE. Statement Submitted to the Commissions. {Translation from the French.] Tours. There are 17 cooperative creameries in the Department of Indre et Loire. Their purpose is to handle the milk and butter of the farmers adherent to them. The number of members in each cooperative society varies from 400 to 1,500, according to the locality. The number of cows contributing to each butter-making plant ranges from 700 to 3,500, and the quantity of milk treated daily varies from 4,500 to 17,000 liters. These associations are made up of very small farmers isolated from one another, each having an insufficient quantity of milk to be able to make butter of a good quahty and in an economical manner. The butter made iadividuaUy does not keep well. Grouped together in a cooperative association and furnishing their milk to a well-equipped butter-making plant where it is treated under excellent conditions, they obtain a first-class quality of butter and are enabled to market it in a direct and economical manner. The factory of each cooperative association has been constructed with the aid of capital, one-third of which at least has been furnished by the cooperators, the other two-thirds being advanced by the State or borrowed from private individuals. Each factory is provided with a mUk-weighing scales, refrigerating box, cream sep- arator, pasteuriiiing apparatus, mechanical churn, butter-working apparatus, etc., aU run by a steam engine, which also operates an ice machine. The construction and equipment of one of these butter-making plants costs from 50,000 to 120,000 francs. 750 AGRICULTURAL COOPERATION IN EUROPE. OPERATION. The milk is collected by a man who goes from farm to farm and is paid for doing it. The weight contributed by each cooperator is written on a ticket kept by him and also inscribed in the register of the butter-making plant. The collection costs from 1^ to 3 centimes per liter. The skimmed milk is returned to the cooperators if they want it, and that which is not reclaimed by them is transformed into casein. Butter is either sold to the "HaUes" at Paris, or shipped to different merchants in the north, east, or south. From one-half of a centime to 1 centime on the selling price per kilogram of butter is reserved to amortize the capital invested. At the end of each month the receipts and expenses are totaled and the profits distributed among the cooperators in proportion to the milk furnished by each. RESULTS. In the Department of Indre et Loire the 17 cooperative creameries have adhering to them 12,000 members. They handle 285,000 liters of milk per day and produce 12,600 kUograms of butter. About 22 Uters of milk are required for a kilogram of butter. The price per liter of milk amounts to about 12 centimes not including the skimmed milk. AGRICULTURAL SYNDICATE OF LOIR-ET-CHER. M. Riverain, President. STATEMENT. Blois. The Agricultural Syndicate of ,Loir-et-Cher has at the present time 16,500 members — that is to say that it includes almost aU the farmers in the Departments. The services which it renders to its members are of a double nature, moral and economic. Our agricultural purchasing department is operating in essentially the same manner as it did in 1904, except that there were then only 7,375 members (less than half our present membership), and our operations only amounted to 11,400,000 kilograms of goods, valued at 1,400,000 francs, whereas in 1912 we have dehvered 26,000,000 kilograms, at a value exceeding 4,500,000 francs. If we have developed so much and succeeded so well in a few years in grouping together so large a mem- bership, it is because our services have been so greatly appreciated. These results have been obtained with the help of the Credit Mutuel Agricole, which has enabled us to organize our purchasing department on a com- mercial basis. Since 1902 our syndicate has purchased for cash all goods ordered by its members. With the funds which the credit agricole has placed at the disposition of the syndicate it is able to make very advan- tageous arrangements with the wholesale dealers through the prompt payments which it can make. Since adopting this method of procedure our orders are very much sought for and we always obtain the lowest prices; therefore it may be said that the syndicate owes its success to the credit agricole; but it may also be added that the credit bank has found equal advantage in the business furnished to it by the syndicate, which is the true cause of its prosperity. The regional bank of Loir-et-Cher is to-day one of the most prosperous in France because it has found in the syndicate, in addition to a hospitable roof, also a clientele entirely adequate to bring to it each year the important amount of business which it enjoys. During the last ten years our two societies have united in bringing to the farmers of Chartres the greatest advantage. Naturally the great extension of the syndicate has not been accomplished without bringing some prejudice to the independent dealers who formerly furnished the farmers with fertilizers, seeds, vineyard products, machinery, and agricultural implements. And since 1908, the date of our twenty-fifth anniversary, our real power has become known. At the immense banquet of 5,000 covers, presided over by the minister of agri- culture in person, the combination of independent dealers in our city were brought up short in their attempted monopoly and are no longer able to take advantage of our farmers. It may be said also that our daring has not proceeded without giving some concern to the inspection service of the agricultural credit societies, because of the importance of the business carried on, which has caused the syndicate to become a debtor to the regional bank for amounts which have been considered too great. The syndicate has taken fuU advantage of the bor- rowing facilities provided by the credit agricole, which were necessary for making the payments required on the business demanded by its members. Our managers are not only very devoted people, but they are also very regular in their attendance and careful in their advice and sensitive to criticism, and they have advised tne members to so arrange their orders that an accounting may be reached every three months. In this way fiu F&ANCE. 751 notes may be kept within a limit of from three to six months and discounted in the credit bank. In this way the syndicate is able to devote itself entirely to purchasing the requirements of its members, and the bank, takes care of the credit facilities of which these purchasers have need. Our syndicate has discounted each year several hundred thousand francs in notes, and it possesses at the present time a reserve fund in excess of 250,000 francs. With this small fortune it has been able to buy the property on which the building containing its office and storeroom is situated; it has installed a branch at Romorantin in a building also belonging to it; it has constructed at several points in the Department large ware- houses in which fertiUzers are stored during the inactive season, thus insuring prompt dehveries at the time of planting. Because of the importance of its reserve fund the syndicate has been able to aid in the creation and develop- ment of agricultural credit locals and agricultural cooperative societies, toward the foundation capital of which it has contributed, as well as directing and indicating the most economical method in their management. COOPERATIVE PURCHASING SOCIETY. Since in 1908 the Court of Appeal protested against the right of the syndicate to perform purchasing operations, our managers were forced, like all the farmers of France, into the new situation occupied by the agricultural syndicates. Seeing that ParHament did not receive cordially the projected law presented by M. Ruau, minister of agriculture, and fearing the antagonism on the part of the commercial combinations, we have created in the beginning of 1911 a corporate society which has for its object the performance of all such operations as may be prohibited to the syndicates, notably direct purchasing from the farm and the storage of goods, in anticipation of the future need of the members. In the beginning this society has concerned itself with operations relating to farm equipment which were ruled as being outside the purchasing scope of the syndicate; but although they had the right to purchase and supply fertilizers, seeds, cattle feed, and insecticides, and the only remaining goods are included under the head of farm equipment, this last item is the most difficult of all, though not the least interesting, for everybody knows that farmers pay a very much greater profit to the middlmen on their machinery and tools than is paid on fertilizers, seeds, etc. If you care to spend a few minutes in examining the account rendered for the years 1911 and 1912, you will be able to see what our purchasing society has accomplished, for in 1911 it did 460,000 francs worth of business and in 1912 more than 500,000 francs worth. Judging by the results of the first semester of 1913, we estimate that more than 600,000 francs worth of business will be done this year. In order to attain this result we have had to provide for about 50 representatives charged with making repairs and keeping our machinery in opera- tion. These collaborators naturally receive some remuneration from this work. We have just now completed this organization and established here at Blois a workshop operated by good mechanics engaged in asseni))Iing the agricultural machinery which we receive in carload lots "knocked down" directly from the manufacturers. We also make at this shop such repairs of a minor character as our members require. We consider it our duty not to offer to our members machines of any other construction than French, and we only deal with foreign manufacturers when it is absolutely necessary. By so doing we make it clear that our object is purely patriotic and that we do not deprecate the excellent quality of American machinery, nor the considerable service which it has rendered to the agriculture of our country. Our cooperative purchasing association has no connection whatsoever with the credit agricole, but lives entirely upon its own resources. Starting with a capital of ipO,000 francs, within the last year it has raised this capital to 300,000 francs. Besides furnishing agricultural machinery at very reasonable prices to the farmers, we have accumulated 65,000 francs of reserve durmg the first two seasons, thus giving an indication of the service which cooperation may render along these lines. The relationship between the syndicate and the purchasing society is regulated in the most simple manner. In reality the latter is simply the agent, but a disinterested agent, which is satisfied vdth a reasonable profit and which confines its deliveries entirely to the farmers adhering to the syndicate. In compensation for these advantages the syndicat places gratuitously at the disposition of the purchasing society housing facilities on its premises, in which the machinery destined to the members of the syndicate may be stored. However, the purchasing society owns the premises on which its assembling plant is situated. AU the stockholders of the purchasing society to the number of about 500 are required to be members of the syndicate. According to the terms of the constitution, the interest paid to the stockholders may not exceed 4 per cent. As may be seen, the society is essentially cooperative, although it has a commercial form. 762^ AGTtfCTJLTtriUL COOPEEATION IN EUBOPE. AGRICULTUKAL CEKDIT. Our first local society for agricultural credit was founded, under the auspices of the syndicate, on July ig 1902, and was from the beginning affiliated with the regional bank of Chartres. This first local had for its sole object the procuring of the sums necessary to enable the syndicate to buy for cash all the requirements demanded by its members. The regional bank of Loir-et-Cher was not created untU December, 1903, and it is since that date that all the locals of the Department have been organized. This organization has been accomplished in a few years thanks to the happy collaboration of the department of agricultural instruction with the syndicate. The pro- fessors of agriciJture have taken charge of the propaganda, and after the meeting for foundation we take in hand the young societies to complete their interior organization and put them in working order. At the present time there exist in Loir-et-Cher 31 local credit societies, all affiliated with our regional banks. We have not thought it advisable to start too many of these societies at first, because in our region the transportation facilities and means of communication are ample and market days frequent. For this reason there is generally only one local for each canton — -two at the most. However, there are special cases where additional locals may be established to supply the need of some marketing point. In France almost all oiir credit societies are established under the law of 1894, receiving subsidies from the State, and are subjected to the control of the minister of agriculture. For this reason they all resemble one another, in a general way at least, and since we are in excellent relation- ship with our neighbors of Chartres and of Mans you will doubtless notice a close analogy between what we are showing you and what you have seen already. The special feature of our organization consists in its relationship to the syndicate. We have always surrounded our affiliated local societies with every precaution, for we consider that the vitality of mutual credit depends as much upon good organization of the locals as upon the good organization of the regional banks. After having facilitated the creation of these locals we have "broken in" their book- keepers to the dehcate task they have to perform. We reduce their expenses by furnishing gratuitously the blank forms, registers, and such other stationery as they require. Finally we take care of their bookkeeping in case they are unable to secure a proper employee to do so, and also because we have to follow their operations in the smallest detail. At the present moment the local banks of Loir-et-Cher have a membership of about 4,000. This is exactly the number of members which the syndicat had 15 years ago. We think that it will take less time to quadruple this number, because the credit agricole has been developing with giant strides during the last few years. In this building are the headquarters of three distinct societies : The Agricultural Syndicate, the Regional Bank of this department, and the Cooperative Society for Agricultural Machinery. QUESTIONS. Q. Will you explain the difference between a syndicate and a cooperative society ? A. The difference is that under the law of 1884, which is the law authorizing the organization of the syn- dicates they are only allowed to deal in seeds and fertilizers. After these syndicates were organized, came the agricultural credit banks, and with agricultural development came the need of better facihties for the acquirement of machinery and other farm requisites. The auxiliary buying and seUing agencies or the coopera- tive societies were created. This movement originated in this Province. The State gives no assistance to the cooperative societies. There is complete autonomy for each organization. The Agricultural Syndicate has 60 branches in the Department of Loir-et-Cher. Its agents in different parts of the Province are not paid but receive commissions on sales. They take orders from the farmers for seeds and fertilizers and send them here to the head office. They do not handle the money at all. They sign a paper which is placed with the local bank, and then this institution, the regional bank of Blois, discounts the notes of the local bank. While each of these organizations is entirely independent, they are mutually necessary to one another. The cooperative machinery society also has its agents in the country, who are most often local blacksmiths or other village mechanics. Q. What reserve fund has the syndicate ? A. It amounts to 300,000 francs a year. Q. What is its annual turn-over ? A. Last year it amounted to 4,500,000 francs. Q. Were these all cash transactions ? A. No ; bank credit. Q. Is there any difficulty in obtaining goods from merchants ? PKANCE. 753 A. Quite the contrary. There is great competition to secure the business of the syndicate. Q. What have the cooperative societies done ? A. They have greatly reduced the price of goods for the farmers. For instance, a machine that used to cost 85 francs can now be had for 45. Q. Have you also cooperative selhng societies for farmers ? A. Not for the staples of agriculture. There are some small cooperative societies for selhng such things as asparagus and green peas. Q. What is the attitude of the merchants toward the syndicate ? A. They do not hke it. Q. Is there a tendency in this district for the rural population to leave the land and migrate to the towns and have the rural banks and cooperative societies done anything to check a tendency ? A. Such a tendency undoubtedly exists all over the country; but here around Blois the agricultural societies and banks have been very successful and have exercised considerable influence in keeping the farmers on the land and in stopping the tendency to crowd into the towns. In some parts of France — Tours, for instance — poUtics have crept into these rural credit societies and exercise a very deleterious influence. Here we leave pohtics strictly alone and are solely concerned with the material welfare of the agricultural population. REGIONAL BANK OF LOIR-ET-CHER. Evidence op the Officials. Blois. Q. What is the official name of this bank ? A. Caisse Regionale de Credit Mutuel Agricole of Loir-et-Cher, located at Blois. Q. What is the date of the organization of the bank ? A. December 12, 1903. Q. What is the number of original stockholders ? A. There were 182 individuals, 6 local banks, and 1 syndicat. Q. What is the purchase price of the stock ? A. One hundred francs a share. Q. What officials has the bank ? A. A president, vice president, and nine directors, all of whom serve without salary. Q. What amount of salaries are paid annually ? A. About 4,500 francs. Q. What is the present number of stockholders ? A. On January 1, 1913, 137 individuals, 30 local banks, and 1 syndicat. Q. What dividends are paid on the stock ? A. Three and one-half per cent. Q. Give the total number of depositors of the bank ? A. On January 1, 1913, there were 40 depositors. Q. What is the total amount of deposits to date ? A. There are 122,529 francs. Q. What is the total number of borrowers ? A. January 1, 1913, there were about 2,000. Q. Give the total amount of loans to date. A. January 1, 1913, 2,449,000 francs. Q. Does the bank charge commissions ? A. No. Q. What is the usual term of loans ? A. Three or six months; occasionally one year. Q. What is the size of the deposits ? A. The average is about 5,000 francs. Q. What interest is paid on deposits? A. Two per cent. Q. Must the purpose for which a loan is to be used be stated ? A. Always. Q. About what is the size of loans ? A. A maximum of 5,000 francs is loaned. About 30 of this amount have been granted. 14174°— S. Doc. 214, 63-1 48 754 AGMCULTTJEAL COOPERATION IN EUBOPB. Q. Wliat rate of interest is paid on loans ? A. Tkree and a half to 4 per cent; never higher than 4 per cent. Q. Are loans guaranteed by indorsement or by collateral ? A. This bank requires at least one indorsement. Q. Are loans made on real estate security ? A. Never for short terms. Large loans up to 8,000 francs are sometimes granted on such seciu-ity. Q. What are the total assets of the bank ? A. January 1, 1913, they amounted to 2,954,033 francs. The liabilities are the same. Q. What were the total expenses for the year 1912 ? A. About 30,000 francs. Q. What were the net profits in the same year? A. They were 49,615 francs. Q. How often are examinations made ? A. The bank is inspected annually by an inspector from the ministry of agriculture. Q. Has the bank a reserve fund? A. On January 1, 1913, the reserve fimd amounted to 181,250 francs. REGIONAL BANK OF LOIRET. Evidence op the Officials. Obleans. Q. What is the official name and address of this bank ? A. Caisse Regionale de Credit Mutuel Agricole du Loiret, located at 23 Rue Pothier, Orleans. Q. When was the bank organized? A. December 26, 1906. Q. What was the number of stockholders when the bank was organized ? A. A total of 41, of which 12 were local banks. Q. What is the purchase price of the stock ? A. Fifty francs. Q. How are the affairs of the bank actually administered ? A. By a manager, one cashier, and one clerk. Q. Annual salaries paid by the bank amount to how much ? A. Total of 3,500 francs. Q. What is the present number of stockholders ? A. Eighty-eight, of which 55 are local banks. Q. Is anything paid on the stock ? A. Yes; interest at 3 per cent. Q. How many depositors has the bank ? A. Up to this date the bank has had only a very few depositors. At the present time there are only 11. Q. What is the total amount of deposits of the bank ? A. On December 31, 1912, the bank had 10,336 francs in deposits, and on July, 1, 1913, 14,921 francs. Q. What is the total number of borrowers ? A. About 650. Q. What is the total amount of loans which the bank has granted to date ? A. The total is 1,154,668.50 francs. Q. Does the bank charge any commission for making loans ? A. No. Q. What is the usual term for which loans are made? A. Three, six, and sometimes nine months; the maximum term is one year. Q. What is the largest single deposit the bank has received ? A. One deposit of 10,000 francs. Q. What interest is paid on deposits ? A. Two per cent. Q. Must the purpose for which loans are to be used be stated ? A. Yes; the purpose must be stated in every instance. Q. What is the size of the loans granted by this bank ? PBANCB. 755 A. The bank has made two loans for as much as 10,000 francs each and quite a number as large as 6,000 francs. The 10 largest loans amount to a joint sum of 63,000 francs. Q. What interest is charged on loans made by this bank ? A. Four per cent, of which 3 per cent is retained by the regional bank and 1 per cent allowed the local bank. Q. Are loans guaranteed by indorsement or by collateral ? A. Most of the local banks affiliated with this institution require security, but loans have been made on shares. Q. Does the bank make real estate loans ? A. The bank does not make short-term loans on real estate. Q. What are the total assets of the bank? A. They amount to 752,264 francs. Q. What are the total liabilities ? A. The same as the assets. Q. What were the gross profits for 1912 ? A. A total of 16,018 francs. Q. What did the expenses amount to in the same year ? A. About 4,208 francs. Q. The net profits then amounted to what? A. For the year 1912 the net profits were 11,810 francs. Q. How often is this bank examined ? A. Once a year by the Government. REGIONAL BANK OF CHATEAUROUX, AND WORK OF AGRICULTURAL SYNDICATE. Evidence of Judge Farrichon, First President of the Covirt of Cassation. Chatbaueoux, Q. What is the name of this bank ? A. Caisse Regionale de Credit Mutuel'Agricole de Chateauroux, located ia Chateauroux. Q. What is the date of organization of the bank ? A. November, 1901. Q. What was the number of original stockholders ? A. There were 112 individuals with no locals. Q. What is the purchase price of the stock ? A. Fifty francs. Q. What officials has the bank ? A. A president, vice president, secretary, and six directors, who serve without salary. Q. What is the amount of salaries paid annually ? A. 2,152 francs. Q. How many stockholders has the bank at present? A. There are 188 individual members and 33 local banks. Q. Are dividends paid on the stock? A. Interest of 3J per cent is paid. Q. What is the total number of depositors ? A. On January 1, 1913, there were 40. Q. What is the total amount of deposits to date ? A. 79,533 francs. Q. What is the total number of borrowers ? A. One thousand five hundred. Q. What is the total amount of loans to date? A. On January 1, 1913, 1,052,113 francs. Q. Does the bank charge commissions? A. No. Q. What is the usual term of loans ? A. Three or six months ; one year for commercial loans. Q. What interest is paid on deposits? A. Two per cent. 756 AGEIOULTTJBAL OOOPEEATION IN EUROPE. Q. Must the purpose of loans be stated ? A. Always. Q. Wliat rate of interest is paid on loans ? A. Four per cent. Q. Are loans required to be guaranteed by indorsement or collateral ? A. Usually by one individual name. When necessary an mdorser is required. Q. Does the bank make real estate loans 1 A. Never for short periods. Q. Wlxat are the total assets to date ? A. They are 2,259,881 francs. The liabilities are the same. Q. What were the total expenses for 1912 ? A. 24,434 francs. Q. What were the net profits for 19121 A. 36921 francs. Q. How often are examinations made ? A. Once each year by a Government inspector of banks from the ministry of agriculture. At this point it was explained that unUke most of the other regional banks, this bank had in the begin- ning of its organization only individual "members. In Chateauroux, there is no cooperative society as in Blois, and the syndicate is thus only able to buyagricultural requisites on order for its members. No stores of goods are kept. Q. Is it true that the syndicat is only able to deal in seeds and fertiUzers ? A. Not exactly. They are not allowed to hold stores of goods and can only purchase on order. Seeds and fertilizers, however, being the prime necessities of the farmers, the courts are inclined to make exceptions in favor of these goods. Q. Are there any cooperative farms in this district? A. No; principally large landowners. Q. What purpose then do the agricultural credit societies serve in this region ? A. There are some comparatively small farmers in the district, who make use of credit facilities for the pur- chase of fertilizers, feeds, coal, machinery, and cattle. They borrow from the credit societies to purchase goods^ and make repayments after harvest time. Q. Has the credit system had the effect of saving the farmer from buying on time from the merchants? A. Yes. At first this regional bank allowed a credit of a maximum of 4,000 francs to the local banks for both money advances and merchandise. But it was found that the farmers were still obliged to buy a great deal on credit from the merchants, and therefore the syndicate undertook to buy from the wholesale houses the requisites needed by the farmers. The syndicate pays for all goods in cash, receiving of course the proper dis- count from the merchants. The farmers then buy what they require from the syndicate; if they pay cash they get the benefit of the discount, or if desired, it will give them 3 or 6 months, or even one year's credit, at a small extra charge for credit of about 3^ per cent. By decision of the last general assembly a maximum of 4 per cent, regardless of variations of the Bank of France interest, can be charged. There is nothing in the French regulations to prevent farmers from buying goods where they like, but they find it more to their advantage to buy from the syndicate, as it deals with the best wholesale houses, gives the easiest credit facilities, and all the goods are of guaranteed quaUty. Q. Has the system of agricultural credit had the effect of keeping the people on the land ? A. To a small extent. This bank system of long-term credit on real estate has done some good in this direction. Such loans carry 2 per cent interest, plus the amortization, and run for periods of 10 to 15 years. Q. Is the syndicat in any way mixed up in politics ? A. A little. It tries to keep politics outside as much as possible, but as it is very much indebted to the State for its assistance, it naturally follows that, merely out of a sentiment of loyalty, its officers are for the most part Eepublicans. However, no attention is paid to the political creed of members. All are welcome. Q. Has the church any influence in the organization ? A. Not in this case. There are, however, independent societies in certain parts of France which have been created by the Catholic Church party, and which act in competition and even in opposition to the State institutions. The great object of these syndicates and banks has been to liberate the small farmers from the yoke of the large landowners. The object of the church societies is exactly the contrary. PRANCE. 757 REGIONAL BANK OF RHEIMS. Statement by the President. Rheims. The Government, with us as intermediators, puts out for the use of farmers sums of money more or less extensive in order to aid them ia their purchases. In this procedure it had two aims: To familiarize the farmers with credit, just as it is utilized by commerce and iadustry, and to enable them besides to fortify their position against usurious loans. The Institution of Mutual Agricultural Credit is very simple and rests upon two organizations : A central bank, called "district or regional bank," which acts as a bank of discount; and the local banks established in the communes, under the name of "local banks," which, being La close connection with the farmers, know well their needs, examine into their requests, and see that the loans are- well employed. The legislature has desired, moreover, that they shall be truly mutual institutions, and to this end it has decreed that each member of a local bank should be a part of an agricultural association established according to the regulations of the law of 1884. It is necessary for us, in order to comprehend thoroughly the fimctions of our local banks, to understand the district banks. The Government does not advance money without a guarantee; the sums which it puts at the disposition of the district banks must be redistributed to the different local banks to which advances are made, providing they are agreed to by the Bank of France. The Government then lends money and does not donate it. The district banks are constituted into societies, with capital variable and unlimited. That of Rheims was established about 13 years ago, with a capital of 300,000 francs. The capital was subscribed for in part by the people of Rheims. The rule observed by the Government is to lend four times the value of the capital. The Bank of Rheims had the right then, at the time of its establishment, to an advance from the Government equivalent to 1,200,000 francs. The Bank of Rheims began business immediately at different sections of the three departments of Marne, Aisne, and Ardeimes by establishing local banks, which also have a variable and unlimited capital. The local banks also have a right to discount loans up to four times their capital. Example: A local bank with a capital of 5,000 francs, according to this rule, shall receive in advance the sum of 20,000 francs. You see, then, that the mechanism is very simple. Now let us give a little attention to the very precise rules concerning the ease with which advances are made. At Rheims we have adopted as a fundamental principle that we wiU only make advances in money to the 81 local banks, which we own; that we would content ourselves purely and simply to the discount of notes which should be presented to us, we reserving the right not to advance funds when we did not have the best guarantees concerning the different borrowers of the local banks. To that end we have established a system of check lists, which permit us to follow with the greatest ease the condition of the different borrowers of the local banks, and then it becomes very easy for us not to advance money to the Mutual Agricultural Credit Society where their borrowers are not scrupulous. It might possibly happen that a borrower would make a request to several local banks, and as these latter have no other resource among them except the dis- trict bank, they might possibly find themselves exploited unless they kept a very exact account for each borrower. The borrowers, as we have already said above, must be subscribers to a share in the local bank and affiliated with an association. The local banks, on receiving their requests for loans, are not bound by the rule followed by the Government of lending simply four times the value of the capital. They can lend eight, ten, twelve, and even fifteen times the value of the shares which the borrower owns in the local bank to which he belongs. The local banks, naturally, must proportion their advances according to the number of their members ; it would not do to show favoritism to one rather than the other. Let us now pass to the discount of loans for which requests are made to us. The Government, in advanc- ing money to the district bank, lends it without interest for a time determined by the bank to which it is to be sent, namely, for six months, two years, four years, etc. The district bank which has to be supplied with a very large capital — that is, in money, actually 1,150,000 francs, and with the reserves, nearly 1,500,000 francs — lends to the different local banks at 3 per cent. The local banks, in order to cover their general expenses, which are not very considerable and which are drawn up for the most part on stamped paper, lend to their borrowers at a rate of 4 per cent, sometimes even [Stub.] 758 AGBIOXJLTUEAL COOPEEATION IN EUBOPE. as low as 3 J per cent when the notes are guaranteed. The notes are filled out in the same manner by all the local banks, as f oUows : EXAMPLE OP A GUARANTEED NOTE. MoTJssY, June 27, 191S. • 500 francs. At the end of October next, I will pay to the Rural Agricultural Bank of the Commune of Mousey, or to ita order, the sum of five hundred francs, value received with interest. Good for five hundred francs. (Signed) Emilb Dabot. To Mr. Emilb Dabot, grape grower, at Moussy. Payable to the Houdaid Bank at Epemay. Mr. Dabot, Emile, at Moussy. Amount of loan: 500 francs. Amount guaranteed by our house, 500 francs. Payable October 31, 1913. Eheims, June 26, 1913. (Signed) Pommery Sons & Co. NOTE NOT GUARANTEED. Moussy, June 15, 191S. 200 francs. At the end of October next I will pay to the Rural Bank of Moussy, or to its order, the sum of two himdred francs. Value received with interest. Good for two hundred francs. (Signed) Vve Blaque. To Madame Vve Blaque Galand, grape grower, at Moussy. Payable at the Houdard Bank, at Epemay. The local banks send these notes to the district bank, which, if it acknowledges them, as I have said above, the borrower being known to be solvent, sends the money immediately. Naturally, in agriculture notes are for long terms of payment, generally for six months and even for a year. The district bank contents itself with putting the total list of notes in the safe, and as it could not itself get them discounted either at a bank or at the Bank of France, since they are drawn at the highest rate of interest, it is satisfied to receive the notes to their order at their time of payment. No one can deny the benefits rendered by the mutual agricultural credit societies both to agriculture and to viticulture in our region. In the first place, it familiarizes the farmer with credit, which is a great point. In our country, the farmers do not like to borrow. It appears to them that when they borrow their con- dition becomes very bad. Now, you know by experience how agriculture is exposed to all the vicissitudes of nature and maladies of all kinds. It also has to fight against sometimes greedy speculators, who profit by the situation by seeking to absorb the products on the easiest terms possible. The district bank, when its fxmctions are properly carried out, acts as a regulator in carrying out its plans at the proper time. The farmer who knows how to borrow money from the bank does not sell his products unless he gets his price, and he is kept out of the hands of usurious lenders, who would profit from his distress if they could by forcing him to mortgage his goods and would deprive him of his just profits. One of the great benefits of the District Bank of Mutual Agricultural Credit is to lend to local banks estabhshed by the agricultural associations for the purchase of fertiUzers. To-day, when the chemical fertil- izers are sold, completely revolutionizing the old methods of our farmers, it is of interest to them to be able to buy these fertilizers in the best possible condition and to obtain every guaranty as to their quality. We have here at Rheims our local bank, which was estabhshed by Mr. Moreau, professor of agriculture at Rheims, and which has the sole object of buying fertilizers, making chemical analyses in the laboratory, purchasing seeds, and putting them at the disposition of the Agricultural and Viticultural Association of the Province of Rheims. At the time of the crisis it is questionable how we could have survived during many years in Champagne, but thanks to the beneficent action of the Wine Association of Champagne, our various local banks in the wine-growing region were able to lend at 1 J per cent, an extremely low rate, to the unfortunate viticui- turists, and that for a considerable sum, which for about three years was carried on their books, amounting practically to 12,000,000 francs. The Wine Association of Champagne came to the rescue of our district bank, in which they placed money, guaranteeing all the notes of the viticulturists, and as these local banM only lent money, as I have said above, at 3^ per cent interest, it saw fit to reduce the rate by 2 per cent to all the borrowers, thus maldng the interest only 1^ per cent. This was nothing more nor less than prac- tically paying a certain sum to grape growers in order to assist them in paying the debts they had contracte . In certain regions, notably in Aisne, we have business with the associations which are occupied entu'e y in the purchase of live stock. Our bank has great influence, and we believe that it is only now at the beguin g of its usefulness. We have reached the state of business that we now lend about 6,000,000 francs a ye FBANOB. 759 We have in 12 years built up a reserve capital of nearly 350,000 francs. We hope to strengthen this reserve and, at a given moment, to utilize it either in extending the benefit of credit or in the employment of insur- ance and other agricultural works. Naturally our notes when the term of payment is due are not all paid, but we have established as a prin- ciple the privilege of renewal when we find that the borrowers are very solvent and when they are able to pay at least one-third of their debt. The credit which we have been speaking of is called in France short-term mutual credit. But now we have another conception of mutual agricultural credit, which, to our view, is the best which legislation has produced, and is called long-term credit. It has for its end the protection of the small farm owner for the purpose of aiding him not alone in the reconstruction of his holding, but in its extension. The Government, through us as an intermediary and through all the different local banks, puts at the disposition of the farmers who are not well off, or who even possess nothing, sums which may even be as high as 8,000 francs, and this money is lent to them for a time as long as 15 years, repayable by annuities following a weU-established schedule at an extremely low rate of interest — 2 per cent. If I look at the schedule which I have before me I find as a matter of fact that for 15 years a borrower of 8,000 francs will pay the sum of 622 francs per year. Naturally, the Government requires the very best of guaranties — that is to say, we are not able to grant a loan unless we take a first mortgage upon the property of the borrower. We are obliged to make the most minute inquiry concerning his morality and that of his family. Now, let us take an illustration of two cases: The case where a borrower possesses some property which he inunediately offers as security against the money which we advance to him; and the case of a yoimg farmer who does not have the necessary means for starting out on a farm. The patrons of long-term credit ought to be recruited by all means from among the young people, after they have left their regiments, who are desirous of following their parents in the cultivation of the soil and are eager to secure the necessary and indispensable resources in their own country homes. You see, therefore, all the moral import and the social value of long-term credit, since it has for its aim the retention in the coimtry of the young people who lack resom"ces and who wUl go into the public service and into the industries in the city for the purpose of securing their livelihood more readily. We have so well applied in our bank every feature of importance of the law of March, 1910, which estab- lished long-term credit that we have organized an advisory service at the head of which we have placed a man of real worth, a retired notary from the coimtry, who has brought to us the fruit of his long experience, and we have been able to apply many himdreds of thousands of francs as loans to farmers who probably would otherwise have abandoned their farms. The long-term credit, concerning which we have been speaking, is called "individual long-term credit"; it remains for me now to speak of "collective mutual credit." This credit is that which is susceptible of being applied to certain agricultural groups or associations. That is the case with the cooperative distUlery at Betheniville, an establishment of recent origin. This distillery, which has a capital of 140,000 francs — a capital subscribed entirely by cooperators — has for its aim the distillation of beets produced by a body of farmers, about 200 of them, and the sale of alcohol produced directly for conmaerce, and the division of the profits— after deduction has been made for expenses — on a pro rata basis according to the production by the different cooperators. This cooperative society is on the high road to prosperity. It has received from the Government a very large advance, in the neighborhood of 210,000 francs, repayable by annuities for 15 years, at an interest of 2 per cent. AGRICULTURE IN VICINITY OF VERZY. Report op a Subcommittee. Veezt (neak Rheims). The land in this district, having a chalky soU, requires sand to be mixed with the fertilizer. The propor- tions are usually 300 kilos of chlorate and 400 to 500 kUos of nitrate, mixed with a sufficient quantity of sand to bring up the consistency of the soU to the right proportions. When manure is used from the stables, 152,000 kilos per hectare are employed. The vines are cut back almost to the ground each year, just leaving two stalks of the preceding year's growth about 2 feet long, and supported by light sticks driven in the ground — no extended system of support is employed, so that the fields look almost like tomato patches. 760 AGEICULTUEAL COOPERATION IN EUROPE. The size of the grapes is generally small, but there is a considerable variety xa the color and size. A '. amount of labor and careful attention is necessary in operating these vineyards, resulting in high prices for the product. The same fertilization as for vineyards is employed in raising beets. The production amounts to 20,000 to 40,000 kUos per hectare, and the price ranges from 25 to 28 francs per 1,000 kilos. Crop rotation and yield. — In the crop rotation wheat comes after beets, but without any further application of fertilizer, the average yield being 2,500 kUos per hectare. Oats yielding 32,000 kilos and selling at 20 francs per 100 kUos and barley yielding 4,000 kUos at 22 francs per 100 kilos are also used in the rotation the same as wheat. The next crop is usually hay, generally of a leguminous character, yielding 2,500 to 3,000 kilos per hectare, which sells for 70 francs per 1,000 kilos. Labor. — Most of the work in the champagne district is done by the owners with their own families, each of which cultivates a small portion ranging from a half acre up to 5 acres, or by tenant farmers operating similar areas on share basis. There are some large farms which are operated with hired help; the farm laborers, when employed by the year, are given their board and an average of 600 francs annually. Day laborers employed at the rush season are paid about SI a day, usually without board. Land values. — Woodland and pastures in this district sometimes sell as low as from $40 to S80 an acre, and lands cultivated in potatoes, beets, hay, etc., average $60 to $140 an acre. Vineyard lands sell at high prices, the value depending upon the condition of the vineyard. From time to time the vines have been seri- ously attacked by plant diseases, injured by frost and hail, and sometimes destroyed by floods. For this reason the prices are lower than they are for the best vineyards in the south of France. Several owners of moderate-sized vineyard properties in the district of Verzy concur in the statement that the average vineyard land is worth from $800 to $1,000 an acre; naturally when the vines are damaged the value is much less, and when the vineyards are extremely vigorous and healthy they may be worth as much as $1,500 to $2,000 an acre. DOMESTIC SCIENCE SCHOOL AT VERZY. One of the large champagne manufacturing companies has recently constructed a set of new buildings for a win3-pressing plant at Verzy, which includes quarters for the manager, office force, and personnel who are to- operate the plant. The traveling school of domestic science, which is just being introduced in the champagne district, and which has to occupy such quarters as may be available in each locality, has taken advantage of this new building for its first three-months' session at Verzy. The building is extremely well adapted to the purpose, for it has a large, light, and well-constructed basement in which the laboratory apparatus has been installed. There is a full set of butter-making machmery, including cream separator, milk-testing apparatus, mechanical churn, and butterworker, etc., and cheese- making equipment. The first floor is devoted to a classroom, with blackboards and seating accommodation for about 20 girls. There is also a dining room on this floor, and in the second story there are sleeping accom- modations for the teachers and nearly all the girls. There are three teachers, who were prepared for this work in a special school, and they explained to us the method of carrying on the course, and appeared to be very well qualified. The girls were all about 15 years old, and belong to families of surrounding farmers, some of them coming from a considerable distance, and boarding at school. Training. — The girls are given practical training in care of the house, cooking, sewing, laundry work, and proper methods of feeding cattle and poultry, full instruction in dairying and cheese making, gardening, and some practical instruction in the planting and care of fruit trees, and the preserving of fruits and vegetables. They take turns in performing the several household duties, including the preparation of their own meals and table service. They are given careful instruction in house sanitation and the nourishing value of foods, and the results of this training are said to be excellent. The course in each locality only lasts three months, after which the school moves to another point, where it stays another three months. This moving from place to place gives an opportunity for the farmers' daugh- ters to receive instructions which they would otherwise be unable to enjoy without having to do expensive traveling. Their mothers are also given an opportunity to keep in touch with the work in these schools, and those who live nearest continue to profit by the assistance of their daughters before and after school hours. Almost all the girls take the keenest interest in these courses, and each one is given a diploma at the end of the three months' course, provided she has an average marking of 50 per cent. Each girl is almost certain to get married immediately after graduation. FEANOE. 761 DAIRY FARM AT CHAUMONT-SUR-MARNE. Report or a. Subcommitter. Chaumont-Sub-Marne . This farm consists of 205 hectares situated at San Martin sur le Pre-Marne. Of this 50 hectares, without buildings, are owned by M. Eigollet le Ronvallet while the adjacent 150 hectares with a full set of masonry buildings constructed about a courtyard are rented and operated by M. le Ronvallet and his family. There, is an additional pasture of 5 hectares situated near by, which he also rents. The principal industry is the production of milk, and the forage and grain necessary for the operation of the dairy are raised on the farm. The farm equipment consists of one 2-horsepower thrashing machine; 2 mowing machines; 1 reaper and binder; 4 hay wagons; 6 work horses, and 6 young horses raised for sale; 18 milking cows, averaging 12 liters daily throughout the year; 22 additional cows which were not giving milk at the time; 350 sheep, of which 200 were ewes carried throughout the year; and hogs, poultry, etc. M. le Ronvallet and his wife have three girls and two boys, all of whom are too young to do much work yet, and they employ one maid in the house at $300 francs a year and board, 5 farm hands, and 1 dairy hand, having sleeping quarters in the barn, at 500 francs a year and board, and 1 shepherd at 1,100 francs a year without board. . LaTid value. — M. le Ronvallet's land was valued at $60 per acre without buildings, and that which he rents at $100 per acre, buildings included. Farm huildings.- — The buildings are situated on the main road, only a mile distant from Chaumont, a town of 30,000 inhabitants, and about 2 miles distant from the railroad station, from which the milk is shipped. They consist of a one-and-a-half story stone dwelling, a very large hay barn two stories high, a one-story sheep barn, cow stable, and implement shed built around three sides of a hollow square, the fourth side of which is separated from the public highway by a high stone wall. The stable manure is piled in the center of this courtyard, and the farm machinery and wagons are left in the open when the weather is fine, and everything is kept in very neat and orderly manner, though the arrange- ment is not what would be considered very sanitary in America. Milk production. — One hundred and sixty liters of milk are sold daily, being sent in 20-liter tin cans to the railroad station, the price received being 4 cents per liter. The cows are fed on hay, barley, beets, and green forage, according to the season. Only the dry cows are allowed out in the pasture with the young stock. Areas cultivated. — The total area of the farm, as operated, amounts to 512 acres, which is cultivated in the following proportion:, Seventy-five acres are devoted to wheat raising, 65 acres to rye, 60 acres to barley, 100 acres to oats, 65 acres to leguminous forage crops (alfalfa, etc.), 35 acres to permanent hay fields, 27 acres to open pastures, 15 acres to wooded pastures, 60 acres left fallow, 7^ acres to beets for cattle feeding, and 2^ acres to potatoes and garden for family use. Crop rotation. — The leguminous crops are left on the ground for two or three years, and the last growth is plowed under, and the following rotation adopted : Wheat or barley. Beets or potatoes. Oats or rye. Potatoes. Alfalfa. Wteat. Alfalfa. Barley. Alfalfa. Crop yields. — Hay, 3^ tons per acre; wheat, 31 bushels per acre; rye, 36 bushels per acre; oats, 50 bushels per acre; barley, 30 bushels per acre; beets, 15 tons per acre. Fertilization. — Stable manure is applied before planting beets, which are followed with wheat and chemical fertilizer in the proportion of 88 pounds of nitrate, 350 pounds of superphosphate, and 350 pounds of potash. The amount applied ranges from 6.6 tons to 13.2 tons per acre. Horses and sheep. — The horses weigh 550 to 600 kilos each, and are woith from $200 to $250 apiece, and they form a profitable side issue in the farm operations, for all the feed necessary for raising them is produced on the place. Great care is taken in breeding the sheep, and in 1912, 70 of the lambs were born in one night. The lambs are raised early in the season and sent to the market early, thus demanding high prices. Relative wages in Paris. — The wages paid to farm laborers in the country being so low, it is interesting to compare the wages paid in the cities. Laborers on temporary construction work in Paris are paid from $1.60 to $2 a day, and those employed in factories receive from $1 to $1.50. Temporary laborers employed in the immediate surroundings of Paris at harvest time receive from $1.20 to $1.80 a day, and those in the interior of France from 80 cents to $1.40, all without board. The price paid the shepherd on M. le Ronvallet's farm for steady employment throughout the year was at the rate of about 60 cents a day without board. 762 AGBICULTURAL COOPEBATION IN BUBOPE. Taking into account the low rate of wages and the fairly good average yield of the land at Chaumont, the use of agiicultural machinery, the high price of live stock, milk, and other farm produce, and the low rental, it would seem that farming should be profitable to the tenant of the type of M. le Ronvallet. He and his family look prosperous, and the children were all being sent to boarding school. The milk was consumed in the town of Chaumont, and the producer had only to deliver it to the station to receive 20 centimes per liter. AGRICULTURAL CONDITIONS IN SOUTHERN FRANCE. Report op a Subcommittee.' In securing data on which to base this report an attempt was made to get the opinion of the farmers them- selves and the cooperative societies as to the results that are being accomplished through cooperation and the satisfaction that is being given by the several available systems for agricultural credit in southern Prance. MODANE, AIX-LES-BAmS, BOUEG. The farmers throughout this whole section seem remarkably prosperous, and most of them live on the farms which, they own and cultivate, their houses being situated separately throughout the Rhone Valley. There are, however, a large number of agricultural workers who live in the villages and are employed on the larger estates. Wages are moderate in price and farm produce is high. Fertilizers are being used extensively and farm machinery is coming rapidly into general use. Cooperative purchasing has been in successful operation through the syndicats for some time, but cooperative selling and distribution are just being started. The credit facil- ities for both long and short time loans are said to be most satisfactorily suppHed through the Credit Agri- cole. Many large proprietors have borrowed from the Credit Foncier on mortgage security, but it was said that the formalities and requirements were prohibitive to the small farmer. The best results in agriculture are said to be attained by the small farmers, holding from 5 to 60 acres and averaging 25 to 30 acres. They have separate houses and buildings and live on their own farms and do most of the work themselves with the help of their own families. The highest income comes from raising straw- berries and vegetables (primeurs), which are sent to the markets in Paris and Berlin, where they command high prices, because they arrive earUest in the season. Hay and cattle raising in the east, wheat, rye, oats, and barley, with hay, in the north, hay, grain, peaches, plums, and small fruits and vegetables in the central part, and vineyards, oil-producing crops, grain, and pastm-age in the south comprise the staple production of the Rhone Valley. Farm laborers receive from 80 cents to $1.40 per day of 12 to 14 hours, and women 50 cents to 75 cents at harvest time, when they do the lighter work, such as raking and shocking up the hay. Hay sells at from $12 to $15 per ton around Lyon, and the president of the Cr6dit Agricole stated that the greatest demand is for short time loans extended to two or three years for the purpose of buying and maturing cattle, and for the purchase of the more expensive agricultural machinery, the saving by which can not pay for itself in one year. In Bourg and Aix-les-Bains, where the farmers are mostly operating on a large scale, or where the land is being operated by tenants, farmers do not make much demand on the Credit Agricole, the large proprietors having already borrowed from the Credit Foncier. What little demand there is from this section is for the long-term loans furnished by the Credit Agricole, which are being called for by farmers' sons, who desu'e to become proprietors of small farms or to increase their production as renters by the purchase of cattle and machinery. VALENOE-LOEIOL (DROME). "Brancas," a 150-acre fruit farm at Loriol (Drome), situated on the east bank of the Rhone, and owned by Tezier Brothers, of Valence, is devoted partly to vineyards and peach and plum orchards, and also to forage crops and cattle raising. This farm is operated by M. Paul Rey, as superintendent, with 15 workmen, four mules, three horses, and modern spraying and cultivating machinery. The wages are 60 cents per 10-hour day throughout the year. The superintendent stated that the elementary schools give some instruction in agriculture and that those pupils who show a special interest or aptitude are given further instruction in the regular schools of agriculture. ' Itinerary: Entering France on June 1, by way of the Maritime Alps, a week was spent on the way to Spain, passing through toe I'oUowing places: Modane, Aix-les-Bains, Bourg, Lyon, Valence-Loriol, Avignon-Carpentras, Nimes, Montpellier, Port Bou to Spain. After passing two weeks in Spain, another week was spent in southern France, entering by way of the Pyrenees, at the pass d'AapOi and continuing through Oloron, Pau, Lourdes, Toulouse, Limoges, Chateauroux, Bourges to Paris. FKANCE. 763 There is not much borrowing in this section, but the service being rendered by the Credit Agricole is the first that the farmers have felt was adequate to meet their requirements. He said the sons of the small farmers were available at harvest time as day laborers for the larger land holders and that there was little trouble through lack of sufl&cient farm hands. AVIQNON-OAKPENTEAS. The mayor of Avignon, former president of the agricultural society, and owner and operator of a large farm near the city, spoke very highly of the service being rendered by the Credit Agricole, and the ofl&cers of the local syndicate quite agreed with him. This is one of the most important sections for the production of primeurs, which are brought m daily to the town of Carpentras and sold at auction, very early in the morning each day during the productive season. This produce is piurchased by intermediaries (expediteurs), who make up car loads and ship it to the northern markets. The producers who have been bujdng all their requirements through the syndicats have until recently been receiving such satisfactory prices that they have not strongly felt the need of co6p- erative selling. Just at this time they are awakening to the very large profits that are being made by the packers and are considering the formation of a cooperative selliag society. During the month of June 25 car loads of strawberries were shipped per day from Carpentras, and other early produce iu proportion. This district has been transformed by irrigation and scientific agricultural methods from an almost desert gravel area to one of the most productive agricultm-al sections of France. Every Wednesday morning they have a great general market sale of cattle and all kiuds of produce, beginniag at 1 a. m., but the fruits are brought iu every morning at that hour, and all shipped away on the train before daylight. American grapevines are being almost universally introduced for the rootstock throughout the vineyards, because they are able to resist the phyloxera, and the native vines are grafted on them. The boys' secondary public school at Avignon makes no attempt to teach agricultural subjects, leaving that for the special agricultural schools. NIMES MONTPELLIER. Grape growing is the principal industry in this section, although between the vineyards there are many farms devoted to cattle raising with forage crops and grain. Agricultural machinery is sold at Nimes through two separate private dealers at very reasonable prices, American mowing machines selling at $50 each. The Credit Foncier was well spoken of for long-time loans, although it was said that the small farmers were getting very much better service from the Credit Agricole on both long-time and short-time loans, and that the Regional Bank at Montpellier has aheady laid aside a reserve amounting to $150,000. This is one-sLxth the amount necessary to repay the advance made through the department of agriculture from the Bank of France. LOUKDES. M. Francois Dubosc, Deputy Mayor, Camperzan (near Launemezan Station), who is the vice president of the local credit bank, said there were 180 local banks in his Department (of Hautes Pjo-enees). He was enthusiastic about the system, saying that borrowers might renew their short-time loans every three months according to their local provisions. They have to return one-eighth of the amount of the loan or of the amount outstanding, together with interest at the end of each three-month period, in order to have the loan renewed. This process may be continued for two years and the interest ranges from 4 to 5 per cent. He reported much demand for long-time loans at 2 per cent plus amortization, which run from 10 to 15 years. He said these are being taken advantage of by young men returning from their service as soldiers and by farm laborers who buy small farms and operate them. Horses, mules, cattle, grain, and hay are the principal products of this section, and the prices paid by the Government for cavalry horses and by the Spanish for mules make the raising of these animals very profitable. TOULOUSE. This is an important agricultural center, having 150,000 inhabitants, and a number of agricultiu-al societies, and is the gathering place for fairs, stock shows, racing events, etc. The regional bank receives deposits on which it pays 2^ per cent, and has supervision over a very large and thriving collection of local banks, some of which are on the limited liability and others on the unlimited liability principle. They all grant short-time loans at 4 to 5 per cent, usually with one or two guarantors, and long-time loans at 2 per cent plus amortization, mostly maturing in 15 years, the annuity amounting to 6| per cent. 764 AGRICULTURAL COOPERATION IN EUROPE. Both classes of loans are in demand and only about one-half of them can be granted, for the following reasons: Unsatisfactory personal character of the borrower; questionable purpose of the use of the loan; lack of satis- factory bondsmen; questionable title to the land, etc. The cooperative selling societies, such as the Violet Growers' Association, the Cooperative Sales Stable for Horses, etc., borrow on long term and are getting along well. The violet raisers ship in carload lots during their season and have become very successful through their cooperative association. The officers of the regional bank and the syndicate are enthusiastic about the service rendered by the Credit Agricole. OPERATIONS OF THE CREDIT FONOIER. M. Simon Kouanet, late registrar of the Credit Foncier, 42 rue des Filatiers, Toulouse, said that about 10 per cent of the loans made by the Credit Foncier in the Department of Tarne et Garonne, had to be sequestered. It was the policy of the bank to take over the management of such properties and to place a superintendent in charge until such time as a sale could be made to advantage, using the proceeds from operations to pay the interest and expenses. As the mortgage was iisually on large landholdings without restriction as to the use of the loans, some spendthrift proprietors had neglected their land and failed to pay the interest, while other proprietor's like vineyardists, had been unable to keep up the payments because of the destruction of their vines by plant pests. The initial cost and formahty of making loans from the Credit Foncier has prevented small landholders from taking advantage of the service which it has to offer. It costs $250 for the fees and other expenses necessary to take out a loan amounting to $5,000. In attempting to sell a property under foreclosure, especially in case of a vineyard which has suffered deterioration, if an immediate sale were attempted the price might not equal the amount outstanding on the loan, so the policy is to start to operate the farm under a superintendent and to lay it off in small parcels, which are advertised for sale. In this way those desiring to acquire small farms may come and look over the property and choose the amount of land they desire and such parcels may be sold to much greater advantage. One of the properties coming under the direction of Superintendent Rouanet consisted of 575 acres, and was estimated to be worth $300 an acre and a mortgage equal to $125 per acre and amounting to $72,000 was taken by the Credit Foncier. When the owner of the land failed to keep up his interest payments, M. Rouanet was placed in charge of the operation of the farm, and he employed 30 men at 70 cents a day, 15 women at 40 cents a day, and 10 horses and 5 ox teams, with a full equipment of machinery. Cattle, horses, and mules were raised and all the necessary crops grown to feed them. The annual income amounted to $12,000, the operating expenses $5,500, including the labor, and the interest at 5 per cent came to $3,600. An additional expense for superintendence and incidentals of 1900, brought the total up to $10,000 per year. The taxes were estimated at about $1,000, leaving a net profit of $1,000. This was the average for about three years of operation during which favorable seasons were enjoyed, but if any unforeseen mishap had occurred, or a disease developed among the animals, a loss might have resulted, instead of a gain, from the operation. The 575 acres was divided into 33 separate parcels, averaging 17^ acres each, but actually ranging all the way from 1, 2, 3, up to 25 acres each. These parcels were sold to farmers' sons and agricultural laborers, etc., at an average of $150 an acre, bringing the total amount realized from the sale up to $86,000. Since the mort- gage amounted to $72,000 there was $14,000 more than enough to cover it. Although the Credit Foncier lost nothing in this case, it might have lost something if it had attempted immediate foreclosure. It is evident that the greatest care is required in estimating the safe limit of mortgage loans on highly developed, intensively cultivated farm land, such as vineyards, orchards, etc. Land not yet planted may be worth $140 to $200 an acre, and when covered with vineyards or orchards the same land is frequently worth as much as $1,600. Before insurance against destruction of vineyards and orchards was taken out, the Credit Foncier took a considerable chance whenever it loaned more than $200 per acre on high-priced vineyard land, and at the same time the proprietors were hampered by the smaU amounts they could borrow on such highly developed land. Many of the early loans made by the Credit Foncier were on too high a valuation and wherever fore- closures have become necessary it has been difficult for the bank to escape without loss. The vineyardists are taking the keenest interest in the mutual insurance associations, recently adopted throughout France, for when their properties are insured they can borrow a larger amount. It is evident that mortgage loans and insurance are very closely related and should be considered together. FEANCE. 765 The Credit Foncier and Crfidit Mutuel Agricole work in harmony and maintain friendly relations because each fills a separate need, and each operates to the advantage of the other. The 10 to 15 year "2 per cent loans, repayable by amortization, and limited in amount to $1,600 which are granted by the Credit Mutuel Agricole to enable farm laborers to purchase small parcels of land, have at the same time provided the means by which the Credit Foncier has been able to dispose of the farms which it has been compelled to sequestrate. These farms, which it was unable to sell to advantage, it has now found a ready market for by dividing them up into small parcels, which are readUy sold at relatively high prices to the clients of the Credit Mutuel Agricole. During the last year (1912), the Credit Agricole Mutuel has loaned $2,500,000 for periods of 10 to 15 years at 2 per cent. COOPERATIVE USE OF AGRICULTURAL MACHINERY. M. Pierre Berdoues, secretary general of the National Committee on Commerce and Industry, bought a thrashing set for a district of 12,000 inhabitants near Toulouse. There were 200 farmers in the district, each owning and operating a farm of 20 to 25 acres, and M. Berdoues, who was mayor at the time, tried to get them to combine and buy this machinery, but they were afraid to undertake it, so he put up the money himself and started renting it to them. Each farmer paid $2 a day of 10 hours, and $2 more for the engine man, for the use of the thrashing set. A quarter of a ton of coal and the necessary oil cost $2 a day of 10 hours, and two farm laborers at $1 a day each cost $2 more. So the total amounted to $8 a day, including the moving, setting up, and taking down of the machinery, or 80 cents per hour. The machine may thrash 100 bushels of grain per hour and require a half day for moving and setting up, so whenever it has to thrash 500 bushels of grain on a farm the cost will be 1.6 cents per bushel. Large quan- tities will cost less and smaller quantities more. The farmers were so well pleased with this arrangement that they requested the mayor to buy other ma- chinery and he did so, and rented that to them. A mowing machine costing $50 was rented at 40 cents per day, the farmer furnishing the team and the driver. The cost of the first thrashing set was $1,000 and it has paid for itself from the rentals in three years and the mayor has turned it over to the municipality of the com- mune. The commune now owns one thrashing set, two mowing machines, and a wheel rake, and- is beginning to appreciate cooperative operation. COOPERATIVE BAKERY AT TOULOUSE. An organization of bakers decided to form a cooperative bakery because their employers were compelling them to work on Sunday when they only wanted to work six days in the week. They secured the promise of a certain amount of direct custom from among their own number and the friends of their members, and formed a cooperative association for the making of bread. They rent a building and use four barrels of flour every day except Saturday and Sunday— eight barrels on Saturday and no work at all on Sunday. They sell the bread at the regular market price and divide the profits among their members at the end of the year. They have never made very high profit, but are satisfied because they are more independent. COOPERATIVE SALE STABLE FOR HORSES. The farmers near Toulouse who raise cavalry horses, hunters, and jumpers beheved that it would be less expensive to them to have these horses trained by a high-priced trainer and sold through a cooperative stable in the city. They organized a cooperative society for this purpose and have been only moderately successful. They beheve that this kind of business does not adapt itself to cooperative management, for the reason that each farmer sends the most inferior stock to the stable, not trusting his finest animals to the care of the trainer. Purchasers sort out the best horses in the stable, so there are always left an inferior grade, and this process con- tinues until those desiring to buy at high prices never go near the stable. BOURGES-CHEE. The secretary of the syndicate at Bourges stated that a great deal of cooperative purchasing of fertiUzers, seeds, and machinery was done through his association, and that they now expect to form a cooperative selling society. They think very well of the Credit Agricole, although there are so many large estates surrounding Bourges, and operations are carried on so extensively that the Credit Foncier has done most of the loaning on mortgage. It is hoped that some of these large estates wiH be divided, and that the small property holders will then make more use of the short-time loans and medium-time loans offered by the Credit Agricole. 766 agkicultubal coopebation in europe. consumers' cooperative society. La Ruche Berrinjere, a cooperative association of laborers at Bourges, started 32 years ago to buy the necessities of life, such as foodstuffs, coal, etc. Ten years ago they had 800 members and now they have 1,200. They have a store through which they aim to sell better goods at the same price or equally good articles at a slightly less price than the independent dealer. They change their manager at intervals of from 6 to 18 months, put aside 1 per cent for amortization and distribute 4 per cent in proportion to purchases by the members. The members pay an initiation fee of $1.25 and 60 cents per month dues. They require employees to become members and they buy from the French cooperative wholesale society in Paris. Although not much profit remains to be divided, their existence serves to keep independent dealers from raising prices and reducing the quaUty of the necessaries of life. They have held together for 32 years and hope in the future to deal directly with cooperative societies which are now being formed among the producers in the locality. conclusions. The large estates from Paris to Limoges in the Upper Rhone Valley, and the southeast of France have for a long time had satisfactory financial service in mortgage loans from the Credit Foncier. As a result they have introduced agricultural machinery, chemical fertilizers, and through the advice of the agricultural department of France they have developed modern methods of cultivation. Extensive farming is the rule and the work is being done mostly by tenants under the direction of superin- tendents hired by the proprietors. Not much cooperation exists as yet in these localities, but the necessity is now being felt for cooperative marketing associations. The tendency throughout the south of France is toward the division of large estates, so that there may be in every locality a majority of farms owned and operated by those who live on them and averaging about 30 acres, this being the size which requires the entire attention of a farmer and his family. It is desirable to have some smaller farms so that the extra members of the family may be available as day laborers to fill the demand of the larger land holders in the same locality. These larger land holdings are also desirable because there always will be a number of very small farms insufficient in area to support the whole family, the extra members of which require employment by the day. It was universally agreed that the long-term 2 per cent loans granted by the Credit Agricole have done much to stimulate the farm laborers and farmers' sons to acquire ownership of land. It also enables that member of a family who desires to remain upon the farm of his father to buy out the interests of the other heirs, at the same time helping them to acquire new holdings if they care to do so. The short-term credit is greatly appreciated and is coming constantly more into use, and the opinion was frequently expressed that through the activity of the syndicates and through private initiative the Credit Agricole would have been adopted anyhow even if the Government had not helped to establish it. However, the interest rates on the 10 to 15 year loans would have undoubtedly been at least twice as great had the Govern- ment not made the arrangement with the Bank of France. It is said that the Govermnent is not actuated by any altruistic motive, but seeing how strong the tendency had become among the democratic people of France to organize themselves, and at the same time hoping to foster its strongest source of recruits for the army in the rural districts, it determined to take the lead in the matter of cooperative credit. This policy has worked out well for the Government and also for the people, the former gaining its objects without cost or risk, and the latter getting better rates of interest and a quicker introduction of the system than they could have possibly attained without Government assistance. FOREST CONSERVATION AND AGRICULTURE.^ Address by Mr. Theodore S. WooLSEy, Jr., Assistant District Forester, United States Forest Service. Would it be going too far to say there can be no sustained and permanently successful agriculture without forestry ? I thiak not. You will find that those countries which have destroyed their forests and have not adopted a wise policy of forest management, are those countries which to-day are decadent, and whose agricul- tural resources have suffered. Perhaps M. Clementel, the French minister of agriculture, was a little too pessimistic when, at the recent forest congress, he recalled Colbert's prophecy that, "Not only France, but the entire civilized world, will perisn through lack of wood," but it is certain, as I have aheady emphasized, that every progressive country must ' This address, delivered in Paris, before the International Forestry Convention, was ordered by the Commissions to be made a pan of the "Evidence." FBANCB. 767 practice forestry, and that "dfiboisement" and decadence go hand in hand. This is not a new idea, since, according to Dr. R6gnault, such men as Leonardo da Vinci, Bernard Pahssy, Columbus, Seneca, and Pliny drew attention to the disastrous effects which would follow deforestation. Look at Greece, at Assyria, at Palestine and Arabia, to-day; possibly some members of this commission have seen the results of deforestation in the Austrian "Karst," in Spain, and in certain portions of the French Alps. FOREST INFLUENCES. Moreover, it is pretty generally recognized that the influences of a forest go further than merely covering the soil, absorbing rainfall, and protecting mountains from erosion. How closely is the health of a nation linked with so-called national parks, which furnish breathing spaces and vacation grounds for men suffocated by the work of modern competition? A famous Frenchman has stated that "this need of the beautifulis deep-rooted in our very nature," yet forests not only give us pleasure but in addition exercise a salutary effect in our health. Examine the Landes in France, where formerly the population was fever-stricken, and where to-day, through the reforestation of maritime pine coupled with drainage, an unhealthy district has been made healthy, and besides yields a handsome revenue. I need not go into details in calling your attention to the beneficial influence of forests on springs, in preventing hail and damage to crops from wind and storms, in favoring precipitation, in controlling avalanches, and in tempering the general climate of a region. The French believe that forests have an unquestionable influence on local climate, although some scientists look for further proof before accepting this theory without reserve. So much for general forest influences. PEOGEESS IN THE UNITED STATES. The opinion that the United States is backward in forestry is only too widespread. As a matter of fact, if I may be permitted to say so, we have a most efficient Forest Service, organized by Mr. Gifford Pinchot, and now directed by Mr. Henry S. Graves. A number of States have appointed State foresters, and I see no reason why it can not be safely predicted that after the next 10 years we shall be at least abreast, and possibly ahead, of other great powers in many lines of forest work. But in order to accompHsh what we should, it is absolutely essential that private owners realize the disastrous effects of deforestation, and on the other hand be made to appreciate the benefits which may result from cutting their timber on a reasonably conservative basis. Even to-day many public men, I am sorry to say, have no clear conception of what forestry comprises. There may be members of this commission who think that forestry only means preserving trees, or planting waste land. This is too narrow a conception. They should also think of forestry as a business. As a matter of fact, the United States Forest Service to-day is selling timber on an organized basis, because it feels that to conserve over-mature trees would mean a loss to the Public Treasury, and would not be practicing forestry. It realizes that grazing, m many cases, damages forests, but it feels, on account of the importance of the grazing industry in the West, that it is preferable to have regulated grazing, because it is a necessary part of western industrial development. It is opening agricultural land, even if it hes within a national forest, because it sees that development in the West depends upon putting the western land to its highest use. It is protecting forests from fire most successfully, and in this one work alone the Forest Service to-day fully repays Congress and the people of the United States for the annual appropriation; and what is true of the Forest Service apphes to many of those States which have organized State services. FOEEST SOILS. One of the most important steps which any Government has to take is to decide what land is most valuable for agriculture, and what areas should be retained permanently under forest cover. It is hard to lay down gen- eral principles, because not even a financial criterion is a fair basis upon which to decide this question, for the proper decision will vary in different localities ; but I am certain that it is an error in pubhc policy to give to the agriculturist those soils which may be cultivated only temporarily, and which, after the humus left by the forest has been exhausted, become waste. There are examples of this class of soil in the United States, which have been settled through railway or real estate speculation, and where many of our best type of citizens have been ruiaed because they tried to cultivate soil which should have been retained under forest cover. Similarly, such soils as are found in the Jura must without doubt be retained under forest. They now yield a handsome revenue in forests, but if they were to be denuded for agriculture they would soon become valueless. On the other hand^ there are many forest stands in the west of the United States on land covered with timber which muat some day be cleared and devoted to agricultural use, partly because the soil yield will be greater from agriculture, but also because many of these timbered valleys are not required for watershed protection. But whether land is chiefly valuable for agriculture or not can not be judged solely from the financial results ; the industries and welfare of States and communities must be considered where their industries depend upon a sustained stream flow neces- sary for navigation or manufacture. 768 AGEIOULTTJEAL COOPEEATION IN EX7K0PE. FORESTRY PAYS. Granted the general principles of forest influence, this commission might well inquire, "What does it cost to practice forestry?" I can state at once that to practice forestry on a rational basis costs very little, and in some cases may yield a considerable revenue. I do not go to the extreme of claiming some of the returns which you have seen claimed by foresters, because one can not help but realize that an oak forest, for example, which may take two centuries or more to mature, wiU not yield more than 1 or 2 per cent under certain circumstances; on the other hand, forests of maritime pine, such as you find in the Landes, or forests of silver fir, such as occur in the Jura Mountains of France, may yield a net revenue of from 4 to 8 per cent on the capital invested. This revenue is in addition to indirect benefits. NATURAL REGENERATION. But you might go further, and ask, "After you have once secured your forests, how can you regenerate them under present conditions in the United States, where even agricultural laborers are difficult to secure V The answer is simple. Regenerate your forests naturally, by practicing forestry. The French secure their second crop of maritime pine by merely cutting clear and protecting from fire, and allowing the seedlings to come up naturally. The silver fir in the Jura is cut on what is called the selection system, by the removal of single trees or groups of trees, and the young growth is found everywhere, without the slightest expense for planting or sowing. The beech and oak in France are fhst opened up to permit the young seedling to start, and then gradu- ally imcovered, until at the first cutting you will find the soil completely covered with regeneration, at little or no cost. These same principles can be applied in the United States. RESTRICTIVE LEGISLATION. Since, in some localities, the permanent welfare of the community will depend on conservative cutting, let us consider what steps are being taken to insure this kind of cutting. As yet, there has been no repressive legislation in America to force owners into practicing forestry, and I feel sure this will seldom be necessary because our citizens are too public spirited, when once they realize that the development of the locality is at stake, to pursue methods that would ruin the prosperity of others. Yet I wish to call your attention to what France has done in Algeria to prevent the unwise destruction of forests. Article 76 of the famous Algerian Forest Code, promulgated in 1903, gives ia a nutshell the conditions under which private land can be expro- priated and declared a measure of public utility: 1. For the maintenance of lands on moimtains or slopes. 2. For protecting the soil against erosion of rivers or torrents. 3. To insure the existence of springs and watercourses. 4. To render stable the coast dunes and those of the Sahara, and for protection against the erosion o the sea, and drifting of sand. 5. For the defense of territory in the frontier zone. 6. For the sake of public health. The direct or indirect protection of agricultural soils in Algeria was one of the maiu justifications for this law. Such legislation as this, it is hoped, is not going to be necessary in the United States, but it shows what the Republic of France has seen fit to promulgate. "How can we practice forestry locally," you may ask? The answer is: Consult the State forester if you have one. If not, write the Forest Service at Washington, or employ a reliable consulting forester just as you would consult a doctor, a lawyer, or a civil engineer. Ordinarily a forester must see local conditions before prescribing a remedy. DETAILS OF FOREST MANAGEMENT. In closing, I want to make it very clear to you what practical forest management really is, because I feel assured that you wiU not omit to link forestry with agriculture in your report. Practical forest management ' is applied by the forester in the administration of public or private forests for the same reason that the modern farmer manages his farm under scientific principles, instead of by the hit- or-miss system of a century ago. Any stand ought to yield more with forest management than without it. The application of forest management includes much that the lumberman has overlooked. In the first place, the proper rotation or age when the timber crop reaches maturity is determined not by guesswork, bu.t by ' This definition lollowa what I have written in a manuscript on "The Red Pine in tlie Lake States." PBANOB. 769 considering the amount, size, and quality of merchantable material that can be cut after a given number of years, as well as the demands of the community, business, and market. A clear understanding of the silvics and growth of a species enables the manager or owner to weed or thin his stands at the proper time, and to remove the trees that are retarding the development of the final crop; to secure a succession of crops by the most suitable system of natural reproduction; or if adverse local conditions prevent this achievement, to sow or plant the proper species so as to fully utilize the ground for which it is best suited. Frequently, only the crudest methods can be applied, when, because of poor market conditions, the final crop has but little value; to work a forest intensively at the cost of aU direct or indirect profit would not be following the correct manage- ment principles. It is apparent that without efficient fire protection no conservative cutting can be successful; nor should the owner cut conservatively, no matter whether public or private property is at stake, without a clear understanding of the ultimate gain which is to be secured by any sacrifice in to-day's receipts. The busi- ness manager does not change his methods without definite reasons, nor should the owner of a forest. But perhaps the gain can not be expressed in dollars; it may be protecting the watershed of a navigable stream, safeguarding the water supply of a community, or providing a playground for a Commonwealth. Often the forest can be made use of as a breeding ground for game. Hence, it is vitally important that the kind of forest management adopted should conform to the object to be gained. The cultural rules, method of regeneration, and intensiveness of management must necessarily depend on the aims of the owner. The State or National forests must be managed on a broader financial policy than the private owner could afford to adopt. The individual must often put the financial returns first, while the State can well afford to raise the material most needed by the local industries or to maintain the cover, merely inter- rupted by light selection fellings. Moreover, in the case of important rivers, such as the Mississippi, which rises in the Lake States, and wherever forest lands are important for watershed protection, it may be best (even at a sacrifice in yield) to maintain a heavy cover. The individual must cut his forest crop so as to get the best returns, unless the public demands for its protection that the cover be maintained as a measure of public safety; you have seen that in Europe the policy of restraining the private owner from cutting, when it damages others, is clearly established in law. 14174°— S. Doc. 214, 63-1 49 ENGLAND. 771 ENGLAND. ENGLISH AGRICULTURAL ORGANIZATION SOCIETY. statement by Mr. J. Nugent Harris, Secretary Agricultural Organization Society. London. It will be necessary to refer briefly to the principal associations that directly or indirectly were connected with the development of the agricultural cooperative movement in England and Wales. In this connection, the premier place must be given to the Irish Agricultural Organization Society. Its existence and the work it was accomplishing in Ireland influenced materially the deliberations and conclusions of the other organizations that appointed committees to investigate the possibilities of adapting the cooperative principle to the agriculture of England and Wales. The first of these bodies to make a considered investigation was the central and associated chambers of agriculture. In December, 1891, the council of this body appointed a committee "to consider and report by what means the organization of the chambers could be utilized so as to promote the cooperative principle for the benefit of all its members in the purchase of farming requisites." The committee reported that they were "strongly impressed by the information laid before them, with the advantages which may accrue to farmers by the adoption of the principle of cooperation," and they gave it as their opinion that the basis of "cash with order" is essential to the success of any scheme for cooperative purchase. Until March, 1896, nothing further was done. In this month the council resolved "That this council recognizes the desirability of promoting combination for the sale and distribution of farm produce and for the purchase of farm requisites," and a special committee was appointed to "inquire into the extent to which the principle of cooperation has been applied in this and other countries to the sale of agricultural produce, whether it is feasible and desirable to promote its further extension, and if so, what means are best adapted to that end." A great deal of evidence was taken and s, report drawn up. The report included a detailed account of agricultural cooperation in Ireland, the Continent, the United States, Canada, and Australia, and it further gave certain conclusions at which the committee arrived. It also reaffirmed the views subscribed to by the council in 1891, but with the further opinion " that cooperation for purchase and cooperation for sale form two separate problems, •and that the solution of the one is easy while that of the other is extraordinarily difficult." The committee, however, gave it as their opinion that notwithstanding these difficulties associations of producers in particular districts for the joint disposal of certain classes of produce would be advantageous, but state: It is not to be expected, however, that such associations will arise spontaneously. They are only likely to be started, even where they may be most desirable, as the result of an organized and systematic mission to explain the princi])le of cooperation, the probable advantages of its adoption in each particular case, and the constitution, rules, and procedure which must be accepted and followed if the harmonious and successful working of cooperative associations is to be assured. In short, work similar to that done in Ireland by the Irish Agricultural Organization Society would need to be done in this country by a purely propagandist body. Beyond creating a considerable interest at the time, nothing immediate eventuated from the action taken by the chamber. Then came on the scene the National Agricultural Union. This latter body was created in 1894, and its program comprised the following items: 1. Reduction in local taxation of agricultural property. 2. Abolition of preferential railway rates on foreign to the prejudice of British produce. 3. Old-age pensions. 4. Amendment of the law relating to the adulteration of food and the merchandise marks act. 5. Amendment of the agricultural holdings act. 6. Increased facilities for the obtaining of small holdings. The main object of the union was to create a nonparty agricultural party in politics, and the above program was accepted by 230 members of the then new Parliament. Aniong the agriculturists of the country, how- ever, it was generally felt that something more than parHamentary action or agitation was needed to improve their position, and attention was concentrated on the railway companies, against whom it was alleged that they gave undue preference of foreign over British produce. 773 774 AGEICULTUBAL COOPEEATION IN EUROPE. For seven years the National Agricultural Union carried on its propaganda with untiring energy, creating many branches and raising large sums of money. One of its most ambitious schemes was the creation of the British Produce Supply Association, formed in 1896, and which was looked upon by the more sanguine of its supporters as likely to lead to a "new era" for the British farmer. The object of the association was "to assist the producer in the disposal of his produce at every stage from the farm to the market." The attempt ended in failure. Inquiry into the conditions under which the organization of agriculture had been successfully carried out in other countries showed that a beginning had invariably been made with the simplest form of combination, and more especially with combination for the joint purchase of agricultural neces- saries. In this way the advantages of cooperation could be brought home to cultivators, who were gradually educated in the theory and practice of combination without having their suspicions aroused and their mutual distrust stimulated by proposals that they should at once alter their old conditions of trading in accordance with that system of combination for transport or sale which really constitutes, not the beginning of agricultural organization, but one of the most difficult and most complicated of aU its many phases. Several of the leading railway companies of the country also endeavored, by conferences, circulars, etc., to bring home to the farmers the need for organization, and the advantages to be derived in reduced railway rates by buying and selling in bulk. Some of the companies expended large sums of money in furthering their views, but with httle result, as their action arousetl the farmers' suspicion that there was an ulterior motive behind it. The first real attempt to organize agricultural cooperation in Great Britain was made by the British Agri- cultural Organization Society, an organization founded on the lines of the Irish Agricultural Organization Society. The British Agricultural Organization Society was founded in 1900 and had its headquarters at Newark, Nottingham. Within a year of the establishment of the society it was decided to amalgamate with the National Agricultural Union, and form an entirely new body, to be called the Agricultural Organization Society, now known as the "A. O. S." One of the conditions laid down in the carrying out of this fusion was that party politics was to be left severely alone and the promotion of the cooperative principle to be adopted as the society's one object; and it is in accordance with this understanding that the operations of the agricul- tural organization society brought into existence as the final outcome of the series of events recorded have been conducted ever since. THE AGRICULTURAL ORGANIZATION SOCIETY. Registered in April, 1901, under the industrial and provident societies act, the Agricultural Organization Society, now known as the "A. 0. S.," was constituted as a nonparty and nontrading body, whose main purpose was to "secure the cooperation of aU connected with the land, whether sis owners, occupiers, or laborers, and to promote the formation of agricultural cooperative societies for the purchase of requisites, for the sale of produce, for agricultural credit banking and insurance, and for all other forms of cooperation for the benefit of agriculture." The society adopted, in fact, on its own account, the principle which had been enunciated by Sir Horace Plunkett at the inauguration of the Irish- Agricultural Organization Society in 1894, when he said: The keynote of our proposals is in the proposition that the farmers must work out their own salvation , and further, that this can only be done by combination among themselves. While, however, pubhc opinion was by this time fully prepared to indorse the soundness of the argument, it greatly doubted the possibility of carrying the proposals into effect. It sympathized with the idea of combina- tion among British farmers, but assumed from the recent experiences that those who made further attempts to attain the reahzation of that idea would simply be following up a forlorn hope. There did also- appear to be a certain amount of presumption on the part of the new society. LordWm- chilsea, president of the National Agricultural Union, had organized his British Produce Supply Association with a capital of £50,000, had securcil the support of many of the leading members of London Society, had started operations on an ambitious scale, and had then failed. The railway companies, with all their powerful resources, had, in turn, sought to promote combination among the farmers, and they, too, had failed. Yet an unpretending little society, which, at the outset, occupied two small rooms in a block of offices situate in a side street in Westminster, and had at first hardly enough funds with which — apart from the voluntary efforts of an active committee — to pay rent, a secretary, a typist, and the charwoman, and distribute leaflets in addition, had started on no less formidable a task than, not merely inducing British farmers to combine, but practically to reorganize their industry, with possibilities of exciting the prejudices, or of arousing the opposition, of pow- erful commercial interests concerned to the extent of many millions in the allied industries on which agriculture was more or less dependent. Yet the society, based on sound principles and increasing in strength as the years went on, was to attain to such success that it represents to-day a national movement. ' ENGLAND. 775 Until 1909 it was supported entirely by voluntary contributions, but in that year a grant from the Small Holdings Account to the Society by the Board of Agriculture for a period of three years from April 1, 1909, was sanctioned by the Treasury. This grant was given in consideration of the work being done to encourage co- operation among the Small Holders, statutory and nonstatutory, and was subject to certain conditions affecting the management of the society, provision being made for the representation of the board of agriculture and one or two other bodies on the committee. The grant has been renewed. In 1911 further official recognition was given the society by the decision of the development commissioners, a body created under the development and road improvement fund act, to recommend His Majesty's Treasury to make an annual substantial grant to the society for the furtherance of agricultural cooperation provided a scheme of reconstitution of the society was carried out on certain linf s The Treasury approved, and pending this reconstitution, an interim grant of £3,000 was sanctioned. The scheme of reconstitution of the Agricultural Organization Society referred to has now been carried through. A new society has been formed under section 20 of the companies (consolidation) act, 1908. The society retains the old title. The memorandum of association of the new society sets out the objects and works of the new society and provides that it shall be a purely nontrading body. The membership consists of indi- vidual subscribers of at least £1 per annum, corporate bodies and representative members of nonincorporate bodies. The directors of the society are styled the governors. The first governors who will hold office until April 1, 1914, are appointed jointly by the board of agriculture, and the development commissioners. Following the holding of the first annual general meeting of the society after April 1, 1914, the board is to consist of 36 governors chosen as follows: Elective (including the president) 18 Appointed by the board of agriculture 12 Appointed by the County Councils Association 2 Appointed by the Cooperative Union 2 Coopted by the governors 2 Total 36 PROGRESS OF THE SOCIETY. The progress of the work of the Agricultural Organization Society is best shown in the statistics of the affiliated agricultural cooperative societies, as given below: Affiliated Societies. Year. Number. Membership. Turnover. 1901 25 41 72 98 123 137 163 281 321 396 439 495 517 1,094 3,245 4,926 7,439 8,700 10, 650 16, 350 19, 500 24, 000 31, 020 45, 000 £9, 467 16, 274 38, 909 136, 677 221, 524 375, 000 615, 523 749, 000 860, 000 1,053,322 1, 331, 083 2,000,000 1902 1903 1904 1905 1906 1907 1908 1909 1910 1911 1912 to May 31, 1913 Analysis showing the number and nature of registered cooperative agricultural societies in England and Wales affiliated to the Agricultural Organization Society in May, 1913. Societies for the supply of requirements and sale of produce 178 Dairy, bottled milk, and cheese-making societies 30 Small holdings and allotments societies 194 Agricultural credit societies 48 Egg and poultry societies 24 Miscellaneous societies 18 Central Cooperative Agricultural Bank (Ltd.) 1 Scottish Agricultural Organization Society (Ltd.) . , 1 Agricultural and General Cooperative Insurance Society (Ltd.) 1 Total ,,,,.,.,...,,, ,... 495 776 AGEICULTURAL COOPERATION IN BUEOPE. The principal objects of the .local societies are: 1. To purchase for their members — (a) Manures, seeds, feeding stuffs, implements, etc., on wholesale terms from the manufacturers, importers, or wholesale merchants, and a small profit being charged to cover management expenses. (&) To attempt to secure the purity of feeding stuffs, seeds, and manures, the guaranties for which are often misleading or insufficient for the information of the purchaser. Cooperative societies are better able to protect their members in their purchases, for even when the proper guaranties are given, farmers, as indi- viduals, rarely have analyses made. 2. To secure the best market for the sale of produce — (a) By organizing the milk supply on a cooperative basis, so that some of the profits may be secured for the trading members. (b) By establishing cooperative butter and cheese factories in suitable districts. (c) By establishing cooperative egg and poultry depots for sorting, grading, and packing. (d) By grading and packing fruit, in order to place it on the market in a fresh and attractive condition. (e) By organizing cooperative markets, to reduce the cost of disposal and to break down the rings formed against the producer. ( / ) To reduce the cost of transport, by bulking consignments and by arranging terms with railway com- panies and carriers. 3. To open up remote districts by motor traction. In a district where the railway facilities were inadequate the Agricultural Organization Society induced the nearest railway company to run a motor goods service between one of its stations and the depots of a coop- erative society formed in the outlying district, the local society acting as agent for the traffic at its end of the route. 4. To hire or buy pedigree stallions, bulls, etc., for the use of their members at reasonable fees. 5. To arrange for all kinds of agricultural insurance. 6. To acquire land and sublet it to members in small holdings or allotments. 7. To establish agricultural cooperative credit societies. These societies are entirely self-supporting and self-governed. They become affiliated to the parent society by the payment of a small affiliation fee — 2 pence per member per annum — which entitles them to many bene- fits. They have the whole of the knowledge and experience of the central society at their disposal; they are advised in matters of policy; they are helped with their accounts; and generally rendered assistance in the coordination of their work is with the movement as a whole. HOW THE WORK OF THE CENTRAL SOCIETY IS CONDUCTED. Whenever by correspondence or otherwise it is ascertained there is an interest in agricultural cooperation in a given district, an offer is made to send down an organizer to address a meeting with the idea of stimu- lating that interest, and at the same time of ascertaining what particular form of cooperative effort would best meet the demands of the district. The following are some of the principal points dealt with at such meetings : (a) The need for better organization in agriculture. (b) The formation and management of agricultural cooperative societies and credit banks. (c) The advantages of cooperation in relation to — (1) The purchase of requirements. (2) The marketing of produce. (3) The acquisition of land for small holdings. (4) The provision of capital through credit societies. (d) The establishment and management of milk and egg depots, and butter, bacon, and cheese factories. Other forms of work include: The publication of the Agricultural Organization Society Journal. The issue of leaflets and reports. The carrying through of the details connected with the registration of societies. The assisting of societies with their books, accounts, and returns. The settling of disputes between societies. The attending of conferences of all kinds whenever there is a chance of furthering agricultural cooperation thereby. , The summoning of conferences to discuss matters where the cooperative federation principle can be apphe to the benefit of agriculture. ENGLAND. 777 HOW THE WORK IS BEING REORGANIZED TO MEET THE INCREASING DEMANDS ON THE SERVICES QF THE SOCIETY. The rapid growth of the agricultural organization movement and the increasing demand for assistance in developing old societies and forming new ones, has called for decentralization of the society's work. This has been met by a scheme of branch devolution. In those districts where the movement has taken the greatest hold separate branches of the Agricultural Organization Society have been formed with a resident staff of organizers furnished from the head office, but acting under the guidance of a local committee. Every effort is made to insure that the local committees shall be as representative as possible of agriculture and its allied interests in the locahty. Representation is given to the affiliated societies, to agricultural colleges in the area covered by the branch, to the local section of the cooperative union, to the railway companies serving the district, as well as to the governing body of the Agricultural Organization Society. There are three of these branches at present in being, viz : The Southern Counties Branch, covering the counties of Wilts, Dorset, Hants, and the Isle of Wight, with headquarters at Salisbury; the Northeastern Branch, covering the counties of Northumberland, Durham, and Yorks, with headquarters at York; and the North Wales Branch, covering the six counties of North Wales, with headquarters at Holyhead. The formation of other branches is under consideration, and it is in contemplation to form in all from 12 to 15 for the whole of England and Wales. It is expected that the bulk of the general work of organizing and supervising societies will be able to be done through these branches, and the head office can then concentrate on the work of general policy, the supervising of branches, the training of organizers, and the providing of experts for the more technical branches of cooperation, such as the formation of cooperative milk depots and bacon factories, the organization of the wool industry in the interests of the sheep farmer, motor transit, marketing of produce, the revision of the accounts of affiliated societies, etc. It will no doubt be of interest to have the main reasons set out which influence the governors in advocating a policy of branch devolution. They are as follows: 1 . Greater interest in the agricultural cooperative movement is aroused in those areas covered by a branch of the Agricultural Organization Society. 2. The possibility of keeping more closely in touch with existing societies with a view of rendering them assistance in various directions, and linking them up with the general agricultural cooperative movement, thereby eliminating overlapping and competition between societies. 3. A more ready ascertainment of the needs of the district in respect of agricultural cooperation. 4. The possibility of giving that close attention to the small holders in the branch area, by which means alone it is possible to organize and insure the successful working of small holdings societies on strict cooperative lines. 5. The setting up of more effective machinery for taking advantage of the educational arrangements that exist for the benefit of those engaged in agricultural pursuits. DISTRICT CORRESPONDENTS. During the past few months the governors have had under consideration the question as to how best to utilize the services of the many keen supporters of the movement in different parts of the country who would gladly give such services, but who are not in a position to incur much personal expense. As a result of this consideration it has been decided to inaugurate a system of district correspondents. The scheme provides for the appointment of county district correspondents, with subcorrespondents working under them. No salary is attached to the positions, but out-of-pocket expenses are defrayed by the Agricultural Organization Society. In districts where a branch of the Agricultural Organization Society is already in exist- ence, the correspondents will work in close touch wiih the council and secretary of that branch. In other districts the district correspondent will be the medium through which all communications relating to agricul- tural cooperation in the county will ffiter to the governing body in London. Applications for assistance from these districts received direct at headquarters will be referred to the correspondent for report before any action is taken. By the adoption of this course it is hoped that local centers will gradually be established in every county in the Kingdom, which will gather up and crystallize interest in agricultural cooperation in the various locali- ties, and wUl place at the service of the Agricultural Organization Society means of obtaining that exact knowledge of local requirements which is so essential if organizing work is to be successful. In those counties which are not yet ripe for the formation of a local branch of the Agricultural Organiza- tion Society, the establishment of a district [^correspondent may well form a nucleus from which a branch organization would ultimately spring. 778 AGBICULTURAL COOPERATION IN EUKOPE. District correspondents are appointed by the governors of the Agricultural Organization Society, but subcorrespondents can be appointed by the district correspondents, subject to confirmation by the governors of the Agricultural Organization Society. CLASSES AFFECTED BY THE SOCIETY'S WORK. The Agricultural Organization Society appeals to all agriculturists, large and snaaU. To the large farmer it points out that though now, owing to the size of his business, he may be able to buy on comparatively good terms, yet that he must be able to do still better if his orders are bulked with those of many others similarly placed, and that by combination he can insure purchasing at wholesale prices, guaranty of quality, and not be at the mercy of the many middlemen who stand between him and the manufacturer. In regard to the disposal of produce, attention is drawn to the savings that could be effected by combination for sale and trans- port, the advantage of cooperative auction markets, and the various ways in which rings and combinations formed by dealers to the detriment of farmers can be countered by cooperative effort. SOME SPECIAL FEATURES OF THE SOCIETY'S WORK. Purchase of requirements. — Buying retail and selling wholesale is a common practice amongst farmers generally. Cooperative purchasing societies place wholesale terms at their members' disposal and also secure for them guaranty of purity and quality in the commodities purchased. The extent to which the farming community has suffered and is suffering, owing to the inferior quality of seeds, fertilizers, feeding stuffs, etc., supplied to it, is almost incalculable. Both large and small farmers experience this trouble, and in this direction alone cooperative societies can effect considerable savings on behalf of their members. Societies acting as central 'purchasing iodies for other societies. — In order that the fullest benefits may be obtained by the smaller affiliated societies from the general scheme of linking up on the trading side, which culminates in the farmers' central trading board, the Agricultural Organization Society has advocated that the larger trading societies should act as central purchasing bodies for the smaller societies in their area. This arrangement offers special advantages to small-holdings societies who, though possessing under their rules powers to trade, are rarely in a financial position to employ competent managers. The large societies have been slow to undertake this work, but there are signs that they are beginning to realize the extent to which they can help the movement by sympathetic action in this direction. At a recent meeting of the West Midlands Farmers' Association (turnover, £50,000) it was decided to accept the smaller societies in the district in membership and to supply them with goods on terms slightly better than those granted to other individual members, and to allow them to participate in the profits made by the society to the extent of one-half the bonus given to ordinary members. The Farmers' Central Trading Board. — The federation of societies for trading purposes has been under the con- sideration of the Agricultural Organization Society for some time. One of the most interesting and useful developments during the year has been the formation of the Farmers' Central Trading Board, which was brought into existence at a meeting of representatives of societies held on September 27, 1912. The managers of the principal trading societies have been in the habit of holding regular meetings since April, 1910, to discuss subjects of general interest to their societies and to arrange for the joint purchase of certain commodities. The managers meetings performed a very useful purpose, but in order to give representation to committees of societies, and to give all trading societies affiliated to the Agricultural Organization Society an opportunity of being repre- sented, the central trading board was formed. The board has been divided into a northern, a southern, and a Welsh section, and meets jointly about every two months. It is expected that great advantages will be gained by societies bulking their orders through the board, and a start has been made in this direction by iriaking very favorable arrangements for the supply of certain commodities. Many matters on which joint action can be taken will be considered by the board and the following may be given as examples of the work to be undertaken: (1) The consideration of the possibilities for cooperation between societies in regard to the disposal of agricultural produce. (2) The consideration of intertrading between agricultural societies and the distributive cooperative movement. (3) The consideration of trade difficulties experienced by societies. (4) The consideration of railway rates and transport generally. (5) The consideration of the question of overlapping of the areas of operations of affiliated societies. ENGLAND. 779 The A. O. S. will from time to time obtain the opinion of the board on questions affecting the trading policy of the movement, and amongst the matters already discussed in this way have been the formation of district federations, and the question of credit and working capital for societies. The central board have appointed representatives on the joint board for trade for England, Scotland, and Ireland, so that the English societies by joining the board will become linked up with the wider movement. It is proposed to hold meetings of the board in different parts of the country, and those already held have been in London, Nottingham, and Manchester. International linking up. — On the trading side of the agricultural cooperative movenient the Farmers' Central Trading Board represents the final grouping for England and Wales. The next aspect to be considered is the relations between the movement in the three countries of the United Kingdom, i. e., England and Wales, Scotland and Ireland. There are directions in which joint action maybe taken with advantage, the three main divisions being: (1) The acquisition of farmers' supplies of the best quality at the lowest price. (2) The marketing of certain classes of produce in the most economical manner; and (3) The interchange of certain products between the movements. Joint hoard for trade. — To meet this a joint board for trade has been formed, composed of representatives of the trading side of the movement from the three countries mentioned. Meetings are held as required, and much benefit has accrued to the movement from the deliberations of the board. Joint hoard for organization. — As many questions arising out of the deliberations of the joint board for trade must affect questions of organization and propaganda work, which side of the movement as previously explained, is conducted separately from the trading side, a further joint board, called the joint board for organization, has been formed to deal with matters pertaining to the propaganda and organizing side which affect the three countries. By this means it is possible to formulate a common line of policy for the whole agricultural coopera- tive movement in the United Kingdom. Dairying. — Butter production as a cooperative industry, save in isolated districts, will never be of much importance, so far as England is concerned, because of the good outlet there is for whole milk, but the organiza- tion of milk depots, provided with up-to-date machinery for pasteurizing, and -also with cheese-making plant, is of the greatest importance. The Agricultural Organization Society has been instrumental in the formation of cooperative dahy societies of this nature in several parts of the country. Upward of 20,000,000 gallons of milk is annually dealt with by the combined dairy associations affiliated to the Agricultural Organization Society. Through these societies it has been possible to bring the producer closer to the consumer and to regulate supplies and avoid the flooding of the market without raising the price to the consumer. Efforts are also being made by organization to bring about an improvement in milk production by the means of milk records and improvement in stock. The first steps toward a national federation of the dairy societies have been taken recently. Eggs and poultry. — Many societies have been started for the collection, grading, and disposal of eggs and poultry. The largest cooperative egg collecting and distributing society in the United Kingdom, (he Fram- lingham (Suffolk) and District Cooperative Society, is located in England. The TnarTceting of fruit and market-garden produce. —The home producer is slill lamentably behind his com- petitor abroad in his methods of marketing this class of produce; especially docs this apply to the small market gardener and small holders. This arises from four main causes: (1) The want of knowledge how to pick, grade, pack, and market produce to meet the requirements of the markets. (2) Absence of collective marketing arrangements. (3) Want of an outlet of such a nature as to insure that the producer would be honestly dealt with and obtain the best returns for his produce. (4) Want of knowledge where to obtain accurate knowledge regarding the many markets and the salesmen to whom produce can be safely consigned. The Agricultural Organization Society contends that all these difficulties can be overcome by cooperative organization, and it has on its staff a fruit and market-garden expert, whose services are specially directed to this end. A satisfactory beginning has been made, but the work is of great magnitude. A scheme is on foot to organize cooperative depots in all the principal markets of the Kingdom through which the various coopera- tive producing societies can dispose of their produce. In connection with this scheme it will be possible to have a bureau of information capable of issuing advice as to needs and requirements of different markets, so that 780 AGEICULTUBAL COOPERATION IN EUROPE. the regular dispatch of produce to the different localities may be organized by the societies in accordance with the market's demands. Improvement of live stock. — Special attention is given by some societies to this important branch of agri- cultural cooperation. Notwithstanding certain difficulties which have arisen in the early stages of societies formed for this purpose, there remains the proof of the really useful work which has been done, and the fact that a much-felt need has been met. Excellent sires are owned by some of these societies, and the members have the use of them at very mod- orate charges, with the result that there is now a distinct improvement in quality of the young stock. Experience shows that much caution and care need to be exercised in the initial stages of these societies, especially in the question of finance and the selection of stud animals. One of the chief difficulties is the im- portance of having a sufficient reserve fund put aside to meet accidents or misfortune which may be met with. The amount of the service fee must be arranged so as to allow all the members to take advantage of the benefits and at the same time be sufficient to meet the requirements of the society. Small-Tioldings societies. — That the success of the small-holdings movement depends on cooperation can not be questioned. The small holder working on a small acreage must look for a greater yield per acre than the average farmer. This involves more intensive cultivation, requiring more capital per acre, and the mar- keting of the produce is more complicated. Every saving in the cost of production is of the utmost impor- tance to this class. Cooperation can help the small holder through combined purchase of requirements, the cooperative ownership of agricultural implements, teams of horses, etc., cheap credit through credit societies, and the profitable disposal of produce in bulk through cooperative depots. The A. O. S. has assisted in the formation of nearly 200 of these cooperative societies. Land-renting societies. — One of the simplest forms of cooperation is what is known as the land-renting society, i. e., a dozen or more men form themselves into a society for the purpose of obtaining land from the local authority or a private landlord ; the society collects and guarantees the rents, in return for which the land- lord should be willing to make certain concessions. Upward of 12,000 acres of land are now rented in this way and let out to the members in small holdings of allotments. Common pasturage forms a part of the scheme. The wool industry. — Wool from foreign countries and the colonies is carefully sorted, graded, and packed and then placed on the London wool market in large lots of a given quality, where buyers from all over the world compete for its purchase, and the highest prices are realized. Home-grown wool is only sorted to a limited extent. It is in many cases badly packed and is generally sold through a local dealer or at one of the country wool fairs. It is contended that if the English sheep farmers would combine and establish cooperative depots for wool sorting and packing they could place their wool on the market at much better advantage and save the profits of the middlemen. The A. O. S. has been investigating this matter and the appointment of an expert wool organizer has been made. As the result of this branch of the society's work the first organized chp of English wool (10,000 fleeces) will be sold at the July wool sale in London. The wool will be packed and baled in the same way as the colo- nial. Welsh wool is also being similarly organized. Development societies. — To test the possibilities of certain classes of production in agriculture by means of State funds a new group of societies called "development societies" is being brought into existence, through which grants from the development fund are to be administered. The services of the A. 0. S. were requisi- tioned in the framing of the rules for registration under the industrial and provident societies act. The profits are not distributed under the rules, but all surpluses are returned to the development fund from which grants are received. Each individual willing to set apart a portion of his land for carrying out experiments in the class of production for which the society was created to promote is admitted as a member on his taking up a nominal shareholding. The society acts as a feeder of materials for the experiments and finds a market for the crops. Statistics relating to costs are to be carefully kept on lines advised by the A. O. S. and the results placed at the disposal of the development commission. After the experiments have been conducted for a stdRciently long time to test their commercial possibilities, the society will be wound up and a new society organized on cooperative lines, which will, if sufficient support is forthcoming, take over the plant, etc., of the development society and run the undertaking as a purely trading concern. The first of these societies to be formed is the British Tobacco Growers' Society (Ltd.), with the object oi ascertaining on a fairly large scale if tobacco can be successfully and profitably grown in England and Wales. Upward of 100 acres have been planted with tobacco in different parts of England and Wales. The leaf will be rehandled before it is placed on the market and careful record kept of all transactions. As far as it is pos- sible to introduce the cooperative spirit into these societies it wiU be done. We hope before long that other classes of production wiU be tested in the way tobacco is now being dealt with. ENGIAlirD. 181 Bacon factories . — The success of the Danish system of cooperative bacon factories has created an interest in the subject in this country and a desire to estabKsh bacon factories owned and managed by British farmers. The first genuine cooperative bacon factory has just been opened at Hitchin, and the West Sussex Farmers' Union has approached the A. 0. S. for assistance in carrying through a similar scheme for Chichester and the surrounding districts. A society has been registered and the necessary preHminaries are well under way. Live-pig industry. — As an alternative to a bacon-factory scheme, which involves considerable capital (from £15,000 to £20,000), some of the A. 0. S. affiliated societies have turned their attention to the disposal of their members' live pigs and have been put in touch with some of the large distributive cooperative societies in the midlands, and as a result a steady trade has been built up between these two sides of the cooperative movement, to the satisfaction of both parties. Several of the affihated societies have taken up this branch as part of their ordinary work and a few societies specially for the purpose have been organized and are successfully conducted. The cooperative distributive movement.— It is the aim of the movement that the affiliated societies shall' be kept in touch with the distributive cooperative movement wherever any advantage can be gained thereby. The Cooperative Wholesale Society is a buyer on a very large scale of agricultural produce for distribution amongst the cooperative branch stores scattered all over the country, whilst many of these latter also buy from other sources to a considerable extent. To aid in bringing these two sides of the cooperative movement in closer relationship the A. O. S. has on its staff an organizer who has had extensive experience in the dis- tributive cooperative movement and who devotes his attention specially to this work. The friendliest rela- tions exist between the Cooperative Union (the propagandist body of the distributive movement) and the A. O. S., and interrelations between the affiliated societies of both organizations is steadily increasing, thus bringing the organized producer and the organized consumer together and avoiding the intervention of any intermediary. The Cooperative Union is represented on the board of governors of the A. O. S. Insurance. — In order that the advantages of cooperation in connection with all kinds of insurance might be at the disposal of agriculturists the A. O. S. promoted the formation, as a separate body, of the Agricultural and General Cooperative Insurance Society. This association is formed on a sound actuarial basis; it under- takes all the usual forms of insurance business, but the dividend on share capital is confined to 5 per cent; any additional profits, after making due provision for a reserve fund, is credited to its clients in the form of a bonus on business done. The society has been working for four years; during the first three years the annual bonus amounted to 25 per cent, and in 1911 to 35 per cent. In addition the A. 0. S. affiliated societies are accepted as agents for the Agricultural and General Cooperative Insurance Society and allowed the usual insurance commission of 15 per cent. One of the associations doing business in this way has earned in one year over £300. Relations with other hodies. — The Agricultural Organization Society in the course of its work is continually coming in touch with various Government departments, county councils, agricultural colleges, and other public and voluntary associations engaged directly or indirectly in the development of the agricultural industry or interested in some form of cooperation. It is satisfactory to be able to record that the relations with such bodies have always continued excellent, and joint working with them has not only facilitated the progress but it promises for the future a unification of the different forces which are working to promote an organized agriculture in these islands. The A. 0. S. and the Irish and Scottish agricultural organization societies. — These bodies have the same objects as the A. O. S., and are making good progress in their respective countries. The experience of any one of the three has been always readily placed at the disposal of the others, and the estabfishment of the joint boards for organization and for trade, already referred to, provides a means of considering and dealing with matters which affect the movement in the three countries generally. The A.O. 8. and Government departments. — From the nature of the work it undertakes and from its consti- tution the A. 0. S. is brought into contact more particularly with the board of agriculture and fisheries, with which it works in close touch, and two permanent officials of the board are among the governors of the society. The society, however, is also in frequent communication with other Government departments; in particular may be mentioned the general post office and the board of education. With the former the A. O. S. is cooperating to get an extension of telephone facilities for farmers in rural districts. We are also in almost daily touch with the chief registrar of friendly societies, through whose department is carried out the registration of the various cooperative societies the A. O. S. brings into existence. The A. 0. S. and county, urlan, and parish councils. — ^A feature of the society's work is the collaboration between it and the councils of numerous counties. Those public authorities which have made use of their powers to let land to cooperative associations for the purpose of small holdings and allotments have frequently applied to the A. O. S. for assistance in getting the various applicants formed into properly registered societies. There is another direction in which the society seeks to help on the agricultural industry, and that is by collaborating not only with county councils, but also with agricultural colleges, and which is an important factor 782 AGRICULTUBAL COOPERATION IN EUBOPE. to agriculturists, be they large or small. Many county councils have now at least one special expert officer who devotes himself to giving instruction in methods of production and other technical matters connected with agriculture. In addition to these instructors (or organizers, as they are beginning to be called), many of the councils have now a staff of assistants and instructors in dairying, poultry, beekeeping, and other special sub- jects, and are in a position to give expert advice on all technical subjects connected with agriculture and horti- culture. All this must eventually lead to the output of produce, not only of an improved quahty, but also in a much greater quantity. This increase will not be of much benefit to the actual producer if, owing to glutted markets and badly regulated supplies, it brings about a corresponding decline in prices. To enable farmers to derive the fullest benefits from improved methods of cultivation, the business side of their undertakings must be thoroughly organized, and experience shows that the cooperative system is, from the point of view of the producer, the most satisfactory way of doing so. It will be seen, therefore, that a general improvement in the agriculture of England and Wales must proceed along two lines, distinct and yet running side by side — namely, improved cultivation and an increased production, and what may be called technical improvement and better methods on the business or trading side ; that is to say, improvement in organization. Under the former heading the county councils and the colleges are now equipped and prepared to assist farmers. With regard to organiza- tion, the A. O. S. has now been officially recognized as the body to promote better business methods in agriculture, and is now being partially assisted from State funds to carry on the work for which for the greater part of 11 years it was responsible in a purely voluntary capacity. The best results can only be obtained from a close cooperation between all bodies that are endeavoring to regain for England the position she ought to occupy in the world of agriculture. The Agricultural Organization Society is always desirous of working in close harmony with the committees and officials of the different county councils, and on several occasions the society has been called upon for assistance. On a number of occasions county instructors and A. O. S. organizers have acted together. Conclusions. — These are some of the directions in which the A. O. S. has tried and is trying to benefit the agricultural community. Considerable progress has been made, but the governors feel that still only the fringe of the subject has been touched, the work having been hmited by the resources at the command of the society. The passing of the development fund and road improvement funds act, with the decision of the development commissioners to recommend that the A. O. S. be given a substantial grant for the furtherance of agricultural cooperation, and the concurrence of the board of agriculture and the treasury with this recommendation, has encouraged the board of governors to hope that it wiU now be possible to tackle all the problems presented on national lines, and within a few years to build up a system of organized cooperative effort throughout the country equal in efficiency to any similar development on the Continent. Whatever legislative measures may be introduced with a view of improving the condition of the agricultural industry, it is certain the agriculturists themselves must also adopt a system of self-help by, in the first place, acquiring the very latest knowledge with regard to the production of crops, and, in the second place, by placing the business side of their calUng on a thoroughly sound commercial footing through organized cooperative effort. The Government departments interested through the agricultural colleges and county councils can render assistance in the one direction and the A. O. S. on the other, both aided by fvmds which the development fund provides to promote the economic development of agriculture. METHOD OF ORGANIZING COOPERATIVE SOCIETIES.' PRELIMINARY MEETING. A preliminary meeting should be called together which should be as representative as possible of persons engaged in agriculture in the district, and the Agricultural Organization Society should be asked to send down an organizer to explain what agricultural cooperation is. If the meeting determines that a society shall be formed, it should also be decided — (1 ) For what purpose it shall be constituted. (2) What area its operations shall cover. Notes. — (1) The Agricultural Organization Society is a propagandist body formed to assist in the promotion of agricultural cooperative societies. It is not a trading body and makes no profits. Its funds are derived partly from the affiliation contributions of the societiCg which it assists in forming, but principally from the voluntary subscriptions of persons interested in the welfare of British agriculture. It is, therefore, hoped that the committee of the society, when formed, will see its way to defray, if not all, a portion of the expenses incurred in the organization of the society. . (2) The area covered by the society should be such that the members of the committee can conveniently meet every weeK necessary. ' Reprint from a circular issued by the English Agricultural Organization Society. ENGLAND. 783 PROVISIONAL COMMITTEE. At the preliminary meeting a provisional committee consisting of eight persons of legal age must be appointed. The members should be chosen as representing different parts of the district. This provisional committee should — (1) Appoint one of its members as provisional secretary. (2) Apply to the Agricultural Organization Society for model rules and adopt them with any modifica- tions rendered necessary by local circumstances. RULES. When considering the rules, the provisional committee should decide — (1) The name of the society. (2) Where the office is to be situated. (3) The nominal value of the shares and the amount payable on application. Notes. — (1) A short name is recommended. (2) If any diflSculty arises about the situation of the office, it is best to locate it temporarily at the house of the provisional secretary, or of one of the members. The full postal address must be inserted in the rules. (3) The shares are usually of a nominal value of £1, of which 5b., 2s. 6d., or Is. is payable on application, and the remainder in such calls as the committee may direct. It is desirable, especially in districts where the holdings are large, to provide that a member shall take up shares in proportion to the area of the land he occupies; for example, one share of the nominal value of £1 for every 40 acres or fraction of 40 acres. REGISTRATION. The next step is to have the society registered under the industrial and provident societies act. A copy of the rules, as approved by the provisional committee, should be sent to the secretary of the Agricultural Organization Society, who will examine them to see if they are in accordance with the act, and, if he finds them to be so, will forward to the provisional secretary two copies of the rules, together with a form of application for registration. The two copies of the rules and the application form must be signed by each member of the provisional committee, which the provisional secretary should call together on receipt of the rules and applica- tion form. Exphcit directions to be observed in signing them wUl be sent by the secretary of the Agricultural Organization Society. When the provisional committee meets immediately after the preliminary public meeting, and the organizer is present, it is sometimes possible for the rules to be adopted and the rules and application form to be signed forthwith. When the provisional secretary has obtained the necessary signatures, he should return the signed rules and application form, together with the reduced registration fee of £1 (see note a below), to the secretary of the Agricultural Organization Society, who, after seeing that they are in order, will forward them to the registrar for approval. If everything is in accordance with the act, the registrar wiU issue, after a lapse of about 14 days, the necessary certificate of registry. Notes. — ^Among the advantages of being registered under the industrial and provident societies act are the following: (a) A nominal fee for registration. The fee charged by the registrar for registering a society which is approved by the Agricultural Organization Society and has adopted the model rules supplied by the Agricultural Organization Society is £1. This is a reduced fee, the full registration fee authorized by the treasury regulations being £5. (6) The capital of the society need not be fixed, so that it does not require to give notice under a £5 daily penalty, as it would have to if registered under the companies act, of any increase in such capital. (c) The society can admit members under 21 but above 16 (unless provision to the contrary be made in the rules) and receive binding receipts from them. {d) Its officers are legally bound to render account and give up aU money or property in their possesbion on demand or notice, and may be compelled to do so either by the county court or the magistrates. (e) The society as such is not chargeable under schedule or D of the income-tax acts, unless where it sells to persons not members, and the number of its shares is limited either by its rules or practice. ENROLLING MEMBERS. The provisional committee should now take steps to enroU as many members as possible. Usually the most effective method of doing this is for the members of the provisional committee to make a personal canvass among their neighbors. For this purpose it is advisable to provide each committeeman with copies of a cir- cular setting forth the objects of the society. A model circular will be supplied by the Agricultural Organiza- tion Society, who wiU also supply a model form of application for shares. The members of the committee will inform the secretary of the persons who have promised to joia the society. The secretary will then ask these persons to sign applications for shares. The applications will be 784 AGKICITLTUBAL OOOPBBATION IN EUBOPE. considered at the next meeting of the provisional committee, and if the applicants are approved the shares will be allotted. Another method of procuring members is to call a public meeting for the purpose of briaging the society and its objects under the notice of the agriculturists of the district. The provisional committee will be the best judges whether a pubUc meeting is likely to be more effective than personal canvassing. If a meeting is sum- moned, the notice convening it should contain a statement of the objects of the society and should be widely distributed throughout the district. A model form of notice wiU be suppHed by the secretary of the Agricultural Organization Society. FIRST ORDINARY BUSINESS MEETING. When a fair number of members has been enrolled, a general meeting of members should be held. At this meeting, which is called the first ordinary business meeting, the provisional committee retires and a committee of management is elected. The procedure at the first ordinary business meeting is as follows: (1) Election of chairman of meeting. (2) Election of president of the society. If present at the meeting, the president takes the chair imme- diately on election. (3) Election of auditors. (4) Decision as to the number of members the committee shall contain, the qualifications of committee- men, their order of retirement and eligibility for reelection, and how casual vacancies in the committee shall be filled up. (5) Election of the committee of management. Note. — A member under 21 years of age is not eligible for membership of a committee, nor as trustee, nor manager of the society. COMMITTEE OF MANAGEMENT. As soon as the committee of management is elected the provisional committee ceases to exist. The pro- visional secretary continues to act as secretary until the first meeting of the committee of management is held. At this committee meeting the following business should be transacted: (1) Election of secretary of the society. (2) Decision as to opening a banking account. (3) Election of manager, if such is required. The secretary may also be the manager. Note. — The officers who have the receipt or charge of money must be required to give adequate security. AFFILIATION TO THE AGRICULTURAL ORGANIZATION SOCIETY. The society, as set out in the rules, must, within six months from the date of registration, become afiiliated to the Agricultural Organization Society. To do this it is necessary to apply for a share in that society. A form of application will be supplied by the secretary. The committee must also allot a fully paid share to the Agricultural Organization Society. Notes: (1) A share in the Agricultural Organization Society is of the nominal value of £1, of which a society is only asked to pay Is. on application, and the remaining IQs. is not likely to be called up. The society will be expected to pay an annual affliation contribu- tion. The following is the rule of the Agricultural Organization Society dealing with this matter: "If the member is a society or other body corporate the contributions payable shall be at the rate of 2d. per member per annum.' In return for the affiliation contribution the society is entitled to the assistence of the Agricultural Organization Society. (2) The object of alloting a share to the Agricultural Organization Society is to permit it to send a representative to any general meet- ing of the society. COOPERATIVE AGRICULTURAL CREDIT IN ENGLAND AND WALES. Statement by Mr. J. Nugent Harris, Secretary Agricultural Organization Society. London. It is a noteworthy fact that in most countries where cooperation has made considerable progress, the credit question has been the first to be dealt with, and other branches of agricultural cooperation have to a large extent been built up on an organized system of credit societies. In England and Wales, on the other hand, the oppor- tunities for starting credit societies have been taken little advantage of, although their adoption has been advocated for the past 20 years. It is true that the actual number of societies formed since 1895 (the year o foundation of the first of these at Scawby, in Lincolnshire), compares favorably with the number formed dunng ENGLAND. 785 a similar period in Germany at the time of the commencement of the movement there. With a few exceptions, however, the work of the individual societies has reached little importance so far as the sums lent are con- cerned, and the spread of the movement is in strong contrast to the rapid and spontaneous development in many continental countries, in India, and to a lesser degree in Ireland. Up till the present time the Raiffeisen system of small local societies working without share capital, and on the principle of unlimited liability, has been the only one adopted — all the existing societies being registered with rules based on that system. The foUowiug reasons may be advanced as affording a partial explanation of the comparatively small progress made: (1) The fact that the rural districts of England and Wales are not burdened by the money lender to the same extent as in many foreign countries and in Ireland. (2) The extent to which England and Wales are served by joint-stock banks compared with continental countries. (3) The unpopularity in England of the principle of unlimited habihty. (4) The unwillingness of the average farmer and small holder to disclose his financial position to his neighbors. (5) The general custom of merchants to give long credit to agricultural customers. (6) A general reluctance to borrow actually in cash. (7) Lack of enthusiasm on the part of the class of men required to undertake the responsibility of acting on committee and the scarcity of keen and properly qualified men to act as secretaries. (8) The difficulty of financing societies if formed. Examining these points in greater detail: 1. The need for credit facilities undoubtedly exists, but England, and to a less extent Wales, does not groan under the intolerable yoke of the worst kind of village money lender to anything like the same extent as do other countries. In these the Raiffeisen principle has come as a relief to an urgent necessity, and therefore has been welcomed. 2. With the single exception of Scotland, England for the number of inhabitants is served by a greater proportion of joint-stock banks and their branches than any other country in the world. Generally speaking, the coimtry branches of the joint-stock banks to a certain extent undoubtedly do enable cultivators to obtain loans on reasonable terms, both with regard to the rate of interest charged and the nature of the security demanded. 3. Experience shows that in England there is great hesitation to take part in a scheme which entails no limit to the liability of individual members. The fact that the liability under the Raiffeisen system is really only nominally unlimited is a point which is not readily appreciated in a country where liability limited by share capital is practically universal in commercial undertakings. To meet this particular objection model rules have recently been prepared for credit societies in which the liability of individual members is limited by guaranty, and it will be interesting to see whether this modification will be instrumental in making cooperative credit becoming more popular in England and Wales. Rules also have been prepared with the liability limited by share capital. 4. 6, 7. These do not call for particular conunent. 5. The wiUingness on the part of merchants to sell goods on credit tends to give the impression to the farmer that he is relieved of the necessity of borrowing actual cash. While no doubt a large number of private firms would be glad to see a restriction of this system, and would then be in a position to sell on terms more advan- tageous to the buyer, it often has the effect of placing the cultivator under obligations to unsatisfactory middle men. This applies particularly to the more isolated districts, and Wales suffers still more in this respect than England. The existing indebtedness of farmers to traders and the expectation that cooperative trading societies ought to give similar concessions with regard to purchasing on credit are two factors which greatly impede the further spread of cooperative trading as well as the work of existing societies. 8. With the object of acting as a central body to assist in providing credit societies with funds wherewith to make loans to their members, a central cooperative agricultural bank was estabhshed in 1908 in connection with the A. O. S. movement. Since its formation the C. C. A. B. has made loans to the total amount of £1,100, but many of these were made in the first case for one year only and have been several titnes renewed, so that its actual transactions are considerably more in amount. In view of the proposed legislation and the nego- tiations entered upon by the board of agriculture and fisheries with the joint stock banks for loans to be made by the latter to credit societies, the policy of the central bank has necessarily been a cautious one for the past two years, when considering the question of grantiag fresh loans. Prior to its formation, the greatest difficulty was often experienced by societies in obtaining the necessary funds to be in a position to lend to members. No 14174°— S. Doc. 214, 63-1 50 786 AGEICXTLTURAL COOPERATION IN EUROPE. definite decision has been arrived at yet with regard to the position to be held by the central bank in view of the arrangements between the board of agriculture and fisheries and the joint-stock banks, and on which Mr. Runciman, the president of the board of agriculture and fisheries, made a pronouncement in the House of Commons on January 14 last. The pronouncement was as follows: The board of agriculture and fisheries have been in communication with the leading joint-stock banks, which have branches in the rural districts, with regard to the assistance which the banks can offer, in accordance with ordinary banking principles, to registered cooperative credit societies, consisting mainly of small holders and allotment holders. The banks named below are willing that the manager of any of their country branches should have permission to assist in the forma- tion of such a society, with liberty to give advice to its officers on matters of bookkeeping, and to take part, when requested, in the audit of the annual return without remuneration. They will also favorably consider the acceptance by their managers of the post of unpaid treasurer, provided that it does not involve membership of the society. These banks are prepared to allow to such a society as good rates as possible for money in their hands. They will also be prepared to give favorable consideration to applications from such societies for advances, but will require in each case to be satisfied as to the security for the loan, and although they will require it to be made repayable on demand, they will in general prac- tice be ready to lend for 12 months, and the loan will then be subject to repayment, renewal, or reduction. If satisfied that the joint liability of the members of the society under its rules constitutes an adequate security for a proposed loan, the bank will require no further guaranty for its repayment. In considering the question of security it should be borne in mind that under the model rules for a society registered under the friendly societies act every member of the society is, equally with every other member, jointly and severally liable for all debts incurred by the society. The rate of interest to be charged on approved advances to such societies will be a favorable fixed rate, subject to a year's notice of alteration. It will thus be seen that the committee of any registered agricultural cooperative credit society may apply with some confidence to the local branch manager of any of these banks for advice and help in matteis of bookkeeping, accounts, and audit, and that if they wiflh to obtain an advance from the bank and are able to satisfy the manager and directors that the security for repayment is sufiicient, they may expect that their application for a loan will be granted on these favorable terms. A supplementary list of other banks which may agree to the above arrangements will be published at a future date. LIST OF BANKS. Bank of Liverpool. Barclay & Co. Beckett & Co. Capital & Counties Bank. Fox, Fowler & Co., Wellington, Somerset. Lincoln & Lindsey Banking Co. Lloyd's Bank. London County & Westminster Bank. London & Provincial Bank. London & South-Westem Bank. Manchester & Liverpool District Banking Co. Metropolitan Bank of England and Wales, Birmingham. National Provincial Bank of England. . Nottingham & Notts. Banking Co. Parr's Bank. Union Bank of Manchester. United Counties Bank. Union of London & Smith's Bank. Williams Deacons Bank. Wilts & Dorset Banking Co. Up tiU now when a joint-stock bank has lent to a credit society the pohcy has been to do so against the signatures of one or a few only of the members whose position alone is a sufficient guaranty to the bank rather than to rely on the joint and several habihty of the whole of the members. The arrangements of the board of agriculture and fisheries are to be welcomed if, by them, the facilities hoped for are obtained. Attention, however, is called to the following points: (a) The interpretation which the banks will put on the proviso that loans wUl be granted "in accordance with ordinary banking principles." (6) The proposals are noncooperative in character, and make no provision for any system of linking up the individual societies on lines similar to those which have been attended with such conspicuous success m Germany and other continental countries. (c) The proposals make no provisions which would make it possible for the savings of those in country districts to be collected and used in their own locaUty or in other agricultural districts of our own country where they could be used to the greatest advantage, instead of being, as at present, collected by the joint-stock banks and used to finance city concerns on possible undertakings in foreign countries which are in direct competition with our own farmers. As stated before, however, there is an undoubted need, even amongst larger farmers, for some cooperative means to be devised by which cultivators can obtain loans for reproductive purposes to be used in connection with their holdings, and which would enable them to pay promptly for feeding stuffs and other requirements rather than to obtain these on long credit. If they are dealing with private merchants or firms, they lose the discount which could generally be obtained in return for cash pajrment, and no doubt to protect their own interests the merchants are compelled to quote a higher price. If, on the other hand, the farmer is ^^j^ through a cooperative agricultural trading society, its financial position is seriously and adversely affected by ENGLAND. 78 Y not being able to obtain ready cash. In the case of small cultivators especially, lack of ready money or means of obtaining credit often leads to produce being sold before it is ready or when the markets are not favorable. Necessary for audit and supervision. — The experience of the A. O. S. goes to prove that it is useless to form credit societies unless arrangements are made for the instruction of the members and for the supervision by some person who has had a certain amount of training tn the methods and principles of cooperative credit. The business is technical, and even educated persons can not properly understand it without previous training. It is inadvisable to form societies imless proper supervision is available. Supervision is best given by the body that organizes the credit societies, such a body to be of a volimtary nature, and all the societies organized by it to be in affiliation with it. Inspection by the organizing body is preferable to that of even a central bank. The two, however, should cooperate. If a central bank has to carry out inspection it will mean additional cost, which would mean having to charge a higher rate for moneys lent. It is absolutely necessary that there should be some one in fairly constant touch with the society who has sufficient education to be able to acquaint himself with and to appreciate the accepted principle and methods of working, and is willing to exercise some control in the initial stage. As the officials of the society and the members get this knowledge, the organizer himself may well gradually retire from direct control, and leave the direction to the members; but it will be a long time before a society can stand alone. Local voluntary effort might also be used for inspection. Those assisting in this way might be called honorary organizers. They would visit societies in the villages of their neighborhood and give them advice under the direction of the central organizing body. The traveling expenses of such men should be met by the central body. Experience proves that efficient societies can not be maintained by simply providing a loan, furnishing a set of rules, and then leaving them to themselves, until the principles and methods of working such institutions are well imderstood. COOPERATIVE WHOLESALE SOCIETY. Statement Submitted to the Commissions. London. One-fifth of the population of the United Kingdom is in the habit of making purchases at cooperative stores, where a little paper or metal check, with figures showing the amount, is given with each purchase. The shop looks like any other; the goods outwardly are not very different; the giving of the check with the purchase is the only feature Mkely to strike an observer. During 1910 these cooperators did a total trade of over £111,582,779. Nearly 123,000 persons were employed in those shops and the warehouses and factories connected with them. These employees were paid £7,133,000 as wages during the year. Yet, small as these wages may seem (the average — men, women, boys, and girls, all together — was 22s. per week), they were substantially higher than the majority of the workers would have obtained in other shops, warehouses, or factories. The goods were of the best quahty, and as cheap as in other shops, and the hours of labor less. The purchasers were, for the most part, of the so-called "well-to-do" working class. The total profit on this £111,582,779 of cooperative trade in 1910, after wages and expenses were paid amounted to £12,024,816. The total capital employed was £50,909,412. Under the system of business followed by four-fifths of the population this profit would have been divided, as interest on capital, between a compara- tively small number of tradespeople. Under the cooperatiye system this huge sum was claimed by 2,661,000 members of cooperative societies. Twenty years ago the total trade of the societies in the United Kingdom was under £40,000,000, These facts and figures afford the most convincing evidence of the inherent vigor of cooperation. So signal a success justifies the sanguine ideal of the Rochdale weavers that the workers of the country were able to own and manage their own business. There are other features of cooperative work which constitute an effective denial of the charge sometimes made, that cooperation is no more than shopkeeping. During 1910 over £91,500 was spent in educational work, an amount which represents much earnest labor in the direction of enlightening members as to the principles of the movement, students' classes, lectures, and so on. Nor are wider claims ignored, for during the same year over £56,000 was subscribed to various charitable objects. The idea that profits should be paid out an the same basis as they are paid in, that as they are first reckoned and got in on the purchase price they should be paid out as dividend on purchases, while capital shoidd only receive a fair interest, seems to have been the original discovery of these Rochdale weavers in 1844. They held very strongly that profit made out of the people in front of the counter should be paid back to them. Their 788 AGRICTJLTTJEAL COOPERATION IN EUROPE. little attempt to run a shop that should belong to the customers, and not to an individual, was attended with immediate success. It held the germ of a great idea, that no individual should be allowed to amass a fortune out of the supply of necessaries to the community. Since 1844, whenever cooperators argued the justice of communal ownership of the means of production and distribution of domestic requirements, they did better work than they knew, because, for every cooperator they made, they made three municipal reformers. The great advance in municipalization of water supply, gas, electricity, and tramways was made easy by the collective and united action preached and practiced by cooperators. Every customer in a cooperative store is, or may become, a part owner of the business. By paying £1 down, or agreeing to pay it by installments, anyone may become a member, entitled to receive a fair rate of interest on their capital, fuU dividend on purchases, and a voice in the management of the aflFairs of the society, including the election of the committee. In addition, membership of a retail store makes one a part owner of the Cooperative Wholesale Society (Ltd.), the immediate subject of this sketch. As stated in its rules, the objects of the Cooperative Wholesale Society are to carry on the trades or busi- nesses of wholesale dealers, bankers, shippers, carriers, manufacturers, merchants, cultivators of land, workers of mines, and insurers of persons and property. This is a comprehensive list, certainly, and shows how cooper- ators have carried into practical effect this sentence, occurring in the first prospectus of the society ia 1863 : The object of the society ia to bring the producer and the consumer of commodities nearer to each other, and thus secure for the working classes those profits that have hitherto enriched only the individual. Statistical position of the Cooperative Wholesale Society in June, 1911, may be briefly stated as follows: Share capital (paid up) £1, 802, 227 Loans and deposits 3, 937, Oil Reserve and insurance 1, 437, 030 Sales for the year ended June, 1911 26, 831, 630 Net profits for the year ended June, 1911 503, 847 Membership of the C. W. S., to use the now familiar contraction of its title, is open only to societies and companies registered under the industrial and provident societies act or the companies act, subject to admis- sion by the general committee, and sanctioned by a general meeting of delegates. In actual fact, the members of the C. W. S. are retail distributive societies, with a few productive societies, and the ordinary limited-hability company is not admitted. No individual can be a member in respect of holding shares or making purchases from the society. Each society becoming a member of the C. W. S. has to take up one £5 share for each five of its own members, which gives a uniform distribution of share capital of £1 per head of the membership of the share-holding societies. The system of representation is about the most equitable that could have been devised, each society having 1 vote for every 500 and part of 500 members it possesses. This gives even the smallest societies one vote, while a society with, say, 8,700 members would be entitled to 18 votes in elections and to send 18 delegates to quarterly meetings. The management is vested in a general committee of 32, including 8 representatives from the Newcastle district and 8 from the London district. This general committe is responsible to the quarterly meetings of delegates from the various share-holding societies. All members of committees are elected for two years, and are eligible for reelection. To save time and secure the greatest attention to details of work, subcommittees are appointed for dealing with finance, production, grocery, drapery, etc., each of which reports to the general committee. The accounts are audited half yearly and quarterly meetings held, two to consider balance sheets and reports, and the other two to consider only a general report from the committee on the quarter's working. After the expenses of management, depreciation, and interest at fixed rates on share and loan capital have been paid, the remaining profits are divided among the members in proportion to their trade, after such sums as the quarterly meeting may determine have been put aside for reserve fund, charitable donations, and grants to relief funds. Cash trading is a fundamental principle of the C. W. S., both in buying and selling. The bulk of the general trade of the C. W. S. is done in goods bought by the society's buyers at home and abroad' and distributed to the retail societies from its warehouses, or, in the case of very large consignments of certain articles, sent direct to the retail society from the manufacturer or port where landed. Large stocKs are held in Manchester, Newcastle, and London in the grocery and provision, drapery, woolens, boot and shoe, and furnishing warehouses, from which the orders of societies in these districts are executed. The stocks o ENGLAND. 789 bacon, hams, and canned goods from America are held in great warehouses at the ports of arriyal, and on the receipt of orders at Manchester, Newcastle, or London, the heavy orders are sent direct, while small and mixed orders would' be executed from the local warehouses. One general principle runs through all the purchasing done by C. W. S. buyers, namely, to go direct to the source of production, whether at home or abroad, so as to save the commissions of middlemen and agents. For some articles, such as tea and coffee, there is, of course, a definite market, where the whole supply is put up to auction by brokers, and in such cases the C. W. S. buyer has to take his place with the rest of the world and bid for what he wants. The home buyers of the C. W. S. usually have samples offered to them by manufactur- ers but in some branches of trade they have to visit special markets. The millinery buyer has to go to London and Paris at certain seasons. The buyer for dried fruit goes to Greece in the autumn and thus secures the pick of the crop by calling on the largest growers and paying cash on delivery. In New York, Montreal, Spain (Denia), Aarhus, Esbjerg, Odense, and Copenhagen, in Denmark, Gothenburg, in Sweden, the C. W. S. has purchasing depots with resident buyers, whose ofl&ce it is to purchase and ship home the productions of these countries as required by English cooperators. On arrival in England the goods are divided among the ware- houses at Manchester, Newcastle, London, Liverpool, and Bristol. Samples are then placed on view in the various salesrooms of the wholesale at Manchester, Newcastle, London, Birmingham, Bristol, Cardiff, Leeds, Huddersfield, Blackburn, Northampton, Nottingham, etc., so that buyers from the retail societies can at once see them and place their orders. The total amount of the goods imported direct by the C. W. S. from foreign countries in the 12 months ended December, 1910, was £7,072,470. The chief items that go to make up this total are as follows: Sugar, bacon, lard, wheat, and canned goods ,. Tallow Sugar, flour, boots, furnishing goods Cheese, bacon, butter, leather Butter, bacon, eggs Sugar, dried fruit, fancy drapery, and furnishing goods Sugar, green fruit, eggs, fancy goods Dried fruit . Rice, cheese, yeast, and margarine Butter, eggs, timber Country. America Australia Austria Canada Denmark France Germany Greece and Turkey Holland Sweden Amount. £1,101,181 128, 891 427, 688 412, 139 3, 545, 469 67, 561 363, 619 268, 629 166, 131 492, 770 While considering the present state of cooperative production as carried on by the C. W. S., certain general facts must be noticed. Cooperators have undertaken production solely to supply certain of their own needs. The goods made by the C. W. S. are made not to be sold for profit, but to be consumed by the proprietors of the factories where they are produced. Though one hears of C. W. S. goods being bought and sold, and of profits made on them, it is of the utmost importance in studying certain aspects of the C. W. S. production to remember that neither in the C. W. S. nor in the distributive store are the goods "sold" to the members at ft "profit" as we understand these terms in the world of competitive trade. When the C. W. S. sends boots made at Leicester to a society and the latter hands them to a member, there is no "sale" or "barter" in the economic sense, but merely a process of distribution. The man who gets the boots, being a part owner of the C. W. S. factory, the C. W. S. warehouse, and his local store, was really the principal in the transactions where the leather was bought and the labor hired for putting it together. He deposited a sum represented by his share capital with certain agents or employees of his who undertake to supply him with a pair of boots when he wants them. When he takes the pair of boots from his local store, he reduces the amount of his deposit with these agents by the value of the boots, and his payment when he obtains them is really making up that deposit to what it was before, with a small sum added, which at the quarter end he may either withdraw or allow to remain in their hands. That he should choose to call his payment at the time of taking the boots the "price" of them, his taking of them, the "buying" of them, and the extra sum added to his deposit account with his employees the "profit" on, them, should not be allowed to mislead us as to the real nature of the transactions involved. In ordinary commerce the manufacturer, the shopkeeper, and the customer are independent, free to buy or not to buy, to sell or not, and free to fix prices. A little consideration wUl show how different cooperative trade is in' these particulars. -The. bank is another important branch of the C. W. S., and its turnover in 1910 amounted to £136,515,610. The wholesale also carries on the business of shippers, having steamers employed on the continenta,l seryice. 790 AGEICULTUBAL COOPERATION IN" ETJEOPE. The various productive works of the C. W. S. are situated in England, with the exception of the creameries and bacon factory in Ireland, a bacon factory at Herning, Denmark, and a tallow and oil factory in Sydney Australia, the latter being a subsidiary to the soap, etc., works at Irlam, Silvertown, and Duuston. In the case of the more important factories sites have been chosen because of the geographical position, the objects being the ready supply of raw materials, the quick dispatch of goods, the neighborhood of the retail stores to be supplied, or the existence of a supply of skilled labor. The output from the C. W. S. factories in 1910 came to over £6,500,000. An important feature of the productive work carried on by the C. W. S. is the consideration of the worker, shown by the commodious factories, with the generous allowance of light and space. Visitors to these works are invariably struck by the order and cleanliness of the rooms, but it is particularly in the conditions attend- ant upon the employment of women and girls that the contrast is apparent between the workers toiling long hours at low rates and the employees in C. W. S. factories. Taking Manchester, for instance, a visitor may find at Balloon Street a group of enormous warehouses covering one of the largest sites in the city. The new administrative block fronts Corporation Street. A beautiful meeting hall — the Mitchell Memorial Hall — is situated over the offices and board room. The dining room for employees and visitors, capable of accommodating 800 persons, is worth a visit in more senses than one. In other parts of Manchester and the immediate vicinity are to be found several important factories. At Broughton, besides a furniture factory, there is a group of clothing factories employing over 1 ,300 hands. Nearer to Balloon Street is the tobacco factory, with a staff of over 680, from which factory £690,930 worth of tobacco, cigars, cigarettes, and snuff were sent out in 1910. AtLongsight there is a printing works, both letterpress and hthographic, with a large box-making plant, employing over 1,000 hands. At Trafford Wharf, on the ship canal, besides a transit shed and bacon factory, there are the Sun Flour & Provender Mills, said to be the largest in the Kingdom. Another large flour mill is situated in Oldham. At Crumpsall we find the biscuit, sweet, and cake factory, the output from which reached nearly £190,000 in value in 1910. At Middleton Junction, near Oldham, the jam, pickle, and vinegar works are situated, where jams, pickles, preserves, vinegar, candied peel, maripa- lade, etc., are manufactured. At Irlam, on the ship canal, we have the soap, candle, starch, and lard works, where nearly 300 tons of soap and over 50 tons of candles are turned out every week. Auxiliary soap works have been erected at Silver- town-on-Thames and Dunston-on-Tyne. The oil and tallow works at Sydney, N. S. W., supply much of the raw material for these works. At Bury there is a large weaving shed, employing about 900 looms on calicoes, dress linings, sateens, and similar fabrics. At Littleborough flannel is made, and at Batley the woolen mill produces cloth and tweeds. Newcastle-on-Tyne is a repUca of Manchester in many respects, the offices and warehouses being situated in and about West Blandford Street. At Pelaw-on-Tyne there is a group of works comprising drug and sundry clothing, printing, furniture, and engineering works. At Dunston there is a huge flour null and near by a soap works already referred to. At Hartlepool there is a lard factory. London, again, like Manchester and Newcastle, has its blocks of warehouses, with offices, meeting hall, dining rooms, etc., and in the immediate neighborhood various factories. In Leman Street, E., oppociite the offices, is the great tea warehouse which belongs jointly to the English and Scottish Wholesale Societies, and which does the largest tea trade in the world, sending out every week for cooperators' consumption about 200 tons of tea. Under the same joint ownership are three large tea estates — NugaweUa, Weliganga, and Mahavilla, in Ceylon, and the cocoa and chocolate works at Luton, in Bedfordshire. At Silvertown, on the Thames, there is another great flour miU, and on land adjoining are works for the preparation and packing of various grocers' sundries, dry sweets, etc., and soap works referred to previously. Next in importance to the three great centers at Manchester, Newcastle, and London comes the Bristol depot, which is a source of supply for societies in the west and southwest of England and Wales. A fifth flour miU, at Avonmouth, was in 1910 opened in this district. The largest factory owned by the C. W. S., and the largest of its kind in Great Britain, is the Wheatsheaf Boot Works at Leicester. Other boot factories at Duns Lane (Leicester), Heckmondwike, Rushden, and En- derby bring the total output to over 2,000,000 pairs in the year. Nearly 2,800 persons are employed in the boot trade. There is a large hosiery factory at HucknaU Huthwaite, near Nottingham. At Leeds is to be found a large brush and mat works; also a clothing factory for the ready-made trade. At Desborough a corset factory employs 280 hands. In 1908 the productive societies formerly known as the Dudley Bucket and Fender, the Keighley Iron- works, and the Birtley Tinplate were taken over by the Wholesale. At Keighley bedsteads, wire mattresses, washing and wringing machines are made. ENGLAND. 791 In Ireland there are purchasing depots at Limerick, Tralee, Cork, and Armagh. Two bacon factories, at Tralee, in Ireland, and Herning, in Denmark, bring us nearly to the end of our hst of works and factories. At Roden, near Shrewsbury, the Wholesale has an estate of nearly 800 acres, of which 200 are under cultiva- tion, chiefly fruit. There is a very fine mansion on the estate — Roden Hall — now used as a convalescent home for cooperators and their families. Another fruit farm is situated at Harden, near Hereford, and consists of nearly 150 acres. A crockery depot at Longton, in Staffordshire, is responsible for supplies of china and earthen ware, much of it being decorated by the society's employees. Cooperation has already shown that it has some great principle of life within it which makes it grow steadily. It makes an appeal to the cool reason of man, unHke the hot pride and passion of war and the enthusiasm of religion. That such an appeal is in keeping with the spirit of our day one may see by the steady growth of opinion in all civilized countries in favor of peace and the recognition of the truth that the prosperity of each nation depends, not on the poverty but on the prosperity of its neighbors. The International Congress of Cooperators, held every alternate year, hke that of the trade-unions, helps enormously to promote good feeling between the workers in different lands who are in the majority in every population. It is a great pleasure to English cooperators to be able to help, from time to time, when inquiries come seeking for practical advice and information in regard to the British phase of the movement. NOTES ON ESSEX AGRICULTURE. Statement Submitted to the Commissions by the British Board or Agriculture and Fisheries. Ipswioh. The agriculturists of Essex are mainly engaged in corn growing — wheat, barley, and oats —dairy farming and, in populous centers, in market gardening. SOILS. The oldest geological formation is chalk. This crops out in the extreme north and extreme south of the coimty, and the basin between is filled with London clay. Between the London clay and the chalk are gravelly deposits. The greater part of the London clay is covered with glacial drift consisting either of bowlder clay (a mixture of clay, chalk, and flints), or brick earth and gravel. Since the glacial period, river gravel and "brick earth have been deposited. The London clay yields a tenacious brown or yellow soil, very expensive to work; much of it is in pasture. When well drained, limed, and cultivated, it produces good crops of com, beans, and mangels. Brick earth only occurs along the estuary of the Thames. It may be described as a calcareous loam of exceptional natural fertility, and excellent physical texture, and, next to the red soil of the Lothians, is the most valuable for farming purposes in this country. DKAINAGE, The characteristic undulating appearance of many of the heavier fields of Essex is attributable to the ancient practice of laying up land in ridges for the purpose of facihtatiug surface drainage. Although the most prominent ridges are now to be found mainly on old grass land, it is stiU the custom to lay out arable land in "stretches" of from 7 to 14 feet, the implements used being adapted to this width. Tile draining and mole draining are now, however, extensively practiced — the latter especially, on account of its relative cheapness. ROTATION OP CHOPS. On the heavier soils, within easy reach of the railway, dairy farming is the rule and much of the land is consequently in grass. Dairy farming is a comparatively recent development in Essex. About 1875 a serious fall in the price of wheat set in and for several years subsequently prices remained at a low level. This, coupled with a series of unfavorable seasons, resulted in many farms being given up and in the introduction of a new type of agriculturist in the form of farmers from Scotland and the west of England. Most of these adopted dairying and by dint of hard work and the advantages accruing from the proximity of London succeeded, in a large measure, in resuscitating the agriculture of the coimty. In the less accessible areas the following is a typical rotation: Roots or bare fallow, oats or wheat, beans or clover, wheat, barley. 792 AGEICULTURAL COOPERATION IN EUEOPE. Bare fallowing consists of plowing and otherwise repeatedly cultivating the land during a whole summer without growing a crop, the main objects being to clear the soil of weeds and improve its physical condition. The practice can only be successfully followed on stifif soil in a dry climate. The rainfall in Essex is usually well under 20 inches per annum. In some of the more remote districts the following primitive rotation is stiU adhered to, viz : Beans, wheat, barley, bare fallow; no roots are grown and the only manures used are artificials. On the lighter soils the rotation is the same as that first mentioned, excepting that there is no bare fallow. Barley is more extensively grown and sheep feeding is practiced. Catch cropping is being introduced more and more, as is also the growth of such crops as maize and Lucerne. Considerable attention is paid to such crops as peas for table use, and to the production of seed for the large seed firms, the dry, simny climate of Essex lending itself admirably to this purpose. Mangels, swedes, cabbages, clover, and various vegetables and flowers are grown in this connection. LIVE STOCK. The cows for the most part are nonpedigreed Shorthorns, but herds of pure-bred Jerseys and Holsleios also occur. Of sheep, the Suffolk is most favored; it produces mutton of excellent quality and is, moreover, little liable to foot rot. Horses are mainly of the Shire breed, but a few SufiFolks are also to be seen. The principal breeds of pigs are the Essex Black and the Large White Yorkshire. EASTERN COUNTIES FARMERS' COOPERATIVE ASSOCUTION. Statement Submitted to the Commissions. Teeling. The counties of Norfolk, Suffolk, and Essex, in which the association does most of its work, are almost entirely agricultural — about 66 per cent arable and 34 per cent permanent pasture. Norfolk is especially noted for fattening oxen, Suffolk for pigs and sheep, and Essex is extensively given to seed growing. Ipswich, the county town of Suffolk, the headquarters of the association, is well situated for carrjdng on the work of the society, being a port on the Orwell, only 12 miles from the sea; also a convenient railway center, offering facil- ities for procuring agricultural requirements and the distribution of products. The industrial cooperative movement has made great progress in the town, and has 10,192 members, with a yearly turnover of £251,000. The present population is about 75,000, and steadily increasing. The Eastern Counties Farmers' Cooperative Association is a purely farmers' organization, existing to sup- ply requirements and sell produce cooperatively. The association originated in 1904. The idea arose out of a visit of a few farmers to Denmark in 1901, and subsequently a dispute with corn merchants about porterage charges led to the actual commencement of practical cooperation — for the removal of the vexatious charge, and afterwards for the combined purchase and sale of goods. The basis upon which membership is admitted and capital raised is one share (5s.) for each 10 acres farmed; minimum, four shares. Of this amount Is. 3d. per share has been called up. The progress made is shown as follows : 12 months to — Feb. 28, 1905. Dec. 31, 1906. Dec. 31, 1908. Dec. 31, 1910. members. 158 452 801 943 Dec. 31, 1912 1,057 ACREAGE. 12 monthB to — Feb. 28, 1905 61,620 Dec. 31, 1906..-- 143,900 Dec. 31, 1908 243,334 Dec. 31, 1910 268,890 Dec. 31, 1912 292,240 NOMINAL CAPITAL. 12 months to — Feb. 28, 1905 £1,540 10 Dec. 31, 1906 3,598 5 Dec. 31, 1908 6,108 10 Dec. 31, 1910 6,722 5 Dec.31, 1912 7,306 12 months to- Feb. 28, 1905. Dec. 31, 1906. Dec. 31, 1908. Dec. 31, 1910. Dec. 31, 1912. CALLED-TJP CAPITAL. £395 987 18 1, 790 14 2, 185 12 2, 607 17 12 months to — Feb. 28, 1905 £15,400 15 Dec.31, 1906 126,996 1 Dec.31, 1908 212,992 14 Dec.31, 1910 276,699 3 Dec. 31, 1912 278,634 4 ENGLAND. 793 The management is vested in a committee of 30 members, one-rthird of whom retire annually and are eligible for reelection at the annual members' meeting. Subcommittees are formed as follows : (1) Trading. — Corn, feeding stuffs, implements, and hardware. (2) Live stock. (3) Eggs. (4) Finance and staff matters. (5) Estate. — Buildings, repairs, etc. (6) Root seeds. (7) Manures. (8) Mill. Branch committees meet at Norwich, Bury St. Edmunds, and Beccles. The permanent officials who work in connection with the various committees are ; 1 . The manager of the corn, feeding stuff, fertihzers, and seed department. 2. The manager of the implements, machinery, and hardware department. 3. The manager of the pigs and other live stock department. 4. The manageress of the egg department. 5. The secretary, treasurer, secretarial, and the financial business. The amoimt of business in 1912 : Corn, feeding stuff, seeds, etc £151, 477 Implements, machinery, etc £28, 819 Pigs £87, 636 Eggs £10,701 Meals ground at mill tons. . 2, 892 Amount of capital employed, £18,833, viz: ' Paid-up share capital £2, 607 Reserve fund (accumulated profit) 4, 306 Loans from members at 4i per cent 6, 362 Bank overdraft 5, 558 Loans are accepted on the following terms: Three per cent at short notice, 3^ per cent at two months; 4 J per cent at four months' notice. The average net profit for nine years, 1904-1912, has been £1,102 per annum, at least 10 per cent of which goes to the workers. Members of committees receive no remuneration for their services, but rail fares are in some cases paid. AU members are required to pay for goods supplied at 28 days, but are not bound to do business with the association. The benefits of the association are : Goods can be obtained at wholesale prices plus small commission to cover working expenses. Seeds are cleaned and tested in farmers' interest. Fertihzers analyzed and made up to required specifications, and guaranteed. Smaller farmers can purchase at same price and equal quahty as larger farmers. Best markets are sought and regularly supplied with farmers' produce with as httle intervention of mid- dlemen as possible. Profits are the property of the members. The farmer's individual energy can become concentrated upon production of crops and stock, trusting to cooperative combination to provide suppUes and facihtate sales. FRAMLINGHAM AND DISTRICT AGRICULTURAL COOPERATIVE SOCIETY. Statement Submitted to the Commissions. Terling. The Framhngham and District Agricultural Cooperative Society (Ltd.) is an offshoot of the old-estabhshed Framhngham Farmers' Club, which since 1838 has done yeoman service in bringing agricultural topics before its members, by its meetings during the winter months, for the discussion of papers on questions of immediate interest, and also by its autumn show of agricultural produce. Among the many who preached the value of cooperation before the club was that great pioneer of the movement, Sir Horace Plunkett. It was, however, 794 AGEICULTUEAL COOPERATION IN EUROPE. due to the efforts of the Agricultural Organization Society (London) that a committee was formed to make inquiries which gave promise of success and led to the formation and registration of this now flourishing society. The society was registered in May, 1903, under the industrial and provident societies act of 1893, which act affords the cheapest and simplest way of obtaining cooperative existence, and also by reason of the fact that such a body can sue for debts and be sued. When starting, the committee little dreamed of eggs playing so important a part in the business, but seek- ing the aid of the National Poultry Organization Society (London), afhUation was applied for and granted, because it was obvious that the British farmer has an almost unassailable position in providing his home market with new-laid eggs which realize the best prices. In commencing operations, however, the society reahzed ahke in the production of his suppUes and in his method of disposing of them, the British farmer had a less perfect system than that of the countries com- peting with him. Enhanced prices, however, above the local existing prices, soon proved to the farmer that it would be worth his while to offer his goods in such a Way that they would fetch the best price. It was necessary, there- fore, on the part of the committee to adopt certain regulations which would make the society thoroughly reliable for the dispatching of new-laid eggs. One rule against which many have kicked and out of which opponents have made much capital is that the society makes a deduction of a penny for every 10 "dirty" and "cookers" (stales) and returning all "bad" to the producer, who is easily known by his distinguishing number stamped on the egg before being collected. The eggs were at first brought into the depot by the farmers, but the daily supply proving most irregular the committee incurred the expense of purchasing horses, vans, and extra boxes which was soon compensated for (1) by an increased quantity of eggs (2) a saving of labor in testing, resulting from regular collection, and (3) "stales" being reduced to a minimum — ^there being less to put on the open market. A bonus of 5 per cent is paid on what are known as 17-pound new-laid eggs, i. e., any 120 eggs weighing 17 pounds and over. All eggs are packed in sectional boxes, made locally, containing 10, 20, 30, 60, or 75 dozen, but the freight for eggs is more per ton from Framhngham than from France. Though approached several times, the Great Eastern Railway has not yet made any reduction, though the society paid £861 in railway rates in 1912 prin- cipally for eggs. The society since 1910 has persevered in the preservation of eggs, doubling the quantity each year, disposing of 80,000 in 1912, and to prevent preserved eggs being sold as " new-laid" the agents are provided with a solution which when apphed to the shell of such an egg will cause it to " blush" ; but it will not affect a "new-laid" one. The society though forwarding about 1,200 fat tiu-keys to London at Christmas has not touched the ques- tion of fattening or cramming poultry, because as a whole the district is too bleak and cold in the early spring to rear chickens in the open; but experience having proved in such district that eggs are more profitable than table poultry, the committee are frequently urging the members to improve the'ir stock by introducing good laying breeds. The society has seven depots with vans making daily collections. Each agent is responsible for testing and dispatching and is not paid by commission but a fixed weekly wage, simply because the same ground has to be covered in winter when eggs are scarce as in spring when more plentiful. The society has extensive premises, costing about £1,100, and by utiUzing the services of a building society, the debt now stands at £450. Shares are issued at 5s. (fully called up), to enable cottagers to join, because it is commonly agreed that on account of the hens being warmer housed, proportionately more eggs are picked up in cottage homes in winter than on farms. Compared with other societies, Framhngham seems to be overcapitahzed, but the share capital is extremely useful in purchasing eggs for cash at the door (a great advantage), and also for preserving eggs in the spring, when, as in 1912, about £280 share capital lay dormant for over six months. Members have confidence in the society, and even outsiders credit the committee with the good work done. It is estimated that in 1912, £5,000 went into the pockets of the members, which amount does not appear on the balance sheet, from the better prices paid for eggs as compared Avith the prices before the society started. ENGLAND. 795 The following table of prices will show at a glance how well the society has done for those confiding in them : Number of eggs sold for 1 shilling. Local price, 1903. Society's price, 1904. Society's price, 1912. January , . . 12 16 22 22-26 22-20 20 18 16 16 14 12 and 10 10 and 12 10 and ' 12 14 16 and ' 18 18 18 and ^ 17 16 and 15 15 and 14 14 and 13 13 and 12 12 and => 10 8 8 1 8, 9, and ' 10 11 and 12 12, 13, and 15 17 16 and 15 14 13 and 12 12 12 and 11 10, 9, and 8 8 and " 7 « 7 and 8 February March April May.: June July August ;'. September October November December 1 1 week. ^ 3 weeks. The society occupies a vinique position in the fact that it has no London representative, a penny stamp and a reliable egg with an occasional visit to town sufficing for the dispatching of nearly 4,750,000 of eggs in 1912. The advance of cooperation and enhanced prices are gradually, but very gradually, affecting the winter supply of eggs in England, but it is a source of congratulation that cooperative efforts are asserting themselves in this respect. Framlingham shows a good lead, for in November and December, 1912, the number of eggs collected doubled those collected in 1911. The following figures show the great difference between the spring and summer collection and that of the autumn and winter: March-August (6 months) 3, 429, 034 September-February (6 months). . ._ : 1, 265, 225 The following results since the society commenced have exceeded the expectation of even the most sanguine : t Members. Shares. Sales. Eggs sold. 1904 171 201 217 251 309 372 429 511 643 3,023 3,763 3,923 4,105 5,169 5,504 5,668 5,940 6,147 £5, 050 6,236 8,401 11, 747 14, 568 15, 049 18, 136 23, 981 29, 038 453, 079 622, 763 845, 045 1, 592, 831 2, 190, 097 2, 190, 097 2, 346, 088 3, 921, 816 4, 666, 920 1905 1906 1907 1908 1909 1910' 1911 1912 Several examples were worked out by the committee with the idea of purchasing eggs by weight, but taking the 2-ounce standard it was found that in the majority of cases the eggs would cost 5 per cent more, and there were still the "smalls" to cope with. To reduce the share interest (5 per cent), which is the first charge on the profits, the committee have now decided that future applicants need only take out one share. Each year the society has shown a creditable trade profit on the year's working, and during March, 1913, the sum of £200 was distributed as a bonus among those members selliag eggs to or purchasing goods from the society, arising out of the profits of 1912 in addition to the share interest of £76 18s. 6d. The society also accepts small deposits which arise from the interest and bonus of the previous year. The society has built up a reserve fund of £889, the share capital standing at £1,541. Agreeably with the rules 10 per cent of the net profits are distributed among the employees, a sum of £58 19s. 3d. being thus divided from the profits of 1912. To carry out the wise spirit of cooperation mutual arrangements have been entered into with the Eastern Counties Farmers' Cooperative Association respecting the prices to be paid for eggs in the several areas covered, and also by the appointment of a joint committee to regulate and facilitate selling in London and other centers. 796 AGEICULTTJBAL COOPEBATION IN EUROPE. RAYLEIGH FARMS. Statement Submitted to the Commissions. Teeling. The Terling farmsj which are owned by Lord Rayleigh, extend to about 4,000 acres, of which about two-thirds are arable and one-third grass. The greater part of the latter consists of old pastures, but about 500 acres were laid down during the agricultural depression between 1880 and 1900. A portion of this has smce been plowed up. The arable land is of a mixed quality, erring rather on the heavy side, and about one-half of it requiring careful underdraining. It is plowed with two horses, and is otherwise not difficult to work. As regards climatic conditions the land is, of course, situated in a dry part of England. The following are a few notes on the management and results of cultivation as practiced on these farms: CopartnersJiip. — For many years an annual bonus has been given to employees when the results of the year's farming have been satisfactory. This has been awarded 15 times in the last 18 years and continuously since 1905, the total sum paid out to date being about £10,000. Until recently the amount was paid into accounts opened on behalf of the men with the post-office sav- ings bank. In 1908, however, a copartnership scheme was instituted, whereby the bonus could be credited to accounts opened between the men and the farms. Pass books are provided, and the men are free to with- draw their money, if they wish to do so. They may also add any savings of their own, their wives, or their children to the amounts standing to their credit. Interest at 4 per cent per annum is guaranteed, and to this is added such dividend as is earned by the farn^ after all expenses have been met. It has been found possible to declare a satisfactory dividend every year since the institution of the scheme, and the number of shareholders has steadily increased from 32 to 191. The sums at present invested by the employees amount to £3,800. Results of individual fields. — On the two largest farms, together representing about 2,000 acres, careful field accounts have been kept for the last 19 years. Detailed results are given of the three arable fields to be seen from the road in the neighborhood of "Whitelands." They are indicated in the map bythelettersA, B, C. The average profit per acre has been arrived at after charging all expenses of cultivation, i. e., labor (men and horses), seed, manure, use of implements, rates, taxes, and rent, but excluding interest on this expendi- ture., The item "rent" represents, of course, the landlord's interest on his capital outlay, which latter com- prises not only land, but all permanent buildings, fences, drainage, etc. A. Cart Lodge Field — lOJ Acres. Year. Crop. Gross return per acre. Expenses per acre. Profit per acre. Year. Crop. Gross return per acre. Expenses per acre. Profit per acre. 1894 Barley £ s. d. 11 17 9 15 11 18 9 13 9 18 11 6 12 12 6 17 5 7 4 3 11 £ s. d. 7 2 6 11 5 17 8 19 7 14 5 6 8 18 6 12 2 11 4 18 6 5 £ s. d. 4 15 3 4 6 10 14 2 4 6 3 14 5 2 9 2 6 2 2 14 1905' 1906 1907 1908 1909 1910 1911 1912 Lucerne & s. d. £ t. d. £ 1. d. 14 1895 Spring oats Mangold Barley 14 17 12 9 13 19 4 19 13 10 14 5 14 7 8 13 11 8 14 6 5 5 18 7 9 n 19 6 4 1896 1897 Wheat Mangold, etc Barley 1 9 5 5 1898 Clover '1 6 1899 Winter oats Mangold Wheat 7 12 1900 1901 Winter oats Mane-nld 6 16 2 8 1902 1903 .. do 1 ° Average profit 2 19 r 1904 do 1 Detailed records for 1905 have been lost. B. "16-AcRBs" Field. 2 Loss. Year. 1894 1895 1896 1897 1898 1899 1900 1901 1902 1903 1904 Crop. Mangold, etc Barley Mangold Barley Clover Wheat Winter oats.. Cabbage, etc. Barley Winter beans Wheat Gross return per acre. £ 10 10 s. d. 3 8 12 9 11 14 10 9 17 10 12 9 11 11 7 5 18 7 5 Expenses per acre. £ s. d. 8 16 6 18 8 10 6 10 6 4 5 15 5 10 8 11 6 19 5 7 4 16 Profit per acre. £ 1 3 3 8 4 5 1 4 11 8 11 9 Year. 1905' 1906 1907 1908 1909 1910 1911 1912 Crop. Wheat Clover Winter oats. Mangold Barley Sanfom do do Gross return per acre. d. 19 8 12 13 5 9 12 4 7 6 10 6 12 Expenses per acre. 7 8 10 5 7 7 2 19 2 4 2 6 Average profit. Profit per acre. I Detailed records for 1905 have been lost. 'Loss. ENGLAND. C. "Kitchen" Field — 23 Acres. 797 Year. 1894 1895 1896 1897 1898 1899 1900 1901 1902 1903 1904 Crop. Mangold, etc Barley Clover Spring oats. . Wheat Mangold, etc Barley Clover Wheat Winter oats . do Gross return per acre. £, 9 9 3 9 11 10 10 s. d. 16 10 13 7 8 2 8 17 6 2 14 Expenses per acre. £ s. d. 10 12 8 19 4 16 7 11 5 3 10 10 6 18 6 8 6 11 5 12 4 6 Profit per acre. £, s. d. ne 11 '1 3 1 9 6 4 '2 4 9 15 10 8 Year. 1905' 1906 1907 1908 1909 1910 1911 1912 Crop. Mangold Barley Clover , Wheat Winter oats . Mangold Barley Peas (seed).. Average profit . Gross return per acre. £, s. d. 9 10 6 11 9 19 9 8 11 10 11 18 51 6 Expenses per acre. £, s. 6 10 6 7 6 2 7 8 10 15- 6 5 51 14 Profit per acre. £ s. d. 11 3 .4 3 17 2 15 5 13 "19 12 2 15 10 1 Detailed records for 1905 have been lost. '' These peas were very scarce at time of sale. ' Loss. Results of different crops. — The following table, taken from Mr. Strutt's presidential address to the Sur- veyors' Institute on November 11, 1912, gives the net results per acre of the different crops over the 2,000 acres (1) for the 18 years 1894-1911, (2) the first 12 years, and (3) the last 6 years of this period: Crop. 18 years, 1894-1911. Total number acres. Average profit per 12 years, 1894-1905. Total number acres. Average profit per 6 years, 1906-1911. Total number acres. Average profit per Wheat Barley Winter oats Spring oats Beans Peas , Swede and mangold seed Red clover Sanfoin Lucerne Rye Tares Trefolium Mangold Potatoes Cabbage Kohl rabi, etc Maize Permanent grassland 4,093 3, 603i 1, 980^ 1, 357i 521 595i 546 2, 084i 785 726J 526 2, 656i 515i 703 275 13, 514^ £ 2 2 2 2 1 2 2 1 1 d. 8 4 6 7 1 19 11 5 5 11 6 9 6 5 4 18 3 18 1 5 18 4 13 2, 358i 2,480 1, 238i 740i 354 389J 485i 1,288 695i 544i 337 1, 668i 113J 505i 236i 9, 133J £ s. 2 5 10 12 >4 4 d. 2 4 6 2 11 2 9 9 9 7 1, 734i 1, 123J 742 617 167 206 60i 796J 89i 182 189 988 402 197i 38i 4,381 s. d. 17 7 9 1 4 8 11 11 3 8 18 14 14 1 12 2 1 Loss. Results of stock. — Stock keeping on the same area of land has yielded the following annual net results: Cows. . . Cattle.. Pigs.... Sheep.. Poultry 18 years, 1894-1911. £801 •32 '11 '14 143 12 years, 1894-1905. £716 •75 •1 '32 159 6 years, 1906-1911. £972 54 •31 22 111 There has been no big herd of cattle kept (usually about 100 to 150 young stock) nor during the greater part of the time has the number of sheep been large. Pigs, however, have been, and still are, kept on a con- siderable scale. With the exception of sheep folded on the land, stock have been given no credit for their manure, and have not been charged with straw for litter. Although the profit per head on the cows is not large (the 798 AGEICULTUBAL COOPEBATION IK ETJEOPE. number averaging about 450), it is fair to add that they have provided a safe and even market for the roots and other produce grown on the farms. Cows. — ^With the exception of Taylor's and Hatfield Bury, the cows are mainly nonpedigree milking stock. The total number kept on the 4,000 acres is about 800. Cow sheds. — The sheds at the first three of these farms are practically identical — dimensions, 68 by 52 feetf accommodation, 84 cows. The one at Hatfield Bury is of similar type but smaller. Tuberculin test. — No animal, whether a home-bred heifer or a bought cow, enters these sheds without first passing the tuberculin test, and this test is applied to the whole herds at least once a year. Feeding. — The cows are not kept in high condition, nor forced either for the show yard or excessive pro- duction. The feeding is moderate. For a herd averaging a little under 2^ gallons per cow per day the cost of cake, meal, grains, and other concentrated food would be about £6 10s. per aimum. Milk records. — The milk of the individual cows is recorded weekly. The average lactation yield for " White- lands," "Taylor's," and "Hatfield Wick" herds from 1888-1910 (2,665 lactations) was 714 gallons. Refrigerating station. — This adjoins the railway station, and the milk before dispatch is centrifugally cleaned and pasteurized, being loaded on the train at a temperature of 40 to 45° F. Scientific worTc. — Researches have been in progress for the last three years regarding the inheritance of mUk yield and allied questions. Copies of the papers so far published are available for those wishing to have them. WALES. 799 WALES. DEVELOPMENT SOCIETIES IN AGRICULTURAL ORGANIZATION. Mr. Rupert Ellis, Chairman North Wales Branch, Agricultural Organization Society. STATEMENT. Bangoe. The last few years have seen in Great Britain and Ireland the beginnings and the early development of new ideas, in the organization of special departments of agriculture. In the past, the general improvement of farming, the introduction of new crops, the evolution of new strains of stock or the institution of a new agricultural industry, have been effected by means that have for long been regarded as the only systems of development possible. To take these systems in the rough order in which they have succeeded one another in the past, we may enumerate them as follows: First, that due to private and personal initiative, the initiative and enterprise that gave England her classic agriculturists of the eighteenth and early nineteenth centuries, whose labors and experiments, as recorded in their diaries and manuscripts, afford such interest to the investigator of to-day; second, that due to the more modern joint- stock enterprise, the combination and concentration that has estab- lished such undertakings as the dairy and milk supply companies of the west of England; the fruit growing and preserving, cider making, and other industries in the orchard districts, to mention but a few of the more recent forms of agricultural enterprise; and third, the introduction of the cooperative system, the beginnings of which and its successful initiation in Ireland and Great Britain are attracting the attention of the entire agricultural community and of which without doubt much more will be heard and great advances recorded within the next decade. Such, briefly, comprise the principal existing means of progress as regards the purely economic and com- mercial side of agriculture. On the other side we have in England the educational element provided in the form of trial and experiment stations, farm institutions, and agricultural training schools; a system that has already attained a fuller measure of expansion upon the continent of Europe and in the United States of America than it has in the United Kingdom. The present grant of some £300,000 which is being placed at the disposal of the board of agriculture by the development commission will it is anticipated enable the much needed advance in this direction to be made. Having thus referred to facilities already existing for advancement, the idea lying behind the so-called "Development societies," of which one or two have recently been brought into existencie, may now be shortly explained. The idea in its essence is as follows: Experimental work in agriculture multiphes every year; an immense quantity of valuable results are obtained, tabulated, and placed on record. It is generally recognized that if fully and effectively utilized in the practice of agriculture they would have in their appHcation a marked influence upon the industry in every phase of its operations. Unfortunately, however, in the past the difficulties in the way of applying new-found knowledge to every-day farming practice have been great; these difficulties are easily recognizable, chief among them being the fact that in ordinary experimental work the provision of equip- ment and the area of demonstration is likely to be upon too small a scale to engage the direct interest of either the practical farmer or the skilled agricultural manager It is true that objections as to the adequacy of experimental and demonstrational work are thought by many to be met and sufficiently disposed of by the large farms controlled and managed by the principal agricultural colleges of the country. As a provision for scientific investigation upon a scale from which reliable data can be deduced, and from which results can be safely placed before the farming community for their direction, they are unquestionably of the greatest value, and fully justify their existence and continuance. There is, however, a somewhat wide middle space as yet to be filled, lying between scientific and commercial practice between what is capable of demonstration, and what is actually carried out by the farmer with his own hands upon his own land; it is in this field that the development societies are likely to have their greatest scope and usefulness. 14174°— S. Doc. 214, 63-1 51 ^^ 802 AGKECULTtTEAL COOPERATION IN EUROPE. Again, always in development work there must arise the important question of continuity. In this country, as in others, much valuable individual work and knowledge gained, has passed away irretrievably with old investigators and experimenters; work and knowledge which if we had the records to-day might prove of the greatest assistance in the solution of more modern problems. It is intended to be part of the work of the societies, now being considered, thoroughly to organize the collec- tion and compilation of local data, and the preparation of reports that may be preserved as permanent records of the industry in which they are engaged. The societies already registered, or now in course of registration, include the following: The British Tobacco Growers' Society, the Flax and Hemp Growers' Society, and the Sugar Beet Growers' Society ; all of which will become aflBliated with the Agricultural Organization Society,from whose annual report for 1912-13 the following abstract, bearing upon the work and constitution of the societies is taken: To teat the possibilities of certain classes of production in agriculture by means of State funds, a new group of societies, called "develop- ment societies," is being brought into existence, through which grants from the development fund are to be administered. The services of the A. 0. S. weie requisitioned in the framing of the rules for registration under the industrial and provident societies act. The profits are nnt distributed under the rules, but all surpluses are returned to the development fund. Each individual willing to set apart a por- tion of hie land for carrying out experiments in the class of production which the society was created to promote is admitted as a member on his taking up a nominal share holding. The society acts as a feeder of materials for the experiments and finds a market for the crops. Statistics relating to costs are to be carefully kept on lines advised by the A. 0. S., and the results placed at the disposal of the develop- ment commission. After the experiments have been conducted for a sufficiently long time to test their commercial possibilities, the society will be wound up and a new society organized on cooperative lines, which will, if sufficient support is forthcoming, take over the plant, etc., of the development society and run the undertaking as a purely trading concern. The first of these societies to be formed is the British Tobacco Growers' Society (Ltd.) with the object of ascertaining on a fairly large scale whether tobacco can be grown successfully and profitably in England and Wales. Upward of 100 acres have been planted with tobacco in different parts of England and Wales. The leaf will be rehandled before it is placed on the market and careful record kept of all trans- actions. As far as it is possible to introduce the cooperative spirit into these societies it will be done. We hope before long that other classes of production will be tested in the way tobacco is now being dealt with. The societies we are here considering are of such recent origin that little can be said so far with regard to the result of their operations. There is every indication, however, that under the scheme of organization that is now being adopted, a cooperation of interests, scientific, educational, and commercial, wiU be secured for the direction and management of such societies, a fact that augurs well for their efficiency and stability in the future. QDESTIONS. Q. How is the individual farmer assisted by the society ? A. In every community we try to get the farmers in touch with the movement and rely upon them to do the demonstrating work on their own land. Q. Do they gather here at the university ? A. We have not brought it up here yet. We have invited the university to cooperate with us, and rely upon the farmer to do the practical demonstration work on his land. Q. To what extent is this work carried on ? A. It is very new, indeed, and it is not easy to make any further statement than that given you in the paper. , Q. Are certain funds of the university appropriated for this purpose ? A. We are not asking for funds. We simply ask for cooperation. Q. What is done with the money ? A. The money is spent in the purchase of seed, hiring of land, and the payment of labor, without regard to the crops. Q. Does the farmer furnish anything except the land ? A. The land and the labor. Q. What is the relation of the farmer to the development project? A. He is acting as the agent of the society to carry out the program. Q. Is he paid a rental for the land ? A. Yes; plus a certain profit over the usual crop. Q. The plan is that the farmer shaU be out nothing and make something ? A. The farmer makes something more than the farming profit. He would be guaranteed the ordmaiy farming profit and from £2 to £5 an acre. Q. How do you keep in touch with the results of the demonstration ? A. We have men who report periodically upon the operations, keeping the results in the books of tne association. WALMS. 803 Q. Are these societies for the purpose of marketing ? A. No; they are outside of the trade altogether. They take over the crop and sell it to meet the expenses. It is to show them how to produce and make the most of the experhnental crop. Q. Must there be a certain number of members in such an association ? A. Yes; most of them have started in the past 12 months only. Q. Are you restricted to certain districts ? A. Yes; we make up our minds as to what would be the best crop. We intend to place the societies on a cooperative basis. Q. The purpose is to teach the farmers ? A. It is for the purpose of demonstrating to the country and the farmers that certain things will work. It is for the purpose of interesting the farmer commercially. Q. What special crops do you experiment with ? A. Tobacco, flax, hemp, and sugar beets. Q. Are these experimental crops confined to north Wales ? A. No;tothe whole country at large. We have tobacco in five or six counties in England. We have 3,000 acres in sugar beets. Q. You carry on operations only on the farms of members ? A. Yes ; the farmers who ask to become members of the society. Q. Does the imiversity take the initiative in organizing these societies ? A. No; they have been under the A. O. S. from the beginning. Q. How many acres have you in your experiment work ? A. For tobacco we have 120 acres. For sugar beets we have 3,000 acres. Q. How many acres in tobacco in one place ? A. Thirty acres is the largest. Q. Is this better than having one large experimental farm ? A. Yes; becaiise the farmers have it on their own land and know their own needs. Q. Do you favor long-time loans ? A. From three to five years. Q. The object is to have an estate for each phase of farming? A. That is our plan. We do not have aU kinds of crops. We send a man wherever there is a demand for him. Q. There is no limit as to the time he is to give to the work ? A. Yes ; he is required to put in a certain amoimt of time. Q. Do you supervise the farmer ? A. Yes; if he makes a mess of it one year he is not given an opportimity the next. Q. What does the farmer pay for the privilege of this instruction ? A. One shilling. Q. Does he have to pay this before taking on the experiment ? A. Yes ; it is purely experimental and for the good of the farmer. Q. How do you awaken the farmers to the proposition ? A. They get very keen about it. They look it up. Q. Do you grow alfalfa at all ? A. No ; not the society. COOPERATION AND BUSINESS ORGANIZATION OF AGRICULTURE. Col. Henbt Pilkington, C. B., Member Executive Committee North Wales Branch, Agricultural Organization Society. STATEMENT. Bangor. My only quahfication for giving evidence before the commissions is that I have been able to consider agri- cultural organization in the hght of experience gained in many parts of the British Empire. I am an Irishman, and have studied Sir Horace Plunkett's work in my own country at intervals ever since its inception. During the last few years I have, as a member of the committee of the North Wales Branch of the Agricultural Organi- zation Society, taken a small part in the advancement of agricultural cooperation in north Wales, and have been able to some extent to keep in touch with the progress which is being made in England. I have resided for some years in Australia and South Africa, as well as in India. I have visited Canada, and know many other 804 AGBICULTTJEAL COOPEEATIOIir IN EtTROPE. British possessions. For more than 30 years, spent in these different countries, I have been deeply interested in the subjects included under the term "rural development," especially in land settlement, and I may say that, in addition to having some practical agricultural experience, I have been sufl&ciently associated with rural industry in various places to have acted as judge at agricultural shows in all the five divisions of the globe. Though I have been in the United States, I can not lay claim to any direct knowledge of agricultural condi- tions there; but it is probably safe to assume that there are close analogies between American conditions and those which prevail in different parts of the British dominions. I will confine myself to certain general con- clusions which seem to me hkely, if they have any value, to find application in America. Believing, as I do, not merely that cooperation is the form of business organization best suited to agriculture, but that the time has come when progressive agriculture is scarcely possible without it, I must briefly support this contention at the risk of repeating some things which the commission has doubtless heard aheady. The reason why the cooperative system is necessary to the business side of agriculturists' occupation arises out of the fact that the productive side is essentially individualistic. Experience shows that farming is almost always most profitably conducted on a scale which seems small when compared with what are found to be the most economical producing units in other industries. The fact seems to be that in agriculture the close personal supervision of the individual farmer is a more potent factor in economy than production in great bulk or the minute division of labor, possible only in large concerns, which tell so heavily in most manufacturing processes. But on the business side — in the buying and selling, the transport, the credit and insurance, which are necessary to them — farmers have as much need of combination on a large scale as any other class of producers. Why then, it may reasonably be asked, can they not combine by means of ordinary joint-stock methods ? The answer is that, from the nature of their calling, their capital must be invested in two different kinds of interdependent undertakings; the chief and dominating one, which demands most capital, is productive and individual; the other, the subordinate one, is commercial and collective. The ordinary joint-stock system applied to the latter will not serve because it can not be so adapted as to insure permanently the distribution of profits in proportion to production, which is obviously what the farmer requires. In other words, under joint-stock organization the commercial side of the business can not be subordinated to the productive side. Thus, what farmers need is a business system which will secure the distribution of the trading profit in proportion to the value pro- duced by each of them, and this cooperation provides. No stronger evidence of the necessity for cooperative organization among farmers can be found than that presented in the report of the recent New York State commission, which found, I understand, that the American farmer receives no more than 40 per cent of the retail price of his produce, whereas the report expressed the opinion that he ought to receive at least 70 per cent. The inference is that organized farmers in America might receive $7 for every $4 received by those who are not organized. It is evident, if this be so, that those who remain unorganized must quickly go to the wall as organization progresses. In addition to the increased prices which organization secures there is a considerable further advantage from the more intensive methods which higher prices make profitable and the consequent increase in production. It is notorious that in the British market cooperation has enabled continental farmers to beat the home pro- ducer even with classes of produce which deteriorate considerably in transit. It is evident that without some form of organization for the disposal of produce the farmers of coimtries which produce more than they consume, and are therefore dependent on foreign markets, could not reach those markets. And it is also clear that if the organization is entirely independent of the farmers' control it may be and will be used to their disadvantage. I will now pass on to what is really the kernel of the subject — the secret of successful cooperation. It is this more than anything else which the commissions need to carry back to America. It is not a mere matter of rules and organization. If it were it would be sent across the Atlantic by post and there would be no need for the commission's inquiry. The motive force which sets cooperative machinery in motion and keeps it going is essentially different from that which drives the ordinary joint-stock mechanism. Joint-stock enter- prise derives its energy from the universal human desire to make direct profits and its method is to make profits for the benefit of an exclusive group of shareholders. A cooperative undertaking, on the other hand, does not aim at any direct profit beyond what is necessary to meet its working expenses. It produces its advantage ndirectly by securing the due reward of their exertions to the mass of cooperators, from whom no quahfied person is excluded, and by distributing this advantage, not in proportion to the capital invested, but in pro- portion to the business done by each. Cooperation aims at the good of the individual through the prosperity of the community. Its impulse can spring only from the desire to benefit, not at the expense of a community, but as a member of one. -Its motive power is what we know in this country as the " cooperative spirit," which is the realization of the coopera- tive maxim, "Each for all, and all for each." Without this spirit cooperative organization may be turned by individuals into a means of securing immediate personal advantage at the cost of their fellow cooperators, to the ■WALES. 805 destruction of the system and their own ultimate loss. So that to have effective cooperation there must in the first instance be sincere cooperators, not necessarily a community completely imbued with the cooperative spirit, but one including a sufficient number of sound cooperators to keep the less sound in hand. This aspect of cooperation, which is sometimes called the "spiritual side," often creates a difficulty which propagandists find it hard to overcome. Men with a rigid conception of business often think that this motive must be impossible to arouse or maintain. The view is not unnatural, but experience proves it to be unjustified. The cooperative spirit may be, and generally is, slow in permeating a community, but once established it becomes not merely strong enough to supply the necessary power but the dominating force in the business life of the community. It has proved its effectiveness in Europe among Teutons, Latins, Slavs, and Celts — all the elements which have contributed to make the American people. The first thing, then, to be considered in organizing cooperative institutions is the generation of the essential motive force. The second follows from it. It is that the constitution must be democratic, since the motive force can reside only in the cooperators. It is this fact which lies at the root of the general failure of Governments when they attempt to create or interfere with cooperation. But here I must say a word on the one apparent exception to this general rule of failure. In some of the British over-sea dominions — most notably in Australia — the Government has created organizations framed iu accordance with the rules of cooperation which appear to work satisfactorily. To some extent this may be due to the high sense of citizenship which is characteristic of Australia and the other dominions, and which may make it possible for the State to give considerable help without creating the dependence which is so detrimental to progress or seriously weakening the spirit of self-reliance and self- help. But I believe the real explanation lies in the fact that in countries which are great exporters of agricul- tural produce organization for sale is so essential (since there could be no sale abroad without it) that any form of organization must succeed in the absence of a better one and that more genuinely cooperative organizations would succeed better stiU. In Ireland the commissions will be able to study the most efficient propagandist body which exists for the purposes of agricultural cooperation. Its system, which embodies the thought devoted by Sir Horace Plunkett to agricultural economics, is the last word in cooperative organization. It affords, I am convinced, the best model on which those engaged m advancing the work can frame their plans. It works chiefly among small farmers. Most Irish farmers are farmers in a small way. But I believe it will be found that in any country the smaller farmers are those among whom cooperation will first take root, spreading gradually upward till it embraces the whole agricultural community. While there is no organization, the larger farmers, who produce, comparatively speaking, in bulk, possess an advantage in the market over small men, and they hestitate to surrender this advantage by joining a cooperative organization which would place all on the same level. But once the smaller men are combined they acquire in their corporate capacity exactly the same advantage over the wealthier individual that he previously possessed over them. He is then forced to join hands with them in seK-defense, and soon finds that his doing so is greatly to his advantage. The system of delegating the work of local organization to local bodies adopted in Great Britain by the Agricultural Organization Society, of which the North Wales branch is an example, has many advantages, and its application to a country so extensive as the United States, where the principle of subdivision for many purposes has been carried so far, is obvious. With regard to cooperative credit, which has no doubt been fuUy dealt with by others, I will only offer one small, but I believe important, suggestion. When credit societies at the outset of their career seek credit in the open money market — which is the right place for them to look for it — they have usually some difficulty in getting accoDomodation on the novel form of security they have to offer. The difficulty is generally overcome by inducing some wealthy well wisher to guarantee the loan. This arrangement has been foimd to involve the objection that the guarantor, who is assumed to act from philanthropic motives, introduces an element which is not business, an element of patronage, which is undesirable. This is a common weakness in the simplest structures of rural credit. I believe it may be avoided if the guaranty, when one is necessary, is always paid for. The history of cooperative credit shows that a very small payment should be adequate to the risk. QUESTIONS. Q. In starting the cooperative movement is it desirable to take advantage of existing societies or is it better to start independently ? A. I should say it depends very largely upon whether the existing societies are cooperative or capable of being made genuinely cooperative. I think as a matter of general principle it is better to buUd on the institu tions which you already have. Generally societies do not lend themselves to cooperative work. Q. In a country where the farmers are tenant farmers, if production is raised from 40 to 70 per cent, what would you do to prevent the landlord from taking the other 30 per cent ? 806 AGEICULTUEAL COOPERATION IN EUEOPE. A. That is a question that is being fired at me from every direction. My own impresaion is that the landlord may legitimately share the profits. Q. Is it possible for the renters to market their produce and secure larger returns without dividing the profit with the owner of the land? A. Quite so. And they do. And you will find that a great many cooperative tenants even ask you not to tell the landlord about it. Q. Would you recommend paying an ordinary trust company to guarantee loans ? A. When cooperative credit has been advanced to a certain point the guaranteeing of credit would be the work of a federation. I have particular reference to the starting of cooperative societies. It generally happens when farmers are smaU men the banks can lend money to their societies at 4 per cent. If they can not borrow the money, they go to the landlord and say, "Will you guarantee a loan of £50 at the bank for me?" The rich man says, "I will"; and if he does so he becomes a patron of the bank, but that is not cooperation. He should say, "I will guarantee the loan, but I expect 5 shillings per annum for doing it." I can see no reason why it should not be the object of the federations to guarantee the credit. In the early stages you have to get some individuals to do it. My suggestion is that in all cases the guaranty be paid for. Q. Wotild you organize half-willing cooperators ? A. No. Wait until they come forward and want to be organized. Create the spirit and wait. IMPORTANCE OF COOPERATIVE MARKETING OF FARM PRODUCE. Colonel the Hon. R. Stapleton-Cotton, Member Executive Committee North Wales Branch Agricultviral Organization Society. statement. Bangor. The importance to farmers and small owners of marketing their produce on cooperative lines can not be exaggerated. In north Wales the question has scarcely been touched. The existing agricultural cooperative societies deal with the buying part of the farmer's business, but not with the disposal of his produce. The farmer does not receive full value for anything he has to sell. The vast army of factors, higglers, dealers, etc., in wool, corn, cheese, poultry, eggs, Hve stock, horses, hay, straw, etc., fatten on what should be the legitimate profit of the producer. So long as this state of affairs continues the pubMc suffers from higher prices and adulteration of their food, and the producer from not obtaining fair prices for his goods. The majority of farmers are not free men in the matter; they are in the hands of dealers, manure merchants, seedsmen, et hoc genus omne. Until they are freed from this serfdom they can not be prosperous. As has been truly said, farmers buy retail and sell wholesale. For the farmer to get full value for his produce, he must either sell direct to the consumer or to the retailer and be a free agent. The majority of the middlemen must go. They have had their day and have no doubt served a useful purpose, but they are now superfluous. Here is an instance of my meaning. In Anglesey some two years back an egg-coUecting depot, run on cooperative lines, was started and affiliated to the A. O. S. Previously the bulk of eggs were sold in open market at prices fixed by the dealers. Always the prices were low, generally ruinously so. Prices are now fixed weekly by the depot, and so long as this is the case the price can not go below market value. Dealers are compelled to outbid the depot or go without eggs. And the producer has a certain market for aU the eggs he can produce at a fair price. He is paid in cash and has no bad debts. There is no longer a fear of a glut in the market. A feature of the trade is the large business done with industrial cooperative societies; they are the best of customers and the best of payers, requiring no credit. The latter means much to a society with but a small capital. Two years ago many merchants and retailers would not buy Anglesey eggs; they were too unreliable, and foreign eggs were preferred. Now that is all altered, and the Anglesey eggs compete successfully with first quality eggs, and command the highest price in the market. Why? Because they are collected regularly, tested, and graded, and can be thoroughly relied on. In September, 1910, the price of eggs in Llangefni market was 16 for Is. In the corresponding week, 1911, the price was 12 for Is., or three months after the depot started work. A tradesman in a large seaside town who has taken eggs from the depot from the first, stated that in September, 1910, he was paying the same price for eggs per 120 as he paid the depot in 1911 during the same months; but at both periods wa WAMS. 807 retail price was the same. What became of the 4 eggs, the difference between 12 and 16 ? Of course, the dealers pocketed them. As an object lesson to the farmers in Anglesey, an effort was made this year to put them in touch with the consumers of oats. The market price at Llangefni has ranged from 15s. to 20s. per quarter of 315 pounds. The prices obtained by farmers dealing direct with consumers has ranged from 19s. to 26s. per quarter. Although only some 1,500 quarters were sold in this way, the lesson has opened the eyes of the farmers more than a httle. What can be done with one commodity can be done with another. How to free the farmer from his dependence on dealers, merchants, etc., is a question of the first magnitude. The formation of agricultural credit banks is one of the first necessities, and these, combined with cooperative trading, are the only means of making the farmer a free man in all his deahngs. AH the rest will follow as soon as he has a free command of capital. (Since writing this paragraph, I have a letter from a farmer begging me to sell his oats at even a ruinous price, as rent day was at hand.) But the movement must come from the farmer himself, and he must make up his mind to trust his neigh- bor and act with absolute loyalty to the cooperative societies. There is no sense in a member who buys his suppUes outside his society for the sake of a few shillings. He is bound to suffer in the long run, for unless societies are loyally supported by their members, they can not exist, and so soon as a society stops business up go the prices. Farmers are generally credited with knowing the value of their produce; many of them no doubt do know it, but I have been astounded at the ignorance displayed in this matter by some. A short time ago a farmer asked 19s. per quarter for his oats. I doubt if he would have got 17s. from a dealer. They were sold for him direct to an industrial cooperative society for 20s. His remark was that it was the first time in 40 years' farming he had received more than he asked, and got cash on deUvery as well. I wish to lay special emphasis not only on the value but on the absolute necessity of a central body, such as the A. O. S. It is astonishing how few there are even among cooperators who understand the true meaning of cooperation. All along the hne we require guidance and keeping to the point. The true meaning of cooperation can not too thoroughly be instilled into our minds, and it is only through a central body with full control of the subject that we can be made continually to reahze what the possibiHties are. One might write yards on yards on this subject and not exhaust the possibiHties. Farmers must eventually be their own millers, bacon curers, egg collectors, dead-meat salesmen, possibly their own manure manufacturers, auctioneers, etc., on cooperative Unes to make their business the success it can be. Not until they are wiU they break the powerful rings which now Uve on them. And for all these purposes an influential central guiding body of a voluntary character is an essential. There are many other minor but important reasons for the existence of such a body. On every subject connected with the agricultural interest the A. O. S. has the widest and most rehable infor- mation, which is at the disposal of every cooperator. The necessity and advantages of a central agricultural credit bank for this island, to enable farmers to increase the production of the land, are so apparent that it is unnecessary to enlarge on the subject. In conclusion, I would wish to refer to the following two schemes which are now being considered by a subcommittee of the North Wales branch of the A. O. S. : 1. COOPERATIVE CREDIT SCHEME FOR ANGLESEY. The creation of an Anglesey county cooperative bank for the provision of capital — (a) For existing and to be formed agricultural cooperative trading societies in the island that may require to start productive enterprises. (6) For local credit banks to be formed as adjuncts of trading societies, through which members of the latter requiring cash to purchase their requirements and to pay cash with order may procure funds and so do away with the necessity of trading societies having a large share capital. The county bank to be registered on the limited habihty basis. The capital to be raised by share deposits supplied by the local societies and guaranties. Shares to be held by local societies and individuals on a basis to be agreed upon. The guaranties to be given by landowners and others, and the deposits to be any surplus of the deposits not required by the local societies for their own use. Shares to carry 4 per cent interest and the deposits 3 per cent. The guarantors, if called upon, to receive 4 per cent cumulative dividends for calls made on their guaranties. Suggested capital, £5,000, and to be raised as follows: (a) Guaranties, £4,500; (&) shares, £500; total, £5,000. Resolution. — That the question of the organization of a cooperative credit scheme for the island of Anglesey is an urgent one; that a subcommittee be appointed to draft one in consultation with the A. O. S., and to report to a special meeting of the branch executive committee to be called together when and where the subcommittee consider necessary. 808 AGEIOULTUKAL COOPERATION IN EUROPE. 2. ANGLESEY FARMERS' PRODTTCTIVE AND DISTRIBUTIVE SOCIETY. Oijects: To develop the productive side of the agriculture of the island by the organization and con- ducting of enterprises on a cooperative basis, such as the sale of live sto6k and dead meat, poultry, eggs, fruit, and market-garden produce, wool, corn, and other agricultural produce; the formation of bacon factories, abattoirs, milk depots; also the erection of buildings for the storage of any of the above commodities or the utihzation by purchase, hiring, or renting of any existing buildings, depots, mills, auction premises, businesses, or other undertakings; also the generation of electricity and the ownership of steamers' trade-marks, etc. Capital: To be raised through the county cooperative bank, part of which to be guaranteed by the exist- ing agricultural cooperative trading societies. First step: To negotiate for the following undertakings in the island by purchase: PwUfanog Mill and premises, also premises at Talyfoel, the business of each to be so organized as to prevent overlapping in collection and distribution. Management: The management to be by a board of directors representative of the county cooperative bank, existing trading societies and individuals representative of the agricultural interest, guarantors and shareholders of the county bank, and business men. QUESTIONS. Q. Should the members of buying or selling societies be required to do all their business with the society? A. Farmers could hire an expert to sell their product for them. An expert should be employed by the different cooperative societies in the district, and he should find a market for all farmers belonging to the societies. Q. Would you let him sell part of his produce outside the society? A. Certainly, if he can find a better market. Q. But suppose the outside buyers send in their agents and offer the individual farmers enormous prices in order to get them to drop away from the society? A. So much the better for the farmer, is the only answer to that. At the present moment the dealers in Anglesey are trying to kill us. If the dealers come along and offer a higher price for eggs, it is better for the farmer, but in the long run they come back to us. The dealers would probably use some means not to give them the full count. Q. Do you think an organization should do business with others than its members ? A. The cooperators should not sell for nonmembers. If a farmer wants to deal through it, he should belong. Q. How can farmers who know nothing about business transact business successfully? A. That would come through the society's experts. To cover expenses a small commission should be de- ducted from the sale. The cooperative society also deducts a small percentage; possibly 2 per cent would cover it all. Q. Do you think it is right to kick the middle man right out of business ? A. (Very emphatically.) Absolutely. Q. What will be the result? A. Prosperity of the agricultural interests. Q. All agricultural interests — the landlord and tenant ? A. Yes; from the landlord down to the laboring man. You can not benefit one without benefitiag the other. Q. Does the consumer share in the profit which the agriculturist has derived through cooperation? A. It helps him, because he gets better produce. Q. Suppose within a given area all producers are organized and all consumers are as well organized; would that be a desirable state ? A. That is entirely a matter of supply and demand. If eggs are all dear in one place, eggs would come m soon enough from another. Q. In general, through England, is there a movement for the meeting of the organized producer and the organized consumer ? A. Yes; all over the country. Q. Has there been any friction between them ? A. Not that I have been aware of. All differences are easily adjusted by the different associations. We have in south and west Wales a very interesting society that produces a very large amount of butter, and tne consumers are societies in that section of the country. WALES. 809 Q. Does not the presence of cooperative societies in a community raise the price of products for the pro- ducers who do not belong as well as for the members ? A. When cooperative societies commence buying the prices come down for all buyers, but I can not say what would be the result in the case of selling societies. The se6d depots raise prices for everybody. We buy from anyone who brings in products. I think there can be no doubt but that cooperative societies do raise prices. DEPARTMENT OF AGRICULTURE IN UNIVERSITY COLLEGE OF NORTH WALES.> STATEMENTS. Bangor. The department of agriculture of University College of North Wales had its origin in a course of lectures on "The Chemistry of Soils and Manures," dehvered in 1885 in Anglesey, by Dr. J. J. Dobbie, F. R. S., chief Government chemist, who at that time held the chair of chemistry at the college. In the course of the session, 1888-89, the first grant was received from the board of agriculture. In 1889 a scheme, providing for both in-coUege instruction and extension work in agiiculture, was adopted by the council of the college. This scheme was the first of its Idnd in the United Kingdom, as at that time, with the exception of a purely academic course in the University of Edinburgh, no comprehensive course in agriculture was available in any university or university college, and at no other center was extension work carried out. The staff of the department consisted at first of two lecturers, but an additional staff was soon required, and in 1895 a chair of agriculture was founded, the late Prof. Winter being the first to occupy it. He held the post until his death in September, 1912. In the early days the work of the department was financed by private subscription, together with a grant made by the board of agriculture. On the formation of the county councils, the college secured their coopera- tion and support in developing a thorough system of extension work throughout North Wales (Anglesey, Car- narvonshire, Denbighshire, Fhntshire, and part of Montgomeryshire), the first part of the scheme being intro- duced in 1891. The connection with the county councils has been maintained and as a result the department is in close touch with all classes of farmers throughout its area. The work of the department may be summarized as follows: (a) In college work. — Courses are provided to suit different classes of students, the following being the chief: 1. The degree course, lasting three years after matriculation, and preparing for the degree of B. Sc. in agriculture in the University of Wales, of Avhich the college is a constituent college. 2. A diploma course, extending over two years, and designed for students who intend to take up farming on their own account after their college career. 3. A short course of three months, for the sons of small farmers and others, who can be spared from home for only a short time each winter. Altogether some 400 students have taken one or another of these courses, and it is safe to say that of these at least 80 per cent are at present farming in North Wales. (6) College farm a7id experimental station. — This is situated at Aber, 5 miles from Bangor, and its area is 675 acres of inclosed ground, along with a right to graze sheep on the open mountain. Up to the present year the only financial support it received was a grant of £200 a year from the board of agriculture, together with £20 received from the Carnarvonshire county council. In the present year an addi- tional grant of £250 has been made by ihe board of agriculture for experimental work. Owing to the lack of adequate financial support, the farm has to pay its way and is largely run on a com- mercial basis. Although, up to the present the experimental work has had to be of a simple and inexpensive character, it has undoubtedly exercised a considerable influence on the farm practice of North Wales. A special feature is made of the live stock, which includes about 1,000 sheep (mostly Welsh Mountain), 90 cattle (Dairy Shorthorn and Welsh Black), and 16 horses (Shires). The present farm has only been occupied about three years. On leaving the old farm in 1910 the greater part of the stock was sold. A new flock and herd are being gradually built up, and it is hoped that before long they wiU again rank among the first of the principahty. Some of the students reside at the farm. Others visit it regularly for teaching and demonstration work, while it is visited annually by large numbers of farmers. ' Synopsis of statements made by the principal, Sir Harry K. Reichel; by Prof. R. G. White; and by Mr. W. Hopkins-Jones. 810 AGBICTJLTUKAL COOPERATION" IN EUROPE. (c) Extension work. — ^A large part of tlie energies of the department are devoted to this work, which includes both extension lectures and field experiments and demonstrations. On an average, over 100 extension lectures are given each year, and experiments or demonstrations conducted at from 50 to 70 centers. This work is done in conjunction with the county councils, the total annual grants jnade by them for the purpose being £1,100, which includes provision for work at the dairy school at Lleweni, near Denbigh. (d) Advisory worlc. — Owing to the close association of the department with all parts of its area, it is freely consulted by farmers wishing to obtain advice on questions concerning their farm practice. Quite recently, by the aid of a grant from the board of agriculture, a new branch of the department has been estabhshed, providing facilities for more technical advice and research in connection with difficulties which lie outside ordinary farm practice. Worlc in fromoting agricultural cooperation. — Since the appointment, in 1904, of Mr. W. Hopkios-Jones, who, previous to his coming to Bangor, had been closely connected with the organization of the largest coopera- tive society in Wales (the Carmarthen Farmers' Cooperative Society), special attention has been paid to developing agricultural cooperation, and every opportunity has been seized to assist in the estabhshment of agricultural cooperative societies. There are at present in the college area 14 ordinary trading cooperative societies. Of these, 9 were estab- lished as a direct result of lectures and addresses given by lecturers of the college. Lectures and addresses are deHvered each winter on the subject of cooperation in districts where special interest is shown in the subject, or where there is any prospect of a society being established. These lectures have formed part of the county schemes of extension work carried out in cooperation with the county councUs. During the recent tour of the egg train in north Wales the coUege cooperated with the Agricultural Organ- ization Society in endeavoring to stimulate the organization of the poultry industry. Mr. Hopkins-Jones accompanied the train and dehvered addresses at aU the centers in the college area visited by the train. It is hoped to follow up this work, and at present prehminary arrangements are being made for a series of meetings in September, when it is hoped that definite steps will be taken to estabUsh societies. QUESTIONS. Q. What proportion of the instruction oflfered is along technical lines and what proportion is along eco- nomic lines ? A. Cooperative work represents a comparatively small proportion. We regard our work as educational along technical hnes. Q. Are courses being offered in the university bearing on cooperation ? A. We have no special courses, but the value of cooperation is emphasized to the students. Q. Is the work designed to assist in training local leaders for cooperative undertakings ? A. Of course that is done in a general way, as stated in the paper. Q. In talks to farmers on cooperation, what hne do you use ? Is the appeal to pocketbooks or public welfare ? A. I think it appeals more to the farmers when you mention the pocketbook rather than public welfare. The shortest way to a farmer's brain is through his pocketbook. We generally give one lecture on cooperation^ and in that lecture give an outline of the method of forming a society, point out its benefits, and then refer them to the organization society for the formation of the society. Q. In lecture work, do you use illustrated lectures ? What are some of the principal points presented ? A. We have no illustrations in the way of pictures, but give ideas of what has been done in other parts of the country. We generally give one or two lectures at the same center in a year. The lectures are at centers away from the college, and are given in courses of only four lectures each. UNIVERSITY COLLEGE OF WALES AND AGRICULTURAL COOPERATION. Statement by Prof. 0. Bbtner Jones. Bangob. The agricultural department of the University College of Wales, Aberystwyth, has associated itself from the outset with the cooperative movement in the counties of mid and south Wales, and has, both directly and indirectly, assisted in bringing the subject to the notice of agriculturists within its area. The depajtment was established in 1890 for the purpose of affording facilities for the study of the scientific principles of agriculture. While the subject of cooperation may not, perhaps, strictly speaking, be regarded as coming within the meaning of agricultural science, that term has always been interpreted by the authorities of the department in its widest sense, and made to include, as far as possible, all subjects having a bearing upon the welfare of agriculture and WALES. 811 its development under modern conditions. Up to about 1901 little had been done in Wales in connection with agricultural cooperation, but in that year a series of articles upon the subject by Mr. Augustus Brigstocke appeared in the Western Mail. These articles, written as they were by an enthusiastic and enlightened advocate of the movement, attracted considerable attention, and it is to Mr. Brigstocke chiefly that the credit is to be given for having started the cooperative movement in the southern portion of Wales. It was indirectly through the articles referred to above, and Mr. Brigstocke's energy, that the agricultural department of the college came to take part in the movement. Some time before this a society consisting of past and present students of the agricultural department, together with the staff, had been formed under the name of the University College of Wales A^cultural Society. It was the practice of the society — a practice which is still continued— to arrange for a pubhc lecture at its annual meeting at the end of the Michaelmas term. In December, 1901, Mr. Brigstocke was invited to dehver the annual address to the society, and he selected "Cooperation" as the subject of his address. The members of the society, both staff and old students, as weU as the farmers present at the lecture, took up the matter with much enthusiasm, and Mr. Brigstocke and Mr. D. D. Wilhams, lecturer in agriculture at the college, were, in consequence, asked to address a series of meetings to be held at various centers in the county of Cardigan during the succeeding two months. These meetings were duly organized, and the speakers were received with much cordiaHty at the centers which they visited. Mr. Brigstocke also engaged an old student of the college, Mr. Walter WiUiams, who now represents the Agricultural Organization Society in North Wales, to act as organizer. For two years Mr. Walter WiUiams worked incessantly, addressing meetiags, organizing societies, and disseminating information relating to the cooperative movement among the farmers of the district. As a result of the work of Mr. Brigstocke, with the assistance of Mr. D. D. WUliams and Mr. Walter Wilhams, a number of cooperative societies were formed in differ- ent parts of the area, the first of these being at Lledrod, a few miles from Aberystwyth. Many of the societies then estabhshed have greatly developed since, and new societies have also been formed in the district. Mr. Brigstocke's encouragement of the work done by the agricultural department of the college in this direction did not end here. With a view to arousing the interest of students pursuing agricultural courses at the college, he offered two scholarships of the value of £10 each to students attending a special course of lectures on agricultural cooperation. These scholarships were subsequently awarded to Messrs. Hopkin Jones and John EUis, the former of whom has now for some years been a member of the agricultural staff of the University CoUege, Bangor, and has in that capacity rendered valuable services to the cooperative movement in the counties of north Wales. The special course of lectures to which reference has been made was dehvered at the College by Mr. D. D. Wilhams during session 1902-3, and attended by 10 students. This, I beheve, was the first attempt to intro- duce agricultural cooperation as a recognized part of a systematic course of study in the principles of agriculture. So much interest had been aroused in the movement by the meetings held, and by the success of the organ- izer in estabhshing cooperative societies, that in the summer of 1902 the county councils of Cardigan, Carmarthen, and Pembroke decided to send delegates, accompanied by a representative of the college, to Ireland, to study the agricultural cooperative movement in that country. At the end of the year also a conference on agricul- tural cooperation, with Mr. Alan Murray, lecturer in agricultural chemistry, as secretary, was held at the college, and was attended by the late Mr. E. W. Hanbury, then president of the board of agriculture and fisheries. Kepresentatives from nearly all the counties of Wales attended the conference, which was in its way one of the most important and best attended meetings ever convened by the college authorities. Among the speakers at the conference, in addition to Mr. Hanbury, were Mr. Nugent Harris, the weU-known secretary of the Agricul- tural Organization Society, Mr. P. J. Hannon, of the Irish Agricultural Organization Society, and others. The conference was the means of drawing further attention to agricultural cooperation, and marks an important step in the development of the movement in the principahty. In subsequent years the members of the staff of the agricultural department have taken an active part in connection with the movement, especially Mr. D. D. Wilhams, who has not only addressed a large number of meetings but has also taken an active part in estabhshing many cooperative societies. The college has for many years found a valuable link between itself and the agriculturists of the district in the Agricultural Students' Society, many of whose members, aU of them past students, are closely connected in various capacities with cooperative societies, and have rendered conspicuous services in connection with the development of the movement generally. In several cases, the secretaries of the cooperative societies are old students of the college. Some of them have also rendered services to the cooperative movement outside their own districts, and there are no more zealous advocates of the principles of cooperation than the old students, a very large number of whom are now farming on their own account. It has been through the Agricultural Students' Society, almost as much as by the direct advocacy of the staff, that Aberystwyth College has been enabled to play such an important part in connection with the development 812 AGEICXJLTTJBAL COOPEEATION IN ETJEOPE. of agricultural cooperation. The society, wMch has now a membership of close upon 400, has been the means of gradually influencing public opinion La the college area, and has in this, as well as in other directions, been a most valuable part of the general organization of the agricultural department of the college. Courses of lectures on agricultural cooperation are now given at the college in the department of economics, where a special course has been arranged for agricultural students, and is recognized by the University of Wales as one of the subjects which candidates may take in their final examination for the degree of B. Sc. in agriculture. Agricultural cooperation is also one of the subjects upon which "extension lectures" are given by the staff of the agricultural department. While the work of the coUege in connection with the cooperative movement does not, and can not, include directly the actual organization of cooperative societies, the college authorities have always regarded it as being within their sphere to deal with the educational side of the subject, and have considered it to be their duty, indeed, to encourage the study of this, as well as of all other subjects, which have such a close bearing as this has upon the prosperity of the agricultural industry. PROMOTION OF AGRICULTURAL COOPERATION. Mr. Walter Williams, Organizer for Wales, Agricultural Organization Society. STATEMENT. Bangoe. The systematic promotion of cooperation in agriculture in Wales dates from the year 1902, when Mr. Augustus Brigstocke, who was then honorary representative of the A. O. S. in Wales, commenced propaganda work. The movement started at a time when Welsh farmers were ripe for it, especially in southwest Wales, where it really originated. The main reason for this was that large tracts of land were put down to pasture annually. At the same time, farmers were obliged to buy feeding stuffs, especially meals and offals, because in many parts dairying was their main industry. The natural result of this state of things was that small merchants in the rural districts increased at a very fast rate. Artisans and small farmers turned merchants, all handling the imported feeding stuffs. One would naturally draw the conclusion that as a result of this large number of merchants coming into existence matters would be made easier for the farmers, but this was not the case, because they agreed among themselves to fix the selling prices. As a result of competition the quality of the feedstuffs was very inferior and the weight often short. Under such circumstances the gospel of cooperation was an agreeable one, and the more advanced class of farmers took it up readily. But the idea of starting "in business" for themselves was a novel one to many farmers, and they needed considerable help and guidance. The requirements of the industrial and provident societies act had to be comphed with, rules had to be adopted, and committees enUghtened as to how to proceed. Through the A. O. S. all this help was given free, otherwise it is doubtful if the movement ever would have made headway. Attempts had been made at cooperating in southwest Wales previous to the time mentioned, mainly in the disposal of produce, but without much success, because the principle adopted was not really cooperative but joint stock. In the same year (1902) Mr. Brigstocke induced the county councils of Carmarthen, Pembroke, and Car- digan to send delegates to Ireland to study cooperation in agriculture on the spot. That country was visited in August, 1902. The delegates reported favorably, and among their recommendations were the following: 1. That we place on record our conviction that the principles of agricultural cooperation, as established on the model of several Euro- pean countries, and as successfully applied in Ireland, are eminently adapted to further the present condition of agriculture in west Wales, and that their adoption is highly desirable in the farming interest. 2. That the comparative failure of butter factories hitherto established in west Wales is attributable iu the main to the fact thattli* elementary principles of agricultural cooperation have not been applied to their formation and subsequent conduct. 3. That the county councils should obtain sanction of the board of education under the technical instruction act, 1889, for the expendi- ture of money upon instruction in the principles and practice of agricultural cooperation, etc. Beyond this, the three councils mentioned did not take any official part in the promotion of the move- ment, but individual members of the deputation worked hard after their return to get the farmers to com- bine for business purposes on the lines seen in Ireland. It has been frequently stated that the councils never spent money to a better purpose than by sending these delegates to Ireland in 1902. WALES. 813 It may be added that some members of the deputation are still hard at work furthering the movement in their individual capacity, and through their efforts some of the largest and most successful societies in Wales have been started. The effect of the movement has been very far reaching. In some instances it has had a marked influence on the intelligence of farmers, apart from the beneficial effects on their pockets. Members of societies by pass- ing in rotation through conunittees have become conversant with a new world — the world of commerce — which was hitherto an unexplored territory to them. By transacting business in committees, they get to know about the sources of supply of feeding stuffs and manures, and learn the way to understand the meaning of analysis, unit values, and similar phrases which they often heard but never understood. The movement has also been a great protection to farmers, because many societies systematically analyze all feeding stuffs and manures and pubUsh the results. It is certain that very inferior commodities were palmed off on the farmers before the advent of coopera- tion. For instance, itinerant vendors of various commodities were very numerous. They carried samples from farm to farm (as they do at present in many districts), preaching their merits and obtaining orders. Calf meals were usually "specialities," and these were sold at very high prices, often at 28s. a hundredweight, whereas the societies at present sell a better article at 12s. 6d. and 14s. About 10 years ago Carmarthenshire and Cardiganshire were dumping grounds for inferior agricultural seeds. This was stated in evidence before a royal commission that sat several years ago, and this fact, when it became known, gave a tremendous impetus to the formation of cooperative societies. The quaUty of seeds, manures, and feeding stuffs generally is difficult to determine as to their merits with the naked eye, and something was badly needed to protect the farmers against fraud. The fertilizers and feeding-stuffs act was a dead letter in Wales so far as the individual farmer was concerned. Indeed, many of them were quite imaware of its existence. Moreover, the act was framed in such a way as to make it almost useless for the farmer, because he will not take the trouble nor undertake the expense of complying with its requirements. But in combination with his fellows he can take advantage of it if he wishes. Usually the managers of societies notify firms that they intend taking samples, it may be, of manures, feeding stuffs, or what not, and state that they expect them to abide by the results. This is done quite outside the act, and in a friendly manner. In the majority of cases where samples are found deficient, an amicable settlement is arrived at as between the societies and the firms. Only firms of repute can exist under the circumstances. If all farmers traded through cooperative soci- eties the doubtful firms would cease to exist. Now a firm's only chance is with individuals whom they solicit on fair and market days and at shows. Compound manure and feeding stuffs firms thrive on individuals, and will continue to do so as long as farmers choose to make their bargains individually. A farmer has no chance alone against the agents of such firms, because they treat and talk, and overwhelm the poor farmer until he is forced to buy; but when the bUl arrives it puts a different color on the whole thing. Many sad bargains have been (and are being) made under the influence of treating, and, moreover, stuff is forwarded very often when no order at aU has been given. This happens occasionally at agricultural shows. Cooper- ative societies are remedying this state of things gradually, because where they have stores everything that is required for the farm is to be obtained there, and the farmer has only to send for it. DISPOSAL OF PEODUCE. In many districts in Wales farmers are severely handicapped because of the barter system that prevails. In the corn-growing districts, Pembrokeshire and Anglesey, farmers have been in the habit of selling corn to the local merchant, who in turn sells them manures and artificial feeding stuffs. It is very hard work to pro- mote cooperation among farmers in such districts. Happily, the movement is making headway in both the counties mentioned with beneficial results. Where the weekly marketing system has died out the same is true. Purchasers go round the farms and buy up poultry, eggs, and butter, and if they conduct a meal trade, they seU this in return, or an exchange takes place. In many parts of Wales outlets for homemade butter are very few. Seldom is it disposed of direct to the consumer; the local grocers take it and control the price. The farmers under the circumstances are, of course, obliged to buy commodities in return. It may be said here that Wales in its- agricultural methods varies considerably. Being divided by moun- tains and hills geographically, it is so agriculturally. In one district the whole-milk trade is the premier industry, everything else being subsidiary; in another, sheep farming; in another, cattle raising; in another, mixed farming, etc. The farmers of Brecon, Glamorgan, Monmouth, and Carmarthen, in the south, have good markets at their doors. Kadnor and Cardigan are somewhat far removed from large consuming populations. The same 814 AGBICULTTJEAL COOPERA.TION IN EXJEOPE. is true of Pembrokeshire. Anglesey, in the north, is purely agricultural, and is obliged to send its produce to far- away markets. Carnarvon has an industrial population and fairly good markets. Flint is on the verge of large populations and has very good outlets for produce. Denbigh is not so well off for markets, and is an agricij- tural county which disposes of its produce outside its own area. Merioneth has a few centers ojf population to which farmers send produce. Montgomery is far from large centers of population and its markets are outside the county. In aU these counties the system of farming differs. Carmarthen, formerly a butter-producing country, is now given over to the whole-mUk trade, because of the demand in its industrial centers and those of the neighboring county of Glamorgan. Through lack of coopera- tion among producers the milk industry was severely threatened until about two years ago, when those in the trade cried out for cooperation. Now the industry is on a better footing and prices are more remvmerative. The high prices of feediag stuffs during the last few years made the margin of profit very small for producers. This combined with undercutting of prices among themselves brought their profits down considerably. The prices to the consumers in the town were aU the time being kept up. The retail dairymen, knowing the large supply of milk available, took advantage of the situation and offered low prices for it. Thus Welsh farmers cooperate at present for selling mUk, butter, eggs, and other produce with splendid results, and there are signs of greater developments ahead. COOPERATIVE TENXJEE OF LAND, CREDIT, AND INSURANCE. Cooperative tenure of land. — There are 10 small holding societies in Wales. Five of these hold approxi- mately 877 acres of land. The membership is 248, with a paid-up capital of a little over £200. The cooperative land-renting movement is confined to Glamorgan and Monmouth. Members of these societies consist of men who have been on the soU some time or other and who stiU retain a liking for it. They follow some constant employment and work on the land in their leisure hours, or join together in employing workmen. Houses only are built for them by the county councils, and in a few instances outbuildings have been built also. They coop- erate for buying their requirements in many cases, and provision for this is made in their rules, thus avoiding the necessity to register a separate society. There are signs that this movement will extend in the counties mentioned during the next few years, as it is found that by puttuig men together on blocks of land they have a better chance to succeed. Cooperative credit.— This movement is only in its infancy in Wales. It is anticipated that it will develop within the next few years, once farmers and others connected with the land come to understand the underlying principles of cooperative credit. Cooperative insurance. — Several societies have taken up insurance, but not to any large extent so far. Once this is thoroughly understood there will be great developments. One society at the beginning of the present year had a total insurance of £18,900. This represented 29 employers' liability policies and 32 fire insurance policies. A feature of this form of cooperation is that claims are settled promptly, thus saving a lot of worry to the farmers. The committee of the society act as agent, and they investigate claims. They can, of course, reject any would-be member if they have reason to think that he is not a desirable person to join the society. WORK OF THE SOCIETIES. General. — There are 75 societies at present in Wales, made up as follows: Ten small holding socie- ties, three credit societies, one surplus milk society, one live-stock society, one bulb society, three egg depots. . The rest are societies for the supply of requirements, but many of these sell produce as well. The total turnover of the Welsh societies in 1911 was £232,475 14s. Id., and they had a membership of 6,041. The figures for 1912 are as follows: WALES. Agricultural cooperation in Wales, returns from societies for 1912. 815 Name of society. Carmarthen Newcastle Emlyn Pumpaaint Llanelly Crudoc Solva Haverfordwest Llangynwyd Clyndermen Llandovery Fishguard Llangadock Cardigan Llandyssnl Pontypridd Gower Builth Pontardawe Cross Im Pembroke West Glamorgan Farmers. Llanybyther Sales. £ 88, 659 10, 908 4,579 8,785 8,363 3,736 13, 766 1,489 34, 019 3,044 2,129 4,837 9,519 9,188 483 4,781 1,774 s. d. 14 1 1 14 7 15 8 8 5 10 Hi 19 6i 16 17 18 7 17 11 16 3 2 6 34 3 H 6 4 11 1,511 3 10 900 3 8i 7, 170 4 1 2, 052 4,402 11 5 Mem- bers. 1,273 540 94 252 190 85 159 37 362 102 42 160 727 219 62 151 83 70 95 149 70 80 Profits. £ s. 1,379 14 193 16 50 4 301 222 18 98 421 16 , 8 15 785 2 46 9 47 14 d. 8i H 10 9 3 5 n 9i 6 66 14 4 225 17 Hi 25 1 11 174 8 10 12 14 49 11 53 7 2 102 16 5i Remarks. Selling farmers' requirements only. Selling produce as well, especially butter. Selling requirements only. Do. Selling produce, poultry. Selling produce, especially corn. Selling com. Selling requirements only. Selling produce, especially butter. Selling requirements only. Selling produce as well. Selling requirements only. Do. Selling butter (returns incomplete). Selling requirements only. Do. This society made a loss of £49 on 10 months' trading, but has recovered itself by now, Aug. 9, 1913. This society made a loss of £25, but has recovered itself by now, Aug. 9, 1913. Selling corn. Selling milk. Selling butter and eggs. Note. — The main purpose of all these societies is to buy farming requirements wholesale and sell retail to their members. North Wales societies. [Profits not given.] Name of society. Sales. Members. Remarks. Ano'leHea Weatern . . £ s. d. 3,717 17 11 987 8 729 6 11 2, 629 2 5 2, 077 1, 316 9 3 5, 855 2,154 13 11 3, 429 8 8 1, 797 12 5 1,376 16 2 9, 744 3,474 12 1, 151 5 4 654 6 9 9, 968 2, 936 1 7 102 57 26 15 125 56 112 57 123 88 44 142 80 88 22 153 73 Besides distributing requirements, sella members' produce. Selling farmers' requirements only. AnplpHPa Bulb Societv Grows narcissi bulbs, sells them, and also sells cut flowers in spring. Sella eggs and poultry. Selling farmers' requirements only. Clvmov Societv Do. Do. Dvaavni Societv Sells requirements to members, and also sells members' produce, espe- Penllyn Society cially wool. Selling farmers' requirements only. Edevmion Societv Do. Union Societv Do. Hawarden Societv Sells farmers' requirements, and also sells com for members. North West Flint Sells farmers' requirements, and also sella members' wool. Sells farmers' requirements only. Colwvn Societv Do. Sells farmers' requirements, and sells members' eggs and poultry. Llanidloes Societv Sella farmers' requirements only. Note.— All societies have not made returns tor 1912, thus totals of these two tables would not represent total trade done by Welsh societies. The largest society in Wales, that of Carmarthen, has two branches and covers an area of 24 miles (from depot to depot) oneway and about 10 miles the other. It is conducted on splendid business lines, and a visit to its premises is sufficient to convince anyone of the possibihties of the farmers' cooperative movement. It has an increase over the previous year of 133 in membership and of £13,172 in turnover. The second largest society, Clynderwen, is situated on the borders of Carmarthenshire and Pembrokeshire. The station is on the Great Western Railway, about 20 miles south of Carmarthen on the route to Fishguard. About half the turnover of this society is for produce sold, mainly butter. They receive it from members in the unsalted state and freshly churned. It is graded, salted, and neatly packed before being sold. ^ Their best markets are in Glamorganshire, where there is an unlimited demand. They also sell a large quantity of eggs. The largest trading society in North Wales is Hawarden, near Chester. This society disposes of large quantities of corn for its members, and it also has a mill. 816 AGRICULTURAL COOPERATION IN EUROPE. Sale of eggs and pouCtry.— In the matter of tlie disposal of poultry and poultry produce, considerable impetus has been given to the industry through the running of demonstration trains. Such a train was ran for the first time in the British Isles in April, 1910, when it toured South Wales. As a result of that train two poultry and egg societies have been started, and several trading societies took up the sale of eggs as a branch of their work. Another demonstration train was run in North Wales during April of the present year, when 19,068 persons passed through the cars. It is anticipated that its visit will give a great impetus to the production and market- ing of poultry and eggs, and that better methods will be adopted as a result of the instruction given. Sale of milk. — One of the most important developments of the present year in Wales is the opening of the surplus milk factory at Llandilo, in Carmarthenshire. The valley of the river Towy in the county men- tioned is a splendid dairying area, and a large quantity of milk is produced. The supply of late has become greater than the demand in the populous centers, with the result that prices have been coming down continually. The farmers have formed a society to undertake the manufacture of cheese and other milk products, so as to avoid flooding the market with whole milk. Fifteen hundred gallons a day were handled at the factory for the week ending June 14, 1913. Sale of wool. — Two societies in North Wales sold wool for members last year, namely the Dyssyni Valley Society, Merionethshire, and North-West Flint Society, Dyserth. Conclusion. — Although the cooperative movement in Wales started 1 1 years ago, it is yet only in its infancy. One real difficulty in promoting the movement lies in the fact that farmers can not distinguish between the cooperative and joint-stock principles. They have been accustomed to see individuals and joint-stock com- panies getting rich by trading with them; they can not appreciate the mission of the cooperative society, which is their own business, to be controlled by themselves. The idea is too good to be true. They have been accus- tomed to look at the commercial world from outside. They can not realize that it is possible for them to look at it from inside. In those districts where the movement has not started there is a solid crust of suspicion and indifference to be broken before a start can be made. The movement is new, whereas the agricultural methods of doing business are centuries old. Even after getting societies started, members of the committees even can not always realize that the business is the farmers' own, a weapon of protection against fraudulent trading, and an institution expressly started for the welfare of agriculture. Land workers think very slowly, and in many cases the cooperative ideal has to be preached to them continually before they can be got to support their societies loyally. Persistent propaganda is indispensable. But the movement in Wales is doing an immense amount of good in those districts where it has been started. The latest move is the formation of a Welsh Board of Trade, as a part of the Farmers' Central Trading Board, which is the national organization. At meetings of this body matters appertaining to trade are discussed and representatives from North and South Wales come together to compare notes, and for the purpose of taking united action in business and other matters concerning the movement. QUESTIONS. Q. What are the chief requisites of a good organizer ? A. It is necessary that he have a knowledge of practical and scientific farming. He should be a reader of human nature. An organizer's work is a pecuhar sort of work. There are speciahsts in our line. I am a gen- eral organizer; it is a very difficult position to be in; sometimes you land in a pecuhai- difficulty. An organizer should know all about practical farnung. Farmers have no use for theorists. Q. Does the dairy school for butter making encourage the cooperative selling of milk? A. We have only one instance of farmers selUng milk cooperatively. Before we started the society there were 15 or 16 farmers supplying the town with milk, and of course there was a great deal of overlapping in milk routes. The association systematized the distribution of milk in the whole town. Instead of 15 or 16 farmers handling the milk individually, they handled it cooperatively. We are against the farmers retailing; we very much prefer that farmers should sell through wholesale channels. If farmers take up retaihng as well as whole- saling you are up against great problems. We have brought into operation 30 cooperative wholesale ( 1) muk- seUing societies, and they are now delivering 30,000,000 gallons of milk annually. Each society has a depot to turn milk into cheese and by-products. Butter production is very small, indeed, owing to the market for whole milk. Q. What was the effect on price in the instance cited ? A. It gets better prices for the producer, and the consumer does not have to pay any more. Q. How much better prices ? A. In some instances half a penny a gallon, and in one instance a penny a gallon. WALES. 817 PENLLYN COOPERATIVE SOCIETY. Statement by Mr. E. W. Jones, Secretary North Wales Brancli, Agricultural Organization Society. Bangor. Prior to 1905 very little had been done in regard to cooperation in North Wales, but about that year several societies were organized, among them being the Penllyn, and although the society has not made such rapid progress as some others, nevertheless its influence h4s acted as a stimulus to the formation of several other societies in the surrounding country. Having been secretary of the Penllyn Cooperative Society for two years, perhaps the best evidence I can give is to enumerate some of the advantages gained by the above society when it was first established. This took place in 1905. Farmers have generally in the past looked upon the commercial world as outside their business, and have always relied upon merchants to do their business for them, always having the fullest confidence in them that they were dealt with fairly. There was no doubt as to this feehng in the above district,' and thsy could scarcely behove they were so imposed upon, even when they saw the difference in prices charged by the society and private firms. The first article that was bought by the society was coal, and this they bought at 7s. per ton cheaper than the individual farmer could buy the same quality. Flour, also, they bought at from 6 shillings to 10 shilUngs per sack cheaper; the difference in prices being so great that farmers were rather afraid to buy, on account of the reduced price, fearing the quaHty of goods must be poor. This was soon remedied by the fact that the millers in the district reduced their prices 5 shillings per sack. This was a very lucky move for the society in question, as it showed the members and others how they were being dealt with. Although the above society does not grow in size as it should, it acts as a standard in the district, almost in the county, of prices to be- charged for goods. The indirect benefit to the county generally is much greater, in my belief, than the immediate advantage to the members themselves, great as this has been. Other advantages have been conferred on the district by the society, such as (a) reduction in railway rates, (6) the leveUng up of agricultural commodities supphed by firms in the district, and in a number of other direc- tions. Although the Penllyn district is severely handicapped by want of capital, and a great deal of credit trading goes on, and where this is so it is very difiicult to dictate terms to merchants, nevertheless the society is doing very good work in acting as a deterrent factor to prevent extortionate prices. Another important effect the cooperative society has had on the farmer is that it has opened his eyes commercially, and he is begin- ning to see how he may help himself by cooperation, rather than always to rely on others for assistance. 14174°— S. Doc. 214, 63-1 52 SCOTLAND. 819 SCOTLAND. AGRICULTURAL ORGANIZATION IN SCOTLAND. Address by Mr. Charles Douglas, President Scottish Agricultural Organization Society. Dublin.' The character and conditions of Scottish agriculture are very varied, ranging from the vigorous farming oi good land in the Lothians to crofting in the island of Foula, where life can barely be maintained. Speakiag generally, the eastern side of the country is given mainly to arable farming, cattle feeding, and sheep feeding. Dairying is being introduced into some districts near the coalfields and large centers of popu- lation. A large proportion of the farms are large. In the southwestern part of the country the principal industry is dairying, in conjunction with arable farming; the pastures occupy a very considerable area, and Ayrshire cattle predominate. Farms vary greatly in size. In the northern and northwestern regions of the country cattle breeding and sheep farming are the principal industries. In the smaller holdings, however, poultry keeping is a growing source of revenue. These holdings are occupied very largely on the "crofting" system of tenure regulated by special acts of parliament, and now especially by the small landholders act of 1912. In the Highland seaboard areas and the islands crofting has hitherto been closely associated with fishing; but fishing as a source of income to the crofters is increasingly driven out by the growth of trawling. Small holdings greatly predominate in the northern and northwestern districts; they are less common in the southwestern district, and comparatively few in the eastern arable counties. Cooperative organization is, in the opinion of the organization society, applicable throughout the country. The joint purchase of the materials of farming is a form of cooperation which increases in importance as the amount of purchased feeding stuffs, manures, and implements grows. This cooperation secures advantages aUke in price and in quality. These benefits, however, are less conspicuous to large farmers than to small farmers, and large farmers are not likely to derive the fullest advantage from cooperative purchase imtil it has become so general that, by the formation and federation of many societies, even more considerable reductions in price can be obtained. Similarly, the joint sale of farm produce, whUe not yet very largely developed, is a promising line of action. Some transactions in the sale of com are now carried out, and Scottish farmers, particularly in the northeastern district, are looking forward to taking advantage of the opportunity of cooperative sale of meat, about to be offered to them by the Irish Organizatio;n Society. The principal instance, however, so far, of joint sale is cooperative dairying, which has been highly suc- cessful where it has been instituted. The method adopted is, that a number of farmers combine to use a single cooperative depot for the sale of their milk and the conversion of surplus milk into cheese. Among the smaller holders, where such a scheme as this may not be applicable, the organization society advocates a scheme of butter making by means of a number of separator stations, each serving a small district, and small butter factories serving larger districts. This, however, has not yet been put in operation. The cooperative sale of poultry produce is most useful in the northern and northwestern districts of the country, and in the islands, which are remote from the better markets. A number of egg societies have been formed, and 50 such societies are now aflSliated to the Farm and Poultry Produce Federation, whose turnover increases rapidly. In respect of price there has been great improvement in the more backward districts. The gains in Orkney, for example, have been not less than 50 per cent for the producer. In Orkney the opera- tions have been on a considerable scale, and a good deal has also been achieved in the West Highlands, whilst recently societies for cooperative egg selling and other purposes have been brought into existence in the island ofUist. Stock breeding forms an important element in farming throughout Scotland, and the organization society is in course of creating a number of horse-breeding societies, conducted according to strict rules, and cooperative ' This address was delivered before the Commissions in Dublin, Ireland, on July 12, and has been included in the section op Scotland in order that itlmaylbe more'easily found. 821 822 AGEICULTUEAL COOPEBATION IN EUROPE. in their character. By the cooperative hiring of stallions by these societies very substantial improvement in the horses of the remoter districts is being made. The organization society has for its primary object the development of local cooperative societies, and its experience increasingly confirms the view, on which it has proceeded, that such societies should be created to deal with small areas so that their members may be easily accessible to one another. This policy, however, entails a further line of action, which is in any case desirable, viz, the development of a second phase of cooperation, the cooperation of local societies with one another in federation. Federations for carrying out the purchases of a number of societies hav? been formed in several regions, and it is hoped that ultimately this may lead to a general federation of Scottish societies. The cooperative dairying associations affiliated to the organization society have a federation to prevent undue competition between them and to further their common interests. For the purpose of joint sale, a farm and poultry produce federation has lately been brought into existence, and while hitherto it has dealt chiefly with the sale of eggs, its powers enable it to become an agency for the selling of all farm produce. The monthly turnover of this federation since its inception, 15 months ago, has been as follows: Month. Eggs, poul- try, and rabbits. Grain and hay. Feeding stuffs, etc., purchased. Total turnover. 1912. March £706 1,294 1,800 1,420 1,250 1,230 780 660 334 322 £706 1,312 1,820 • 1,434 1,261 1,230 780 879 571 567 April £18 20 . 14 11 May June July : August September '.' October 219 237 245 November December 1913. January 9,796 764 10, 560 664 883 2,106 2,188 2,640 281 169 472 28 47 945 1,058 2,622 2,337 2,926 February £6 44 120 240 March April May 8,481 997 410 9,888 In almost every department of cooperative organization progress is delayed by lack of capital. Purchase operations can not be carried through to the greatest advantage by associations which have no capital at their disposal; the fabric of dairying depots is costly, and the crofters and small holders are apt to be very largely under the influence of local merchants to whom they owe money and have, consequently, difficulty in transfer- ring their custom to cooperative societies. If capital were forthcoming at moderate rates of interest, there is little doubt that the movement in Scotland would be much more rapidly advanced. Such capital would be utilized : (1) In providing trading societies with the means of carrying on their business to the greatest advantage. (2) In enabling cooperative credit banks to give loans to individuals for the more advantageous working of their holdings, especially in the districts where small holdings are most numerous. The formation of credit societies has probably been retarded by the fact that the Scottish Joint Stock Banks do already supply credit, even to small agriculturists, better than commercial banks in most other coun- tries. An additional cause of delay is perhaps to be found in the fact that hitherto credit societies have only been proposed on the Rafleisen principle, with unlimited liabihty of their numbers. Unlimited liability is an unpopular arrangement, and better success may perhaps be looked for in the case of banks whose members undertake definitely restricted liability. It may not be without interest to trace the development of the organization socie'ty which may be indicated by a few very general figures. The society was formed partly as a result of a Scottish commission which visited Denmark in 1904. The report of this commission was considered at a meeting of the Scottish Chamber of Agriculture in January, 1905, and it was resolved to form an oi^anization society. The first steps in ^^ direction were taken during the spring and summer of 1905, and at this, as well as at other stages, the society SCOTLAND. 823 was under the deepest obligation to the English and Irish organization societies, more particularly to Mr. R. A. Yerburgh and Mr. Nugent Harris, of the A. O. S., and to Sir Horace Plunkett and Mr. R. A. Anderson, of the I. A. O. S., all of whom visited Scotland at various times. The necessary financial support having been guar- anteed, the society was formed in the autumn of 1905, to act not as a trading but purely as an educational and propagandist body. Owing to a variety of circumstances, however, little progress was made during 1906 and 1907. The progress of the society's work since its formation is indicated by the following figures: /. Societies formed and affiliated, 1906 to 1913. Societies. 1906 ; 7 1907 5 1908 11 1909 16 1910 22 1911 11 1912 17 1913 (January to June) 17 Total societies affiliated June 10, 1913 106 II. Trade turnover oj societies. Year. Dairy produce. Poultry produce. Agricultural require- ments, etc. Total. 1909 £34, 900 55, 000 88, 000 92, 300 £70, 900 154 son £105, 800 209, 800 256, 000 303, 040 1910 1911 £16, 700 32, 600 £151, 300 178, 140 1912 III. Membership of affiliated socfietiis. 1909 , 3,880 1910 4,800 1911 5,890 1912 7,140 The society as originally constituted was wholly dependent upon voluntary subscriptions. Two years ago, however, on the society's application, a grant was made to it from the development fund, and this grant has since been continued. It is limited in two ways: (1) It has so far been sanctioned only to the extent of £1,000 annually. (2) It is given only in proportion to funds raised by voluntary effort for the society, being restricted to one-half of the total spendings. It is a condition of this grant that the society should receive on -its executive seven members, two nomi- nated by each of the three agricultural colleges and one nominated by the conveners of crofting counties. The society accepted this condition without reluctance, as it desires that its work should be kept in close accord with the educational efforts of the colleges, while it also seeks to maintain the closest relations with the crofting counties in which small holdings predominate. Small holdings have in recent times declined in number in lowland Scotland, partly on account of the rise in agricultural wages, partly on account of .difficulties connected with the teniu-e and equipment of land, and partly because those individuals who would be most likely to succeed in small holdings have been attracted in large numbers to the towns or to other countries. The northern and northwestern population is perhaps most likely to develop small holdings of an economic size. The Scottish Board of Agriculture, however, is now specially charged with the duty of stimulating the increase of small holdings. With the agrarian side of the operations of the board the organization society has no concern; but the society exerts itself in the promotion of agricultural cooperative societies among small holders and acts in conjimction with the board. In its relation to the cooperation of the smaller holders the work of the society is by no means confined to addressing meetings in order to promote the formation of cooperative societies. Not only is it found that close personal effort for a considerable period is required in order to form stable societies, but such societies when formed have been very dependent for their usefulness upon the continuous help of the organization society. It has given them constant guidance in their purchases, obtained for them the best terms with mer- chants, and assisted them in finding markets for their produce. Until last year, when a special federation was formed for the purpose, it undertook this duty even with regard to the very large quantity of eggs consigned 824 AGRICULTUKAL OOOPEBATION IN EXJBOPE. by local societies; and in relation to other matters, such, for example, as the hosiery produced in Shetland from the wool of the Shetland sheep, it still exerts itself in opening up the best markets. Perhaps in no respect, however, has it been more useful to societies than in advising them as to the purchase of seeds, feeding stuffs, and fertilizers, and even the equipment of fishing boats and the selection of stud horses. It must be remembered that, through the whole crofting regions of Scotland, little has so far been done in the way of agricultural education, and the conditions of life are exceedingly simple and primitive. It is the policy of the society to promote the development of specialized federations for trade purposes; but up to the present moment, without itself engaging in trade, the society has found it necessary to act directly as an advisory body for local associations; it has also of necessity given assistance frequently in the keeping of their accounts. The society, however, while recognizing the special necessities of the smaller holdings, directs its activities to the development of every phase of cooperation in every department of agriculture; in spite of the strong individualism of the Scottish character, and of the many difficulties which it encounters, it seems to have entered on a period of increased usefulness, and its members have every expectation of a rate of progress much greater than has hitherto obtained. RURAL CREDIT IN SCOTLAND. Statement Submitted to the Commissions by Mr. J. N. McCunn, United States Coneul at Glasgow. Glasgow. There are 10 great banks that transact business in Scotland, the head offices of which are located as follows: In Edinburgh. — Bank of Scotland, British Linen Bank, Commercial Bank of Scotland, National Bank of Scotland, Royal Bank of Scotland. In Glasgow. — Clydesdale Bank Limited, Mercantile Bank of Scotland Limited, Union Bank of Scotland Limited. In Aberdeen. — North of Scotland and Town and County Bank Limited. In London, England. — Farrows Bank Limited. Each of these banks has branches in every large city and town in Scotland, while ia the smaller towns and villages one or more of them are represented, and each of them has correspondents in every section of the business world. Credit is extended to the fanners in precisely the same way as to other customers of the banks. The account current is applicable to anyone who lodges money from £1 upward. Overdrafts are not permissible except by arrangement with bankers, and farmers are placed on the same footing as merchants and traders. When the party is considered financially sound the accoimt may be overdrawn to a limited extent for a short period. Farmers in this district can generally secure credit from the bank, for they are usually men of recognized ability, experienced in carryuig on good farms, and often have considerable sums to their credit on deposit. Tenants of small farms in some sections of Scotland, however, have difficulty in obtaining bank credit, owing to inability to give the required security. Consequently there are throughout Scotland a considerable number of tenant farmers who are not allowed the sMghtest credit by the existing banks. The local bankers are generally among the first to know when a particular farmer gets into financial diffi- culties, which makes it impossible for him to overdraw his account, as his check would be promptly dishonored should there be no actual funds to his credit. Great caution is exercised by bankers in the matter of credit by overdrafts. Local bankers are not authorized, except at their own personal risk (or unless with the consent and arrange- ment of the head office), to grant overdrafts, unless where there is a deposit of security. Title deeds of heritable property, without formal deed of assignment, do not form a pledge of any legal value. "The small landholders (Scotland) act, 1911," is being put into operation through the instrumentality of the land court, which has been sitting in various parts of the country for a considerable time, adjusting questions of rent, etc., as between landlord and tenant. This court has undertaken a large amount of work. It would be almost impossible for this act to be carried out even with Government support without banking facilities other than those existing at present. It is only when small holdings are in close proximity to some large town or center that they can be expected to be successful. If, under these circumstances, the holder wiU grow fruit or vegetables to be ready early, he will find an easy and profitable market for them. A "land bank" might extend the facilities of small landholders. The main difficulty would be one oi security, as it is almost impossible in Scotland to give a floating security over movables, growing crops, etc. An inquiry was held not long ago at the instance of the chamber of agriculture, when a report was given in SCOTLAND. 825 against the establishment of a land or credit bank, because of the want of security that coiild be given, and also on the ground that such a bank could not be run to give loans cheap enough to be of any use to a small farmer. On ordinary call deposits 3 per cent interest is paid where the amount has remained for 30 days or over, but no interest is paid where the amount has lain for less than that period of time. On time deposits for six months or over SJ per cent is allowed on ordinary sums, while if the amount exceeds £10,000, 3i per cent is allowed for a time deposit of three months or over. At present 6 per cent is charged on secured overdrafts and 6^ per cent on unsecured. Credit is given to farmers on the prospective value of their crop or cattle, and in such cases a particular period is arranged for repayment. The personal bond for the period is the only security in such cases, but the general standing of the farmer is very particularly taken into account as to the extent of the loan as already mentioned. Generally, however, credit is given entirely by arrangement, and for a period not exceeding one year. The banker,' before giving any loan or overdraft, has to be satisfied as to the purpose for which the money is wanted — such as for payment of debts or for buying new stock or implements, etc. Dealings with farmers in this consular district are considered fairly safe, and losses from loans without security are very slight. Bankers have no special preference in the event of bankruptcy. The sureties are not often called upon so far as the farmers are concerned. The surety is not hable for sums drawn on the bank over the amount mentioned. Bankers are not known to lend to farmers outside of Scotland, but they might, in special cases, to former customers who had left Scotland. It is a matter of security. Under the small landholders act, the Government is to place at the disposal of the board of agriculture (a) the annual sum of £1,500 for the improvement of congested districts in the Highlands and islands of Scot- land, and (&) any sum not exceeding £185,000 voted by Parliament for said purpose. The rural population is rapidly decreasing owing chiefly to emigration, the growing desire for change and excitement, the shorter hours in the towns, while the extent to which the laboring classes are educated tends to make the younger generation believe that the hard. manual work of a farm laborer is unsuitable for them as compared with the daintier living in towns. Generally, agricultural land is decreasing in value in Scotland, unless in the proximity of large towns. The rents of arable farms have, however, risen during the past 10 years. The rents of sheep farms have gone down considerably. The products of the land are, for the most part, rising. Hay has been a crop selling at very fluctuating prices, and straw is almost unsalable. This is caused by the great increase in motor haulage in the towns. Grain stuffs are faUing in price owing to competition from abroad. Milk, on the other hand, is advancing in price. At present there is a rise in prices of cattle and butcher meat, but this may be due to temporary causes, such as the prevalence of foot-and-mouth disease in other countries which restricts the available supply here. Agricultural wages are rising rapidly, and there is at present a strong agitation in favor of shorter hours. At present there is a bill before Parliament to give the agricultural laborer a day's holiday every week, or increased pay on that day in lieu of the hoUday. The cost of living in Scotland has increased in recent years owing to a variety of causes, the chief being the increased cost of foodstuffs. Another cause is that in nearly every town and city, as well as the rural dis- tricts, local taxation has increased to meet the growing demand for school accommodation, better sanitary methods, etc. In a great number of instances rents have also risen, and the general opinion appears to be that this is on account of heavier Government taxes being placed on landlords, who seek to recoup themselves by increasing the rents of their properties. In the case of the employer, wages have increased aU around, and he has to meet many more claims and demands than formerly under statutory enactments, such as the employers' hability act, the workmen's com- pensation act, and the national insurance act, and this gives rise to an increase in the price of the manufactured article. Then there seems altogether to be a higher or at any rate a costlier standard set up by the people at which they should aim, including not merely necessaries, but what might be termed "extras" or pleasures, such as the football field (involving traveling, better clothes, etc.), the music hall, and the picture palace. Special provisions applicable to agricultiu'al leases of land are very numerous. The first point is the destination in the lease as regards the right of the tenant. It is usually taken to the tenant and his heirs, and excludes assignees, subtenants, creditors, and heirs portioners. Legatees imder the agricultural holdings act may also be excluded. Then follows a description of the subjects let, the period of the endurance of the lease, the term of entry and the reservations in favor of the landlord. Formerly, in most parts of Scotland, the 826 AGEICULTURAL COOPEEATION IN EUROPE. period was usually fixed at 19 years, but the period -whicli formerly varied from 14 to 31 years, is now frotn 14 to 15 years, to view of the provisions of the recent finance act. There are farms in some sections of Scotland to-day held by heirs under a 99 years' lease, and in some parts of Scotland there is now a growing tendency to lease from year to year. With reference to reservations, mines and minerals are usually reserved, with right to work same on payment of surface damage to the tenant, right of the landlord to make, alter, and use roads. Also of growing timber with right to cut and remove same, and of game subject to the rights of the tenant under the ground game acts of 1880 and 1906; also all fishing belonging to the proprietor. The tenant's part begins with the obligation to pay rent at stipulated terms, and half of the annual premium for fire insurance over the buildings on the farm, and the whole premium on the insiu-ance on stock and crops to be effected in name of the landlord. The tenant generally accepts the buildings, drains, fences, and gates on the farm as in good order and repair. In the lease there are usually provisions as to the proper cultivation of the land by a system of rota- tion of cropping, the proper stocking of the farm, the consumption of all turnips or straw or fodder raised thereon, and the application to the land of the manure made thereon. At the end of the lease there are various conditions set forth as to the rights of the incomiog and outgoing tenants, respectively, relative to the way-going crop. There is usually a specification of the landlord's right to terminate the lease in the event of the tenant becoming bankrupt or by allowing the rent of the farm to run , into arrears for more than six months. Unless there is an undertakiog in the lease to remove without legal warning, both parties to the lease are generally understood to be bound to give one year's notice, otherwise the lease continues on the principle of what is known as "tacet relocation" year after year on the same terms and conditions as set forth in the original lease. The terms of these leases vary to some extent according as the farm is arable, pastoral, or partly arable and partly pastoral. A large number of very important statutes have been passed affecting agricultural leases; the more im- portant of which are the hypothec abolition (Scotland) act, 1880; the ground game act, 1880, as amended by the ground game act, 1906; and the agricultural holdings (Scotland) amendment act, 1910. Following upon these acts and the legal consideration of same, a vfery great number of cases have been settled by the law courts. Elaborate provisions are made as to the method of ascertaining the value of improve- ments made by tenants, compensation to tenants for damage done by game and various similar matters. The tenant can, by will or other testamentary writing, bequeath the lease to any person subject to the qualifications set forth in the act of 1908. Important provisions are made also in that act regarding tenant's property, fixtures, machioery, etc. Provisions are made as to the appointment of guardians of minor children of the tenant. The ground game act of 1880 gives to every occupier of land, as incident to and inseparable from his occupation of the land, the right to kill and take ground game. This liberty practically only relates to the killing of rabbits by spring traps. In certain counties in the North of Scotland landlords sometimes give lands to tenants on what are known as "improvement leases." Under these leases the tenant acquires a small farm or piece of land for a term of years agreed on at a nominal rent, on condition of bringing it into cultivation, fencing in, and erecting a dwelling house and offices suitable for a farm thereon. Under the small holders act of 1911, tenants of holdings at a rent not exceeding £50, or of an area not exceeding 50 acres, who have paid for the whole or greater part of the buildings or improvements, are en- titled, as at April 1, 1912, if they are yearly tenants, or if they hold leases, then on the expiry of their tenancy thereunder, to the privileges conferred upon "landholders" by that statute. These are (1) security of tenure; (2) fixing of a fair rent; and (3) compensation for improvements. The land court previously referred to makes the awards. COMMERCIAL BANK OF SCOTLAND. Evidence of Mr. John Roddick. Annan. Q. What is the name of this bank ? A. The Commercial Bank of Scotland (Ltd.). Q. How was the formation of the bank effected ? A. By royal charter in 1810. In 1863 the bank was placed under the company's act of that year whereby the UabUity of the shareholders (shares of £100 each) was Umited to that amount; £20 of this £100 ^^^ been called up, and the balance of £80 so far has not been called up. Of this balance £40 is liable to be called up in the event of the bank being wound up and the other £40 may be called up for the purpose of increasing the bank's capital for conducting business. SCOTLAND. 827 Q. How would capital be increased 1 A. Under reference to answer 2, the capital would be increased by calling up from the shareholders £40^ of the uncalled liability on the shares. Were this insufficient for the purpose required, an application to the courts for power to issue further capital would be the only course. Q. What rate of interest, if any, do you pay on deposits ? A. The rate of interest throughout the year varies in accordance with the Bank of England rate, which is fixed in London. Each of the Scotch banks is under a binding agreement whereby the rates charged upon loans and paid upon deposits are identical with those charged in the other Scotch banks. Rate of interest on ordinary deposit averages 2J per cent throughout the year. Owing to the stringency of money the rate during the last year has averaged 3 per cent. Q. What rate of interest do you charge upon unsecured loans to farmers ? A. The present rate is 6^ per cent, but the average rate is 5 to 5^ per cent. Q. What is the smallest loan which you will make to farmers ? A. Any amount required from £1 up. Q. What security do you demand ? A. The above rate of interest is upon unsecured loans which are only made to approved persons and for temporary purposes. If a loan is required more permanently the custom of the Scottish banks is to ask preferably for two approved guarantors. Any other security with the exception of real estate is accepted such as stock-exchange securieties; real estate never accepted by the majority of banks where avoidable. Q. Do you demand from the borrower the purpose of the loan ? A. Not necessarily if the security offered and position of the borrower is assured, but it is customary to ask the purpose for which the loan is required. Q. What is the length of time that the loans are originally made for ? A. There is no restriction to time, but both parties have the right to demand or to pay up the loan in fuU at any time. It is to be kept in view that loans made by private individuals, financial trusts, and loan companies in Scotland upon the security of real estate are generally tied up for a period of three years or five years firm, but provided the security remains ample such lenders generally leave the money lying for a much longer period. Keep in view that the ordinary chartered banks in Scotland do not favor real estate as a security. Proprietors of land are confined to private individuals, trusts, and loan companies for their money. As an instance of the length of time which a loan upon real estate is allowed to remain I may say that I have under my charge for the Annan Savings Bank (which is a separate institution from the commercial bank) loans which have remained upon the estates upon which they are charged for over 50 years. The rate per cent charged by trusts, etc., upon first-class real estate loans is fixed by commissioners in Edinburgh, consisting of the foremost legal men of that town, from time to time, and the present rate is 3f per cent. It will thus be seen that loans upon real estate and commercial loans are dealt in by different classes of the financial world in Scotland. Q. In the event of borrower not being able to meet his obligation on expiration of period arranged, if any, will renewal be granted ? A. Generally, yes; without difficulty provided there is no change in the existing circumstances. Q. What dividends, if any, have been paid by your institution ? A. The dividend upon the £100 share (of which £20 only has been subscribed) is and has been for a long period with this and the majority of other Scotch banks approximately 20 per cent upon the paid-up capital of £20. Incidentally it may be remarked that the present price of the £100 share — £20 paid only — is 76, so that the yield afforded to an investor in the shares is approximately 5 per cent. To depositors and the public gen- erally who deal with the bank it will be seen that the shareholders' liability to the bank is an additional security. Q. What disposition is made of your surplus ? A. Placed to reserve or employed to investment account. Q. What losses do you sustain ? A. Farming loans are generally very satisfactory in this respect. The losses upon general commercial risks taken by banks in Scotland so far as I am able to say vary with the class of business done. Q. Are the books of the bank regularly inspected, and by whom ? A. Each year an auditor is appointed by the shareholders of the Scotch banks to check and examine the books of the bank and to report to the shareholders as to whether they have found the same to be in order or not. The report of the auditor, who must be a chartered accountant, is thereafter filed with the Government officer known as the registrar of joint-stock companies, together with a balance sheet and profit and loss account. Q. What is the capitalization of the Commercial Bank of Scotland (Ltd.) ? 828 AGEICtrLTirEAL COOPERATION IN ETJBOPB. A. The subscribed capital is £5,000,000 in shares of £100 each, £1,000,000 or £20 per share of which is, as above mentioned, paid up. Q. Is the control ot the bank owned by any one person ? A. No. The shares are held amongst a very large number of different persons (4,939 shareholders) and no one shareholder has a holding anything like approaching a control of the capital. Q. What is an account current ? A. Accounts between customers and Scotch banks are divided into two — accounts current and deposit or interest accounts. In an account current the customer may draw by check on his account with the bank what- ever sum he requires and his balance is naturally from day to day a fluctuatiag balance. Deposit accounts on the other hand represent sums of money (generally a round amount such as £100) placed in bank by the customer, for which he gets a special interest-bearing receipt. On current accounts above mentioned no interest whatever is now paid by Scotch banks, although untU 15 years ago it was customary to allow a small rate of interest on the fluctuating balance. Some English banks to this day allow interest on fluctuating cyrrent account balance, but not so the Scotch banks. IRELAND. 829 IRELAND. SUGGESTED SOLUTION OF THE RURAL PROBLEM. Address by the Rt. Hon. Sir Hohace Plunkett, K. C. V. 0., President Irish Agricultural Organization Society. Dublin. The conference to which I have the honor to welcome you is unique, both in its composition and in; the purpose for- which it has been convened. You set out from North America accredited by Governments, Federal and State, dominion and provincial. After a careful study of life and labor on the farm lands of Europe, you entertain the hope that you will be able to exert an elevating influence upon the rural side of your civilization, which you feel has somehow failed to maintain the standards of national progress claimed — and rightly claimed — for your land of promise. We who receive you here have not traveled so far, and have no official character or status. But we have this in common with you — we are English, Scottish, and Irish workers in that neglected field of social service upon which your investigations and report are expected to throw new light. Some of us have devoted our best years to the cause. All of us have based our efforts upon the experience of the countries from which you have just returned. So you see that your commission is studying, and that the agricultural organization societies to which we belong are working upon a problem profoundly interesting to all who are concerned for the future of the United States and the British Empire^the problem of rural life. The imagination to which such a meeting as this made no appeal would, indeed, be dull; and poor would be the spirit which did not feel a glow of pride at the prospect of assisting you in your great inquiry. To us there is the additional incentive to serve you; in any help we may be able to give you we shall not only be honoring, but also helping, ourselves. SECOND STAGE OF THE INQUIET. If we are thus qualified to understand the meaning and purpose of your mission, you have most assuredly come to us at your psychological moment. When you landed upon our shores you had reached the second of the two stages into which your inquiry naturally divides itself. In the first stage your study of the economic and social life of typical rural populations on the continent of Europe wiU have brought home to you the basic fact of the entire situation with which you have to deal. You will have observed that these communities have a rural economy which differs fundamentally from that which obtains with you and with us. Your examination of their methods in agricultural production, distribution, and finance will have brought it home to you that, in the four essential matters to which your especial attention is called in the general instructions governing your inquiry, the way these farmers conduct their business is far in advance of the agricultural methods with which we are familiar. Furthermore, you will have observed that the difference between the two cases lies in the matter of organization. These continental agriculturists work together; ours persist in working separately. And this in days when every important industry and business must be done on a large scale if it is to hold its own — when, in the complicated interdependence of agricultural and industrial activities, the organized industries prey upon the unorganized. PRECISE PROBLEM TO BE SOLVED. Everywhere you will have found that the organization of farmers is achieved through the application of the cooperative principle to agricultural production, distribution, and finance, and that this procedure is regarded, not only as being necessary to the economic salvation. of the farming industry, but also as an essential of the structure of any progressive rural society. Last, but not least, although this is outside your instructions, you wUl not have failed to notice that the fact of being organized on business liaes for business purposes enables farmers to compel due attention to their needs at the hands of the legislatures. Before you landed in Italy— when you had merely discussed the object, scope, and method of your inquiry— you must have known that the question uppermost in your minds when you reached this second stage would be, "How can the lesson of all 831 832 AGEIOULTURAL COOPBBATION IN EUBOPE. that we have seen and heard in our journeyings be best applied to the rural economy of the Western Hemisphere ?" Now, however; that question will have assumed a more concrete form: "How can our farmers be enabled and induced to reorganize their industry, their business, and their lives on cooperative lines?" It was this view of your inquiry and of its possibilities that seemed to demand, as an essential part of your proceedings, a conference between yourselves and those who are engaged in dealing with the identical problem in the British Isles. The choice of this house for our meeting is not without significance. It is the headquar- ters of the Irish Agricultural Organization Society, which directs the movement, founded nearly a quarter of a century ago, to do for the Irish farmers the very thing which, unless I have wholly misconceived the character of your inquiry, it will be your chief desire to get done for American farmers. This cooperative movement has spread from Ireland eastward over Great Britain, where the English and Scottish agricultural organization societies (formed on the Irish model) are actively promoting it. What is more remarkable, and will be more interesting to you, is that a similar movement, to which I shall revert before I close, has been launched under the most promising auspices in the United States. PURPOSE OF THE CONFERENCE. My fellow workers may, perhaps, be pardoned if they feel that their scheme for a new rural civilization to meet the needs of our little island has some resemblance to the biblical grain of mustard seed. But it is in no insular, still less in any boastful spirit, that I mention these outgrowths of an Irish idea. I have thought it right to make it clear why the reception committee in London, with the cordial approval of your distinguished ambassador (one of the foremost thinkers upon American rural problems), decided that the leaders of the three agricultural organization societies in the United Kingdom were the persons best qualified to aid you in the second stage of your inquiry. You would then be considering at least the general character of the message in which you would convey the inspiration of the best agricultural thought and work of Europe to the farmers of the United States and Canada. And as you were studying and we were working upon the same problem it was surely a happy thought of the Southern Commercial Congress that we should see how far we could help each other by an exchange of experience and ideas. PROBLEM COMMON TO THE ENGLISH-SPEAKING WORLD. The purpose of our conference will now be clear, but if it is to be fruitful in practical results, our counsels must be based upon at least a general agreement as to the elements of the problem we are to discuss. It is, further, necessary that you who inquire of us should have in your minds the conditions to which our work relates, and we who desire to aid you in your inquiry should have some knowledge of those special features of American agriculture, which will have to be considered in any similar social work which you may recommend for your countries. The circumstances of my life having brought me, I may almost claim, into equally close touch with rural conditions in your countries and ours, it was thought proper that I should outline as briefly as I can what has been our experience in trying to solve problems of rural reconstruction, and, secondly, that I should state clearly what are the convictions which that experience has burned in upon our minds. Our rural conditions differ, of course, widely from American rural conditions. But in its broad human aspects the modern problem of rural life is common to every country in the English-speaking world. Upon the eleinents of that problem I must now say a few words. ORIGIN OP THE PROBLEM. In the fall of 1910 I perpetrated a book. It was of modest proportions, but bore the somewhat ambitious title "The Eural Life Problem in the United States." I was moved thereto by the report of the Country Life Commission, and by the agricultural aspects of the conservation movement, which has since shown signs of what I believe is only a temporary reaction. I opened the book with the proposition that "in the United States, as in other English-speaking communities, the city has been developed to the neglect of the country. I proceeded to outhne a scheme, designed to readjust the balance of our (as I argued) dangerously one-sided civilization by restoring the oldest industry — in a sense the only absolutely necessary industry — to its proper place in the economy of the nations to which we belong. I mention this book because some of you may have done me the honor to read it, and I shall be repeating things which I have there said more lucidly than is possible now. I can here do no more than give you a precis of what was itself but a brief analysis of the problem. According to the view I now submit, our problem, recognized but yesterday by statesmen and economists, had its origin in the industrial revolution (the name, as you know, given to the economic changes produced by the first large application of science to mechanical industry), which began in England in the latter half of the eighteenth century. Then was struck what has ever since been the dominant note in the national policy of the rBBLAND. 833 Anglo-Saxon peoples. Both in England and in the countries which are still influenced by the example she set in the years of her greatest national expansion, an increasing subordination of agriculture to commerce and industry has characterized the attitude of public opinion, and consequently of Governments toward the several interests and occupations in the national economy. It has been assumed — and until the last few decades the assumption was probably true in its hard facts — that the political strength of a country depended upon indus- trial development at home and commercial expansion abroad. Not only the economic theorist but the phi- lanthropist as well allowed the statesman to proceed as if the age of the city and the factory had come to stay, and the farmer's industry and home were matters of secondary national concern. That was essentially what we may call, for brevity and convenience, the Enghsh policy. In the countries you have visited the fear of invasion necessitated a military regime which was not at the time conducive to industrial progress. There was, however, the compensating advantage that from the military point of view the moral and material upkeep of the rural population was at least as important to the safety of the nation as the development of urban indus- tries. This may be the reason why in these countries the attention given to the education of those engaged in farming bears a closer resemblance to that given to those engaged in other occupations than is the case with us. And this appUes not only to technical but also to general education, to which we must look for the devel- opment of the commercial instinct in the rural mind. How far the universal adoption of the cooperative sys- tem, so soon as it became an economic necessity, is due to the indirect effect of education and how far to direct propagandism I do not pretend to say. But at least the education and the circumstances just mentioned, taken together, prepared the way for the cooperative organizer. EFFECT OF ANGLO-SAXON ECONOMIC POLICY ON AGEICULTUKE. I can not here enlarge upon the social, economic, and political consequences of the" English policy. Enough to say that, by general admission, rural society has been retarded in its development and is not in line with the progress of the age. Almost everywhere, even, with a few exceptions, over the immense areas you represent, there is a tendency to regard the oldest and the most honorable of human occupations as offering no career for those possessed of enterprise, initiative, and resource. The rural exodus is ever taking all that is most progres- sive in the country population into the cities. Farm labor is declining both in quantity and in quahty. For a time it was assumed that what the country lost the city gained. Now, however, the question is being seriously asked. How far does the modern city, which takes pride in its marvelous progress in every branch of civil life, depend for the physical as well as the 'mental and moral health of its population upon the constant influx which it has enjoyed for many decades of aU the best country blood? If this source of the higher citizenship be de- pleted and deteriorated, is there not a danger that the city may suffer with the country and national degeneracy set in ? But why speculate upon any other phase of national evolution when you are faced with the astonishing fact that in the United States — a country so blessed by nature that with reasonable husbandry its food exports should be increasing — the growth of the population is gaining so fast upon the production of food that in a few years the workers upon your farm lands will not be able ,to feed the workers in your cities. If the necessary condensation of the foregoing survey of the problem we are discussing has not obscured the argument, our basic fact, as I have called it — that is, a defective rural economy in the Enghsh-speaking portions of the globe — is the result of the English economic pohcy which is predominantly commercial and industrial, whereas the analogous continental pohcy is agricultural as weU. The solution of our problem wiU involve the introduction of the agricultural element into our pohcy. lEISH RECOGNITION AND PKACTICAL TREATMENT OF THE PROBLEM. It was the Irish mind which first rebelled against the Enghsh pohcy — not, -as you might imagine, because it was Enghsh, but on the merits of the case. We determined not to wait until the national conscience and intelligence were aroused to the evil tendencies of a mistaken attitude of pubhc opinion, but to take prompt, vigorous, and effective means for dealing with the agricultural conditions of our own corner of the United Kingdom. A similar determination led to the British and Scottish movements, upon which others will speak to you, and I expect your mind is moving in the same direction. I will now tell you of the beginnings made in Ireland to apply the lessons of European rural progress to the agricultural life of this country. Ireland will serve best for the purpose of illustrating the story of the agricultural cooperative movement of the United Kingdom for many reasons. In the first place the movement had its origin here, and has had to surmount every kind of opposition which the wit of man cpuld devise. This country offers exceptional advantages to the inquirer into the principles and working methods of agricultural cooperative organization. In no other division of the United Kingdom are both the population and the wealth of the country so pre- 14174°— S. Doc. 214, 63-1 53 834 AGEICULTUEAL COOPEBATION' IN BTJEOPE. dominantly agricultural. This small island also contains aU sorts and conditions of rural folk, from the most Individualistic to the most associative — I doubt whether a greater variety of rural characters, temperaments, and capacities is to be found in any other country. But what, I take it, will make the work of rural recon- struction in Ireland especially interesting to you at the present time is the fact that it was conceived as the logical and necessary complement of an agrarian revolution. For these reasons Mr. Yerburgh, Lord Shaftes- bury, and Dr. Douglas, who occupy the highest positions in the English and Scottish movements; Mr. Henry Wolff, the first authority on agricultural cooperation in these islands, if not in Europe; and Mr. CahiU, the author of the latest — and may I add of the admirable — work upon rural credit, all agreed that the British and Irish movement should be presented to you in this country both in its theoretic aspects and in its working details. IRISH AGRICULTURAL MOVEMENT. In the year 1889 the end of a conflict, centuries old, between a small class of landlords and a numerous class of not very prosperous tenants was in sight. Gladstone had eight years before carried through legisla- tion which made a vast improvement in the position of the tenant, gave him permanence of tenure at a rent fixed by a State tribunal, with the additional right of selling to the highest bidder the interest in his holding, to which had thus been given a new and greatly enhanced value. On the other hand, a new and disturbing factor in European agriculture — foreign competition — had made its appearance. With the development of rapid and cheap transportation the markets of Europe began to be supphed with the abundant produce of vast tracts of virgin soil newly opened to settlement, notably in the Mississippi Valley. The old-country farmers were hard hit, the Irish tenant losing as much in his industry as he had gained in the improved condi- tions of his tenure. This led to dissatisfaction with the land legislation. The rents had been greatly reduced, and this displeased the landlord. The lessened profits of his industry made the tenant feel that his rent was stiU too high. It was generally accepted that the only way out of the difficulty was to abolish the landlord and tenant system, and for the State to step in and finance upon liberal terms the transfer of the landlord's interest to the tenant, and make him sole proprietor. This, as no doubt you are aware, is now the accepted policy of all parties. This huge operation will, from first to last, require the use of the State's credit to the extent of some 200,000,000 pounds sterling. When the situation I have described first became clearly defined, a few Irishmen, myseK among them, set themselves to prepare the farmers for the immense task which lay before them. In the first place, foreign competition had, as I have said, made radical changes in the conditions of the farmer's industry. The market which he suppUed — chiefly great masses of artisan populations in manufacturing cities — required that food should be consigned to it regularly in bulk and of uniform quality. If farmers were not organized they could not fulfill these conditions of the world market (as the economists now began to call it), and a horde of middle- men, or, worse stiU, a highly organized "combine," would come in between the producer and consumer, and exact tribute from both. That, I think, is your experience in America to-day. In the times of which I am speaking we had the very educational experience of being beaten in the EngHsh and even in the Irish markets in such commodities as butter, bacon, and eggs, for the production of which we are exceptionally favored. It was then that we Irish, compelled by the circumstances I have indicated, began to make the kind of inquiry into the rural economy of our competitors on the Continent that you have just completed. The lesson we learned, put in the fewest words, was this : The success of our continental competitors was due to a combination of organized voluntary effort, with judicious State assistance. Both were necessary, but the part played by the Governments was of insignificant importance compared with the astonishing po- tency of cooperative production and marketing. Everywhere, too, the cooperative organization of the pro- ducers was not only highly effective as a method of business, but was the secret of the political power which enabled the farmers to get the assistance they needed at the hands of the Government. We, therefore, set ourselves to introduce agricultural cooperation into Ireland, and then, upon a foundation of organized self- help, the best definition I know of cooperation, to build a system of sound educational State aid. We began with the dairy industry in the south of Ireland, because it offered just then a unique opportunity. The industry was going through what might technically be called its industrial revolution — the old home methods were bemg supplanted by the factory method. But our farmers, not understanding how to organize for business purposes, could not do better than sell their milk to outside capitalists. These men were not here for their health nor for our benefit. They were under no obligation to give our farmers more than the milk was worth to them under the discarded domestic methods. Before we began an attempt had been made to organize our farmers to do their own dairying business for their own profit. But the attempt was made upon the only system of combination which was understood — the ordinary joint-stock plan. These companies all broke down, simply because the joint-stock system is, as I have pointed out, not suitable to the farmer's industry. Under far less lEELAND. 835 favorable conditions we organized creameries on the cooperative plan, and to-day cooperative societies, founded upon the ruins of the joint-stock companies, are producing some $10,000,000 worth of butter under a system which gives the entire control and profits of the industry to the farmers themselves. Some of these societies you will, I hope, see on your way to Queenstown. From the small beginnings of a single creamery brought to birth after infinite propagandism — my own pergonal efforts including exactly 50 meetings before I succeeded in organizing the first society — these insti- tutions multiplied, and the cooperative principle gradually established itself in the Irish rural mind. To-day there are approximately 100,000 farmers in this little island engaged in various forms of agricultural coopera- tive effort, and accounting probably, with their famihes, for 500,000 of the population. I expect that within a very short time the number will be doubled. They combine together to buy seeds, manures, implements, machinery, and other agricultural requisites; to market poultry, eggs and other kinds of produce. In one in- stance — at Roscrea, in Tipperary — between 3,000 and 4,000 small farmers have provided the necessary capital, and embarked upon the highly technical and ambitious project of a cooperative bacon factory; while at Wex- ford a similar project for the cooperative disposal of beef, mutton and pork is being wisely and cautiously under- taken. Other societies have been formed to treat the flax crop between the harvest and the sale to the spinner. Credit societies have been formed on the Raiffeisen plan, and to the development of this system we look for the economic and social redemption of the most backward and debt-laden of our rural communities. Many other farming purposes are embraced in the activities of the societies. The total business transactions of the movement will aggregate, roughly, this year some $15,000,000 of your currency. We do not attach any im- portance to the amount of business done, which we know full well is as yet far too small. All that we do claim to have achieved is that we have successfully demonstrated that the cooperative system is capable of enabUng the farmer to produce and distribute efficiently and economically, and at the same time to finance both these operations. STATE AID UPON A FOUNDATION OF SELF-HELP. In Ireland the political influence of the cooperative movement has been commensurate with its business success. Under the laissez faire doctrine, as it is called, the policy of strict abstention from any interference by Government — even by way of technical education — with the business of the people was carried to the length of withholding the kind of assistance which every other European Government was giving to its farmers. No department of government was specially concerned for the welfare of the workers upon the land. The effect of such neglect upon a country Hke Ireland, dependent absolutely for the welfare of all classes upon the produc- tivity of what is sometimes called its single industry, I leave you to imagine. The poUtical influence developed by the organized farmers enabled them to obtain from Parliament the department of agriculture and technical instruction, which gave you an official reception this morning. The demand for this concession to the farmers was formulated by the recess committee, which was organized in 1895, and reported in the following year. This body, so called because it sat in the parhamentary recess, was an unprecedented union of Irishmen of every variety of political opinion, religious behef, and business occupa- tion — a union made possible by the new spirit of cooperation in the country. The procedure of the committee will be interesting to you. Before considering their report they made, through very able commissioners, an extensive inquiry into the rural economy of nine European countries whose agricultural progress were held to have lessons for Ireland. The commissioners were instructed to distinguish very carefully between the parts played respectively by Governments and by voluntary associations in agricultural development. A special feature of the unanimous report of the committee was its insistence that any help given to the farmers should supplement but in no sense provide a substitute for the organized voluntary effort which, it was recognized, must be their main rehance. ATTITUDE OF BRITISH PARLIAMENT TOWARD ORGANIZED AGRICULTURE. One other important political result' of the organization movements must be mentioned. All the Gov- ernments in the United States and the British Empire are more or less concerned to stop the rural exodus, and to settle a prosperous and, if possible, a numerous population upon their farm lands. In England there has been of late a good deal of legislation f aciUtating the acquisition of small farms for farmers with httle capital. It is felt that this scheme is bound to fail unless these farmers practice cooperative methods. You will be told by the representatives of the English society how it has been called in by the English board of agriculture to aid in the working out of its small-holdings policy. The Government in 1909 created what is known as the devel- opment commission, which is liberally endowed mainly for the purpose of "aiding and developing agriculture." Among the means specifically mentioned by which this was done a prominent place is given to "the organi- zation of cooperation. " The question at once arose. How could money appHed to this purpose be administered ? 836 AGEICTJLTUEAL COOPBEATION IN EUROPE, There were four possible ways of giving effect to the intentions of Parhament in this matter. The money might be handed over to the department of agriculture. It might be intrusted to the local administrative bodies which already have important functions in connection with technical education. It might be given to educa- tional institutions. These three alternatives the development commissioners considered and rejected. They came to the conclusion that the work could be done efficiently and economically in one way only, and that was by utilizing the agricultural-organization societies of England, Scotland, and Ireland. The reasons for this decision, the significance of which you will not fail to appreciate, I will reserve until I come presently to the same question, as it is arising now in the United States. SOCIAL EFFECTS OP AGRICULTURAL COOPERATION. I come now to the most interesting aspect of the movement — its social aspect. I feel that to you, no less than to us, it is the most important as well, but I must only touch upon it briefly, because it wiU be the sub- ject of a paper by the editor of the Irish Homestead on Tuesday morning. To him I gladly leave the subject, for he has leapt into prominence as the most illuminating writer upon the rural problem that these islands have produced. Mr. George W. Russell was known to a wide circle as a poet, painter, and mystic long before any one suspected that the familiar letters "A. E." might be taken to mean agricultural economist. In my five and twenty years of Irish work my more than sufficient reward has been the friends it has brought me. None has done more to smooth my path than this friend with his keen and subtle intellect, brilUant wit, imagina- tive charm, and splendid vision. And if some of you think that poetic fancy may be a strange mate to such questions as the marketing of butter and eggs and the problems of a credit bank, I would renaind you that the Irish poet who sang of the "deserted village" had a clearer vision of the rural problem more than a century ago than any economist or statesman since. MEANING OF THE IRISH FORMULA BETTER FARMING, BETTER BUSINESS, BETTER LIVING. Upon the social aspect of agricultural cooperation, then, I will only say what is required to make you under- stand its precise relation to the other parts of our rural problem. I have told you of the abohtion of the land- lord and tenant system. In effect the result of this legislation was the sweeping away of the whole fabric of our rural society. The legislature did nothing — laws could do very little — toward the building up of the new order. This must be left to voluntary effort. We in Ireland had, therefore, to formulate a theory, and elaborate a plan of rural reconstruction. We accomphshed our task after much study in foreign countries, supplemented by practical experiment at home. If Ireland has contributed anything to the solution of the rural problem it is to be found in two cardinal propositions — one of principle, the other of procedure. The first is that you must approach the problem on its three sides. You must regard agriculture as an industry, as a business, and as a life. Into the industry you must introduce the teachings of modern science, as it has been introduced into every other important industry. Into the business must be imported methods of combination simply because under modern business conditions transactions must be on a large scale to be economical. The hfe of the rural community must also be modernized by making it physically more comfortable, mentally more stimulating, and socially more satisfying. You know — indeed, I think some of you have done us the honor of adopting our Irish formula — better farming, better business, better hving. That idea, the necessity of dealing com- prehensively with the problem, in its practical, in its commercial, and in its social aspects is the chief con- tribution that we have made to its solution. The second Irish proposition relates to the order in which the three parts of the solution must be operated. We hold that you must begin with better business, because it is found to be a condition precedent to both better farming and better hving. It is a condition precedent to better farming, for a reason which I can give you from administrative experience, as I was the working head of the Irish agricultural department for its first seven years. You have no effective agency for imparting the technical instruction or even the useful information, both of which it is the province of the Government to provide, until you have bodies of farmers organized, not for the nominal purpose of helping the Government, and too often merely for getting subventions from the Government, but for the purposes of their own business. I could write volumes — but here I have no room for sentences — upon the waste of splendid educational effort in your country owing to the lack of business organiza- tions of farmers to cooperate with those who desire to improve their husbandry.^ The social reason for maldng better business the foundation not only of better farming but of better liviiig as well, is also a matter of experience. It is found that when men come together in the business of their lives, 1 I am quite aware that almost every form of agricultural cooperation is to be found in the United States, but I doubt whether 1 per cent of the agricultural business of that vast area is transacted cooperatively. Many organizations calling themselves cooperative are not really so, both the control and the profits belonging to the shares. IBBLAND. 837 and have found it to mutual advantage to do so, it is much easier to get them to come together for the higher purposes of intellectual and social advancement in the community life. There are, as you know, certain dis- tinguishing characteristics of the cooperative system — notably its democratic principle of one man one vote, in the control and its distribution of the profits over the business done rather than over the shares. The social bearing of these provisions, a subject to which I would have devoted a good part of my address if you had not already made so much study of cooperation where it is to be seen in its highest achievement, can not be further treated here. Enough to say that cooperative organization develops a social spirit which is the antithesis of the selfishness engendered by the capitalistic joint stock system of combination. I personally place a far higher value on the social effects of cooperative organization than upon its economic benefits. AGEICtTLTUEAL ORGANIZER. Such is the Irish idea of rural reconstruction. It remains to describe the method by which it is put into practical operation by the English, Scottish, and Irish organization societies. For the constitution and the details of the work of these bodies, I may refer you to their literature which has been circulated among you. But you may want to know exactly how their work is done at the point where the thought of the movement takes practical effect in the working lives of the rural population. The actual building up of cooperative asso- ciations among the farmers is the task of a new type of social worker- — the agricultural organizer. He must be a man of somewhat exceptional qualities and with a good deal of special knowledge and training which is not easy to get. He must be a man of cheerful disposition and of infinite tact and perseverance. He will require the patience of Job, with whose comforters he is sure to be surrounded. He must be a good judge of men, so that he will know whom he can trust to help him. He must know when the purely material benefits of the movement should be expounded and when the higher considerations should be emphasized. He must have a general knowledge of economic principles and a fairly good commercial education. He must be able to express himself concisely and clearly, and be a good correspondent and have a shrewd eye for accounts, in order to keep a hold over the societies in his district . But, above all, he must be thoroughly at home in the whole philosophy, science, and art of cooperation, for your organizer must be able to demonstrate the necessity for cooperation and to explain how it differs from the joint-stock form of combination; he must be able to make clear what are the sound principles which are the basis of each particular type of organization, whether it be a credit bank or a creamery or an agricultural society for the purchase of seeds and manures. He must be a master of the details in each organization and able to bring home their importance to those beginning a cooperative enter- prise. The organizers of cooperation, who will be the itinerant instructors of the country in this subject, must be men of wide experience and understanding both of human nature and of social institutions and how they work. APPLICATION OF FOREIGN EXPERIENCE TO KUEAL PROBLEM OF UNITED STATES AND CANADA. I have now presented the problem of rural life in its broadest aspects as it affects the civilization of the English-speaking world. I have shown how the recognition of that problem, first in Ireland and then in England, Wales, and Scotland, resulted in a scheme for an all-round reconstruction of rural life— a scheme based upon cooperation in business, which was found to be a condition precedent of technical efficiency on the one hand and of a satisfactory social existence on the other. I have thus fulfilled the special task assigned to me. But I must not forget that you may wish to elicit opinions from the leaders of the British and Irish movements, and from those actively engaged in the work, on questions which would arise whenever a reorganization of American agriculture upon Old World cooperative lines is contemplated. To my friends here, therefore, quite as much as to you, I shall now speak briefly upon a few features of your rural life and upon some quite recent events in your country which must be borne in mind when definite action within the scope of your inquiry is under discussion. The outstanding fact of the rural situation in the United States is the ending of what we may caU the pioneer stage. It is only now that the vast area of fertile land which lies between the Appalachian Eange and the Rocky Mountains is aU occupied. While there was still free land it was more profitable to exhaust the soil and move on than to maintain its fertility. In the circumstances it was a waste of breath to preach good husbandry. To-day you have this paradox: In your Federal Department of Agriculture, your univer- sities and agricultural colleges, and your agricultural press — to say nothing of the excellent agricultural articles which figure increasingly in your daily and weekly journals and magazines — you have provided education and useful information for your farmers in a degree and of a quahty which can not be surpassed in any European country; yet American agriculture, by the test of the yield of the staple crops, is the least productive to be found in any civilized country except Eussia. 838 AGEICULTTJRAL COOPEEATION IN EUROPE. Passing from the practice to the business of farming, there is the same glaring contrast between the enter- prise, intelligence, and resourcefulness of your people as a whole and the almost total, lack of the commercial instinct in the most important body of your wealth producers. In a letter, forming a part of a lengthy correspond- ence in which I vainly tried to commend to Mr. Lubin the wider scope of your inquiry, so strongly indorsed hy your president and the two ex-presidents, he writes: "The only man behind the times in the United States is the farmer." But he hastens to add, "not because he does not understand prganization, but because he has no cash, no open account. Give him that and he will have the rest." Here Mr. Lubin (to whose splendid initia- tive, indomitable courage, and exemplary perseverance I pay my humble tribute) and I must agree to differ. Upon the issue between us, which looks very like a discussion as to which is the cart and which is the horse, you will hear from Father Finlay (my fellow worker in the Irish movement for over 20 years) on Monday, and I will say very little. I hold strongly that until farmers have fallen into line with the economic system of your and our country by organizing their business they can not themselves know the character of the security they have to offer and therefore will not have credit or get cash adequate for their requirements. For this reason alone I should rejoice that you have decided not to restrict your inquiry to the financial aspects of your problem. But there is another and more cogent reason against the narrower inquiry. Had you not set yourselves to study the problem of rural life in its entirety you would not only have failed to grasp the significance of the rural econo- mies you have been investigating; you would not only be as much behind as you ought soon to be in advance of the thought and action upon the rural problem in these islands, but when you go back to America you would find that public opinion upon your own subject had left you far behind. For since you went on board the Saxonia, the Federal Government and a body of voluntary workers have, each within their proper spheres, initiated- a remarkable and, as I believe, a sound, practical, and effective movement for which the support of this commission is urgently demanded and will, I feel sure, be cordially granted. I allude, as some of you at least must know, to the recent establishment within the Federal Department of Agriculture of a rural organization service, with the eminent economist Dr. Carver at its head, and the founding of the Agricultural Organization Committee of America, under the presidency of Mr. Gifford Pinchot. Associated with hiin in this project are such men as Dr. Charles McCarthy, of Wisconsin — a practical statesman if ever there was one; Charles Barrett, president of the Farmers' Union, the largest agiicultural association in the world; Senator Newlands ; Lawrence Godkin, son of the famous journalist, who has specialized in cooperative law; and that patriarch of rural progress in the Middle West, Henry Wallace. The coming of these two new and important agencies, specially designed for the solution of your problem, raises and makes urgent the settlement of an issue contained in the first of your instructions. You have to report upon "the parts played, respectively, In the promotion of agriculture by the governments and by the voluntary organizations of the agricultural classes." Upon this vital question no body of men have thought more earnestly or feel more deeply than the Irishmen in this room. But I realize that it would be whoUy improper to pursue the matter in its Irish aspects, as it has given rise to a heated controversy which, I believe, the mere fact of your coming to Ireland wUl do much to allay, and you may rest assured that however we may differ in other matters we are unanimous in our desire to give you a good time while you are with us and unclouded memories when you have left our shores. Whatever may be accomplished by the governmental and the voluntary agencies of rural reform which I have just mentioned, it is quite certain that you will have recourse to joint action of this kind in America. I think it well, therefore, to say a few words upon the general principles which seem to us here to be established with regard to the particular instruction to the commission, which we are now discussing. FAULTY TEKMINOLOGY. Here I want to say a word upon a matter of -more importance than might appear at first sight. You will notice that both the institutions I have just named, the official and the voluntary, have the same word "organ- ization" in their title. I regret this, because in a complicated question upon which public opinion has yet to be formed terminology counts for a great deal, and using the same word for two different things confuses thought. I am convinced that the use of the word "cooperation" in official circles in the United States has done a great deal to hinder the growth of the kind of cooperation you are concerned to promote. The word seems to be used whenever two governmental bodies work together or a governmental body works with a voluntary agency. "Cooperative education," "cooperative demonsttation work" are instances. Some years ago I urged upon some of the officers of the Federal department that the word "coordinated" (which has the advantage of bemg quite as long and even more sonorous) should be substituted for "cooperative," and I still hope that this may be done. lEELAITD. 839 But, leaving names and returning to things, I desire to suggest the clear line of demarcation between gov- ernmental and private initiative and administration in the field of work which we are considering. The Govern- ment may legitimately and usefully provide for any body of citizens all the education and aU the information which is needed for the efficient conduct of whatever business occupation they may be engaged in. Part of this education and information may relate to the organization of business, whether it be on the joint stock or on the cooperative plan, but the actual organization of the bodies of workers for the conduct of the definite business operations must be left to private initiative and responsibility. As in the case of our development commission, to which I have alluded above, it is quite legitimate to give public funds, to supplement moneys voluntarily subscribed by philanthropic persons for doing this work, simply because, unless the whole of my argument is a mere waste of my own and your time, it is vitally important that this reorganization of the chief industry of all nations should take place. But governmental money should only be thus applied until the beneficiaries so well understand the economic advantage of the reorganization that they will have no excuse for not providing all the money that is necessary to bring it about. Further, where communities are economi- cally depressed, as is the case in many parts of Ireland, this form of indirect governmental assistance may be continued. But in no case must official persons do the administrative work. In the first place, if any prin- ciple has been established since the organization of farmers to do their business cooperatively has been a recognized social service, it is that this work must be directed by social workers and not by public officers. Otherwise you will bring the Government into conflict with important interests. This is truer now than ever, for a reason to which I would call your special attention. HIGH COST OF DISTEIBXJTION AND THK REMEDY. One of the chief factors in ripening public opiaion as to the necessity of agricultural cooperation is the rising cost of living in the United States. It is beginning to be felt that this is largely due to the failure of farmers, from lack of organization, to get their produce to the consumer without a preposterous addition of middle profits to the price. I saw the other day an interesting generalization upon this anomaly by a committee on distribution in a report made to the Wisconsin State Board of Public Affairs. "Never before," this commit- tee say, "have we had such ample facilities for distributing and marketing the products of the farm as now, and yet it is costing more to get these products to the consumers than ever before. Indeed it is costing more to market food products than any other class of products we sell." In a recent report by the committee on markets of the New York Industry Commission it is shown that the middleman's charges on food coming into that city vary from 16.19 to 160 per cent of the price which the farmers receive. I need not, however, commit myself to figures and details. Secretary Wilson, before he left your Department of Agriculture, where his long and distinguished service wUl ever be gratefully remembered by the American farmers, startled the world by his denaonstration of the immense cost of getting the country's food from the producer to the consumer. I do not think it wiU be disputed that as long as this state of facts exists you wUl never be able to get either the brains or the capital of American farmers properly applied to production until they find some means of escape from a business situation which gives them, to say the least, a precarious hold upon the profits of their industry. The way of escape is no other than cooperative organization, and that is why the last of your instructions called upon you to inquire into the relation of the cost of living to the business organization of the food-producing classes. But you wiU see that the eliminating of middle profits is involved, and I need not tell you that as middle interests are highly organized and agricultural interests are not, any official attempt to adjust matters between them is more likely to wreck governments than to rescue farmers. BUSINESS COOPERATION AS A FACTOR IN UPBUILDING OF A RURAL COMMUNITY. When you come to the part which cooperative organization may play in the social improvement of your rural communities you are confronted with one comparatively new factor which will be somewhat surprising to my British and Irish friends. There is a marked tendency throughout the United States from occupying ownership to tenancy. It is extremely difficult to get people who have no abiding interest in the place of their habitation to concern themselves for all those things which must be attended to to insure a progressive and agree- able social life in a community. Again your rural communities are often badly handicapped in their social life by the fact that they contain groups of different nationalities, sometimes speaking languages unintelligible to each other. Finally, the great distances which often divide the rural inhabitants in your huge country are a formidable obstacle to common action. I mention these adverse factors not as a reason against, but as a reason for, cooperation. Cooperation is the best— I might almost say the only— foundation for a rural community. It will go far to put an end to the migratory habit and to create a desire to have a permanent home and a progressive social existence. A good cooperative organizer can teach farmers how to make use of the telephone 840 AGEICULTTJBAL COOPEBATION IN EtTEOPE. and the motor car in discussing and conducting their common affairs and thus overcome the difficulty of dis- tance. In fact, it is one of the marks of a good organizer that he can apply the general principles of organization, which are always the same, to the different circumstances of different districts. It provides, immediately, a common interest; later, a common understanding, and is a far more effective bond than a common language, which, without cooperation, as we here know, may only be a vehicle for giving emphatic expression to our antipathies. In this matter the experience of the Irish movement is not only relevant, but to those who have found, as I have, that in these problems the more the external conditions differ the more the human factor stands out, it is convincing. The members of the governing body of the Irish Agricultural Organization Society, most of whom are democratically elected by the farmers' cooperative societies, work together in a spirit of such ideal brotherhood that it strains the imagination to realize how violently their opinions differ in other matters. COOPERATIVE SPmiT. All this is easily understood by those who have grasped the truth that the cooperative movement is one of the spirit. The spirit reveals itself in many forms. But the unity behind all, and that which holds together the whole fabric, is the spirit. You can set up machinery, you can reproduce the mechanism of successful models, but if you have not the spirit pervading the whole society which makes it truly cooperative, you have no security against the preversion of the cooperative movement from within or its overthrow from without. But if you have the real spirit behind it you wiU be able to face and to overcome both of these difficulties and dangers — difficulties and dangers which, allow me to utter the warning, will have to be faced in the United States and Canada as well as in the United Kingdom, in France, in Germany, and in other countries. You have been giving a great deal of your studies to the very vital problem of cooperative finance, both what is called "long term," or "real credit," and "short-term," or "personal credit." Finance is, indeed, a vital part of the cooperative organism, and in all forms of cooperation the goodness of the financial system depends on the presence of the true cooperative spirit. There was never a purer embodiment of that spirit, than in the ideals of Raiffeisen. No movement ever realized more clearly than the RaifiFeisen movement that cooperation to be real and abiding must rest on the spirit of self-help among its members. No movement was ever more inde- pendent in spirit. And that Hes at the root of aU true cooperation. That, too, is one reason why cooperation, if properly and purely explained to our peoples who have been so nurtured on the doctrine of liberty, shall yet seize upon and hold their imagination. SELF-HELP AND SELF-GOVERNMENT. There is nothing more vital for the cooperative movement as it is to-day and for its future, than that it - should clearly sound out this note of self-help. Looking not only to the future of America, but at the movement in the old world to-day, this idea stirs the depths of my feelings; that while the State and the voluntary move- ment must advance side by side, and wliile the State must give its aid to the cooperative movement, it must seek to secure to that movement the greatest freedom. That is why I rejoice that your terms of reference and your inquiries have covered a vdder field than the subject of cooperative credit. Cooperative credit itself can not be adequately considered save in relation to the whole problem, of which it forms a part. For the whole ideal of cooperative community is one which is closely bound together. Better business is at the center, and with it are better farming and better living, but it all alike rests on a spirit of mutual aid, on a truth as old as Aristotle, that man — ^rural man as well as town man — is a "social animal," and that you have to see his life as a whole and not simply take one set of relations belonging to it. And here, if I may speak my mind frankly, is where I see, as a deeply interested onlooker, the particular value of your service to the cause of cooperation. The questions of cooperative credit in its various forms have been studied — almost exhaustively studied — by agricultural and economic students. To listen to and study the evidence of such experts, as you have been doing, was necessary to your pronouncing upon the whole problem before you. But judgment upon systems of credit must only be a part of your work. You, as a body of representative citizens, looking at this question as it affects the life of the commiuiity, must make first things come first. You must see that if you are to have a real living cooperative movement in America it requires that missionary faith which inspired Raiffeisen and has inspired all the great pioneers in the cooperative movement. And you must lay it down in immistakable terms that at the center of the work there must be a free association, as you speak of the church being free, carrying on the work of organi- zation. You have to create this free association with the power of strong personal appeal and attachment. It is something which must be beyond the sport of politics and of the party gains. You, coming as citizens from every State of the Union and from three of the great Provinces of Canada, surely are the trustees of a unique opportunity. The issues you have to deal with are fraught with the most vital and enduring conse- IBELAND. 841 quences for the rural life of our country, and through, this for the whole of our civilization. And I ask you, do not rest content short of the broadest view of the situation, so that we may see things in their true propor- tion — the many sides of the movement all recognized — the expression of one common spirit, which is the source and inspiration of any permanent and progressive cooperation. I hope that in addition to offering you some thoughts of possible suggestive value we may be able at a later stage to play a small and useful part in the practical work at home to which your investigations abroad may lead. I hear that the agricultural organi- zation committee contemplate working through a staff of agricultural organizers and students and sending them to Europe to be trained. Part of the training we may be asked to do, and I think I can assure you that we can place the committee in a position to profit by our experience and avoid a large number of errors in principle which are inevitable to the experimental stage. OFFERING FROM THE HEART AND MIND OF IRELAND. Just one last word on behalf of my fellow workers here. In honoring this house with your presence you have come to the home of an idea. It is an Irish idea, but none the less it is primarily practical, and, unlike too many of our contributions to thought, it is being put into effective operation in the country of its origki. It thus bears the character of the Ireland of to-day and of to-morrow, rather than that of the Ireland of yesterday. Every nation worthy of the name takes pride in the offerings of its heart and mind to other nations. The workers in this house are proud that the most progressive rural economists of the more prosperous parts of the United Kingdom have adopted our idea and the plan through which we strive to make it fruitful in the lives of the workers upon the land. Prouder far shall we be if you carry away our idea enriched by the fruits of observation, reflection, and discussion in your memorable tour, and adopt our plan. DIFFICULTIES IN ORGANIZING FARMERS. Statement by Mr. J. Nugent Hakbis, Secretary Agricultural Organization Society of England. Dublin. Without going into details here in Dublin concerning the work being done in England and Wales, I have m mind some points of interest which I would like to mention. First of all I would like to touch upon the human factor of our work. When I started as secretary of the Agricultural Organization Society some of my friends said to me, "When you go up and down the country preaching cooperation we hope you will not mention the word 'cooperation' at all because of the suspicion in the rural mind." I said, "Do you believe in cooperation? If so, why do you hesitate to mention it or to preach it?" Wherever I went I then mentioned the term instead of the word "combination," and our success is largely due to that fact and to my insistence in mentioning cooperation and explaining its principles. Wherever one comes into contact with the farmer one finds that his occupation makes him look with sus- picion on everything that comes from the town. In the early days I addressed many meetings, and at the end of my address a farmer would sometimes get up at the back of the room and say, "Before we go any further in this discussion I would like to know what Sir Horace Plunkett is getting out of this job." On one occasion at a meeting in Wales a small holder got up and said: "A rumor has spread in this district that Sir Horace Plunket is receiving a salary of $1,000 a year." I also remember once going down to a meeting in Sussex which was organized by our local society. I turned up a little before the hour in a schoolroom large enough to seat 100 people and only found the chairman there. At 10 minutes past 8 not a soul had come. At 15 minutes past S one man came in, and 20 minutes past 8 another man came in, so I started to get ready to deliver my address. The chairman said, "You don't mean to tell me you are going to address only these two men?" And when I informed him that was mj^ intention, he said he was game if I was, so called the meeting to order. I addressed that audience of two men for 20 minutes, and near the end another man came in for a few minutes. The secret of the failure of the meeting, as I afterwards learned, was the fact that the last man who entered the room was .the local dealer, and he had gone around that district a week before and visited every farmer, saying: "If you attend that meeting for cooperation, remember you are on my books up to a certain amount and you will have to pay within 48 hours." That is one of the difficulties we have had to contend with. Another difficulty is the delightful manner in which a farmer can "sit on the fence"— a very favored occupation not alone in England and Wales but in Sweden, Denmark, and other countries. You address a meeting to form a society, and the farmers wiU say to themselves that they will wait and see how it goes. If it is a success they wiU join, but if it is a failure they say "I told you so." 842 . AGBICULTUEAL COOPBBATION IN EUEOPE. Another difficulty is disloyalty. If there is one thing more than another to preach it is the ahsolute necessity of loyalty to your society. It is remarkably amusing now how the farmers in England and Wales are fast beginning to realize that their success depends on their hanging together. Social interest should be created. The business interests in England which formerly blocked the way of the cooperation movement are realizing now that it will not hit them so hard after all. These movements which at first presented almost impossible difficulties have now practically revolutionized the countries in which they exist. When you come to carry out the agricultural cooperative work that I hope you will carry out in the United States and Canada, bear in mind that the difficulties with which you are met in themselves lend power to your movement in overcoming them and that you will have a very much stronger movement than if you did not have any difficulties to overcome at aU and everything went smoothly. I would like to say also that in our work here we are deeply indebted to the men and women who throw in their lot ynth our movement. We have about 50 voluntary workers who do not get a single farthing for their services and who serve simply because they believe it is a movement that is going to do more for the better- ment of the rural life than anything else can in England and Wales. PROBLEMS OF ORGANIZATION. Statement by Mr. R. A. Anderson, Secretary Irish Agricultural Organization Society. Dublin. The problems of the farmers are universal, and the difficulties with which the farmers have to contend in Ireland are practically the same as those with which the farmers of England have to grapple. When you are trying to reach a people who are hard to interest in economic improvement, the more opposition you experience the more determined you usually become to accomplish a reform. A movement that has no opposition would have no good in it. The most serious opposition we had was a disinclination to start in on any lines — a reluctance to work together and a distrust for each other. In talking of the cooperative movement we have to remember that it is not only the cooperators who join the societies who are benefited, but that benefit is derived by the whole of the agricultural community. For example, there was a small group of cooperative agricultural societies started in Tipperary which began ^^ith 40 or 50 farmers, none of whom took more than 4 or 5 shares, for which they paid 1 shilling a share. The volume of business was considerable. Formerly they paid exorbitant prices and got poor qualities. Some of the men who had a little business experience had to examine into the contracts and tender^. A brilliant idea struck one of the chairmen of these societies — that all of the societies in the community should block their orders for manures. He consequently advertised for the bids and then had the societies to meet and consider them on a certain date. The societj'- was not recognized except by -one firm, which bid for the business and offered a 40 per cent lower price than they had formerly paid. The societies then negotiated for a special train and had the shipment brought to the local station. To-da}^ there is not a single farmer in Ireland who need pay the ridiculous prices formerly asked him for his fertilizers. VALUE OF ORGANIZATION. Capt. L. a. Bryan, Member of Committee Irish Agricultural Organization Society. STATEMENT. DUBLIN. As far as I can make out, the farmers in the United States and Canada ate very much the same as the farmers here. I have read much of the people in India, and the truck farmers there have practically the same problems and ideals. The farmers differ, however, according to the soil on which they live. It is clear to me that in America what you are chiefly suffering from is the cost of collection and dis- tribution. We have the greatest respect and admiration for the great commercial developments that ha've taken place in your country, especially in regard to the organization of the beef industry. We admire it so much that we could not do better than try and imitate it, but in the interest of the farmer we are going to get as close as we can to the actual consumer. We had a man, an Irishman, who has spent five years in your country; he started in Cudahy's works, and we are trying to copy you in regard to the mechanical side, and later on the selling side. We have arranged our rules and regulations so that we can comfortably do it. In America I believe you wUl have to organize your agriculture on as large a capital basis as possible. The farmer has good credit, and if you organize properly you will be able to take charge of these big interests. We IRELAND. 843 in this country have rings, although they do not do us much harm. We have also the machinery manufac- turers' combine. They do not like the cooperative societies, and it may be necessary in the future for the societies to go into the manufacturing business also. Everywhere the way by which you can get success is first of all to, cultivate the cooperative spirit. QUESTIONS. Q. Does cooperation tend to socialism ? A. No. Sociahsm does not do for society what cooperation does. In 1868 and 1869 the individuals took up cooperation as an antidote for socialism. Some socialists, however, make exceedingly good cooperators, not for that reason, but because they are both. Among our leading agricultural cooperators we have no one who professes to be a sociaHst. One is a voluntary organization, the other is compulsory. Q. In what way can large capital be obtained in a poor community ? A. Capital can be dispensed with for cooperative trade by simply acting as agents. We have a society which started with a paid-up capital of £100. It has now paid all debts and has paid 5 per cent on its shares; it has 500 pound shares. Another society started with no shares and at present has paid-up shares of 98,000. The members are farmers who are landowners, and they take unlimited collective HabUity. RURAL CREDIT IN IRELAND. Address by Rev. T. A. Finlay, S. J., Vice President Irish Agricultural Organization Society and Professor of Political Economy in tte National University. Dublin. I possibly owe the members of the American commission an explanation of my coming before them with an account of a special branch of the work of the Irish Agricultural Organization Society. As an exponent of purely economic schemes I might seem to be out of place; merely material interests are usually not the concern of my profession. Schemes with which we are interested here are primarily designed for the assistance of the poor, and the minister of rehgion can find abundant warrant for any service he can render in this high cause. Cooperation, as we know it in modern Europe, is essentially the resource of the poor man, a potent aid in his humble sphere of production and consumption, his protection against the powerful interests which strive ruth- lessly for domination in the fields of industry, commerce, and finance. We are endeavoring to apply it com- prehensively in rural Ireland, as has already been explained. We employ it to promote efficiency on the farm, freedom in the market, and a higher standard of living in the home. Within this wide range the organization of agricultural credit — the special subject n6w before us — has its place. Cooperators accept the maxim current among the economists, that "labor without capital is barren," and they are well aware that the principle holds good in the humblest grades of industry as well as in the highest. Capital is as much a need on the farm as in the factory; in the cultivation of a 20 acre holding as in the opera ■ tions of a gigantic cotton mill. To provide capital by the organization of credit must be a part of every good scheme of agricultural cooperation. How large that part will be depends upon the circumstances and condi- tions of the community for whose benefit the scheme is promoted. Where a system of small holdings prevails and where the occupiers are held in the toils of the usurer — or, as we name him in Ireland, the "Gombeen man" — the first service cooperation must render to the farmer is to set him free; and this it can do only by the method of organized credit. In such communities credit societies are the first manifestation of a cooperative movement. It was so in Germany. What moved Raiffeisen to plan and to propagate the associations which bear his name was the bondage of debt and the consequent paralysis of industry into, which the small cultivator had been brought. So, too, it is even now in many parts of Ireland. The money lender is stUl with us in some of the larger towns, and from thence he casts his net over the surrounding rural districts. But his operations, hurtful though they are, are not those which do most to enslave the small farmer. The shopkeeper in the village or at the crossroads who suppHes seeds, manures, and household goods on credit can estabhsh a more effective and more complete control of the farmer's industry. Once well in his books the farmer without capital is his creature, and in due time too often his victim. Henceforth the farmer must buy from the creditor shopkeeper, and from him only. He must take without question the goods offered him, whatever be their quahty and whatever be their price. His debt grows, and the bonds of his servitude are drawn tighter. If his holding is worth acquiring, his Hability is allowed to increase up to the point at which his security is exhausted, and his property then passes into the hands of his principal, or it may be his only, creditor either by private contract or by pubhc sale. If at any stage in the process of ruin he ventures on resistance, the threat of a writ is usually enough to reduce him to acquiescence. 844 AGBICTJLTTJBAL COOPERATION IN EUROPE. Where the farmer has been made a bondsman by these or equivalent methods, credit organized for his dehverance is obviously the first agent which cooperation must employ on his behalf. Whether he be a ryot of India, a bauer of Prussia, or a cottier of Connemara, first aid from cooperation must be given through the credit society. His freedom won, other cooperative methods must forthwith be employed to enable the farmer to maintain it. He must be taken out of the hands of the middle man; he must be enabled to sell in the mar- ket where he Avill get a just price for his produce and to buy in a market where he will get full value for his money. This impUes that the trading society must supplement the credit society if the latter is to furnish more than a partial and temporary relief. This principle was so clear to Raiffeisen that he invested his credit societies with trading powers, and our experience in Ireland has been that where the credit society does not lead to a trading society its benefits to the farmer are both scanty and ill assured. The conditions which demand for the credit society the first place in the cooperative program are not, however, by any means universal. In a farming commxmity in which the need is for the costly appUances of production, which it is beyond the individual to purchase or fully to employ, or where the scale of his purchases or his sales will not give him access to the wholesale markets, other forms of cooperative organization — ^the creamery, the implement society, the agricultural society — will be the first to appear. The specific organiza- tion of credit may even be dispensed with altogether. In the districts of Ireland where the farmers are of the substantial type — "strong" farmers is our designation of them — we have not found it necessary or advis- able to promote a separate organization for credit. The capital required for the productive or trading societies of which farmers have need is furnished by the share contributions of the members. If the shares are not fully paid up and a loan is needed for the build- ing of a creamery, or for cash payment in the case of a consignment of seeds or manures, an advance from a joint-stock bank can easily be obtained. The advance is made on the guaranty of the committee or other solvent members of the society, and these have their security in the unpaid portion of the shares of their feUow members. As a rule the earnings of the society speedily discharge the habiUty. A creamery which can increase by 30 per cent the value of the farmer's produce and a trading society which can reduce by 40 per cent the cost of his agricultural requirements should promptly diminish its collective indebtedness. If it fails to do so, the failure points to defects in the management, and for these the remedy is in the hands of the members. Coming now to the various needs of the agriculturist which cooperative credit is adapted to meet and the forms it must assume in order to cope with them, we may classify them according to the character of the loans to be provided and reduce them to three categories. In the first category are loans of fixed capital; that is, long-term loans, which yield a retiu-n only after a lengthened period of investment. In this category belong loans to individuals for reclamation of land, for drainage, for farm buildings, and, in the case of newly acquired holdings, for stock and general farm equipment. In the second we include loans of working capital to cooperative societies for the conduct of their collective business. In the third we may place loans of working capital to individuals, loans which become productive within the period covered by the yearly round of the farmer's industry. The provisions of loans of the first class — ^long-term loans — is one of the most difficult problems which cooperators have to face. Whether they can solve it or not depends largely on conditions estabhshed by law and by pubUc opinion in the communities in which they find themselves. In Germany the problem has been solved by the landschaften, societies of landholders, which issue bonds secured on the collective landed prop- erty of the members. Investors in these bonds have an unimpeachable security in the landed assets of the society as a whole, and the society is secured against the individual members by its claim on his landed property up to the extent of the bonds issued in his behalf. Such a system to be feasible must embody two requirements, which are imperative. In the first place, a perfect system of land registration is required, caring for all charges upon land; in the second, a state of pubhc opinion is needed which opposes no hindrance to the enforcement of mortgage claims upon land and which gives no support to a defaulting debtor merely because his pledged security is a farm. In Ireland our need for long-term loans is quite as urgent as that of the Germans. That we have not been able to copy the organization of the landschaften is sufficiently accounted for by the twofold circumstance that oui system of land registration is woefully imperfect, and that pubhc feehng in Ireland is, for reasons which require no expla- nation, peculiarly adverse to any disturbance of occupying owners in their possession of the land. Owing to these causes — ^to the latter especially — the great lending corporations are unwilhng to accept a mortgage on Irish land, and without their assistance the issue of bonds on this security is practically impossible. The financing of trading societies of solvent farmers by their own capital, or by loans obtained on the SL'ourity of the unpaid portions of their shares, offer no difficulties, and, as I have already explained, we have found it easy to deal with the question of credit with these societies. lEBLAND. 845 The cooperative provision of working capital for the small farmer and the laborer on personal security only is secured in Ireland by the methods which EaifFeisen devised and which are so popular throughout Europe. With these methods the studies of the American commission in Italy, Germany, and elsewhere have made you familiar. Ireland has copied them from Germany without essential modification. The credit society receives loans from the public in the shape of deposits, or from a joint-stock bank in the form of an overdraft on the collective personal security of its members, and at times by a guaranty from men of standing who sympathize with the struggles of their poor neighbors. The society then in turn lends to its members on personal security — the personal security of the borrower backed by that of two of his feUow members. The safety of this proceeding is insured by the fact that the society operates within a small area, so that the character of each member is thoroughly known to all the others, that only persons of approved reputation for honesty and industry are admitted to membership, and that loans are made only for productive purposes, which in the course of the period for which they are made will yield the means of repajmient. Our experience in Ireland accords with that of Germany. It has proved that no system of credit is more secure than when based on the character of the poor man. Such security is as trustworthy as railroad stock or treasury bonds. Permit me before closing to add a few words on the measures which in the course of our propaganda we have learned to be necessary for the successful working of these societies. In the first place, when the societies have multipHed to any considerable extent a central society or feder- ation is essential to their healthy development. The societies are at once institutions of thrift and credit. When the deposits in a society which has won public confidence and is freely intrusted with the savings of the locality in which it is established accumulate beyond its lending requirements, a central body which wiU take these surplus deposits and lend them to other growing societies which are in need of capital becomes a necessity. Without this outlet the prosperous society must refuse further deposits, and its functions as an iQstitution of thrift are at an end. In Ireland we have reached the stage at which the need for the central credit society has become apparent, and the foundation of such a society has been one of the latest developments of our work. The local society also needs strict supervision and rigorous audit. In a community of small farmers, especially where they do not live in a village, but in scattered homesteads upon the land, laxity of manage- ment is apt to creep into their credit organization. Strict observance of the rules is not always maintained, the punctual repayment of loans not insisted on, remissness in the keeping of accounts condoned or tolerated. An outside authority with power to make itself obeyed is the only safeguard against these defects. Whether this authority shall be centered in a central credit society, or in a "union" as they are called in Germany, specially established for this pmpose, must be decided by those who think and lead in the national cooperative movement. We see in Ireland a prospect of solving this question on easy lines. The enlarged resources with which the Government grant has endowed the Irish Agricultural Organization Society will enable it to defray the cost of inspection and audit which our Irish societies could not themselves hope to meet. The officers of the Irish Agricultural Organization Society Avdl keep in touch with the central credit society and their reports will indicate where its authority must be brought to bear to safeguard its own interests and at the same time pro- mote the general welfare of the credit societies. Irish cooperative credit societies have been free from State intervention and State control. We welcome State aid for oiu- educational work. We hold it to be within the functions of the State to teach the people — the poor before all others — the best method of industry and business. This is just as legitimate a use of State resources as the maintenance of schools for the teaching of the three "R's." In this form we welcome State aid, but the aid thus furnished does not imply State intervention in the conduct of industry or business. The cooperative society depends for its success on the enterprise and self-reliance of the members. Any State intervention which impairs these qualities in the members or dimin- ishes their responsibilities we regard as a peril to our movement. In expressing this view I speak the mind of our Irish societies as a whole, and I enunciate a principle which the experience of continental countries has universally justified.^ ' The Lord Lieutenant of Ireland: I would like, in the first place, to join with you in expressing thanks to the Rev. T. A. Finlay, the gentleman to whom we have just listened. I am sure I will not lessen your appreciation of Prof. Finlay's valuable services in con- nection with the question which has brought us together here this morning, if I remark that he has always been a pioneer in movements for the welfare and prosperity of his country. I may mention especially in this connection an institution which has existed for about 25 years, the Irish Industries Association, of which Prof. Finlay was an early friend. I do not think I need to apologize for alluding to work of that kind, because it is in aflSnity with the work you are studying. In connection with the paper to which we have just Ustened, I could not help but recall to mind how, when many years ago there was a great epidemic of cattle disease in Scotland, Mr. Gladstone would apeak of the manner in which the farmers cooperated to stamp 846 AGEICULTUBAL COOPERATION IN EUROPE. GENERAL VIEW OF RURAL CREDIT. Address by Mr. H. W. Wolff, Author of "People's Banks." Dublin. Prof. Finlay has just given you an account of what is being done in Ireland with cooperative banks. As a philanthropist and minister of the gospel he has put forth a subject with which he is specially connected as vice president of the society which promotes the Kaiffeisen banks. There is another phase of the cooperative credit movement. The Raiffeisen system is not the only system that applies cooperative methods. You have looked iuto the Schulze-Delitzsch system in Germany, and when you see there a union of less than a thousand banks keeping in circulation the sum of seventy-five million ster- ling — loaning from one hundred and twenty to one hundred and fifty million sterling — then I think you will come to the conclusion that there is a very good business side to this matter; and in America probably you wUl have more of the business side than of the immediate philanthropic, but even the philanthropic banks have to be organized on sound business principles. The cooperative banks in Ireland are only a small cluster — 240 — and their transactions are comparatively small, but they have grasped the cooperative spirit. After the beginning ma'de in 1894 they got hold of the right spirit. I do not think the Government should interfere in their work, and to show what State interference will do I want to tell you what happened to a Prussian Raiffeisen bank through State interference. In 1895 a State-endowed bank was formed in Prussia to finance a cooperative credit society. Up to that time the Raiffeisen unions had been solvent. In 1895, when this bank was formed, they said, "No; we don't want any assistance; we have money enough, and we thank you for nothing." However, the financial people brought pressure to bear, and eventually they entered negotiations, and consequently they rather overrated the amount of money at their command, and a few years later found themselves in very serious difficulties. They had speculated and had some pretty hard times. They got out of it only by rather heroic methods, and I do not think there will be any losses in the end, for the contributions of the societies will be repaid. Now that these Raiffeisen insti- tutions are free from State aid they are doing well again. Go about it privately and you will find that even the Imperial Federation in Prussia, which reli6s on State advance, is heavily impoverished with the interference it has to submit to. For what the State gives it asks about ten times the amount in return. The head of this union complained to me in 1898, "We can not stand it any longer." There followed rebelhon, and when the State wanted to tighten the strings the union grew very restless and said, "We will make ourselves independent. We have 150,000 pounds, and we will throw off this Government yoke." The only banking aid they had open to them was the State banks, so they went to the Raiffeisen Union to try and make its societies the collective agencies for its own work and in return to act as agent for them and cash their bills, but the Raiffeisen societies would not consent to this. They then went to an ordinary joint-stock bank, one of the largest in Germany. This institution does not tie them to exclusive business, and to both parties this is a far more satisfactory arrangement. Even the tradesmen societies which have been favored in every respect openly say they would like to break with the State. In France you have seen the system of the Credit Agricole — there is unrest, and the result of State aid has not been what they had expected. I understand that you have visited some of the French banks where they really have accumulated a reserve fund. That is what State aid is intended for, but only in one or two districts has it actually been done. A select committee of the Frenqh Chamber of Deputies reporting recently on credit to be given to the trading classes points out that in agricultural banks supported by the State in France the people did not repay as they should. The money being advanced by the State, according to this report, some of the people did not expect to have to pay back. out the disease. I mention that simply as an illustration to show that all who have had anything to do with cooperation recognize the importance of the movement. ' The subject of agricultural credit is one principal branch of the cooperative movement and we feel that Prof. Finlay has given a very frank discussion of all the distressing conditions of the small farmer. A striking section of the subject is that where Prof. Finlay said you should desire to secure that there should be no preference on the part of the creditor as against the debtor merely because he happened to be a farmer. I would like to say in reference to the visit of the American commission that one of the indirect benefits of this conference has been an opportunity of coming in contact with persons who are equally interested in the whole subject and desirous of doing their part in obtaining the main objects in view, but who may have been working on different lines. I wish to express my appreciation at being one of the guests of this meeting to-day. On account of having to leave Ireland for a bne period, I will have to leave the meeting before its conclusion, but am glad it will not be the last time I will be able to exchange views with members of the American commissions. IBELAND, 847 Reports from the south of Italy also indicate that State aid is not promoting cooperation. I think the shoemaker should stick to his last and let the cooperators do the work in their own way. The State can not spend too much money on education, but it should not interfere in cooperation. Now, speaking of credit more generally, I want to confine myself to personal credit. You are interested in mortgage credit, and it is a thing which can be dealt with cooperative!}' . I have been told that the German Landschaften and the French Credit Foncier are not apphcable to the United States, and I am sorry that neither the American commission nor the National Monetary Commission that preceded you a few years ago have paid any attention to the cooperative mortgage banks in Denmark and in Sweden. I devoted a chapter to them in my book on Cooperative Banking, but otherwise they have been very little discussed in English literature. They are cooperative societies and are working very well. Some of the joint- stock banks which are not cooperative may also be useful. ' I hear the banking interests of the Uliited States are distinctly opposed to the introduction of cooperative banks, and I think, if it is so, that the banking interests of the United States are very shortsighted. Banking people 20 years ago gave us a lot of trouble in Ireland about savings banks, but now everywhere we find among the more intelligent bankers a friendly feeling toward the cooperative banks. The cooperative banks come into the field not as competitors of the commercial banks, but as feeders for them. People who want to do banking should go to cooperative banks. In Italy it was the cooperative banks that stimulated progress and brought banking up to date. I do not think there is any danger in this country or in the United States of cooper- ative banks becoming rivals of the ordinary commercial banks. Another point I want to speak about is the fact that you do not seem to like the principle of unlimited liability in the United States, and while our people do not like it in Ireland it is necessary in the Raiffeisen banks. The Raiffeisen system, however, is not by any means the only one which helps agriculture. For instance, you have seen big Italian banks that provide credit for agriculturists. In Germany, to take a concrete case, there are big banks as well as small village societies on unlimited lines which deal with the small agriculturists. I am very favorable to the Raiffeisen system, because it stoops 30 much lower than the big banks. It takes the moral character of the man in hand and makes him more religious, more sober, and a better man altogether. Raiffeisen wanted, as you know, cooperative societies for all purposes. The advantage of unlimited liability is that the poor man can get larger credit. In Canada there is a cluster of admirable banks which have been in existence since 1900 and which have not lost a cent. They were foiinded in Quebec. Three times they have tried to pass an act to allow their estab- lishment in the whole Dominion, but the traders have each time successfully opposed the effort. There are also some of these banks in New Hampshire. I do not recommend them because they are in a very imperfect and elementary state. The first bank was formed in Quebec in 1900 and is an exact facsimile of the Luzatti bank, and the Luzatti system is the one most likely to fail in America. What we have to contend with is people who are very anxious to promote cooperative credit, but who put the cart before the horse. These people want to find the money; the difficulty, however, is not to find money, but to make sure that the money loaned will be repaid. The Agricultural Bank of Egypt, for instance, an institution endowed with more than £5,000,000 sterling, started without a cent and from that developed into the Bank of Egypt, and then they instituted an agricultural bank which is not a State institution, but one guaranteed by the State and helped by the state in every con- ceivable way. In spite of it all, that agricultural bank has failed to do what it was intended to do, for it has loaned money it can not collect. More than 18 per cent of the money loaned has not come back, and in upper Egypt it is more than 50 per cent. Compulsory means were resorted to, and it was found that the people had been taught to borrow, but not to repay. They had gone into debt for nonreproductive purposes; the money was spent on high living, and when they found that the agricultural bank would not loan them any more money the people went back to the usurer. , In contrast with this, nowhere has the cooperative bank spread as in India. Everything is not perfect there, but they have the right spirit on the whole. They have tried to create good banks to serve as models and stimu- late imitation. I think the movement began in 1905, and a year ago there were over 8,000 banks. These banks have not only given the people money but they have stimulated their intellect to a very high degree. Their losses are also very trifling — last year they amounted to only about 36 pounds. This has been done with very little State aid. The viceroy stated that the Government has been severely criticized for limitiag State aid to such a small figure, but it had been done on my suggestion. The people have been put upon their own mettle and have sup- ported their own banks. The people now want to support the national cause, and the registrars report that they have no difliculty in raising money. Deposits come ia freely from the people themselves, and in several instances local rural banks have refused State aid. 848 AGEICULTTJEAL COOPERATION IN" EUROPE. Cooperative banking must create security. That can be done in various ways. One way is careful selec- tion of members, for one of the best guaranties is the character of its members. You do not advertise and ask people to come in, you select your members, then you have a minimum of risk. You must not invest in risky business. Everything must be done openly, and the bank should not exist for the benefit of the shareholders, for no more should be paid to capital than a fair remuneration in the form of interest. In both Germany and Italy that feature was overlooked m the beginning because people did not know how easily money could be secured. There is a large bank in Milan, for instance, which pays about 17 per cent interest and has shares that are transferable. These shares are dealt ia on the stock exchange anid have now gone up to twice their value. That is not cooperation and only goes to show that every system has its weak points. The Raiffeisen system goes down to the bottom of society, has no shares whatever, and therefore must have unlimited liability. The maia object is not to insure the creditor but to watch one another. You have to watch one another because you deal without shares. Raiffeisen did not want shares because he wanted to open the bank to the very poorest; however, under the law he was compelled to have shares, so he made them as small as possible. In Italy some of the shares are as low as 1 penny. The more shares are dispensed with the more unlimited liability is needed. Money which is loaned must be used for reproductive purposes. So far as I am aware there is no case where the unlimited liability of the members has been called on. The reserve fimd has had to be used; the borrowers have had to pay, but they have never had to tax the members under their unpaid liability. In all systems you must also have careful control. What they have in all banks, whatever the system may be, is local boards of supervisors which check the committee; and then they must have, quite apart from the audit, an inspection of the superior body. State audit is worth little or nothing. Central banks for audit and inspection are needed. The inspector of a joint- stock bank thinks only of his bank. Cooperative banking is different in every way from joint-stock banking, and is not even in the same line. You should also be very careful about central banks. After you have a cluster of banks, however, you should form a central bank to work for all, which is the only right way. In England they wanted to have a central bank to find money for the individual banks. That is very dangerous. There is no central bank in existence now which has not had serious difficulties. Cooperative business is safe but not very remunerative business. The main thing is to keep things safe and that can not be done except with ready control; if you have that you will be successful, but without the maximum of control and the minimum of risk you will not succeed. I will be very much surprised if an institution which has worked so well in almost every part of the globe should not also find a fit and proper occupation in the United States, and I very much hope that the outcome of the inquiry of the .American commission will be that before long you will have a system of cooperative banks in the United States for the benefit of agriculture. RURAL CREDIT. Statement by Mr. J. R. Cahill, Author of "Rural Credit and Cooperation in Germany." Dublin. It is essential that agricultural credit societies be created, for the ordinary joint-stock banks can not meet the needs of the small farmer. In the first place the joint-stock banks can not locahze sufficiently. It does not pay a joint-stock bank to set up a branch in a rural district. I refer to a branch which would always have at least one or two officials on the spot. The ordinary district can not support such a bank and therefore you must put in its place a credit society. The joint-stock banks do not mix with the small farmer. They do not know the character of the people so well, nor do they appreciate what they are worth. Some members of your commission have said that if it were proposed to estabUsh an unlimited habihty society in America, the first thing to be done with the person making the proposal would be to put him in a lunatic asylum. The question of limited or unlimited Uability is not essential. You want to create a security. If you can get together a sufficient number of persons to create a security, then you have created credit. The advantage of unhmited liabiUty is to provide a better credit foundation. State aid and intervention depends upon the way the State gives the aid; it can not be covered in every branch. If the State is going to undertake the organization of societies it must familiarize itself with all kinds of societies. That is certainly socialism, because the State would have to take into its hands the control of all kinds of commercial activities. Another principle concerning the organization of credit which must be kept in mind in deaUng with this problem, which is entirely new to you, as it is to us, is that you must localize your credit. Credit depends IRELAND. 849 on knowing the people, therefore create a society which will localize. The principle of localization is to confine your operations to a certain area; if you spread it over too large an area you can not supervise the credit at all. AGRICULTURAL COOPERATION. Evidence op Officials Irish Agbicultural Okganization Society. Dublin. Q. What is a reasonable limitation on cooperative activity? A. The Irish Agricultural Organization Society was founded for the reorganization of the agricultural industry along cooperative lines. We got support in this work from a great number of people not interested in agriculture at all but in all kinds of trades. We restricted ourselves absolutely to the farmer's business; we recognized that in many districts it is quite impossible for farmers to combine. The Government has recog- nized the necessity for building up the farmer's industry, and it has provided money for the organization of cooperation as a means of aiding and developing agriculture; that money we are going to use in common with the agricultural organization societies of England and Scotland. This money is limited by statute to the farmer's business alone, and we have not only the original limitation of our union, but we have the further statutory limitation on the acts of the department. Every cooperative society should draw its own limitations. Q. You have no fixed limitations, then? A. No. If occasion arises where cooperation will serve the purposes, every right to cooperate is given. The only instance where people do not cooperate is for electric light and power, because they find that the electric companies can supply it more cheaply. If banks were capable of giving small farmers credit on reason- able terms we would not want cooperation, but joint-stock banks can not furnish that need. The limitations are dependent upon the conditions under which cooperation is employed. Cooperation is of necessity the organized work of a community. Any business of a community which can be done by a combination more effectively than by members individually is a subject for cooperative effort and, therefore, the Umitations would be imposed by the character of the business in which the community is engaged. The limitations are imposed, so far as there are any, by the nature of the industry in which the community is en- gaged, and circumstances which facilitate or hinder the organization of the members for cooperative purposes. Q. It would appear, then, that there is a clear and distinct limitation on cooperation, because of the neigh- borhood idea underlying cooperation ? A. That is the fundamental principle of cooperation; it does not, of course, limit the principle of coopera- tion but does limit the extent of the organization as such. In cooperation the business is carried on to such an extent that each individual concerned can take an active part in the business from which he is to receive benefit, and where results will be distributed to the members and become their private property and not where it is produced for the benefit of the State. The socialistic idea is entirely distinct from the one we are trying to promote. There is an important point which has been made, and that is the distinction between the thing which they cooperate to do and the qualities of the people who cooperate. Our experience has shown, and I think yours will also show, that a cooperative system is the ideal way to get over the personal qualities of individuals. For example, the committee of the Irish Agricultural Organization Society has its quarterly meeting this afternoon, and sitting at this table will be Prof. Finlay, who has addressed you to-day and who is a Jesuit priest, the Rev. E. F. Campbell, and Mr. Oliver, a very prominent member of the Orange Order. If to-day we were hard up for organizers we would not hesitate for a moment to ask Father Finlay to go up north to talk to the Orangemen, and Mr. Campbell to go south, and both would be received with the best of spirit. That is one illustration of what is being done. We find, of course, that a man to do our work must be thoroughly familiar with a technical knowledge of agriculture, and no matter what they knew they would be absolutely useless for our purpose unless they could start these cooperative principles. If you are doubtful about the economic value of cooperation, you should not turn it down unless you are quite sure it wUl not produce the moral and social influence every- where as it has where it has been tried. You should bring about the cooperative commonwealth by educating the children of the country through the schools. Get an individual to understand himself and take stock of himself, and you will get the spirit of cooperation which is right to develop throughout the country. In Germany you find that the cooperative societies do not want to go into supplying household necessities, for the reason that they can not do so economically. If they did they would have to employ a man who under- stands the business, and he would have to give much of his time, and so it would not pay. That is the only lim- itation—because it can not be handled economically. Cooperation is not a paying proposition in all cases. There are, then, certam distinct interests which will not combine, and where they can not be used for cooperation cooperation should let them alone. 14174" S Tinr, 914 fi3_1 la 850 AGEICULTUEAL COOPEEATION IN ETJBOPE. DEPARTMENT OF AGRICULTUEE AND TECHNICAL INSTRUCTION. Address by Mr. T. P. Gill, Secretary. Dublin. Can any of the experience of this little island or of the Irish department of agriculture and technical instruction be of use to you in America in solving your problems ? Perhaps you can get some help, especially as a large part of the problem both in Ireland and in the United States is a human problem. You would be most likely to do so if you would fasten your attention on certain features of our situation, features which wiU enable j'ou better to understand our Irish development itself and which may have certain relevancies for your conditions. The features I recommend for this purpose are (1) land tenure, (2) developmental adminis- tration, (3) education, and (4) voluntary organization properly understood; that is, properly regulated by the State in the general interests against the abuses of individualism, whether the voluntary organization be a trust or a cooperative society. Regarding the land-tenure problem, you can not understand the Irish lesson until you take hold of the fact that within the hfetime of middle-aged men the Irish farmer has been transformed from a serf into a free landholder. There has been a complete social revolution, as complete as that which began in an earlier day in Prussia, Bavaria, or Denmark, and, as was the case in those countries, it is upon that basis the agricultural prosperity of Ireland is going to be reared. It is that change whose influence only began to be effective within the last 15 to 20 years which has made the work of the Irish department of agriculture and the work of agri- cultural organization even possible. Under the old system the Irish tenant farmer could not dare to improve his position by such means. He had neither economic security nor civil liberty; his rent could be raised on him if he improved, and if he objected or sought redress he could be expelled from his farm; one of my own early recollections is that of a number of farmers receiving notice to quit a week after voting at a parliamentary election for a relation of mine who was supporting the tenants' cause. All that had to be, and now has been, fundamentally and absolutely altered. No land system is perfect; and this land system we now have in Ireland instead of the old- one is not even the nearest to perfection that has been worked out; but, such. as it is, it is a sohd and secure founda- tion which will last for many a day for the economic and social development of the country. Now, the personal and psychological effect upon the farmer himself is the most significant to note here. The cringing serf has been replaced by a free and independent man who can meet the former landlord and agent on equal terms. He meets them so upon the councils and committees of agriculture under the system of our department; he meets them so on the local governing bodies; he meets them so on the committees of cooperative societies. It is thus that wholesale combined action amongst those connected with agriculture has been at last rendered possible. Over four-fifths of Ireland to-day this emancipated farmer is the type you wiU meet and, make no mistake about it, independence and security have, in his case, had their usual result, and as the original material they have to work upon i? particularly good the resiilt will be a particularly fine one. No keener, shrewder, more intelligent and more capable man about his business is to be found anywhere than the emancipated Irish farmer. He is now well able to take care of himself. And the cm-ious irony of history is that having been treated by the landlord and the State with the most extreme of neglect when he was helpless, now that he has been made independent there is a tendency almost to be the opposite extreme. The farmer as a class is now being waited on hand and foot by all sorts of helpers and advisers, official and unofficial. At any rate the State, being now the landlord of Ireland, has had its duty forced upon it. It is going to be a good landlord, and it is in this sense of being a good landlord, as representative of the people as a whole, that most of its action through such bodies as the estates commissioners, the congested districts board, and the department of agriculture and technical instruction is taken. This connection between tenure and the work of such agencies as the department is necessary to realize if true deductions are to be drawn from what you observe in Ireland. But it may also have a more direct relevance to some of your own agricultural problems in the United States. One of your problems in the older Eastern States, and especially the States of New England, is that of rural depopulation. These States are nearly all individually bigger than Ireland, each of them possessing all of the essentials of a great nation in itself, and you have within some of them the case of land going out of cultivation, dereUct homesttadL', and great agricultural wealth in the soil left undeveloped. This, it seems to me, is one of your problems, and, for individual States, one of the greatest of all your problems. At the present time you can see that same problem being dealt with in Ireland in a way that may have some suggestion for you. We can take you to places in Ireland where the arable land had been cleared of its population in the days of the wholesale evictions, and where the State is now engaged restoring population and reconstituting agricultural life. You will see the several agencies of the State working hand in hand, i-he IRELAND. 851 agency of land legislation acquiring the land and dividing it up amongst new owners, the agency of develop- mental administration assisting the economic status of the settlers, and the agency of education, and, with it the agency of organization. You will see two great branches of the State, the estates commission and the congested districts board as one, deaUng with land purchase and settlement, and the department of agriculture as another, at this moment engaged in joint action upon this task. It is as if your pubUc domain on a minia- ture scale were being parceled out into homesteads of a much reduced size; and that, I say, may be one of your problems for the individual States. Some of your land systems want looking into if you want to have the road clear for agricultural progress, and here, too, our legislation may have some light for you. The transition from the occupying ownership intended by your homestead laws into something very different in some of your States — the process of mort- gaging and seUing out by a succession of occupiers from the original homesteader and the acquisition of numbers of homesteads by mortgagors and owners who do not work the land but draw a species of rent from it — this may, in some States, constitute a question of tenure as well as of agricultural credit. I remember once the astonishment of public opinion in the Middle West on discovering how easily Old World abuses could creep into American systems; and here, strange to say, you got light in a bad sense from Ireland. I had myself the good luck to be the accidental means of a reform in this respect in America. I was making an inquiry once into the bonanza farming in the West, and I was struck with the growth of a regular system of Irish landlordism in some of the Middle States as a result of this process of successive mortgaging. I found a landlord class hving in Springfield, 111., having control of the legislature through their agents and attorneys and letting the land upon penal leases of the worst Irish type — of the abohshed, the then illegal Irish type — and I found that the introducer of these leases was a very famous Irish landowner who had acquired some 60,000 acres in Ilhnois. You could not have agricultural cooperation or scientific development under leases like that. I wrote an article in the North American Review about what I saw. It was reproduced in the Chicago papers, who could not credit the story. They sent commissioners to investigate; everything I stated was confirmed; the thing was made an issue at the next State elections, and the upshot was that a new legislattire put an end to tenures of that type. I do not know whether you are adequately protected against that sort of thing in other States, but agricultural credit, agricultural organization, and the right kind of agricultural education will be your best protection against it if it has appeared. The mention of agricultural credits reminds me to say that a committee of inquiry has been for the past 18 months investigating the whole subject of rural credit in Ireland and the conditions in other countries so far as they are applicable to Ireland. The report of the committee, which is at present being drafted, will furnish very valuable information on this important inquiry. It will probably be ready within two or three months, when copies wiU be available for use in America. Without attempting to explain to you the various ways in which we carry on our agricultural education in Ireland, through the Royal College of Science, through the Albert Agricultural College, through the dairy and rural domestic economy schools, through our winter classes, itinerant instruction, etc., and how a distinct feature of our educational work is the closeness with which it is linked up with the central depart- ment of agriculture, and with the local department of agriculture, and local representative committees in every part of the country, I want simply to point to one thing which is the root of the whole matter. That thing is that our education, as we conceive it, is not merely technical. It does not aim merely at training men to be farmers or women to be skilled in the arts of a farmer's wife, or young men in the towns to be merely clever artisans. It does not make the calling secondary to the man. Its aim is wider and deeper. It is not education for the calling, but education through the calling. We hope and believe that in this conception of our educational work we are helping to make of our people a nation of good men and women and good citi- zens, and if this part of the task is accomphshed successfully all the rest of the problem wiU be easily solved. As I have mentioned, a large part of this matter is a human problem, and humanity is the same whether in Ireland or America. This last point, therefore, of the educational conception is the one upon which I would myself most insist. It was said once that the men of Massachusetts could work any constitution. By that was meant that if you trained your man properly as a man in the right use of freedom and in the right ap- preciation of his duties as well as his rights, no matter what the public problem presented to them, men of that type will be able to solve them. That is my firm belief, and while we are endeavoring to tram our Irish farmers to be skilled and scientific agriculturists, and to be able to take care of their own interests m every way, we hope at the same time to train them so that no other class or interest in the country need fear them, and that they will be an element of the population by whom the welfare of all, as well as their own weKare, will be equally and efficiently regarded and protected. 852 AGKIOXJLTUEAL COOPERATION IN EUEOPE. ORGANIZATION OF AGRICULTURAL EDUCATION IN IRELAND.' STATEMENTS. Dublin. Agricultural work is carried on in Ireland by three great organizations, namely, the Irish agricultural organization society, of which you have akeady been told, the congested districts board, and the department of agriculture and technical instruction for Ireland. CONGESTED DISTRICTS BOARD. The congested districts board is extensively engaged in purchasing land, and converting tenants into proprietors. For instance, more than 300,000 tenants have been able to become owners through the assistance of this board. No greater work has ever been undertaken by any Government. WORK OF THE DEPARTMENT OF AQRICXILTURE. Under the department of agriculture and technical institution for Ireland, the work is carried on under two methods — i. e., through local agricultural county committees and by the department itself. The county committees are not appointed by the Government, but are elected by the county council. These committees administer the following schemes of agricultural education and organization: Agriculture: Itinerant instruction. Field and feeding experiments. Winter schools. Farm and cottage prizes. Seed, manure, and feeding-stuff control. Agricultural statistics. General advisory and inspectorial work. Horticulture and Bee Keeping: Itinerant instruction. Demonstration plats. Selection and distribution of fruit and forest trees. Bee-pest act and plant-disease orders. General advisory and inspectorial work. Butter Making: Classes. General advisory and inspectorial work. Poultry Keeping: Itinerant instruction. Classes. Poultry stations. General advisory and inspectorial work. Horse Breeding: Nominations to mares. Cattle Breeding: Bull premiums. Swine Breeding: Boar premiums. Sheep Breeding: Sale of rams. Grants to Local Societies: Agricultural shows. Skilled labor competitions. Industrial exhibitions. The work administered directly by the department of agriculture and technical instruction may be briefly grouped and stated as follows: Educational Institutions. Royal College of Science. Albert Agricultural College. Farm Schools. Athenry. Ballyhaiae. Clonakilty. Ballycolman. Mount Bellew. Forestry Schools. Dundrum. Avondale. Dairy and Poultry Schools for Girls. Munster Institute. Ulster Dairy School. Schools of Rural Domestic Economy. Benada. Claremorris. Clifden. Loughglynn. Killeshandra. Portumna. Ramsgrange. Educational Institutions — Contiuued. Schools for Rural Domestic Economy — Continued. Swinford. Westport. Special Schools. Cheese making. Flax. Poultry Fattening. Horse Breeding. Purchase, resale, and registration of stallions. Irish draught-horse scheme. Cattle Breeding. Selection and inspection of premium bulls. Provision of stock bulls. Irish dairy cattle improvement. Cow-testing associations. Creamery Improvement. Visits of instructors. Registration of creameries. Courses for creamery managers. Creamery managers' certificates. Surprise butter inspections. Cheese making. ' Statements made at the hearings conducted for the Commissions at Albert Agricultural College, July 14, 1913. lEELAND. 853 Forestry. Purchase and development of lands. Advice to landowners. Restrictions on timber rutting. Feuit Growing. Fruit as a farm crop. Planting loans. Marketing. Shows and prizes. Nursery inspection. Tobacco Cultivation. Instruction. Subsidies. Plant Breeding. Experiment station. Seed selection. Field trials. Flax Industry. Itinerant instruction. Field experiments. Continental visits. Improvement of scutch mills. Retting and scutching trials. Seed selection. Potato Growing. Spraying. Boxing. Early potato culture. Seed trials. Seed Testing and Plant Diseases. Seed-testing station. Sampling. Trade supervision. Plant diseases. Suppression of Weeds. Inspection. Prosecutions. Destructive Insects and Pests Acts. American gooseberry mildew. Black currant mite. Black scab in potatoes. Analytical Station. Sampling manures and feeding stuffs. Analyses. Prosecutions. Marketing of Produce. Work in Great Britain. Produce shows. Instruction in packing. Standard packages. Suppression op Frauds. Detection. Prosecutions. Loan Schemes. Credit societies. Stallions. Bulls'. Fencing. Village halls. Special Investigations. Dead meat trade. Cattle feeding. Warble fly. Scutch mills. Meal mills. Bams. Agricultural implements. Fruit trees. Veterinary hygiene. Implement trials. Sugar beet. In Congested Districts — Supplementary. Instruction in farm operations. Introduction of fresh seeds. Demonstration plats. Sale of spraying machines and of agricultural implements. Live stock. Sale of forest and ornamental trees. Veterinary dispensaries. ALBERT AGKICULTUEAL COLLEGE.' Albert Agricultural College is situated on the north side of Dublin, in a healthy situation, about 170 feet above the sea level. The college consists of a residence for about 60 students, together with a farm, orchard, and gardens, all covering an area of about 180 acres. The original institution was built in 1851, and till 1899 was under the direction of the commissioners of national education, by whom it was at first used mainly to qualify elementary teachers to instruct pupils of rural schools in the principles of agricultural science. On the creation of the department of agriculture, in 1900. the institution was handed over to that body, to be by them converted into a technical college for the training of agriculturists and horticulturists. With this end in view the department prepared a scheme for enlarging and remodeling the institution to fit it for the new career upon which it was to enter. The reorganization and remodeling, on the most modern lines, have now been completed. CoUege iuUdings. — The new buildings comprise principal's house — the former quarters having been given over to the accommodation of the students, and of the resident staff required by the new conditions — dormi tory, classroom, dining room, biological laboratory, and two lavatories, wliile the older buildings have been ' The description of the work of Albert Agricultural College was given by Prof. J. R. Campbell, who illustrated his statemen with especially prepared lantern slides. y54 AGRICULTUEAL COOPBBATION IN EUROPE. recast to provide kitchen, increased accommodation for matron and servants, study, students' common room, dormitory, reception room, cloakroom, chemical and physical laboratory, wood and iron workshops, etc. A water supply, the want of which was felt for many years, has been obtained by means of a bore-hole 160 feet deep, from which a plentiful supply is now obtained and forced by air pressure up to the main cistern. Special attention has been paid to ventilation and heating, while an electric plant has been installed to light the whole premises. The sanitary arrangements are of the most up-to-date character, and include ade- quate lavatories and baths, the sewage from which is disposed of by the septic-tank process. Farm. — The farm buildings have also been remodeled and enlarged. The additions comprise large piggeries for the rearing of the breed of pigs for which the farm has long been famous, new stables, granary, and loose boxes. The yard and courts have also been relaid and redrained. There are two herds of cattle. One consists of from 35 to 40 commercial dairy cows, some of the milk from which is used in the institution and for educational purposes, while the remainder is disposed of in the city. The other is a pure-bred Shorthorn herd, at present comprising about 30 cows and an equal number of bulls, heifers, and calves, among which are representatives of all the best strains. This herd has been estab- lished both as an object lesson to students and also for the production of stock and pedigree buUs. Two herds of pedigree pigs are also kept — Large York and Large Black, these being the most popular breeds in the country. The farm has an area of about 176'acres, of which one-half is in permanent pasture, while the other is worked on an eight (or double four) course rotation. The crops grown comprise many varieties of wheat, oats, roots, and potatoes, as well as of rye grass, clover, and timothy, aU of which (except some seed grain and potatoes) are consumed on the premises. Poultry department. — There is a poultry department managed on the most modern principles. In addition to serving as chief distributing center, from which poultry stations throughout the country are suppUed with pure-bred birds, this branch of the farm is used for the training of the students in the best methods of poultry breeding and rearing. Typical specimens of some dozen economical breeds are kept, and by the aid of trap nests it has been found possible to develop birds of special laying qualities, the eggs of which are in great demand all over the country. Gardens and orchard. — About 5 acres of the farm are laid out as an orchard and 2 as a market garden. In these are grown many varieties of fruit trees and vegetables for illustrating the best method of culture. Such a large area is found necessary, as in addition to serving for the general instruction of farm students, it must afford training for the pupils of the horticultural school attached to the college. An apiary is also maintatned solely for educational purposes. COimSES OF INSTKUCTION. The college provides two distinct courses of instruction — one for farmers, the other for gardeners. The former or agricultural course occupies in the department's scheme of agricultural education a position inter- mediate between the instruction given at the agricultural stations and that provided by the agricultural faculty of the Royal College of Science, Dublin. The horticultural course is intended for selected pupils who are seeking to qualify for the post of instructor in horticulture. The college also serves as a hall of residence for a number of the agricultural scholars at the Royal College of Science. AGEICIILTTJRAL COURSE. This course is intended for young men who desire a technical and practical knowledge of agriculture, to fit them for entrance to the Royal College of Science, Dublin, for becoming farmers, or for engaging in any other occupation — such as creamery management — which requires technical training in the sciences underlying agri- culture. It includes instruction in agriculture in the classroom, farmyard, and fields, supplemented by lessons in dairying, horticulture, poultry management, beekeeping, and veterinary hj^giene. The elements of physics, chemistry, botany, zoology, and entomology are taught so far as is necessary to the proper understanding of the principles underlying the most approved farm practice. Instruction is also given in bookkeeping, surveying, and woodwork, while literature, mathematics, and drawing receive such attention as is found requisite. Every encouragement is given to the pursuit of athletics and to the development of social intercourse among the students. The college discussion society meets frequently throughout the session. The papers read before it relate to topics of current interest to the farming community. The library is supplied with standard works on agriculture, and copies of the best farming periodicals are procured regularly for students' use. To these are added the numerous departmental and other official publica- tions which the college receives gratuitously. IRELAND. I 855 The museum is being reorganized. It will ultimately contain a not too extensive but well-selected collec- tion of teaching specimens. Staff. — ^The staff consists of principal, agriculturist, house niasters, and teachers of chemistry, botany, zoology, veterinary hygiene, horticulture, dairying, poultry keeping, beekeeping, and woodwork. A competent drUl instructor attends twice weekly to see to the physical training of the students. The clergy of the different denominations also visit the college weekly to give religious instruction. The domestic comfort and bodily health of the students are under the care of an experienced matron. Session. — The course of study extends over a session of 10 months, beginning on the second Tuesday in October, and ending on the second Friday in August. There are two intervals, one at Christmas and the other at Easter, each about a fortnight, during which students return to their homes. Diploma. — The college diploma is awarded partly on the result of the sessional examinations and partly on the work done throughout the year. It is of two classes, the first being reserved for those students who add to a,n intelligent grasp of scientific principles a high standard of skill in practical farm work. Prizes are given by the department for progress made, for work done, and for services cheerfully rendered to the common weal. These prizes are awarded after consultation with the principal, and not merely on marks obtained at the examination. Conditions of admission. — Admission to the college is conditional on passing the entrance examination and furnishing evidence of good health and character. Only resident students, who are prepared to stay the whole session and to take the full curriculum are admitted. They must not be less than 17 nor- more than 30 years of age on September 1. Intending candidates should make appUcation as soon as possible after June 1, and not later than August 15. AppHcations wiU be dealt with in the order of their receipt in the department's offices. The entrance examination is usually held in the first week in September at four centers situated one in each province. Each applicant for admission is notified in due course as to the center at which he will be required to present himself. No expenses are allowed in respect of attendance. The subjects at present included in the examination are as follows: (1) English, including dictation and composition. (2) Arithmetic, including calculations requiring a thorough knowledge of weights and measures, decimal and vulgar fractions, percentages, and interest. (3) Mathematics. — The elements of mensuration — lengths, areas, volumes; and algebra to simple equations. (4) Agriculture. — The questions on this subject are framed with a view to testing knowledge acquired by practical experience of farm work. No textbook is prescribed or recommended. The examination may be oral as well as written. Fees. — The fees for tuition, board, residence, laundry, and ordinary medical attendance during the entire session are: For students whose parents or guardians derive their means of living mainly from farming in Ireland £15 For students other than the foregoing £50 The fees are payable to the principal in two installments, viz, one of £10 (or £30) on entrance, and the balance on February 1. In addition to the installment of the fee payable on entrance, each student must deposit with the principal a sum of £3 to cover the cost of books and stationery and of repairs to clothing. The un- expended balance, if any, of this deposit is refunded at the close of the session. HOKTICTILTUKAL COURSE. The horticultural course is suited for men who have already had experience in fruit growing and general gardening, such as can be obtained by working for four or five years under a fuUy qualified gardener. In addition to the practical work in the gardens, classroom instruction is given to the students to enable them to understand the scientific principles underlying horticulture. AppHcants must be at least 20 years of age on the 1st of October in the year of entry, in good health, and of strong constitution, and should have received a fair general education. A limited number of pupils are admitted on probation as the result of an examination held early in Sep- tember. The subjects included in the examinatioh are: (1) English— to be tested by dictation and a short letter. (2) Arithmetic— the first four rules, simple and compound, weights and measures, and percentages. (3) Practical fruit growing and gardening. A high standard is not expected in Enghsh or arithmetic. The examination in practical fruit growing and gardening, however, covers the whole range of these subjects. Particulars as to the date and place of the examination are notified in due course to each eligible appHcant. 856 AGEICULTUKAL COOPERATION IN EUEOPE. Applications to attend the examination must be made on the form provided for the purpose, which may be had on application to the department. No expenses are allowed to candidates in connection with their attendance at this examination. Successful candidates are required to enter on their duties early in Octpber. Students are provided with furnished lodging, including coal and light, and receive an allowance of 14s. per week during their first session and of 16s. per week during their second session. They are required to find their own board. They are subject to the conditions under which the gardeners at the college are employed. Outdoor hours. — During October, November, December, January, and February, students attend from 8 a. m. till dark, with one hour for dinner; for the rest of the year from 7 a. m. to 6 p. m., with one hour for dinner. On class nights work ceases at 5 p. m. Half the class attend the markets on alternate Friday mornings. The keeper of the Koyal Botanic Gardens gives a special course of about 30 lectures and demonstrations. These take place weekly, either in the Royal Botanic Gardens or in the grounds of the college. Indoor hours. — The attendance of pupils is compulsory for indoor instruction from 7 to 9 p. m. three nights per week. On one, instruction is given in calculations, writing of reports and letters, and in the preparation of plans. On another, a discussion class is held, presided over by the lecturer on horticulture. On the third, a class is held in biology, including plant life, disease of plants, and injurious insects. From time to time instruction in bee-keeping, woodwork, and the use of fertilizers is given as opportunity offers. The session closes on September 30. Students may be retained at the school beyond that date if, in the opinion of the department, they would profit by an extension of the course. The department does not undertake to employ or to procure employment for students at the close of the courses, but the names of those who qualify are sent to county committees of agriculture, with an intimation that they are eligible for appointment by such committees to instructorships under the department's scheme of instruction in horticulture and beekeeping. Several men who have passed through the school are now employed by county committees of agriculture. QUESTIONS. Q. Is any credit given to the young men who attend the short term winter agricultural schools in either Albert Agricultural College or the Royal College of Science? For instance, is the term shortened for young men who have attended a winter school for, say, three consecutive years ? A. No. Nothing wiU shorten the term in the Royal College. Four years are required for a diploma. No man is admitted there unless he can prove he has a thorough knowledge. Every man must be tested for practical knowledge and must be able to pass in the service of the college. Q. Are most of the students in the Royal College farmers' sons ? A. Yes; they must be farmers' sons. Q. What are the qualifications required to enter the Royal College ? A. Successful examination in practical agriculture. The student must come to the Albert Agricultural College and prove by demonstration that he knows everything about the operation of a farm. He must then pass an examination in Latin, mathematics, and English language. At the Royal College of Science he will then receive a scholarship. If he pays his own fee, it will cost him £70. Q. In the entrance examination, what subject receives the most weight, English or science ? A. More practical knowledge than anything else. It is insisted that men who are going to become experts must first of all know practice. Entrance examination credit is thus chiefly given for signs of practical knowl- edge. The applicant must know enough mathematics to enter a school, but recently the department of agri- culture has been seeking to give these studies, in addition to technological work, a certain amount of literary studies over and above the work of bare technical agriculture. In this way the schools will be able to assist further young men who are backward in their studies. More stress is laid on agriculture than literary subjects, but in the entrance examination stress is laid on both. Q. What is the average age of young men who enter the agricultural department of the Royal College of Science ? A. Twenty-one years. Q. Providing an education which costs £70, do you get students who could only afford to pay £50, or do you exclude that class ? A. They mostly come in on scholarships. They are educated men as a rule, and are without exception sons of farmers — some of them sons of quite small farmers. The large majority of agricultural instructors in Ireland are sons of small farmers. IRELAND. 857 In Ireland there is also a large group of women instructors throughout the country districts teaching butter making, poultry keeping, and aU the arts of the farm and home. There is a training school for the teaching of domestic economy and instruction, in addition to the local schools, one of which is at Cork. Q. Is the number of so-called winter schools in Ireland limited to 20 ? A. Yes; about 20. Q. Is there much competition in the counties to become members of such groups ? A. Occasionally in a district where interest has been spread, you will find the demand greater than can be taken care of, while in other districts if 20 students can not be secured we are glad to start with 12. The prin- ciple of these winter schools is that they are for ambitious young men. Q. What is the length of the school term in these winter schools ? A. It was originally intended to last 20 weeks — between the time when the harvest is taken in and the spring — but owing to the comparatively short winters in Ireland, we find that there are hardly 20 available weeks, and so are satisfied with a course of 16 weeks, if regular attendance can be secured. "We have trained a large number of men as teachers, but as yet there are not a sufficient number of teachers in Ireland. _Q. What tests are required to enter these wiuter schools ? A. First, the applicant must prove that he is a genuine bona fide student of agriculture. Beyond that the test is very simple. We have to be very careful with the yoimg farmer. We shake him by the hand, and if it feels horny we begin and talk about his home and farm, and what he can do, and then ask any simple question in arithmetic, and then we test him a little in his English. This is just to be sure that he is a farmer and to see if he has a fairly good education. We are very careful, however, not to term it an "entrance examination." Q. Are there sufficient laborers in Ireland during the harvest ? If not, how do you provide for the situation ? A. The small farmers often help each other in their harvest and can get along without labor; in other cases the farm is small enough for the farmer to get along without any help. There is little or no migratory labor in Ireland. Q. How many hours are required a day in the winter schools ? A. Usually foiu^ hours, but it depends on the studies. Q. At what age do the students enter ? A. At 17 years of age. There has been an attempt to induce boys of 15 to enter, but it is possibly a mis- take to take them in so young. Q. Are these courses given in the country high schools 1 A. No. We simply go into a village and take the first house available; maybe the courthouse, or it may be the jail or a barn. We do not put up buildings, owing to the migratory character of the schools. Where there is a village hall it can be used for this purpose. It is the people who come around and apply for instruc- tion who make the school. THE RURAL COMMUNITY. Address by George W. Russell, Editor "The Irish Homestead." Dublin. There may seem to be something odd in a continental State like America coming to a small island like Ireland to learn from it; but the laws of human life are the same everywhere, and as we are beginning, I believe, to recover from an economic disease with which America is threatened, the method of treatment here, the policy which is being applied; will probably be applicable in every rural community. I am sorry rural America has had to travel abroad for the sake of its health. The disease of rural decay has wrought more harm in the Old World than the New, and we have probably thought more over remedies than you have; but in neither the Old World nor the New does there seem to me to be much first-class thinking on the life of the countryman. This will be apparent if we compare the quality of thought which has been devoted to the problems of the city, state, or the constitution of widespread dominions, from the days of Solon and Aristotle down to the time of Alex- ander Hamilton, and compare it with the quality of thought which has been brought to bear on the problems of the rural community. On the labors of the countryman depend the whole strength and health, nay, the very existence of society; yet in almost every country politics, economics, and social reform are urban products, and the countryman gets only the crumbs which fall from the political table. It seems to be so in Canada and the States, countries which we in Europe for long regarded as mainly agricultural. It seems only yesterday to the imagination that they were colonized, and yet we find the minister of agriculture m Canada announcing this year a decline in the rural population in eastern Canada. As children sprung from the loins of diseased parents manifest at an early age the same defects in their constitution, so Canada and the States, though in their national childhood, seem already 858 AGKICTJLTUEAL COOPERATION IN EUROPE. threatened by the same disease from which classic Italy perished, and whose ravages to-day make Great Britain seem to the acute diagnoser of political health like a fruit, ruddy without, but eaten away within and rotten at the core. One expects disease in old age, but not in youth. We expect young countries to sow their wild oats, to have a few revolutions before they settle down to national housekeeping; but we are not moved by these troubles, the result of excessive energy, as we are by symptoms of premature decay. No nation can be regarded as unhealthy when a virile peasantry, contented with rural employments, however discontented with other things, exists on its soil. The disease which has attacked the great industrial communities here and in America is a discontent with rural life. Nothing which has been done hitherto seems able to promote content. It is true, indeed, that science has gone out into the fields; but the labors of the chemist, the bacteriologist, and the mechanical engineer are not enough to insure health. What is required is the art of the political thinker, the imagination which creates a social order and adjusts it to human needs. The physician who understands the general laws of human health is of more importance to us here than the specialist. The genius of rural life has not yet appeared. We have no fundamental philosophy concerning it, but we have treasures of political wisdom dealing with humanity as a social organism in the city states or as great nationalities. It might be worth while inquiring to what extent the wisdom of a Solon, an Aristotle, or an Alexander Hamilton might be applied to the problem of the rural community. After all, men are not so completely changed in character by their rural environment that their social needs do not, to a large extent, coincide with the needs of the townsman. They can not be considered as creatures of a different species. Yet statesmen, who have devoted so much thought to the constitution of empires and the organization of great cities, who have studied their psychology, have almost always treated the rural problem purely as an economic problem; as if agriculture was a business only and not a life. Our great nations and widespread empires arose in a haphazard fashion out of city states and scattered tribal communities. The fusion of these into larger entities, which could act jointly for offense or defense, so much occupied the thoughts of their rulers that everything else was subordinated to it. As a result the details of our modern civilizations are all wrong. There is an intensive life at a few great political or industrial centers, and wide areas where there is stagnation and decay. Stagnation is most obvious in rural districts. It is so general that it has been often assumed that there was something inherent in rural life which made the country- man slow in mind as his own cattle. But this is not so, as I think can be shown. There is no reason why as intense, intellectual, and progressive a life should not be possible in the country as in the towns. The real reason for the stagnation is that the country population is not organized. We often hear the expression "the rural community"; but where do we find rural communities? There are rural populations, but that is altogether a different thing. The word "community" impUes an association of people having common interests and common possessions, bound together by laws and regulations which express these common interests and ideals and define the relation of the individual to the community. Our rural populations are no more closely connected, for the most part, than the shifting sands on the seashore. Their life is almost entirely individuahstic. There are personal friendships, of course, but few economic or social partnerships. Everybody pursues his own occupation without regard to the occupation of his neighbois. If a man emigrates, it does not affect the occupation of those who farm the land all about him. They go on plowing and digging, buying and selling, just as before. They suffer no perceptible economic loss by the depar- ture of haK a dozen men from the district. A true community would, of course, be affected by the loss of its members. A cooperative society, if it loses a dozen members, the milk of their cows, their orders for fertiUzers, seeds, and feeding stuffs, receives serious injury to its prosperity. There is a minimum of trade below which its business can not fall without bringing about a complete stoppage of its work and an inabihty to pay its employees. That is the difference between a commimity and an unorganized population.. In the first the interests of the community make a conscious and direct appeal to the individual, and the community, in its turn, rapidly develops an interest in the prosperity of the member. In the second the interest of the individual in the community is only sentimental, and as there is no organization, the community lets the individual slip away or disappear without comment or action. We had true rural communities in ancient Ireland, though the organization was rather mihtary than economic. But the members of a clan had common interests. They owned the land in common. It was a common interest to preserve it intact. It was to their interest to have a numerous membership of the clan, because it made it less liable to attack. Men were drawn by the social order out of merely personal interests into a larger fife. In their organizations they were unconsciously groping, as all human organizations are, toward the final soUdarity of humanity, the federation of the world. Well, these old rural communities disappeared. The greater organizations of nation or empire regarded the smaller communities jealously in the past, and broke them up and gathered all the strings of power into capital cities. The result was a growth of the state, with a local decay of civic, patriotic, or public feeling, ending in bureaucracies and state departments, where paid officials devoid of intimacy with local needs replaced lEELAND. 859 the services naturally and voluntarily rendered in an earlier period. The rural population, no longer existing as a rural community, sank into stagnation. There was no longer a common interest, a social order turning their minds to larger than individual ends. Where feudahsm was preserved, the feudal chief, if the feeling of noblesse oblige was strong, might act as a center of progress; but where this was lacking social decay set in. The difficulty of moving the countryman, which has become traditional, is not due to the fact that he lives in the country, but to the fact that he Uves in an unorganized society. If Dubhn or another city wants an art gallery or public baths, or recreation grounds, there is a machinery which can be set in motion, there are corporations and urban councils which can be approached. If public opinion is evident — and it is easy to organize pubHc opinion in a town — the city representatives will consider the scheme, and if they approve and it is within their power as a corporation or council, they are able to levy rates to finance the art gallery, pubHc bathhouses, recreation grounds, pubhc gardens, or whatever else. Now, let us go to a country district where there is no organization. It may be obvious to one or two people that the place is perishing and the humanity is decaying, lacking some center of life. They want a village haU, but how is it to be obtained ? They begin talking about it to this person or that. They ask these people to talk to their friends, and the ripples go out weakening and widening for months, perhaps for years. I know of districts where this has happened. There are in all prob- ability hundreds of parishes in Ireland where some half-dozen intelligent men want cooperative societies, or village halls, or rural Mbraries. They discuss the matter with their neighbors, but find a complete ignorance on the subject. Before enthusiasm can be kindled there must be some knowledge. The countryman reads little, and it is a long and tedious business before enough people are excited to bring them to the point of appeal- ing to some expert to come in and advise. More changes often take place within a dozen years after a cooperative society is first started than have taken place for a century previous. I am familiar with a district — Templecrone, in northwest Donegal. It was one of the most wretchedly poor districts in Ireland. The farmers were at the mercy of the gombeen traders and the agricultural middlemen. Then a dozen years ago a cooperative society was formed. I am sure the oldest inhabitant there will agree that more changes for the better for farmers have taken place since the cooperative society was started than he could remember in all his previous fife. The reign of the gombeen man is over. The farmers control their own buying an' I selling. Their organization markets for them the eggs and poultry. It procures seeds, fertilizers, and domestic requirements. It turns the members' pigs into bacon. They have a village hall and an allied woman's organization. They sell the products of the women's industry. They have a cooperative band, social gatherings, and concerts. They have spread out into half a dozen parishes. They have gone southward to Ardara with their propaganda and eastward toward Falcarragh, and in half a dozen years in all that district, previously without organization, there will be well organized farmers' guilds, concentrating in themselves all the trade of their districts, having meeting places where the opinion of the members can be taken; having a machinery, committees, and executive officers to carry out whatever may te decided on, and having funds, or profits, the joint property of the community, which can be drawn upon to finance their undertakings. You see what a tremendous advantage it is to farmers in a district to have such organizations; what a lever they can pull and control. You will understand the difference between a rural population and a rural community, between a people loosely knit together by the vague ties of a common latitude and longitude, and people who are closely knit together in an association and who form a true social organism, a true rural community. I assert that there never can be any progress in rural districts or any real prosperity without such farmers' organizations or guilds. Wherever rural prosperity is reported of any country, inquire into it and it will be found that it depends on rural organization. Wherever there is rural decay, inquire into it and it will be found that there was a rural population, but no rural community, no organization, no guild to promote common interests and unite people in defense of them. It is the business of the rural reformer to create the rural community. It is the antecedent to the creation of a rural civilization. You have to organize the community so that it can act as one body. It is not enough to organize farmers in a district for one purpose only — in a credit society, a dairy society, a fruit society, a bacon factory, or in a cooperative store. All these may be and must be beginnings, but if they do not develop and absorb all rural business into their organization they will have little effect on character. No true social organism will have been created. If people unite as consumers to buy together they only come into con- tact on this one point; there is no general identity of interest. If cooperative societies are specialized for this purpose or that— as in Great Britain or on the Continent — to a large extent the limitation of objects prevents a true social organism from being formed. The latter has a tremendous effect on human character. The spe- cialized society only develops economic efficiency. The evolution of humanity beyond its present level depends absolutely on its power to unite and create true social organisms. Life in its higher forms is only possible because of the union of myriads of tiny lives to form a larger being, which manifests will, intelligence, affection, and the spiritual powers. The life of the amoeba or any other unicellular organism is low compared with the 860 ■ AGEICULTUEAL COOPERATION' IN EUBOPB. life in more complex organisms, like the ant or bee. Man is the most highly developed living organism on the globe, yet his body is built up of innumerable tiny cells, each of which might be described as a tiny life in itself. But they are built up in man into such a close association that what affects one part of the body affects all. The yell which the whole being will emit if a needle is stuck into one cell in the human body should prove that to the least intelligent. The nervous system binds all the tiny cells together, and they form in this totality a being infinitely higher, more powerful, than the cells which compose it. They are able to act together and achieve things impossible to the separated cells. Now, humanity to-day is, to some extent, like the individual cells. It is trying to unite together to form a real organism, which will manifest higher qualities of life than the individual can manifest. But very few of the organisms created by society enable the individual to do this. The joint-stock companies or capitalist con- cerns which bring men together at this work or that do not yet make them feel their unity. Existence under a common government effects this still less. Our modern States have not yet succeeded in building up that true national life where all feel the identity of interest; where the true civic or social feeling is engendered and the individual bends all his efforts to the success of the community on which his own depends; where, in fact, the ancient Greek conception of citizenship is realized, and' individuals are created who are ever conscious of the identity of interest between themselves and their race. In the old Greek civilizations this was possible because their States were small — indeed, their ideal State contained no more citizens than could be affected by the voice of a single orator. Such small States, though they produced the highest quality of life within themselves, are no longer possible as political entities. We have to see whether we could not, within our widespread nationah- ties, create communities by economic means where something of the same sense of solidarity of interest might be engendered and the same quality of life maintained. You see that I am greatly ambitious for the rural community. But it is no use having mean ambitions. Unless people believe the result of their labors AviU result in their equaling or surpassing the best that has been done elsewhere they will never get very far. You, I take it, are out in quest of a civilization. It is a great adveiiture, the building up of a civilization — the noblest which could be undertaken by any persons. It is at once the noblest and the most practical of all enterprises, and I can conceive of no greater exaltation for the spirit of man than the feeling that his race is acting nobly and that all together are performing a service, not only to each other, but to humanity and those who come after them, and that their deeds will be remembered. It may seem a grotesque juxtaposition of things essen- tially different in character to talk of national idealism and then of farming, but it is not so. They are insep- arable. The national ideahsm which will not go out into the fields and deal with the fortunes of the working farmers is false ideahsm. Our conception of a civilization must include, nay, must begin with, the life of the humblest, the life of the average man or manual worker, for if we neglect them we will build in sand. The neglected classes will wreck our civilization. The pioneers of a new social order must think first of the average man in field or factory and so unite these and so inspire them that the noblest life will be possible through their companionship. If you will not offer people the noblest and best, they will go in search of it. Unless the countryside can offer to young men and women some satisfactory food for soul as well as body it will fail to attract or hold its population and they will go to the already overcrowded towns, and the lessening of rural production will affect production in the cities and factories, and the problem of the unemployed wiU get still keener. The problem is not only an economic problem, it is a human one. Man does not five by cash alone but by every gift of fellowship and brotherly feeling society offers him. The final urgings of men and women are toward humanity. Their desires are for the perfecting of their own hfe, and, as your Whitman says, where the best men and women are there the great city stands, though it is only a village. It is one of the illusions of modern materialistic thought to suppose that as high a quality of life is not possible in a village as in a great city, and it ought to be one of the aims of rural reformers to dissipate this fallacy and to show that it is possible — not, indeed, to concentrate wealth in country communities as in the cities, but that it is possible to bring comfort enough to satisfy any reasonable person and to create a society where there will be intellectual life and human interests. We will hear little then of the rural exodus. The country will retain and increase its population and productiveness. Like attracts like. Life draws life to itself. Intellect awakens intellect, and the country will hold its own, tug for tug, with the towns. Now you will say I have talked a long while round and round the rural community, but I have not sug- gested how it is to be created. I am coming to that. It really can not be created. It is a natural growth when the right seed is planted. Cooperation is the seed. Let us take Ireland. Twenty-five years ago there was not a single cooperative society in the country. Individuahsm was the mode of life. Every farmer manu- factured and sold as seemed best in his eyes. It was generally the worst possible way he could have chosen. Then came Sir Horace Plunkett and his colleagues preaching cooperation. A creamery was estabhshed herej an agiicultural society there, and, having planted the ideas, it was some time before the economic expert could decide whether they were planted in fertile soil. But that question was decided many years ago. The coopera- IKELAND. 861 tive society, started for whatever purpose originally, is an omnivorous feeder, and it exercises a magnetic in- fluence on aU agricultural activities, so that we now have societies which buy milk, manufacture and sell butter, deal in poultry and eggs, cure bacon, provide fertiUzers, feeding stuffs, seeds and machinery for their members, and even cater for every requirement of the farmer's household. This magnetic power of attracting and ab- sorbing to themselves the various rural activities, which the properly constituted cooperative societies have, makes them develop rapidly, until in the course of a decade or a generation there is created a real social organ- ism, where the members buy together, manufacture together, market together; where finally their entire in- terests are bound up with the interests of the community. I beheve in hah a century the whole business of rural Ireland will be done cooperatively. This is not a wild surmise, for we see exactly the same process going on in Denmark, Germany, Italy, and every country where the cooperative seed was planted. Let us suppose that in a generation all the rural industries are organized on cooperative lines, what kind of a community should we expect to find as the result ? How would its members live ? What would be their relations to one another and their community? The agricultural scientist is making great discoveries. The mechanical engineer goes from one triumph to another. The chemist already could work wonders in our fields if there was a machinery for him to work through. We can not foretell the developments in each branch, but we can see clearly that the organized community can lay hold of discoveries and inventions which the individual farmer can not. It is little for the cooperative society to buy expensive thrashing sets and let its members have the use of them, but the individual farmer would have to save a long time before he could raise a thousand pounds. The society is a better buyer than the individual. It can buy things the individual can not buy. It is a better producer also. The plant for a creamery is beyond the individual farmer; but our organized farmers in Ireland, small though they are, find it no trouble to erect and equip a creamery with plant costing £2,000. The organized rural community of the future will generate its own electricity at its central buildings, and run not only its factories and other enter- prises by this power, but will supply light to the houses of its members and also mechanical power to run machinery on the farm. One of our Irish societies at Roscrea is making arrangements for supplying electric light for the whole town. In the organized rural community the eggs, milk, poultry, pigs, cattle, grain, and wheat produced on the farm and not consumed, or required for further agricultural production, will automatically be dehvered to the cooperative business center of the district, where the manager of the dairy will turn the mUk into butter or cheese, and the skim milk will be returned to feed the community's pigs. The poultry and egg department will pack and dispatch the fowl and eggs to market. The mill will grind the corn and return it ground to the member, or there may be a cooperative bakery to which some of it may go. The pigs will be dealt with in the abattoir, sent as fresh pork to the market, or be turned into bacon to feed the members. We may be certain that any intelligent rural community will try to feed itself first and will only sell the surplus. It will realize that it will be unable to buy any food half as good as the food it produces. The community wUl hold in common all the best machinery too expensive for the members to buy individually. The agricultural laborers wUl gradually become skilled mechanics, able to direct thrashers, binders, diggers, cultivators, and new implements we have no conception of now. They will be members of the society sharing in its profits in proportion to their wages even as the farmer will in proportion to his trade. The cooperative community will have its own carpenters, smiths, mechanics, employed in its workshop at repairs or in making those things which can profitably be made locally. There may be a laundry where the washing — a heavy burden for the women — will be done; for we may be sure that every scrap of power generated will be utilized. One happy invention after another wUl come to lighten the labor of life. There will be of course a village hall with a hbrary and gymnasium, where the boys and girls will be made straight, athletic, and graceful. In the evenings, when the work of the day is done, if we went into the village hall we would find a dance going on perhaps or a concert. There might be a cooperative choir or band. There would be a committee room where the council of the community would meet once a week, for their enterprises would have grown, and the business of such a parish community might easily be over £100,000, and would require constant thought. There would be no slackness on the part of the council in attending, because their fortunes would depend on their communal enterprises, and they would have to consider reports from the managers and of&cials of the various departments. The cooperative community would be a busy place. In years when the society was exceptionally prosperous and earned larger profits than usual on its trade, we should expect to find discussions in which all the members would join as to the use to be made of these profits — whether they should be altogether divided or what portion of them should be devoted to some public purpose. We may be certain that there would be ammated discussions, because a real soUdarity of feeling would have arisen and a pride in the work of the community engendered, and they would like to be able to outdo the good work done by the neighbormg communities. 862 AGBICULTXTEAL COOPERATION IN EUROPE. One might like to endow the village school with a chemical laboratory, another might want to decorate the village haU with reproductions of famous pictures, another might suggest removing all the hedges and planting the roadsides and lanes with gooseberry bushes, currant bushes, and fruit trees, as they do in some German communes to-day. There would be eloquent pleadings for this or that, for an intellectual heat would be en- gendered in this human hive and there would be no more illiterates or ignoramuses. The teaching in the village school would be altered to suit the new social order, and the children of the community would, we may be cer- tain, be instructed in everything necessary for the intelUgent conduct of the communal business. The spirit of rivalry between one community and another, which exists to-day between neighboring creameries, would excite the imagination of the members, and the organized community would be as s^vift to act as the unorganized community is slow to act. Intelligence would be organized as well as business. The women would have their own associations, to promote domestic economy, care of the sick and the children. The girls would have their own industries of embroidery, crochet, lace, dressmaking, weaving, spinning, or whatever new industries the awakened intelligence of women may devise and lay hold of as the pecuUar labor of their sex. The business of distribution of the produce and industries of the community would be carried on by great federations, which would attend to export and sale of the products of thousands of societies. Such communities would be real social organisms. The individual would be free to do as he willed, but he would find that communal activity would be infinitely more profitable than individual activity. We would then have a real democracy carrying on its own business, and bringing about reforms without pleading to, or begging of, the State, or intriguing with or im- ploring the aid of pohtical middlemen to get this, that, or the other done for them. They would be self-respect- ing, because they would be self -helping above all things. The national councils and meetings of national federa- tions would finally become the real parliament of the nation, for wherever all the economic power is centered, there also is centered all the political power. And no politician would dare to interfere with the organized in- dustry of a nation. There is nothing to prevent such communities being formed. They would be a natural growth once the seed was planted. We see such communities naturally growing up in Ireland, with perhaps a Uttle stimulus from outside from rural reformers and social enthusiasts. If this ideal of the organized rural community is accepted there will be difficulties, of course, and enemies to be encountered. The agricultural middleman is doubtless as powerful a person proportionately on the American continent as he is in this little island. He will rage furiously. He will organize all his forces to keep the farmers in subjection, and to retain his peculiar func- tions of fleecing the farmer as producer and the general public as consumer. Unless you are determined to eliminate the middleman in agriculture you will fail to effect anything worth while attempting. I would lay down certain fundamental propositions which, I think, should be accepted without reserve as a basis of reform: First, that the farmers must be organized to have complete control over all the business connected with their industry. Dual control is intolerable. Agriculture will never be in a satisfactory condition if the farmer is relegated to the position of a manual worker on his land; if he is denied the right of a manufacturer to buy the raw materials of his industry on trade terms ; if other people are to deal with his raw materials, his milk, cream, fruit, vegetables, live stock, grain, and other produce; and if these capitalist middle agencies are to manufac- ture the farmers' raw material into butter, bacon, or whatever else — are to do aU the marketing and export, pay- ing farmers what they please on the one hand and charging the public as much as they can on the other hand. The existence of these middle agencies is responsible for a large proportion of the increased cost of living, which is the most acute problem of modern industrial communities. They have too much power over the farmer and are too expensive a luxury for the consumer. It would be very unbusinesslike for any country to contem- plate the permanence in national life of a class whose personal interests are always leading them to fleece both producer and consumer alike. So the first fundamental idea for reformers to get into their minds is that farmers, through their own cooperative organizations, must control the entire business connected with agriculture. There will not be so much objection to cooperative sale as to cooperative purchase by the farmers. But one is as necessary as the other. You must bear in mind, what is too often forgotten, that farmers are manufacturers, and as such are enti- tled to buy the raw materials for their industry at wholesale prices. Every other kind of manufactui'er in the world gets trade terms when he buys. Those who buy, not to consume, but to manufacture and sell again get their requirements at wholesale terms in every country in the world. If a publisher of books is approached by a bookseller, he gives that bookseller trade terms because he buys to sell again. If you or I as private indi- viduals want one of those books, we pay the full retail price. Even the cobbler, the carpenter, the sohtary artist get trade terms. The farmer, who is as much a manufacturer as the shipbuilder or the factory proprie- tor, is as much entitled to trade terms when he buys the raw materials for his industry. His seeds, fertilizers, plows, implements, cake, feeding stuffs are the raw materials of his industry, which he uses to produce wheat, beef, mutton, pork, or whatever else, and, in my opinion, there should be no differentiation between the farmer IRELAND. 863 when he buys and any other kind of manufacturer. Is it any wonder that agriculture decays in countries where the farmers are expected to buy at retail prices and seU at wholesale prices ? You must not, to save any row, sell the rights of farmers. The second proposition I lay down is that this necessary organization work among the farmers must be carried on by an organizing body which is entirely controlled by those interested in agri- culture — ^farmers and their friends. To ask the State or a State department to undertake this work is to ask a body influenced and often controlled by powerful capitalists and middle agencies, which it should be the aim of the organization to eliminate. The State can, without obstruction from any quarter, give farmers a tech- nical education in the science of farming; but let it once interfere with business and a horde of angry interests set to work to harnper and limit by every possible means; and compromises on matters of principle, where no compromise ought to be permitted, are almost inevitable. A voluntary organizing body like the Irish Agricultural Organization Society, which was the first to attempt the cooperative organization of farmers in these islands, is the only kind of body which can pursue its work fear- lessly, unhampered by alien interests. The moment such a body declares its aims its declaration automatically separates the sheep from the goats, and its* enemies are outside and not inside. The organizing body should be the heart and center of the farmers' movement, and if the heart has its allegiance divided its work will be poor and ineffectual, and very soon the farmers will fall away from it to foUow more single-hearted leaders. No trades-union would admit representatives of capitalist employers on its committee, and no organization of farmers should allow alien or opposing interests on their councils to clog the machine or betray the cause. This is the best advice I can give you. It is the result of many years' experience in this work. I have followed — so far as it is possible for an old-world resident — the story of your agricultural population in the States, and I feel certain that, enlarged to continental dimensions and with changes in detail but not in principle, our Irish rural policy should be yours also. You will have to fit what you have learned in Europe into your gigantic and complex national life, and I believe you will do better than Europe has done with the same ideas. You have the energy of young races, and where we are tired you are. fresh. The greatest of your poets made a boast of your youth when he asked a question and answered it. "Have the elder races halted? Do they droop and end their lesson wearied over there beyond the seas? " We take up the burden and the lesson and the task eternal, pioneers, O pioneers." WUl you do the work your race set out to do ? Your task is to truly democratize civilization and its agencies, to spread in widest commonality culture, comfort, intelligence, and happiness, and to give to the average man those things which in an earlier age were the privileges of a few. The country is the fountain of the life and health of a race. And this organization of the country people into cooperative communities will educate them and make them citizens in the true sense of the word; that is, people continually conscious of their identity of interest with those about them. It is by this conscious sense of solidarity of interest, which only the organized cooperative community can engender in modern times, that the higher achievements of humanity become possible. Religion has created this spirit at times — witness the majestic cathedrals the Middle Ages raised to manifest their faith. Political organization engendered the passion of citizenship in the Greek States, and the Parthenon and a host of lordly buildings crowned the hills and uplifted and filled with pride the heart of the citizen. Our big countries, our big empires and repubhcs, for all their miHtary strength and science, and the wealth which science has made it possible for man to win, do not create citizenship because of the loose organization of society, because individuahsm is rampant, and men, faihng to understand the intricacies of the vast and com- plex life of their country, fall back on private Hfe and private ambitions, and leave the honor of their country and the making of laws and the apphcation of the national revenues to a class of professional pohticians, in their turn in servitude to the interests which supply party funds, and so we find corruption in high places and cynicism in the people. It is necessary for the creation of citizens, for the building up of a noble national hfe, that the social order should be so organized that this sense of interdependence will be constantly felt. It is also neces- sary for the preservation of the physical health and beauty of our race that more of our people should five in the country and fewer in the cities. I beheve it would be an excellent thing for humanity if its civihzation could be based on rural industry mainly sLnd not on urban industry. More and more men and women in our modern civilization drift out of nature, out of sweet air, health, strength, beauty, into the cities, where in the third gener- ation there is a rickety population, mean in stature, feverish and depraved in character, with the image of the devil in mind and matter more than the image of Deity. Those who go hke it at first, but city hfe is like the roll spoken of by the prophet which was sweet in the mouth but bitter in the belly. The first generation are intoxicated by the new hfe, but in the third generation the cord is cut which connected them with nature, the great mother, and Hfe shrivels up, sundered from the source of hfe. Is there any prophet, any statesman, any leader, who wUl, as Moses once led the Israehtes out of the Egyptian bondage, excite the human imagination an;l lead humanity back to nature, to sunhght, starhght, earth breath, sweet air, beauty, gaiety, and health? 864 AGEIOULTURAL COOPERATION IN EUROPE. Is it impossible now to move humanity by great ideas, as Mahomet fired his dark hosts to forgetfuhiess of life, or, as Peter the Hermit, awaken Europe to a frenzy so that it hurried its hot chivalry across a continent to the Holy Land ? Is not the earth mother of us all ? Are not our spirits clothed round with the substance of earth ? Is it not from nature we draw life ? Do we not perish without sunhght and fresh air ? Let us have no breath of air and in five minutes Ufe is extinct. Yet in the cities there is a slow poisoning of life going on day by day. The lover of beauty may walk the streets of London or any big city and may look into ten thousand faces and see none that is lovely. Is not the return of man to a natural life on the earth a great enough idea to inspire humanity? Is not the idea of a civiHzation amid the green trees and fields under the smokeless sky alluring? Yes, but men say there is no intellectual life working on the land. No intellectual life when man is surrounded by mystery and miracle, when the mysterious forces which bring to birth and life are yet undiscovered, when the earth is teeming with fife and the dumb brown lips of the ridges are breathing mystery. Is not the growth of a tree from a tiny cell hidden in the earth as provocative of thought as the things men learn at the schools ? Is not thought on these things more interesting than the sophistries of the newspapers ? It is only in nature and by thought on the problems of nature that our intellects grow to any real truth and draws near to the Mighty Mind which laid the foundations of the world. Our civilizations are a nightmare, a bad dream. They have no longer the grandeur of Babylon or Nineveh. They grow meaner and meaner as they grow more urbanized. What could be more depressing than the miles of poverty-stricken streets around the heart of any modern city? The memory lies on one "heavy as frost and deep almost as hfe." It is terrible to think of the children playing on the pavements, the depletion of vitality, with an artificial stimulus supplied by flaring drink shops. The spirit grows heavy as if death lay on it while it moves amid such things. And outside these places the clouds are flying overhead snowy and spiritual as of old, the sun is shining, the winds are blowing, the forests are murmuring leaf to leaf, the fields are green, but the magic that God made is unknown to these poor folk. Truly the creation of a rural civilization is the greatest need of our time. It may not come in our days, but we can lay the foundations of it, preparing the way for the true prophet when he will come. The fight now is not to bring people back to the land, but to keep those who are on the land contented, happy, and prosperous. And we must begin by organizing them to defend what is left to them, to take back, industry by industry, what was stolen from them. We must organize the country people into communities, for without some kind of communal hfe men hold no more together than the drifting sands by the seashore. There is a natural order in which men have instinctively grouped themselves from the dawn of time. It is as natural to them to do so as it is for bees to build their hexagonal cells. If we read the history of civilization we will find people in every land forming Uttle clans cooperating together. Then the ambition of rulers or warriors breaks them up; the greed of powerful men puts an end to them. But, whether broken or not, the moment the rural dweller is left to himself he begins again, with nature prompting him, to form Uttle clans, or nations rather, with his fellows, and it is there hfe has been happiest. We did this in ancient Ireland. The baronies whose names are on Irish land to-day and the counties are survivals of these old cooper- ative colonies, where the men owned the land together and elected their own leaders and formed their own social order and engendered passionate loyalties and affections. It was so in every land under the sun. It was so in ancient India and in ancient Peru. The European farmers and we in Ireland along with them are begioniog again the eternal task of building up a civilization in nature, the task so often disturbed, the labor so often de- stroyed. And it is with the hope that you in America will build better than we that I have put together for you these thoughts on the rural community. UNITED IRISHWOMEN. Statement by the Countess op Fingall, President. Dublin. This society was started in September, 1910, under the title of "The United Irishwomen," a name which, taken in its widest and simplest sense, exactly describes the work we have undertaken, namely — to unite the women of Ireland in a common bond, to work for the good of their country by trying to raise the standard of life in the rural districts. This we have striven to do, and are glad to report that we are gradually becoming known through the country. We have now 41 branches over Ireland with a membership of 1,450. The number of our individual members (who are interested in our work but not connected with any branch) is steadily increasing — 336. Our branch committees are composed of the women of the neighborhood, and each branch is free to take up the special forms of work its members consider most needed in the district. We have three organizers, who visit districts, holding meetings, giving all information about the society, help to form branches, and give expert advice on such forms of work as the branches may decide to take up. iBELAin}. 865 SYSTEM OF INSTRUCTION. In addition to the oiganizers, we have instructresses, who, when invited by a branch, take up their resi- dence for some months in a district and hold classes on such subjects as cookery, dressmaking, gardening, etc. One of our instructresses in Wexford has turned a very dreary three-room house into a model cottage. She holds classes there, and is "at home" every first Sunday to any of the countrywomen who care to come. Last Sunday, I believe, she had nearly 20 visitors, and, fortunately, it was a fine day, and tea could be served in the hayfield, as the cottage could not possibly have held so many. Her clever arrangements for economizing space are being adapted by several of the women. We also receive valuable assistance from the instructi esses of the department of agriculture and technical instruction, who give classes for two months or longer in aU branches of domestic economy. In many of the branches various healthful activities show the life force at work. In some, where village halls exist, horticul- tural and agricultural shows, concerts, lectures, or dances are held, and the money so gained is used to further the aims of the branch. Practical schemes have been drawn up for the training of Irish girls as village maternity nurses. One girl has completed her training, the necessary money having been collected by her branch after praiseworthy exertions, and she is now proving the greatest benefit to her village. Others are in process of training, and we look to these nurses to help us to combat one of the most serious evils of Irish nu-al life. In five centers a domestic mUk supply has been organized, and the depots are proving an immense boon to their neighborhoods. In one district women have walked miles to get mUk, which is in so many places ex- tremely scarce during the winter months. In several schools the branch conmiittees have started cocoa lunch- eons for the children, which are much appreciated. The children pay Id. a week, and, after the initial, expense, it pays. Within the last fortnight our late president, Mrs. Lett, has been inspecting the conditions of the islands of the west, of which so much has been heard lately, and we are hopeful of planting ourselves among these poor people on one of the islands. Perhaps om- most daring venture is the monthly paper we have started. We felt it such a vital necessity to have some means of keeping the branches in touch one with another, and iateresting our individual members and the outside public in our work, that with scarcely any backing we took this very serious step, and hop^in time that it wiU fully repay us. SMALL HOLDINGS AT ROSCOMMON AND CASTLEREAGH. Report of a Subcommittee.' Dublin. Some of the facts elicited are as follows: The Estates Commission of three members, appointed for life, had its origin in the Windham Act of 1902 dealing with the division and purchase of estates by tenants. This commission now handles about £8,000,000 per year, aU used for the purchase and division of estates. These estates may be purchased at a voluntary sale from the owners or (within the area of the congested districts board) the sale may be made on compulsion. At present the sales are almost all voluntary. Since its inception the estates commission has purchased and resold about 8,000,000 acres, valued at £90,000,000. The Congested Districts Board is a larger commission, also nominated by the Government, and has for its object the division and sale of estates in nine western counties of Ireland, where the congestion of tenants was such that the cottager was unable to make a living on his very small parcel of ground. This board has pur- chased land worth perhaps £3,000,000, of which it has sold about £100,000 to date. The field of operations of the estates commissioners covers aU of Ireland; the board works in but nine counties in the poorer parts, but their purposes are similar. The congested districts board has, however, many other activities besides the splitting up of land. The procedure is about as foUows: A large estate, perhaps entirely in pasture land, is put up for sale. The officials appraise it with reference to its productiveness. If the price asked by the owner is satisfactory the estate is purchased, and the owner is paid in Government land, scrip, or stock bearing 3 per cent interest. Hitherto the voluntary seller has been given a bonus of 12 per cent of the purchase price, but this bonus seems to have been withdrawn recently. Estates sold under compulsion the Government must pay for in cash. As a matter of fact, there are three methods of paying for land: (a) In stock, the usual and immediate payment method; (6) in cash, an option ' This committee was accompanied by Mr. Gill, secretary of the Department of Agriculture and Technical Instruction for Ireland; Mr. Bailey, estates commissioner; Prof. Campbell, of the Department of Agriculture; Mr. Hyde, agricultural instructor; Mr. Gallagher, district inspector; Mr. CahUl, and Mr. Scott-Robertson. 14174"— S. Doc. 214, 63-1 55 866 AGBICULTTJEAL COOPEEATION IN EUBOPE. which is rarely resorted to, since the prospective seller must ia this case await his turn, for cash sales are often very long delayed; (c) or partly in cash and partly in scrip. The 3 per cent stock is now selling at about 80, which means that for an estate valued at £10,000 the seller receives stock marketable at £8,000. Once purchased, the estate is divided into tracts of 25 to 30 acres; liue walls are built, if necessary; a house is constructed at a cost of about £200; and the place is sold to a tenant, preferably a former tenant on the estate, sometimes a purchaser from some other district. Srace there are frequently 25 to 40 applicants for each holding, it is not difficult to find honest, capable, industrious purchasers. Very often an estate is purchased by the tenants thereon by mutual agreement with their former landlord as to purchase price. The Govern- ment buys the estate, pays the landlord in stock or scrip, and sells it in small holdings to the tenants, who thus become the debtors of the State. The land must be sold to the purchasing small holders at a price not to exceed the purchase price. Fre- quently it is sold for less. Or the land plus the house and improvements are sold at the actual price paid for the land. The small holder, who may have no capital — and seldom has enough to stock the holding — pays at present 3 per cent interest on the purchase price and one-half per cent amortization, or a total of 3^ per cent, payable in semiannual installments. This rate amortizes the debt in about 62 years. The purchaser is given a title to the land, pays the taxes on it, and may transfer his equity at any time if he chooses. Out of £90,000,000 sold the failures to pay the installments promptly have been inconsiderable. In the county of Cork the defaults have been nil. In case of default or failure the installments are paid out of the county exchequer; hence the tendency to pay promptly is warmly applauded and the slow payer is frowned upon. The results of this system seem to be excellent. In the district about Roscommon and Castlereagh some 200 or more small holders have been established on the land, partly under the authority of the Estates Commissioners, partly under the Congested Districts Board. The lands here subdivided were formerly pasture or grazing land held in one or two very lai^e estates. It appears that some 50 years ago this section was stripped of the small holders who then occupied it and who were hard pressed by the high rent charges, the whole consolidated into very large holdings — one of them nearly 20 mUes in length — and turned into pasturage. When this land was purchased by the Government in 1906 and 1907, there was scarcely a tilled acre on the whole tract, almost no walls or fences, and a very few poor buildings, chiefly herders' cottages. The Government divided the land into tracts of 25 to 40 acres, rebuilt the fallen walls, erected comfortable houses of various styles of architecture, some two-story and some single-story buildings, frequently put up other farm buildings, planted trees, and laid out gardens. The houses cost about £180 to £200 each, are buUt of stone, and seem very neat and comfortable. After the new owners, who were obtained from a poorer district, had been established in their new homes the Department of Agriculture and Technical Instruction put into the field an instructor in agriculture, who makes his headquarters in Castlereagh and whose business it is to instruct the small holders in proper methods of agricultural practice and animal husbandry, to encourage tillage, the introduction of roots, clover, and potatoes, and the use of proper manures, fertilizers, and improved machines and implements. These instructors are continually in the field and at the call of the various small owners. Owing to this encouragement and material assistance the district has taken on a much more prosperous aspect. Considerable tillage is carried on, farms have been greatly improved, steadings have been beautified, good roads constructed, and a substantial and profitable system of agriculture set up. The committee drove over several mUes of the district near Castlereagh and personally interviewed a number of farmers. They are uniformly hopefid, although some are much more intelligent and thrifty than others. All are paying their installments. Only one vacated house was seen, the owner having transferred his equity to a larger holder. All the holders visited were married men with comparatively large families, and all seemed to have some relatives — children, brothers, or sisters — in the United States. The small-holdings movement has not stopped emigration, but it has made agriculture and rural life more hopeful. The contrast between the old thatched-roof one-story cottage and the new two-story slate-roofed home, with a large yard and flower garden, well laid out and inclosed by a substantial wall, is very marked. The new homes are much more comfortable, even if less picturesque, than the old whitewashed cottage with the low roof and the unpleasant sanitary surroundings. The Government in several instances has made loans to small holders for the purpose of enabling them to purchase tools, manures, stock, or other capital to an extent of perhaps £50 per individual. These loans IBKLAKT). 867 are made at 3 per cent; in general no repayment except interest is required for a few years, and the loan need not be entirely repaid until the expiration of 10 years. The small holders in the Castlereagh district, as well as others, have taken advantage of these loans. The agricultural inspectors find it rather difficult to persuade the farmers to maintain a large area of tilled land. The tendency is to allow the land to revert to hay land and pasture. It appears that the limestone soil of this area is very well adapted to permanent grass land, and there are still numerous large estates devoted to the pasturage of store cattle. The grazing farm requires less thought and energy, and owing to the vicissi- tudes of the climate is more certain, if less profitable, in returns. Hence the instructors must struggle con- tinuously to persuade the holders to develop and maintain tillage. Especially difficult have they found the introduction of root crops. At Loughlynn is located a school of domestic science, established in 1907 by the Franciscans. The school was founded on an old estate, and the demesne residence and buildings are now used for instruc- tional purposes. The sisters in charge are almost all French and Belgians — some from Alsace — with a few from Ireland. The pupils are girls from the surrounding districts who have completed the work of the ele- mentary national schools. The minimum age is 14 years, and there is no maximum. In aU there are some 50 pupils, chiefly from the small holdings in the vicinity, although occasionally a girl may come from a distant part of Ireland or even from the Continent. The school has the approval of the Government. Some of the instructors from the department of agriculture visit it and give occasional instruction, and most cordial relations are manifest. No literary instruction is contemplated; the course is all practical and technical; sewing, lace making, and embroidery are taught, emphasis being laid on the making of everyday garments. Instruction in cooking pertains both to the more modem methods and culinary appliances and the old peat fire hearth. In fact, a great deal of attention is given to making the best use of the primitive appliances of the small Irish landholder in his thatchad cottage. Dairying, including the care of the herd and butter and cheese making, is ah important part of the instruc- tion. Gardening and poultry culture and care are also emphasized. The whole tenor of the instruction is practicability and adaptability to the small Irish farmer. COOPERATION IN WATERFORD AND WEXFORD. Report ov a Subcommittee. ARDMIRE DAIRY FARM. Wexford. On July 16 this subcommittee visited the "Ardmire" dairy farm owned by the Richards family of Wexford. This farm embraces 300 Irish acres, which are equivalent to about 500 English acres, and has been owned by the Richards family since 1819. The dairy herd consists of 70 cows — shorthorns crossed with native stock — of which 45 were being milked. A record of each and every cow is kept, showing the number of pounds of milk the animal produces and the value of the milk when sold. The average annual production of milk per cow was said to be about 8,000 poimds. The production record of a few of the choice cows is of interest. From May 14, 1911, to November 1, 1912, for instance, one cow produced 14,490 pounds of milk, with a market value of £39 8s. 8d. The animals are tested, and any cow producing less than 6,150 pounds a year is taken from the herd and sold. The milk is sold at the rate of 23 cents per pound of butter fat. The average richness of the milk is 3.03 of butter fat. Jacobs & Co., biscuit manufacturers of Dublin, buy most of the output of the farm for 3i cents per quart in summer and for 4^ cents per quart in the winter — a quart weighing 2.58 pounds. A creamery in the vicinity takes the excess of the milk not demanded by Jacobs & Co. at 2^ to 3i cents, according to the season, and retm-ns the skim milk and the buttermilk to the farm. The farm is divided into about 200 acres of pasture land, 75 acres in hay, 20 acres in oats, and 5 acres in beets and turnips. The prices paid for feed for the cows are $1.34 per hundred pounds for brewers' gram, $50 per ton for cotton cake, and $2.50 per hundred pounds for ground wheat. Power and light for the barn and residence is furnished by a suction gas plant, which uses small particles of anthracite coal, producmg power at a cost of one-eighth of 1 penny per horsepower per hour. 868 AGBICULTUBAL COOPEKATION IN EXJEOPE. BALLYCANEW COOPERATIVE AGRICULTURAL SOCIETY. A visit was made to the Ballycanew Cooperative Agricultural Society, which consists of a butter-makihg plant and a store located above the creamery, which handles foodstuffs, fertilizers, groceries, machinery, hard- ware, and in fact practically everything except dry goods. This society began in 1895 with a capital of $1,500; shares at $5, on which $1.25 was paid. Members hold as many shares as they own cows. The society pays 5 per cent dividends, and places the balance of the profits in the reserve fund, whicli now amounts to about $10,000, and is used to finance the store operations. The plant is at present worth about $15,000. About 150 farmers supply the creamery with milk. After the milk is separated, the farmers take back approximately 85 per cent of their deliveries in the form of skim milk. At the height of the season more than 25,000 gallons are supphed daily. It requires, so it was stated, 2f gallons of milk (each gallon weighing lOJ pounds) to manufacture 1 pound of butter. The butter is sold in London at the rate of 109 shillings per hun- dredweight f. o. b. at the plant. Milk is bought at the rate of 2| cents a quart in summer and at 3i cents a quart in the winter. The milk must test 3.5 per cent butter fat. The working force of the society consists of a superintendent, who receives a salary of $600 a year and house, an engineman at $15 a week, 2 store clerks, and 6 creamery hands, at an average wage of $20 a month each. The plant does about a £4,000 business a year. The hauling to and from the station of the store supplies and the butter is done under contract by a man who has two 1-horse carts with a capacity of a ton each, which make four trips a day. This man carries 5 to 35 56-pound boxes of butter to the station, a distance of 4 miles, twice daily, and returns loaded with 1 ton of merchandise on each cart. He receives under his contract $2.50 a day. Butter is sold locally at 1 shilhng a pound. The society pays for the milk from samples taken daily. Mem- bers are sold goods at the store on credit, in view of the fact that they carry current accounts at the creamery for the milk suppUed. DOTNE FARM AT WILLSGOKET. This farm, owned by C. M. Doyne, contains 900 acres of grazing, wood, and^cultivated land, worth $75 an acre. It is stocked with 500 sheep and lambs, which on an average weigh 66 pounds dressed, for which 18 cents a pound can be secured, amounting to about $12 for each animal for meat, and $3.40 more for the skin. The best bucks are worth $100, and weigh 224 pounds each. Ewes are worth $30 when for exhibit. In addition to the sheep there are about 150 head of cattle on the farm. The weight of the beef animals is from 1,400 for 2-year-old to 900 pounds for the 1-year-old animals. The average size of the farms in the immediate vicinity is 40 acres, supporting from 8 to 10 cows each. ENNISCORTHY COOPERATIVE AGRICULTURAL SOCIETY. The objects of this society, as expressed in rule 3 of the special regulations of the society, are as follows : To carry on the occupations of commission agents, wholesale and retail dealers in farm and garden produce, seeds, artificial manures, feedstuffs, agricultural implements and machinery, breeders, exporters, and importers of live stock, bankers, and general dealers in any class of goods the committee may direct; to obtain and disseminate useful information among its members, and generally to develop and promote the cooperative movement in Ireland; to carry on any occupation or manufacture that the committee may deem desirable. It shall be lawful for the society to do all things necessary or expedient for the accomplishment of its object. The plant of the society consists of a large building, situated on a large courtyard, in which there are de- partments for manufacturing harness and leather goods; for the assembling of machinery, and the storage of hardware and of fertilizers ; also departments for groceries, seeds, and foodstuffs, and for the manufacture and sale of carriages, paints, oUs, and other things. The society was founded in 1905, and in 1912 had 930 shareholders. It sells farm machinery as follows: A reaper and binder for $120; British mowing machine for $55; and American mowing machines, which cost the society $52.50, are sold for $57.50. The society borrows money from a local joint-stock bank at a rate of 1 per cent under commercial rate on the signature of the members of the board of directors. Five per cent is paid at present. Liability is limited to the amount of the shares held. Three per cent interest is paid on funds that are deposited with the society. The society has no mortgage debt. In the ypr.r 1912 the society made sales to the value of £21,000, out of which it realized a profit of £2,439. The expenses in this year were £1,786. Deposits at the end of the year amounted to the value of £3,368. IBELAND. 869 Goods are sold both for cash and on credit to the members, but only for cash to nonmembers. Members participate in the profits. Wages are paid at the rate of 50 cents a day of 10 hours. The society also ar- ranges contracts for special cooperative insurance. In the country around Enniscorthy, land which sold for $48 an acre 8 years ago is at the present time worth from $75 to $100 an acre. AGRICULTURAL COOPERATION.' The cooperative movement was inaugurated in the County Wexford 18 years ago. Its introduction has been the outcome of the enterprise of a few local pioneers who had studied its possibilities. The farming community were unaware at the time of its inauguration of any direct means of relief from the dependence on private traders in the matter of purchase of their requirements or for the sale of their produce. The movement at first met with the most bitter opposition of private traders, and was viewed with an amount of scepticism and distrust by those whom it was intended to benefit, namely, the farmers. A great majority of the latter, with their natural conservatism, had little desire to change and put little belief in the proposed cooperative methods. The organizers, however, knowing the material they had to deal with, perse- vered in their endeavors and were aware that practical demonstration of the advantages of the movement would alter the attitude. A few cooperative banks and the Enniscorthy Cooperative Agricultural Society were promoted, and at once direct interest was created. The benefits which the Enniscorthy society immedi- ately secured to the farmers in the district brought in many adherents hitherto opposed to the movement, and created an atmosphere of discussion, inquiry, and examination among farmers regarding their economic posi- tion in the country generally. The promotion of other societies and the educational effects of agricultural associations have altered the attitude of the farmers entirely in regard to their power and position in the country, and the associations of farmers in cooperative societies have engendered a business instinct which can now be found directly expressed in the working of their farms. At the present time there is scarcely a parish which has not its cooperative society of some kind, and some parishes have two or three societies working in their midst. There are 84 cooperative societies in the coimty at present, with a total membership of about 3,800. These societies are divided as follows: Cooperative dairy Bocieties 4 Cooperative pig and cattle suppliers societies 45 Cooperative credit societies V 30 Cooperative agricultural societies 1 Cooperative thrashing societies 4 The pig and cattle suppliers societies exist for the purpose of decentralizing the work and imdertaking the responsibility of supplying the raw material and the required capital to the Wexford Meat Supply and Bacon Factory, Limited, which is largely engaged in the fresh meat trade, and which will shortly open a bacon factory. The Wexford Meat Supply and Bacon Factory enables its members to market their fat stock to far better advantage than hitherto and also supplies educational advice regarding the most economic methods of producing beef, mutton, and pork. The Enniscorthy Agricultural Cooperative Society has been successful in reducing the prices of manures, farm implements, and other requirements and at the same time provides its members with seeds and manures of guaranteed quality. The value of this may be better understood when one remembers that a large quantity of the seeds and manures sold in Ireland are almost valueless. The 30 cooperative banks have been of great advantage to the small farmers in various parts of the county. A number of individual instances could be cited of material benefit derived by members of cooperative credit societies. In some districts banks which have hitherto done a large business are now practically deftmct for no other reason than that they have placed their members in an independent position, and a good many of those who had hitherto been required to borrow have now money to their credit in the joint-stock banks. The committees of our local credit societies have invariably administered their affairs in the true cooperative spirit. The dairy societies have been long'established'and have produced very good results, the most important being the great increase in the production of butter and increase of prices. That they have not been further developed is because the greater part of the county is more adapted to tillage than to dairy farming. Although much good has been done and great headway has been made, the cooperative movement is as yet only in its infancy in this county. Industry and enterprise in other directions are being so thoroughly organ- ized that the agricultural interests can not afford to neglect to further improve their position. > statement by Mr. O'Leary, of the Irish Agricultural Organization Society. 870 AGBICULTtTBAL COOPERATION IN EUEOPE. The United Irish Women's Societies, which have been formed to enable the women of Ireland to take their part in the social regeneration of the country, have considerably developed in this county, and the junction of the social and domestic forces with the larger economic forces of cooperation is boimd to have a strengthening effect on the whole movement and to bring its influence into the daUy lives of the people. The cooperative movement in Wexford County has now secured a quiet, determined, and sustained interest of the farming community, and it has reached the stage when it develops of itself. As an Olustration of this, during the year 1912 the turnover of the cooperative societies in the county amounted to approximately £90,000, and during the current year their turnover is estimated to reach £140^000. BENEFITS OF COOPERATION. Speaking of the benefits which cooperation has brought to the farmers of Wexford County, Mr. T. Alex. Kudd stated that manures were now from $5 to $10 cheaper than they were prior to the introduction of the cooperative institutions. Binders which previously sold for £37 could now be bought for £24. Cooperation in any section was a benefit to the large farmer as well as to the small farmer. In Wexford County they got seeds for less now than they paid the regular seed firms for sweepings five years ago. They were getting better seeds and better fertilizers than prior to the establishment of cooperative societies. NEED OF DISTRICT CREDIT BANKS.' Cooperation for the purpose of agricultural credit in Ireland has so far been organized only on the simplest lines. Credit societies are doing valuable work, scattered throughout the country; each society, however, is seK-contained and seK-rehant. Such criticism of their work as has been made public is a criticism of faults either real or alleged, due almost entirely to the lack of mutual support, self-examination, friendly inspection, and kindly criticism. It is now fully recognized that some friendly central inspecting and advisory institution should exist, and arrangements are being made to create a central cooperative credit society to provide for a more regular inspection and more effective supervision of the work of the local credit societies. This is probably only a preliminary development. Even in Ireland the comparative weakness of a too great centralization will soon become apparent. It must also be evident that societies, however valuable and beneficent their existence may be, must fall short of the ideal if left entirely to their own devices, if, as sometimes must be the case, their secretaries are wanting in the necessary qualifications, and their social and economic conditions do not allow of the keeping of accurate accounts nor the safe custody of considerable sums of money. The force of circumstances will lead before long to the establishment of at least one inter- mediate circle of organizations in the scheme of centralization. It is not easy to imagine a rural community whose members can not rise to the level of receiving and considering applications for loans when conveyed in simple form, of recording their approval or disapproval in a simple register, and of issuing a draft on a stronger and more highly organized society, which shall be the depository of their credit and their cash, and the keeper of their more detailed and intricate accounts. In such a system as I have in view, the group of farmers forming the local unit would combine to obtain their credit from a joint-stock bank (or some other source) and would transfer that credit to the unit of the inner circle on which they might depend and on which they could make all of their payments by draft. The local society would thus keep only the simplest accounts and would retain no funds in their possession beyond the time absolutely necessary before making the transfer to the inner unit. This inner unit, "the district bank," as it may be called to distinguish it from the town or local group, would inspect and audit the simple accounts of the affiliated local societies (say 6 or 10) depending on it, would hold custody of the cash, would keep accounts in detail, would build up a credit of its own, and hold deposits. The district bank might and probably would be the financial branch of a district cooperative store. The district banks in turn would depend on a central cooperative bank that should in course of time develop a credit sufficient for the needs of the whole cooperative system. In bringing this suggestion to the attention of the American commission, I do so in the belief that the evUs of a too direct, and I may say summary, centralization will be more prominent in the wider area and less thickly populated districts of the New World than in Ireland, and the advantages of intermediate circles or groups of organizations would be even greater. ' Statement by Mr. E. A. Johnson. lEBLAND. 871 LABORERS' COTTAGES BUILT UNDER BOARD OP GUARDIANS ACT. A number of laborers' cottagfes built under the board of guardians act were visited, and a brief statement of the system on which they are provided may be of interest. These cottages were built to replace the old mud cabins. Outside dimensions of the cottages are 16 by 24 feet, and 12 feet to the eaves, with 8 feet more to the peak. They are divided into four rooms. A 3 by 4 window is located in each gable on the second story. The entrance door is located in the center, with a 3 by 5 foot window on either side of it. A big fire place is provided in the center. The cost of construction is from $600 to $750. The land on which the cottages are placed costs $20 an acre. A cottage and half an acre of land is rented for 18 cents a week, and 20 cents a week is charged for a cottage and 1 acre of ground. These houses are intended to be occupied only by agricultural laborers with families, whose wages run from $2.50 to $3.75 a week for day work, and up to $5 a week for night work. The cottages are constructed and allotted by the rural district counsel only to married persons, and as the families increase the rents are decreased. Local proprietors who have to depend upon this class of labor say that these laborers are made so inde- pendent with their house and Httle plot of land that they will only do as much outside labor as is necessary to eke out their existence, and can not be relied on as a dependable labor supply. WEXFORD MEAT SUPPLY AND BACON FACTORY. The Wexford Meat Supply & Bacon Factory includes an abattoir fitted up and superintended by an Irish- man who has spent several years in the employ of P. Cudahy & Co., in the Chicago stock yards. The factory is fitted up in a thoroughly modern manner, with cold storage rooms, and all departments necessary for taking care of the by products. Adjacent to the plant are stalls for housing cattle intended for slaughter. The cattle are brought in from the rural districts on the afternoon before slaughter, the next morn- ing are driven into the individual stalls and watered but not fed. Two hundred and fifty head of cattle are slaughtered each week, together with from 500 to 600 hogs and as many sheep. The cattle dress 57 to 60 per cent of the live weight, the sheep 55 per cent, and hogs 75 to 80 per cent. Pigs when dressed average 160 pounds and sell at 16 cents a pound; sheep dress 106 pounds and bring 13 cents. Cattle dressed will average about 700 pounds and bring 13 cents, making the value of the meat $91, while the hide is worth $11.25, the head $1, the horns $30 a ton, and extra parts $7..75 per head, a total of about $111 which a single head of cattle will bring. The best meat slaughtered by the concern is shipped to London, while the inferior cuts, which are much m demand in the local market, are sold through the local retail departments to the town and country trade, at the following prices: Cents a pound. Round steak 16 SMoin 18 Roast 17 Hock and neck 10 and 11 The meat for the local Irish trade is shipped in baskets and dehvered largely by rail. The freight rate is 9 pence per hundredweight for a distance of 30 ndles or less in the county. The railroads return the baskets free. Owing to the ruling against shipping live cattle into England when the-foot-and mouth disease was epi- demic in Ireland some time ago, this slaughterhouse became the only medium through which Irish meat could reach the London market. This was because the meat was dressed, and because the disease was not prevalent in Wexford County. Had the facilities for slaughtering and shipping been large enough the whole normal export of meat from Ireland might have been controlled by the society. GLENMORE COOPERATIVE CREAMERY SOCIETY. The Glenmore Cooperative Creamery Society is a society with 154 members. Before the estabUshment of this creamery the butter produced in the community was practically unsalable, but the value of butter to the farmer has now increased from 30 to 100 per cent. For example, before the creamery was estabUshed each cow produced only £4 in value; now the average production of each cow is valued at £9. The farmers not only produce better butter now but they get better prices. The farmers are paid for their milk on the 12th day of each month. After the milk has been separated at the creamery, the farmers carry the skim milk back to their farms. Each cooperative farmer keeps from 1 to 35 cows. The total supply iof milk is derived from 1,500 cows. 872 AGBIOULTtTBAL COOPEBATION IN EUBOPB. The creamery was built on money secured on overdraft from the New Ross branch of the Munster and Leinster Bank. Each share of stock is valued at £1, on which 5 shillings was paid in at the time of organization. The plant is operated by a manager and four employees. The manager and the head dairymaid are employed from outside of the community. The working expenses for 1912 amounted to about 8 per cent of the turn- over. Butter is shipped in 56-pound boxes to regular wholesale customers in London at 32 cents a pound. The local trade pays only 25 cents a pound. The manager of this society is a member of the Creamery Managers' Association, whose headquarters are at Cork. The association furnishes regular reports on prices in the principal markets in England and Ireland. Six members from the Glenmore Cooperative Creamery Society combined and bought a $3,000 thrashing outfit with money borrowed at 3f per cent interest from the local bank on overdraft, each of them assuming an equal share. It was considered advisable not to admit more members in the ownership of this outfit for the reason that there was always a striving among the members to see who should have his grain thrashed first. Seven, it was' thought, was about the largest number that could agree. After the grain of the members is all thrashed, the machine is rented to nonmembers. An engineer, at 10 cents an hour and two helpers, at 5 cents an hour each, go with the machine. The man whose grain is Being thrashed furnishes the coal, which is usually worth $6 a ton, board for the men, and pays $1.50 an hour for the outfit. The outfit is able to thrash as much as 100 bushels per hour, but counting the setting up, taking down, and removing of the machine, it averages only about 50 bushels an hour for oats and about 44 for barley. This is equivalent to the yield of 1 acre for each of these grains. The cost of operation to the owners of the machine is 10 cents an hour for the mechanic and 10 cents an hour for the two helpers, making a total cost of 20 cents an hour, or a profit of $1.20 an hour, out of which cost of repairs and interest on the investment have to come. This outfit is operated for three months in the thrashing season. After that the wheels of the machine are taken off and rollers are substituted so that it may be used for road building. CUSHINSTOWN AGRICULTURAL CREDIT SOCIETY. The Cushinstown Agricultural Ciedit Society, County Waterford, was established in 1904 with 39 charter members without share capital. It received a loan of £50 from the department of agriculture in DubUn, raised £50 itself by holding concerts, and was then granted £200 more by the Irish Agricultural Organiza- tion Society. With this £300 a town hall was built by the society. There are now 23 such halls in Water- ford County. The loan of £50 from the department of agriculture was atthe rate of 3 per cent interest. Need- ing more money, the society secured it on overdraft at 4 per cent interest from a local joint-stock bank up to the limit of £400 on the security of a joint indorsement of the local directors. Because of the exacting rules of the department of agriculture, which would not permit members of the same family to borrow and to act as security, the society decided to free itself of the department of agriculture by repaying the £50 borrowed. This was done by borrowing the money from the local joint-stock bank at an additional 1 per cent interest, which they were wUling to pay for liberty. At the present time the membership of the society is 91 members, who borrow on the average $75 to $100 for as long as 10 months at 5 per cent interest, for the purchase of cattle, machinery, fertilizers, seed, and feed, secured by a note carrying two signatures in addition to that of the borrower. Of the 91 members, how- ever, only about 25 or 30 actually borrow from the society. The total amount loaned by the society in 1912 amounted to about $1,500. Only three members were depositors with the society, each in about equal amount, up to a maximum of $230.- At the time of the visit of the subcommittee, only $1.30 was found on deposit. On this amount 4 per cent interest is paid. Money is loaned by the society only for productive purposes. The average duration of theioans is six to seven months. The directors of this society are all farmers. The accounts are audited once a year, at an expense of $2.62, by a public accountant. No salaries are paid and the operating expenses consequently are negligible. The local branch of the Bank of Ireland at New Eoss, which transacts the business of the society, is very friendly. Interest is computed on monthly balances made up every three months. For example, the directors sign for a total overdraft up to £400, but pay interest only on the amount actually used. Interest is not paid, how- ever, until the amount is returned to the bank. Before the Cushinstown Agricultural Credit Association was organized farmers in the district were chaiged a much higher rate of interest, even as high as 14 per cent, by the joint-stock banks, which demanded interest payment in_advance. IBELAND. 873 The farm products in the section in which the society operates are milk, beef, cattle, sheep, brewery barley, grain, butter, and eggs. The best fed cattle are sold directly to the cooperative meat supply and bacon factory at Wexford, mentioned above. The poorer grade of cattle often brings better prices when sold to private buyers. BANSHA COOPERATIVE AGRICULTURAL AND DAIRY SOCIETY. Mb. R. D. Barrt, Manager. STATEMENT. Bansha. I understand that the object of your visit is to ascertain how the cooperative creamery was started in this district and how it is operated. The creamery of the Bansha Cooperative Agricultural and Dairy Society was started with a capital of £300 in 1902, with shares of £1 each, on which 5 shillings were paid. The build- ings and machinery we now have cost £5,000. For the first year our turnover was £4,793, while the turn- over for the past year was £25,080. The profits paid the balance due on the shares four years ago, since which time the shareholders have been paid 5 per cent interest in cash. For the first year, in which the creamery was operated only seven months, the net profits of the society were only £97; in 1903 the profits were £178. The object of the society is not to make big profits, but to give the farmers as much as possible for their milk. The business, of course, belongs to the farmers, who own the plant. The society has wiped out its original loan, and if we were closed down in the morning the only lia- bihty against the society would be £300 paid in by the shareholders. QUESTIONS. Q. How many members did the society have to start with? A. Eighty-seven. Q. How many members has the society at the present time ? A. One hundred and one. Q. How many cows were represented in the membership when you started ? A. Eight hundred. Q. How many cows are now represented ? A. We have not increased the number of cows very much, although we have increased the number of shareholders. At first we had Suppliers who were not shareholders. We now have about 900 cows. Q. What is the difference between the prices paid for butter before the society was organized and those which the farmers receive now ? A. The farmers now receive about one third more for their milk than formerly. Before the creamery was started they only received about 2J pence per gallon for their milk; now they get on an average 8 pence during the three winter months ; and for the whole of last year an average price of 4.8 pence per gallon was paid. Q. Have you any way of knowing whether the work of the society has changed the price of butter to the consumer or not ? A. Yes; the consumer is paying a little more for his butter now than he was 15 years ago. Then, how- ever, the whole profit went to the manufacturers. Q. Have you any regulations which require the members to patronize the dairy ? A. Yes ; some years ago it was found necessary to estabhsh a rule binding the men to sell their milk only to the creamery for a number of years. Q. Was there any opposition to the enforcement of that rule ? A. We have not been called on to enforce it. Q. How could the rule be enforced ? A. The penalty would consist of a deduction of 1 shilling a day per cow for the number of cows owned by the defaulting member. The fine is recoverable by law, either as a deduction from the amount due the farmer from the creamery or by direct attachment. The advantages of the cooperative system, however, have been recognized by the farmers, and there is not the slightest danger of them leaving the cooperative dairy except for private purposes. Q. What portion of your milk is now obtained from shareholders ? ' A. About 95 per cent of our milk is suppHed by the shareholders, but we will take milk from anyone, provided it is in proper condition. Q. What is meant by proper condition ? A. Milk that is perfectly sweet, so that it will staad a temperature of 80° to 100° F. 874 AGBICT7LTUBAL OOOPEBATION IN EXJBOPB. Q. Do you test the cows to see that they are healthy ? A. We have testing associations where the quality of the milk is tested. It must be delivered in clean and sweet condition and in thoroughly clean vessels. Q. If you found a cow was unhealthy, would you stop the milk ? A. Yes. We have a doctor who would notify us, and upon notice from him we stop the milk. Q. To whom is the doctor responsible ? A. He is employed by and reports to the creamery. We do not have cattle diseases in this district, and consequently do not demand an examination of the cows. Q. Have you any system of encouraging the farmers to secure a larger percentage of butter fat in their milk? A. Yes ; the cow testing associations which have been started in Ireland during the past few years under- take such instruction. Heretofore a number of farmers have been keeping cows which do not pay for their own feed. The average price of milk per cow for 45 weeks should be £10. In addition to this the separate milk is returned free by the creamery to the farmers. Q. Do you make butter at your branch estabhshments ? A. We separate the cream at the branches, but only manufacture the butter at the central plant here. By concejitrating the manufacture we find that the expenses are reduced. Q. At what distance are the branch stations from the central plant ? A. From 3 to 6 miles. They bring in the cream each day by team. Q. Do you sterihze the milk? A. Only when necessary. We do not pasteurize the milk during the summer months, but do in the winter. Q. Explain this; for usually the reverse is the practice. A. The cream is only workable three times a week in the winter, and root feeding in winter makes the milk impure. Q. Do you pasteurize your cream? A. We pasteurize the whole milk. Q. Where do you sell your product ? A. All over the United Kingdom. We endeavor to sell the product to the large grocers, but sometimes we have to sell to wholesalers. Q. Have you any customei^ among the cooperative stores in England ? A. Yes. Q. Do you mark the butter with a special brand? A. Yes. Q. Is there any national control over trade-marks ? A. Not appHcable to butter. There is a national trade-mark apphcable to all manufactiu'ed goods, but its use is not compulsory. The name of the creamery is usually printed on the butter. Q. Do all of the dairymen raise pigs ? A. Not all, but quite a number of them do. Q. Are they taking more interest in the raising of pigs ? A. I can't say that the interest in pig raising is increasing. We have no pig organizations in this region. Q. Do the local farmers raise poultry? A. Yes; most of them keep poultry. Q. Are there any poultry associations here? A. No; not in this immediate section. Q. Does the Bansha Society make any effort to raise pigs or poultry ? A. We endeavor to induce the farmers to keep as many pigs as possible in order to consume the sMm milk they receive back from the creamery. Some years ago the people in this neighborhood stopped keeping pigs, owing to the low prices they received for them, and a large quantity of the skim, milk was left at the creamery. We then started to manufacture casein, but the returns have been very poor. Q. What is the relative amount of mUk which is received in Jime and in December ? A. In the summer months we get close to 3,000 gallons of milk per day. In the winter we seldom get more than 300 gallons per day, and sometimes can not get that. If we could secure double the quantity we now receive, we could pay more for it because our operating expenses would be reduced by half in proportion to the increased returns. Q. Are any efforts being made to encourage the breeding of distinct dairy cattle ? A. Yes. The department of agriculture has taken up that question. During the past year and a half a number of such associatioas have been started in Ireland. They are also giving premiums for the best milking rBELAND. 875 breeds of cattle, and I believe in a very short time the breed of milkuig cattle wiU be greatly improved through- out the country. Q. What breed of cattle predominates among your members and other patrons ? A. They have no particular breed. One man may have one kind and another man another. The Dexter, however, is the best breed we have here. Q. Do you distribute a profit of 5 per cent on the share capital of this society ? A. Yes. Q. How do you distribute the profits above this ? A. We first apply them to the debts of the society, and after they are paid the difference is divided among the farmers who are shareholders. Q. Milk suppliers who are not shareholders do not share in the profits ? A. No. The principle of control is one man, one vote. Q. Where did the society get the balance of the original capital over and above the £300 share capital ? A. We borrowed it from the national bank at Tipperary, on the security of a joint note signed by the 10 members of the committee. The members elected 10 members as a managing committee, who gave their personal note for £700. They had no protection. They took the chance in order to start the business. The rule now is that every shareholder is liable for the fuU amount of shares. Each member has to take guaranty shares to secure the shares, but he does not have to pay anything except a nominal amount on the guaranty shares unless the business fails. We pay 4 per cent for the loan from the bank. At first we started in a small way. The buildings were small, and only cost £1,300. As we grew we added to them according to our profits. We did not have to pay for the machinery in full the first year, for we got it on credit. The capital now amounts to £520. The shares are now worth practically 10 times their face value. Five per cent is figured on the original capital. We only pay a dividend on the amount actually paid in on the shares. Q. What is the number of shares a committeeman is allowed to hold ? A. There is no limit. Q. Have you any shareholders who are not milk suppliers ? A. Just a few. Q. What is the number of shares an ordinary member would hold ? A. About 15 shares. The general rule is 1 share per cow. Q. Does the area in which you operate overlap with any other cooperative creamery ? i A. We have another dairy within 100 yards of us, but two cooperative creameries are never erected; under 2J miles of each other. In some districts the distance which they are apart is from 5 to 6 miles. Q. What amount of business does the other local dairy handle ? A. The private dairy here does a business of about 200 gallons of mUk per day. Before we started it handled aU of the business in the neighborhood. Q. Are there any silos in this district ? A. No. Q. What are the cows fed in the winter? A. The principal roots are round turnips and mangel, and then they are fed a mixture of crushed oats, wheat, and Bombay cotton cake. Globe turnips are fed in November, Swede turnips in December, and mangels in March. We regard the Swede turnips as the best turnip food. Q. Do you feed com in the summer time ? A. No. Q. About how many months are the cows kept on the pastures ? A. About six months. In the middle of October, when the grass is getting low, we usually feed Swede turnips with the grass. ' Cows are usually out from the 1st of May until the 1st of January. Q. What is the price of a cow in this section of Ireland ? A. From about £12 to £20. That is not, of course, for a full-blooded cow, but only for the average cow. Q. Has this society issued any printed matter concerning the rules tmder which the cooperative associa- tions are incorporated ? A. There was a bulletin issued at Dublin which will give all the information about these creameries. The following statement was made regarding the method of handlmg the milk in the creamery of the Bansha Cooperative Agricultural and Dairy Society: The milk is brought to the creamery by the individual farmers m their own conveyances. It is put mto scales and weighed and a sample taken. The samples are kept for the month and the average percentage of butter fat ascertained by a tester, on which basis the farmer is paid for the entire quantity delivered for the 876 AaBIOtJLTUBAL COOPERATION IN EUBOPE. period. After being weighed the milk is strained and allowed to flow by gravitation into a pasteurizer, after which it is separated, and the separated milk is pumped outside the building and given back to the farmers. The cream is pumped into a cream room; it is there kept in vats for 24 hours, where the temperature is regu- lated for ripening, say, from 65° to 70°. When ripe, it is cooled by refrigeration to 45°, after which it is churned, packed, and shipped. A culture prepared on the premises is used to force the ripening of the cream. AUDITOR'S REPORT. 59 Middle Abbey Street, Ditblin, March E, WIS. The Bansha Coopbbativb AoRicuLTtiRAL AND Dairy Society (Ltd.): Gentlemen: I herewith submit your audited accounts for the year 1912. During the year your suppliers sold you 441,596 gallonB oJ milk, for which you paid them an average price of 4.82 pence per gallon. The total quantity of butter sold was 205,951 poimds, which realized an average selling price of 12.91 pence per pound (including cream sales) or of 12.82 pence per pound (excluding cream sales). The annexed comparative statement of statistics for the past three years show the remarkable growth of your society's business in 1912. Your accoimts were as follows: 1. Cash account. — ^Total receipts, £26,285 12s. 4d.; total disbursements, £25,954 19s. 6d.; due to bank commencing, £147 5s. lid., leaving the balance in the bank at end of year £183 68. lid. 2. Trading account.— Stock (butter) commencing, £41 10s.; purchases, £26,765 188. 8d.; productive expenses, £1,342 Os. Id.; sales £28,933 5s. 8d.; stock of butter at end of year, £106 Ss.; interest on advances, £21 15s. 2d.; and discounts saved, £18 158. Id.; left the ■ gross profit at £930 15s. 2d. The general expenses amounted to £167 78. 5d.; depreciation to £247 Ss. 8d., leaving the net profit for the year at £516 48. Id. 3. Profit and loss axxount. — Balance of profits forward from last account, £1,840 lis. 5d.; profit for the year, £516 4b. Id.; interest on investments, £5 8s. 2d.; rent of manager's house, 6s. 6d.; the bonus and interest on share capital was £60 ISs. and interest added to shares, £15 18s., have been charged to this account, leaving the balance of profits forward at £2,285 15s. 2d. 4. Balance sheet. — Liabilities: Share capital, £520 88.; sundry creditors, £1,171 10s. 7d. Assets: Sundry debtors, £784 15s. 2d.; cash in bank, £183 6s. lid.; stock on hand, £211 58. 6d.; investments, £28 6s. 2d.; buildings, after depreciation, £1,240; machinery after depreciation, £1,430; cans, after depreciation, £100, leaving the balance of profits at £2,285 15s. 2d., as per the profit and loss accoimt. I am pleased to report that the accounts were very well kept, and desire to congratulate you on the very satisfactory results of your year's trading. I am, gentlemen, yours, faithfully, W. O'B. HismoN, Public AudUm. Comparison of results for three years. egin Number of members at end.. Total purchases Total sales Expenses, including depreciation. Profits Total gallons of milk supplied Average prices: Paid for milk Received for butter 1910 £25, 418 £27, 161 £1, 628 £140 £481, 338 £4.63 £12. 06 1911 £24, 437 £26, 244 £1, 704 £129 £433, 304 £4.88 £12. 96 1912 £26, 765 £29, 039 £1, 756 £516 £441, 596 £4.82 £12. 91 DROMBANNA COOPERATIVE CREAMERY. Evidence of Mb. P. Lynn, Manager. Drombanna. Milk at the Drombanna Cooperative Creamery is weighed, strained, heated, and separated; the cream is pasteurized and pumped into a cooUng room for ripening, while the separated milk is cooled and pumped into a tank to be returned to the farmers. Q. When was the creamery started ? A. In October, 1912. Q. How long has it been in active operation ? A. From the 1st of May. Q. What was the cost of the plant ? A. The site which is one-fourth of an Irish acre, cost £20; the building cost £800; and the manager's residence and water supply £400. A total of £1,220. Q. What is the size of the building 1 A. Seventy-five by forty-two feet. maukmt. 877 Q. What did the machinery cost ? A. One thousand eight hundred pounds. Q. What is the capacity of the plant ? A. As it is now operated, from 6,000 to 7,000 gallons of milk a day. Q. How much are you actually handling ? A. About 4,300 gallons is the average daily output. Q. What is the capital of the organization I A. One thousand two hundred shares at the value of £1 each. Q. How much of the capital has been paid in ? A. One shilling per share. Q. How many members are there ? A. Fifty-eight. Q. These members are located within a radius of how many miles ? A. From 2 to 3 miles. Q. How many cows do the 58 members represent? A. One thousand two hundred. Q. Is milk secured from nonmembers ? A. Yes, From four nonmembers. Q. About how many cows do they represent ? A. Forty. Q. How much did the organization borrow from the bank ? A. Two thousand five hundred poimds from the national bank. Q. What is the charge on the overdraft ? A. Four per cent for an indefinite period. Q. What security was given for this loan ? A. The personal security of each member. They are liable for the unpaid subscription and the total amount of the society's indebtedness to the bank. Q. On what principle are profits to be divided ? A. Profits will not be paid in cash, but will be used to pay up the unpaid portion of the shares. Accord- ing to the rules of the society the shareholders are entitled to 5 per cent of the profits with which to pay off the shares. As dividends are declared the amount is credited to each subscriber and then paid to the bank to reduce the loan. Concerning the butter sales, I may state that we get the market quotation from the Creamery Managers' Association at Cork, which informs us how the market is going and in what centers trade is most active. With this information we wire for quotations from the most active trading centers and sell our butter to the highest bidder. We have, however, regular buyers. Q. What proportion of the butter is sold to the regular consumers and what proportion is sold to outsiders ? A. We are turning out about 15 hundredweight daUy, of which about two- thirds goes to the regular consumers. Q. Are the regular consimiers chiefly in Dublin ? A. No. Our output is sold to butter merchants in London, Dublin, Glasgow, Cardiff, and Birmingham. The terms are seven days. We have some customers who return check in four days. Q. What market gets the nonregular one-third of your output ? A. Anyone who wants it. Q. Do they get the same terms ? A. Yes. All have seven days. Q. You have then no serious risk of bad debts ? A. No. We make special inquiry as to the standing of the buyers before we ship the goods, and unless we are thoroughly satisfied the order will not be filled. Q. Does the organization gather any milk ? A. No. All milk is delivered to the creamery by the dairymen twice daily. Separating is begun at a quarter to seven in the morning and the first delivery is made anywhere from 9.30 to 10. Q. Do the farmers take the skim mUk back ? A. Yes. They wait for it. The society only buys the cream and a portion of the skim milk. We pay the difference between what the farmer takes back and 80 per cent. When we started in May we made a little casein, but our trade in the city has become so large we can now dispense with it. Q. How many employees has the society ? 878 AGBICULTUEAL COOPEEATION IN EUROPE. A. A manager, two men as general assistants to the manager, a dairyman, an engineer, and a man to dis- tribute the separated mUk. We also keep a horse and cart and employ a driver. Q. What prices are secured for the mUk, skim milk, and butter ? A. The price of butter last Monday, July 14, 1913, was 106 shillings and 8 pence for 112 pounds f. o. b. Limerick. We paid for the butter fat a shilling per pound, which is at the rate of about 8J pence per gallon, the separated mUk being returned free to the farmers. One hundred pounds of butter fat will produce 116 pounds of butter. Any separated milk not returned to the farmers is paid for at the rate of 3 farthings per gallon. In this creamery last month it required 2^ gallons of milk to make a pound of butter, which means that the amoimt of milk sufficient to make a poimd (pf butter costs 10.3 pence. We realize on the 2^ gallons of milk only 11.5 pence, a profit of 1.2 pence, which covers the operating expense and the 5 per cent item on the members' shares. Q. Do the farmers as a rule take back all the skim milk ? A. No. Not in this particular district. So far the creamery has been very successful in handling aU the milk which is left. IRISH COOPERATIVE AGENCY SOCIETY. Statement by Mr. D. L. Riche, Secretary and General Manager. LiMEEICK. The Irish Cooperative Agency Society was organized before the foundation of the Irish Agricultural Organi- zation Society, and was planned as a cooperative union. It was established in 1893 by 16 creameries then in existence for the purpose of selling their produce. The original idea was that all butter made by the cooper- ative creameries should be sold by the society, but cooperation grew so quickly the society was unable to handle the butter business, and the creameries had to handle their own output, the society assisting them to find a market. The creameries have foimd that they can get as good prices as we were able to get for them. The capital of this society is a little over £10,000. We have had a turnover of 4,000,000 since we started. The annual turnover of the society is about £400,000, and the total turnover since the organization of the society has been about £4,000,000. We helped improve the grade of butter by starting a prize competition, which has now been taken over by the Government. We also look after the sale of pure butter. For instance, we appointed an inspector who secured about 70 samples of butter before evidence justifying prosecution was found. In this way the society learned where adulterated butter was sold, and in seven months several prosecutions were brought in places where local inspection had discovered no evidence on which to base prosecutions. Since the Government took over the prize-butter competition the society has not done anything along that line except draw attention to existing frauds. , Members of the society take the shares, of which there are 600, but the bulk of the capital is taken by investors. On £20 shares, for instance, they (members) pay £5, and the 5 per cent interest paid on the amount paid up goes to pay the balance due on the shares. To-day the society is a federation of incorporators whose principal function is to provide a market for the products of its members and to assist them in handling their own products. This is entirely pioneer work. Some j^ears ago we had a quotation committee, which is now a national committee to which most buyers belong and which furnishes market reports to the association. Practically all the creameries in Ireland are federated in this society. About two-thirds of the amount of butter handled is sold outright and the rest is given on time. Reports are received from the several branches located through Ireland every day. The society sells direct to the local groceries and collects through agencies. These agencies may represent other interests, but must not let it interfere with the society work, and as a rule they devote their whole time to the society. The society also supplies the creameries with all requisites. A profit of about 8 to 10 per cent is charged on sundry goods. Profits become the property of the shareholders. For instance, the profit on butter is about 2^ per cent. If the society were not in existence the farmer would find himself in the hands of the middleman. The object is not to make a profit, but to serve the best interests of the farmers. Agencies of the society are distributed throughout the country, and have broken up the "ring," which previously met every morning and arranged the price of butter for the day. lEELAND. 879 RULES OF THE SOCIETY. 1. This society shall be called the "Irish Cooperative Agency Society, Limited." 2. The object of this society shall be to promote the cooperative movement in Ireland, by the selling on commission of Irish creamery and other butter, on a commission not exceeding 2^ per cent for members consigning regularly, and a commission not exceeding 5 per cent for nonmembers and members consigning irregularly; and, subject to the sanction of a general meeting, on due notice, the buying and selling of poultry, eggs, fruit, dairy and farm produce in general; coals, feeding stuffs, manures, agricultural implements and machinery, farm and garden seeds; the manufacture, packing, blending, and exporting of butter or any dairy or farm product; the buying and selling of swine, including the manufacture and export of bacon; the occupation of manufacturing and analytical chemists; wholesale and retail dealers; bankers, shippers, carriers, and insurers; and the carrying on of any occupation or trade in any way whatsoever allied to or con- nected with the farming industry. The society shall have power to do all things expedient for accomplishing all or any of such objects including the power to purchase, hold, sell, mortgage, rent, lease, or sublease lands of any tenure, and to erect, pull down, repair, alter or otherwise deal with any building thereon. 3. The registered office of this society shall be at Limerick, in the county of Limerick, where all the books of accounts, securities, and documents of the society shall be kept, other than such, if any, as are required for carrying on business on account of the same elsewhere; but the place of the registered office may be altered by the committee, subject to the sanction of a general meeting; and the society shall have power to open branch offices throughout the United Kingdom. 4. In case of any alteration in the place of the registered office of the society, notice shall be sent to the registrar within 14 days in the form prescribed by the treasury regulations. 5. The members of this society shall consist of such cooperative societies registered under the industrial and provident societies act 1893, on whose behalf these rules are signed and such other societies similarly registered as may be admitted by the committee and here- inafter dscribed as "the members." Every application for shares shall be sanctioned by a resolution, in writing, of a committee meeting of the society making such, and signed by three members of the committee and the secretary of the applying society. Applications for shares shall be made only in the form prescribed by these rules and shall also be similarly signed ; and every society applying for admis- sion shall take not less than 20 shares of £1: Provided, That no member shall hold more than 200 shares in the society. The representa- tives of societies shall be deemed to be members for the purpose of signing documents on their behalf. 6. The liability of members shall be limited to the amounts of their shares. 7. All special, general, and ordinary general meetings shall be held at such place and such date as the committee directs from time to time. No general meeting shall proceed to business unless delegates from not less than seven societies are present within one hour of the time of meeting, otherwise if the meeting be an ordinary general meeting or a special general meeting convened by the committee, it shall stand adjourned for at least 14 days, and to such time and place as the members direct, of which adjournment notice shall be sent to the registered address of each member entitled to vote thereat; and the adjourned meeting shall be competent to proceed to business at the end of half an hour from the time of holding the meeting whatever the number of delegates present may be. But if the meeting is convened by a notice from the members and the want of a quorum has arisen, it shall be absolutely dissolved. No general meeting shall he rendered incapable of proceeding to business by the want of a quorum arising after the chair has been taken, and any such meeting may adjourn for any time which it may determine. 8. A special general meeting may be convened at any time in virtue of a resolution of the committee or by any 10 members, on giving seven clear days' notice in writing to the secretary, signed as they appoint, specifying the objects thereof; of which meeting a notice shall he posted to the registered address of each member, specifying the time, place, and object of such meeting at least four days before the day of meeting. No other business can be transacted at any such meeting than the business specified in the notice convening it. 9. Every member may nominate by resolution one delegate, who shall have one vote and who shall, for the purpose of representation, be deemed to be a member of this society for and on behalf of the society he represents. 10. The capital of this society shall be raised in shares of £1 each, and shall be transferable only except as hereinafter provided, and shall be held by members in the proportion laid down by rule 5. Every society on its admission shall pay not less than 5 shillings on each share taken up. No dividend or interest shall be withdrawn by members until their shares are paid up. Any member may pay up its share in advance. The committee shall have power to call up the unpaid capital in such installments as they may from time to time determine, provided that every member shall receive 14 days' notice in writing of any such call. Any member desiring to transfer any part or the whole of its shares to any other member or society eligible for membership may, with the consent of the committee, be allowed to do so. The committee may repay the whole sum credited upon any share in any case where they refuse to confirm the transfer of any such share which is fully paid up. The member on whose account such shares are held shall defray the costs (if any) necessary for obtain- ing such transfer to be legally made, including the cost of the proper stamp, without which no transfer shall be registered. The com- mittee may repay the amount of share capital standing to the credit of any society if such society becomes insolvent or goes into liqui- dation or ceases for 12 months to produce butter. The ordinary business meetings may also from time to time issue debentures or preference shares to such amount and bearing such interest and redeemable in such manner as they may decide. ^ 11. All the shares of the society shall be numbered progressively, and a share register book shall be kept in which shall be entered the following particulars: The name, registered office, and date of entrance of each member of the society, the number of shares held by each member, with the number and value of same, and the date when membership began and ceased in respect of any share. The trans- fer of all shares shall be registered in a similar way. 12. All the transfers shall be made in the form following and shall be attested as therein expressed: Irish Coopbkative Agency Society (Ltd.), Limerick, , 190-. In consideration of the sum of this day paid by the Cooperative Society (Ltd.), to the — ■ Cooperative Society (Ltd.), herein respectively called the transferrer and transferee, the transferrer hereby transfers to the transferee shares in 'Amendmentreglstered Jan.31, 1907: . ,,,.,, "Rote 10. Insert after the word 'batter,' on line M, the loUowing words: 'or fails during any year ending on the Slat of December to consign to this society for sale at least one-twentieth of their produce of butter during such year. A society the amount of whose shares has been repaid shaU thereupon cease forthwith to be a member of this society.'" 880 AGBIOULTTIRAL COOPEEATION IN EUBOPE. the Irish Cooperative Agency Society (Ltd.), now standing in the name of transferrer in the books of the society on which the sum of per share remains unpaid, to hold such shares subject to the same conditions on which the transferrer held the same at the time of the signature of this transfer, and the transferee hereby agrees to take the said shares subject to the same conditions. In witness whereof the three undersigned members of the committee of the transferrer and transferee have hereto set their hands, respectively attested by the signatures of the secretaries of the said societies. 13. The society shall have a lien upon the shares or deposits of any member indebted to it, and may set off any sum credited to such member thereon in or toward the payment of any such debt; and if any member is indebted to not less than three-fourths of the sum for the time being credited on the shares so held, and does not pay the amount due within one calendar month after a special demand thereof has been duly made, the committee may sell and transfer in the books of the society such shares to any other member or society entitled to become a member, and apply the proceeds of such sale, including the sum which, on any transfer made by the member so indebted, with the consent of the society, would have been payable as is above provided, in or toward the payment of such debt, and any expenses incurred in or about the same, and shall pay over the surplus, if any, to such member, without being responsible for any loss occasioned thereby; and any transfer so made shall extinguish the right of such member in the share so transferred and 8ha,ll operate as an original issue thereof. Any sums due from a member for subscription to shares or otherwise shall be recoverable as a debt due to the society. 14. The accounts of the society shall be audited by a public auditor, who shall be elected by the members at the annual meeting of the society; he shall retire annually, but shall be eligible for reelection. He shall audit the accounts of the society, and see that they are correct, duly vouched, and in accordance with law, and shall examine all securities and shall have power to call for and examine all papers and documents belonging to the society; and every balance sheet signed by him and approved by the general meeting shall be binding upon all the members of the society. 15. The books of the society and the names of the members shall be open to the inspection of any member or person interested in the funds of the society at all reasonable hours, at the registered oflBce of the society, or at any place where the same are kept, subject to such regulations as may be made from time to time by the general meetings of the society, except that no person other than an officer of the society, save that he be specially authorized by a resolution of the committee, shall have the right to inspect the loan or deposit ticcount of any member without this member's consent. 16. Land and buildings shall be depreciated at the rate of not less than 2J^ per cent, and fixtures and ships at 10 per cent per annum, which amounts shall be quarterly deducted from the original value of such land, buildings, fixtures, and ships. 17. Each member shall receive upon the share capital standing to its account in the books of the society interest at such rate, not exceeding 5 per cent per annum, as the profits allow. Interest shall not be paid on fractions of a pound nor for a less period than one month. 18. The net proceeds of all business carried on by this society, after paying or providing for the expenses of management, interest on loans, the proper reduction in value of land, buildings, fixtures, and ships, and for such interest on the paid-up capital thereof as aforesaid, shall from time to time be carried to the reserve fund of the society, untU that fund amounts to £10,000; and subsequently, as the general meetings may direct, to any lawful purpose; and subject to any such direction shall be divided among the members in proportion to the amount of their sales to the society and to purchaaers from the society, during the period to which the division relates, at such rates upon the respective sales and purchases as may be fixed by general meetings from time to time. Any undivided balance, together with the profits realized on nomnembers' business, shall be added to the reserve fund. 19. The society shall be managed by a president, vice president, and a committee, consisting of seven members ,who shall be elected in the manner following: The committee, president, and vice president shall be elected from a list of persons nominated by the members by means of papers sent to each member. These nomination papers shall be posted to the registered address of each member not less than 15 days before the day of election, who shall, within five days after receiving same, return it to the secretary of the society, duly filled up with the names of the persons nominated for the posts of president, vice president, and committeemen, all of whom must be members of societies being members of this society, and giving the names of the societies to which the candidates belong; provided that no member of this society shall nominate more than one of its own members or more than one member of any other society for the office of committeeman. The secretary of this society shall, not less than five days before the election day, post to the registered address of each member a complete list of the candidates duly nominated as above. At the holding of the election each delegate shall receive a voting paper containing a list of the candidates duly nominated in alphabetical order. The delegate shall mark with a cross the names of the candidates for the different offices which he votes for and shall deliver such voting paper up to the person or persons appointed by the meeting for that pur- pose, who shall declare the result of the election to the meeting. The president and vice president shall be ex officio members of the committee and shall hold office until their successors are appointed. They shall retire annually, as shall also three members of the committee, who shall be the three members having attended fewest meetings of the committee during the year, but they shall be eligible for reelection. If, however, the retiring members are guarantors for any sum or sums in use by the society they may hold office until relieved of such liability. Three members of the committee shall form a quorum. The president shall take the chair at all meetings of the committee if present, and in his absence the vice president. If both be absent, then the committee shall move one of their number to the chair. The chairman shall have a vote and a casting vote. 20. Casual vacancies arising in the committee may be filled up by the remaining members of the committee, or if not so filled by the next general meeting. But every person so appointed shall be substituted for the member who has caused the vacancy and shall retue from office at the time when such member would have retired. 21. The committee shall have control of all business carried on by or on account of the society, subject to the provisions herein con- tained. It shall arrange their hovirs and place of meeting and shall meet as often as is found necessary for the transaction of the society s business, provided that it shall meet at least once a month. The committee shall in all things act for and in the society's name, and all its acts and orders not inconsistent with any rule of the society shall have the like force and effect as if they were the acts and orders of a majority of the members of the society at a general meeting thereof. All questions shall be decided by a majority of votes. A special meeting may be called by a notice in writing given to the secretary by two members 48 hours before the time proposed for such meetmg, and no other business shall be done at the meeting than the business named therein. The committee shall convene all meetings of the society and shall cause the accounts of the society to be entered in proper books, and shall cause a statement of the accounts of the society with all the necessary vouchers, up to the last day of December in each year, to be made out and laid before the auditor not less than seven IBELAND. 881 days before the day appointed for the annual general meeting of the society, and shall lay before such annual general meeting a balance sheet of the receipts and expenditures, and also of the assets and liabilities, together with separate accounts of the trading and banking departments. The committee shall in February in each year, provided the society carries on the business of banking, make out a statement, which shall be kept conspicuously hung up in the registered office of the society, and which shall show, as far as circumstances permit: (1) The capital of the society, stating (a) the amount of each share; (b) the number of shares issued; (c) the amount paid on shares. (2) The liability of the society on the 1st day of January previous; (o) on judgment; (&) on specialty; (c) on notes or bills; (d) on simple contract; (e) on estimated liabilities. (3) The assets of the society at the same date (a) in Government securities (stating them); (&) bills of exchange and promissory notes; (c) cash at bankers; (d) other securities. 22. Every person elected as aforesaid shall be deemed for all purposes connected with the management of this society to be a member thereof, and shall have one vote at the meetings of this society. 23. Any member of the committee shall vacate his office if he holds any other office or place of profit under, or if he has any relations employed by the society; or if he or the society he represents becomes bankrupt, insolvent, or in liquidation; or ceases for 12 months to produce butter; or if the society of which he is a member disclaims or repudiates his representation; if he is concerned in or participates in the profits of any contract with the society; provided, however, that no committeeman shall vacate his office by reason of his being a mem- ber of any society which has entered into contracts with or done any work for the society, but he shall not vote in respect of such contract or work, and if he does so vote it shall not be counted. 24. No employee of this society shall be an auditor or scrutineer of voting papers. 25. Every person appointed to any office touching the receipt, management, or expenditure of money for the purposes of the society shall before entering upon the duties of his office, give such security as is thought sufficient by the committee for the time being. 26. The annual general meeting of the society shall assign to the committeemen, delegates, auditors, scrutineers, or any officer of the society, such remuneration and traveling allowances as seem to them desirable, but no expenses shall be paid to any delegate unless the society he represents has supplied to this society not less than one-fourth of its output of butter for the six months preceding the meeting 27. There shall be sent to every member, a fortnight before the day of. the annual general meeting, a copy of the business paper, which shall contain all proposals by any mernbers of matters which they desire to bring before the meeting, and have communicated in writing to the secretary, not less than a fortnight before the aforesaid day. Any member may, not less than seven days before the day of meeting, send any amendment to any proposal, or any proposal arising out of any matter contained in the said paper, to the secretary, who shall forward a copy to each member as soon as is practicable after they have been received, as an additional business paper. No matter other than that shown on the original or additional business papers or arising out of the same shall be put to the vote for the purpose of definite decision at any meeting; and in every case a matter put to the vote for this purpose shall be decided by counting the votes given for or against. The chair shall be taken by the president, or in his absence by the vice president, who shall not vote unless the votes be equal when he shall have one vote only. 28. The delegates shall be admitted to the general meeting only by cards of admission, such as the committee from time to time directs, one of which shall be sent to each member with the business paper for each meeting, and the delegate shall give it up on admission thereto. 29. The committee shall appoint and may remove a secretary, who shall have such functions and remuneration as they from time to time assign to him, but shall have no vote. They may also appoint and remove a general manager and such other officials as may be necessary, and shall fix their remuneration and duties. The secretary, general manager, and other officials shall in all respects act under the control and direction of the committee. 30. The committee may delegate any of the powers hereby given to them to a subcommittee of its own members, who shall, in the functions intrusted to them, conform in all respects to the instructions given them by the committee. 31. The committee, by the direction of a general meeting, may invest any part of its capital upon such terms as may be agreed upon, in the shares or on the security of any other society registered under the industrial and provident societies act, 1893, or under the building societies acts, or of any company registered under the companies acts, or incorporated by act of Parliament or charter, provided that no such investment be made in the shares of any society or company other than one with limited liability. 32. The committee may obtain by way of loan from any person or from any society for the purpose of this society from time to time, upon mortgage of the whole or any part of the property of this society, or by bonds or debentures under the seal of the society, or in such other manner as they deem best, such sum or sums of money, not exceeding £100,000 in the whole, on such terms as may have been decided upon and subject to such provisions for repayment as are agreed upon. They may also obtain advances from the society's bankers from time to time and give continuing securities by mortgage, legal or equitable, under the seal of the society, for any property of the society for the money which shall be owing on the account current of the society with the bankers, limited to such an amount as shall have been agreed upon. 33. Should the committee have more money on hand than they can profitably invest, they may apply the same in repayment of loans due from the society and, after all the loans are discharged, in the reduction of the number of shares held by the members, taking them in order of the number of shares held by each member, beginning with the highest. Any member may, nevertheless, leave the sums so repaid in the funds of the society after the notice of repayment has expired, but shall not receive any interest thereon. 34. The society shall have its name engraven in legible characters on a seal and shall have its name mentioned in legible characters in all notices, advertisements, and other official publications, and in all bills of exchange, promissory notes, indorsements, checks, and orders for money or goods purporting to be signed by or on behalf of such society, and in all bills of parcels, invoices, receipts, and letters ■ of credit of the society. The seal shall have the device of an Irish harp surrounded by a wreath of shamrocks, and shall be in such custody as the committee direct, and shall be used only when directed by a resolution of the committee, a minute of which resolution shall be duly recorded by the secretary. The society shall likewise keep its name painted or affixed in legible characters upon the out- side of every place where its business is carried on. 35. The society may be voluntarily dissolved— (1) By a resolution to wind it up, made as is directed in regard to companies by the companies act, 1862. (2) By an instrument of dissolution signed by three-fourths of the members for the time being, and in the form prescribed by the regulations inJorce under the industrial and provident societies act, 1893. 14174'>—S. Doc. 214, 63-1 — -56 -' - ' ' V' 882 AGKICULTUEAL COOPEKATION IN EUEOPE. 36. Title society may by special resolution passed in the manner prescribed by the industrial and provident societies act, 1893 — (1) Change its name with the approval of the registrar in writing. (2) Amalgamate with or transfer its engagements to any other society or company under the companies acts or accept any such transfer from a society. 37. In case any dispute arises between this society and any of its members, or of members or persons claiming on account of a member, or under the rules or of any complaint against any member, application may be made to the committee for redress; and should they not bring the parties to agreement appeal may be made to a general meeting of the members of the society whose decision shall be final. 38. If any member has any complaint to make relative to the qualities or prices of goods sold or supplied by the society or respecting the conduct of any of the employees, such complaint shall be sent in writing signed as the committee of the complaining member directs, to the committee of the society, and shall be investigated and decided by the committee, who shall record their decision on the minutes, subject, nevertheless, to appeal to a general meeting, whose decision shall be final. Every complaint brought under this rule before any committee or general meeting shall be communicated in writing to this society seven clear days before tjhe holding of meeting at which it is to be investigated, and the subject shall be stated on the agenda paper of the meeting. Any member may send to the committee, in writing, any suggestions for carrying into better effect the objects of the society, which shall be considered by the committee. 39. If any member of this society after being warned in writing by the committee to desist from any conduct specified in such warning which the committee considers to be injurious to this society, persists in such conduct, the committee (1) may bring the conduct complained of by a charge in writing, where the same is specifically stated, and of which the offender shall have 14 clear days' notice, before a general meeting of this society, which may expel the member complained of or otherwise deal with the case as it thinks fit; (2) may, until such meeting can be held, suspend the offender from exercising under the rules of the society any right not connected with any defense to the charge made. No member so expelled shall again be readmitted except by the votes of two- thirds of the delegates present at a general meeting, nor unless notice has been given at the last previous general meeting of the intention to propose his readmission. The full value standing in the books of the society to the account of any member so expelled shall be paid to such member. 40. No new rules shall be made nor any of the rules repealed or altered except by the vote of a majority of two-thirds of the mem- bers present and voting thereon at a special general meeting of the society, of which notice shall be given to each member at least four weeks before the time of holding such meeting, stating the time and place of such meeting and also specifying the rules to be altered, amended, or repealed, and setting forth all additions or alterations proposed. No amendment of rules is valid imtil registered. 41. In construing the rules the expressions following shall, respectively, have the meanings following unless the same are incon- sistent with the context: Member shall mean a society admitted under rule 5; words importing one person or thing only shall apply to more than one person or thing, and the reverse; and words importing the masculine gender shall apply to females. 42. The committee shall, not later than the 31st day of March in each year, furnish to the registrar of friendly societies the annual return prescribed by the industrial and provident societies act, 1893, and shall on demand furnish a copy of same to every person interested in the funds of the society. 43. The committee shall on demand furnish to any person a copy of the rules on payment of 1 shilling. 44. An application may be made by one-fifth of the members, under section 15 of the act, (a) to appoint one or more inspectors to examine into the affairs of the society and report thereon; (6) to call a special meeting of the society in the manner prescribed and for the purpose provided by such section. APPLICATION FORM TOR SHARES BY A SOCIETY. We, the undersigned, secretary and three of the committee of management of the Cooperative Society, Limited, herein- after called the applicant, in virtue of a resolution thereof, dated the day of , hereby apply on its behalf for transferable shares in the above-named society, in respect of which the applicant hereby agrees to make all payments required by the rules of the above-named society and otherwise to be bound thereby. In witness whereof we have signed our names hereto, by the authority of the society. Three Members of the Committee. Secretary. IRISH AGRICULTURAL ORGANIZATION SOCIETY.^ The I. A. O. S. was founded in 1894 after a small group of agricultural reformers had been five years at work and after a certain number of cooperative societies had been founded. The object of these societies, of which there are now about 900 in existence, was to help the farmers, through the application of cooperative principles, to dispose of their produce at the best terms, to buy their requirements in bulk at wholesale prices, as manufactm-ers do who use raw material, to produce a finished product, and to combine for olitaining credit for their bushiess purposes at a low-rate interest and under suitable conditions. All these matters and the forms of organization necessary for the development of these varied types of society are discussed in detail in the leaflets. ' A memorandum prepared especially for the Commiseioiis, IRELAND. 883 The earlier stages of the working of the I. A. 0. S. were slow, tentative, and difficult. The agrarian move- ment, which ultimately resulted in the various land-purchase acts, whereby Irish tenant farmers have become or are becoming occupying owners, had concentrated the thought and attention of the farming classes upon land reform to the neglect of agriculture. Meanwhile our foreign competitors in the English market had learned the value of combination in marketing and of uniformity in the production of their produce. Only by copying their methods or applying them to the altered conditions of Irish agriculture was it possible to keep pace with the competition of Denmark and other countries. So much was known when the I. A. O. S. began its work. In 1896 these agricultural reformers were successful in gathering a group of public men representative of the various political parties of that time and of those who believed that the settlement of the political Irish question was largely conditioned by economic considerations. These public men (called "the recess committee," because they met in the recess between two parliamentary sessions) came together in 1895 and issued a report in the following year pointing to the necessity for a twofold movement for agricultural reform in Ireland. Ore side of the movement was the development of cooperation through the voluntary machinery laid down by the I. A. O. S. The other was the formation of a government department, which should supplement the efforts of the people themselves by bringing the most up-to-date teaching and the most effective science into practice. The department of agriculture which thus arose out of the recess committee began its business in 1899. The I. A. 0. S. continued to carry on its program of better business, to which the department added a program of better farming, and both bodies worked in conjunction in improving the conditions of farm life. It is of course with the work of the I. A. O. S. that we are here concerned. Since its formation it has suc- ceeded in organizing tens of thousands of farmers and hundreds of societies. The membership at this date would be measured by about 100,000 people, mostly heads of families, and so a not inconsiderable fraction of the working population in a country of a little over 4,000,000 people. The latest available exact statistics are shown in the report of the I. A. 0. S. for 1912, into which have been collected the audited statistics for its societies for 1911. The following summary will show the position of the cooperative movement at the close of 1911 : Number of societies. Member- ship. Paid-up share capital Loan capital. Turnover. Dairy societies Auxiliary societies (not separately registered) Agricultural societies Credit societies Poultry societies Home-industries societies Miscellaneous (including bacon-curing societies and beekeepers) . Pig and cattle supply societies Flax societies Federations I. A. O. S. societies, total I. A. 0. S. per supplemental societies. Total. 326 87 171 236 18 20 25 40 9 2 45, 725 £, 146, 370 £ 111, 183 £ 2, 002, 127 18, 271 19, 505 5,879 1,375 4,928 657 624 247 6,836 1,966 706 15, 737 24 550 8,517 40, 672 56, 554 2,434 783 7,847 129, 199 56, 055 62, 897 6,257 59, 606 4,171 11, 154 3,402 132, 929 934 97, 211 107 180, 706 179 234, 798 12, 161 2, 452. 472 214, Oil 934 97, 318 180, 885 246, 959 2, 666, 483 It is, of course, impossible to give an adequate account of the whole work of a movement covering nearly a quarter of a century — the first cooperative society was founded in 1899 — within the compass of this memo- randum. But it may be briefly stated that the work of the I. A. 0. S. has rescued the butter industry from threatened extinction; has provided thousands of farmers, who could not obtain suitable credit at suitable terms, with the means of carrying on their industry satisfactorily; has rescued thousands of Irish peasants from the village usurer; has brought Ireland (once the dumping ground for the worst seeds and manures in Europe) up to the level of the other countries in the provision of these essentials of profitable farming; and has enabled the small farmers, through learning the benefits of combination, to apply to practice those economies of sale and purchase, without which no farmer can hope to face the competition of the world market of to-day. The I. A. 0. S., it will be seen, is not a State body, nor a State-aided body (except that it receives a small subvention in return for defimte work done in the poorest or "congested" districts of Ireland). Its organizers go everywhere, organize all branches of agricultural cooperation, and bring about in Ireland those conditions of modern organization which, as the commission will have learned, have been proved indispensable to the agrarian prosperity of Germany, Denmark, and all the principal countries in Europe. The future of Ireland will be determined almost entirely by the success or failure which the farmers who are now coming into possession 884 AGBICULTUEAL COOPBBATION IN ETJKOPtl. of the lands they till make of their business. In the fewest words, the agricultiiral-organization movement is the better business part of Ireland's formula for the solution of the modem growth of rural life, "Better farming, better business, better Mving." WORK OF IRISH AGRICULTURAL ORGANIZATION SOCIETY AND WHY AGRICULTURAL ORGAN- IZATION WAS NECESSARY IN IRELAND.* For many years before the Irish Agricultural Organization Society began its work it had been noted that Irish agriculture was decaying. There were prosperous agricultural communities abroad, but very few pros- pering farmers at home. Irish farmers had made their own diagnosis and Irish politicians accepted it. The diagnosis of the Irish farmer was incomplete, as he was suffering from a complication of economic diseases and he only knew the name of one. He thought, and he convinced public men, that if he owned his land all would be well with him, and the magic of property would make weeds to vanish and butter to come early from the churn, the hens would lay more eggs, and the cows give more milk. There is a great magic in property, and within the limits of a farmer's knowledge ownership of his land does set his thought on the better farming of that land. But the Irish farmer was suffering from economic troubles of another kind which he could not diagnose. Prices of produce weie falling, and he did not know why, and it became obvious to some observers that even if the Irish farmer paid no rent at all he would still remain miserably poor. The foreign farmer sold in our markets and flourished on the prices he received. Both had the same markets. One set of producers grew prosperous, the other set, nearer to those markets, could not make farming pay. It was not merely a question of rent, because the foreign farmer often paid as much rent as Irish farmers did. It was a question of business organization. The modern world had turned away from the old methods of doing busi- ness. The large factory had replaced the home industry. Everywhere there were combinations to effect economics in production and trade. It was realized that in business the biggest battalions have most chance of winning, and the individual, unless he had a huge capital, was out of the running. Trusts and combines were springing up everywhere. Wholesale provision dealers wanted to buy in a wholesale way as well as sell in a wholesale way. They coidd not be bothered with the few pounds of butter made by the small farmer or with his wife's weekly dozen or so of eggs. The expense of collection was too great. They wanted to buy butter and eggs by the ton, and they wanted to deal with agricultural producers who could supply them with large quantities of farm produce, graded in the way they wanted, always unifoim in quality, so that they in their turn could sell it with the same confidence as a first-rate manufacturer of watches can advertise his timekeepers as always being true to the minute. The foreign farmer met the wholesale provision mer- chant. The foreign farmer had organized his business. In association with other farmers he bought, manu- factured, and sold. He studied the markets, met then' requirements, and got the trade. The Irish farmer knew nothing about this business organization of his rivals, and his business was going from bad to worse. ORIGIN OF THE I. A. O. S. The foreign farmer had recognized that combination was just as necessary in farming as in any other busi- ness. He did not form companies. Under the company system capital came into conflict with the producers and capital invariably predominated. Capital was not out for the sake of its health, but to make more cap- ital, and this did not suit the farmers, whose business was exploited. It became gradually recognized over Europe that the cooperative system was the right one for farmers to adopt when combining for business pur- poses. It was found, too, that these cooperative combinations brought about living and lasting bonds between the individual and his associates. Thus in a society the example of the most progressive member rapidly became the practice of the whole society, and any advice or instruction the State offered was more easily assim- ilated and put into practice by the association than it was by unorganized farmers with no bond of union. It was found where farmers combined they became very progressive, and where they did not combine they were backward and ignorant. It is easy to spread knowledge when pupils gather in a school. It is difficult or impossible to teach where there is no grading of pupils and the children remain at home. The cooperative associations placed the most progressive farmers at their head, and the whole district soon found themselves committed to swift progress and development. The first person to apply these ideas in Ireland was Sir Horace Plunkett. He returned in 1889 to Ireland from America, wheie the advantage of combination in business has been perhaps unduly pressed and where little businesses are swallowed up until the trust is all in all. But the advantages of combination were undeniable, and he himself started a crusade in the country and worked •Reprint from pamphlet by Harold BarboTir issued by Irish Agricultvjial Organization Society_i , . IBELAND. 886 for some years with only one or two associates, preaching the gospel of agricultural cooperation in the face of much opposition and chilling apathy. But the doctrine which is economically sound finally makes way. Slowly, very slowly, the first societies started like bathers, unwilling to take a plunge into icy water, but those who did adventure found it paid, and then the demands from the country became so numerous that in 1894 the Irish Agricultural Organization Society was formed as a necessary central body, first to establish cooperative societies among the farmers, and then, when established, to advise and guide them. The establishment of a central body was absolutely necessary. Just as the duties of parents do not end when they have brought children into the world and they are com- pelled to bring them up to manhood and womanhood, so it was not sufficient to establish societies and leave them. There was an immense amount of organizing to do to bring the movement up to the point of efficiency of continental societies; and the I. A. 0. S. had to undertake this work. Since its formation the I. A. 0. S. has had a checkered career. At first it was mainly supported by Sir Horace Plunkett's friends, and very real friends to Ireland they were. Later it was the recipient of an annual grant from the department of agriculture, which also owed its existence to Sir Horace. Now the organizing body is dependent altogether on subscrip- tions and affiliation fees from the societies it has formed and on the subscriptions which still come from those who welcome a nonpolitical and very practical way of doing something to bring peace and prosperity to the country.* On its work the I. A. O. S. has spent over £100,000, and never was money better spent in Ireland. In the cooperative creameries alone it is admitted that the additional annual gain to the farmers through this organization is now £400,000 ft year. Regarded as a national investment this one result alone more than justifies the expenditure of the I. A. 0. S. The total trade of the movement since it began is over £20,000,000. The annual turnover of the societies is considerably over £2,500,000, and it increases year by year. We believe few people wiU differ from us when we say that this £100,000, spread over 20 years, was well-spent money. CHANGE IN DAIRYING. It is generally known that agriculture is our main Irish industry. But it is not generally recognized that the value of our exports of cattle, bacon, eggs, . and butter exceeds the value of our exports of linens, ships, and liquor. Three-quarters of our population are entirely dependent on farming for their living, and we might say also that three-quarters of the urban population in Ireland are dependent for their living upon the power of the farming population as consumers to take from the towns groceries, hardware, draperies, and other goods. A bad year for the farmers is a bad year for townsmen, except those few who depend on foreign trade or the more numerous class who are civil servants. You can not multiply shops indefinitely. Their success will depend on the power of consumption. The wealth of a country and of its towns finally depends on two classes of wealth producers — the farmers and manufacturers. By increasing production we increase the power of con- sumption, and the distributive classes, who do not themselves create wealth, benefit in turn. So it is obvious that he who would help Ireland to-day must first help her agricultm-e. The I. A. O. S. has by no means com- pleted its program of work. As regards the cattle trade pure and simple, no cooperative scheme has yet been introduced, though it is generally recognized that some scheme to do away with the necessity for marketing beasts in Ireland and then again in England would by eliminating one of the middle sales and middle profits be of benefit both to seller and buyer. When we come to bacon we can point to Roscrea as an established farmers' factory doing well and apparently to be the forerunner of several similar undertakings. But the Irish butter trade of to-day might be said almost to owe its continued existence to the cooperative movement. Briefly, the history of the trade is as follows: Before the development of cheap transit any kind of butter was welcome in England, and the prices were remunerative. When the continental and colonial supply of butter to England began, the requirements of the English markets were closely studied by these foreign importers and their agents. It was found the Englishman wanted regular supphes and uniform quality. The foreign pro- ducer satisfied these requirements, and for a time we did not. From a hundred farms ia a valley a hundred different kinds of butter issued every week, and in the same farm even under the old system the quality of the butter varied from week to week. Irish butter made by some hundreds of thousands of Irish farmers in some hundreds of thousands of more or less untidy homes did not meet the requirements of the market now catered for by a new set of businesslike foreign farmers who centralized the making of their butter in factories, under expert management, consigned it regularly, and with as imiform a quality as it was possible to have. The result was that the prices Irish farmers received fell to a point where the margin of profit on butter making dis- appeared, and Irish butter instead of being at the top of the market began successfully to compete for the very lowest place. 'Since thiB was written the Government, through the Development Commissioners, haa decided to renew the annual grant to thftXA. 0. S. 886 agbicultueal cooperation in exjeope. Cooperative creameries. The introduction of the cooperative creamery system and the centralizing of the butter making of a parish in one building equipped with the latest scientific appliances enabled Ireland to offer butter of improved quality, and in a short time the business was brought to a point which led to a revival of the industry. The change was an inspiring one. From the same land and the same class of cattle we are now producing a butter held in high esteem, competing at the top of the market, selling freely at remunerative prices. It made aU the differ- ence between a bare existence and a fair profit for his work to the Irish dairy farmer. The reform was a great one, but it is not enough. We have still to get the Irish farmer to improve the milking capacity of his herds without impairing their beef value. Cow. testing associations will enable the farmer to weed out the worst cattle which pay him least from his stock, and with the example of what other countries have done we can reasonably hope to increase the average yield from Irish diary cows from 450 gallons to 600 gallons annually. We can still further improve our butter and increase its value, and by acquainting the farmers in cooperative societies more thoroughly with the demands of the market, we hope to prove to him the necessity for wdnter dairying, if he wishes to stand ahead of his competitors in the English market or even to hold his place in the world compe- tition with which he is now confronted. At present, owing to having. little butter to market in winter, it becomes necessary each spring for the Irish creameries to buy their way back to the position they had won during the preceding year by offering their produce at a lower price than the foreign stuff which had replaced it. There is an adverse criticism often brought against cooperative creameries by unthinking people. The statement is that since creameries were introduced the farmers' children get no milk to drink, and they suffer in health from the withholding of this nourishing food. Now, what are the facts ? Before the creamery movement came to stay the farmer's milk was worth threepence per gallon. Now it is worth fourpence and more, and we are asked to beheve that a man who was a good father when milk was threepence per gallon became a heartless father who starved his •children when he became more prosperous by the rise in value of his milk by one penny per gallon. These same critics do not tell us of the sufferings of the little ones in locahties where milk is worth eightpence a gallon for supplying urban populations. The argument is really one which if carried to its logical concluticn would indicate that it is dangerous to do anything to improve the quahty of Irish farm produce because the price might be enhanced as a result, and one by one Irish farmers would withdraw eggs, milk, butter, poultry, potatoes, etc., from their children's dietary until the wealth of the farmers increased so much that they would refuse to feed their children at all. ' AGRICULTUHAL SOCIETIES. The dairy societies are productive societies. The agricultural societies, which are growing very numerous, are distributive societies and procure agricultural requirements for the farmers. They enable the farmer to reap the advantages in price gained by purchasing in large quantities for prompt cash payments, and this alone considerably improves his chances of meeting the world-wide competition in the market in which he sells. The individual farmer has very rarely used, and is never very hkely to use, the safeguards offered by analyses of manures and feeding stuffs and the testing of seeds. These safeguards are brought into play for him by his society without any trouble or expense to him, and while it is true they were more necessary in the past than they are at present, yet, judging by reports from county agricultural experts, there is still ample need for the societies using every safeguard to protect their members. Through the medium of the agricultural societies the smallest farmer is enabled to purchase his agricultural requirements at wholesale prices. This reduction in the retail price of fertilizers and feeding stuffs has enormously enhanced the output of manufacturers, because with reduction in retail price consumption increased, and so farmers and manufacturers both benefit by the creation of these societies. There is an increasing tendency on the part of the dairy societies to enlarge the scope of their business and to take up the work of agricultural supply associations in addition to butter making. Another service which these societies perform for their members is the purchase of expensive machinery like steam thrash- ers, , which are lent to them at low rates. Some societies own thousands of pounds worth of agricultural machinery. agricultural banks. Profitable farming, hke any other business, necessitates the use of credit at certain times and seasons. The agricultural bank is the form of combination which has proved to be the most helpful way of dealing- with farmers' credit. Previous to the introduction of these banks the farmer used to run a credit Avith his local trader, a system which was bad for the farmer, because he lost his independence and sometimes his farm. The I. A. 0. S. has organized about 300 agricultural banks. These are associations of farmers who pledge their joint credit for the safe-keeping of any money lent to them or deposited. On this joint guarantee they borrow 8 large sum of monoy sufficient for the n^eds of their members at a low rate of intei*e8t and lend it out agajo lEBLAND. 887 to these members at a slightly increased rate. Hitherto it has been found possible to borrow money at from 3 to 4 per cent and to lend it out at the popular rate of 1 penny per pound per month. From his agricultural bank the farmsr can borrow in accordance with his needs. Money is only lent for reproductive purposes sanc- tioned by the committee of the society. Interest is not deducted beforehand from the loan, and the length of time for which the money is advanced is determined by the purpose of the loan. So is the method of repay- ment. A man borrowing money to buy a milch cow will be getting his check every month from the creamery, and so he can repay by installments. Another farmer buying young pigs or fertihzers will have to wait six months, maybe, before his beasts are ready or his crops are sold, and he will repay in one sum when he has made his profit out of his loan. The pecuUar needs of farmers are met in every way. The societies serve a very use- ful purpose in country districts, taking from the wealthy their superfluous capital for which they pay a fair interest, and lending it out again to those who require it for reproductive purposes. The money of the district is in this way kept in the district, where it is always producing more money and doing good. The farmers also are instructed in the true use of credit, which is to borrow money to make more money and not merely to fill up some gap by throwing good money after money that is gone. This system, introduced into Ireland by the I. A. 0. S., is the system of credit for-farmers which is most widely used over Europe. POULTRY SOCIETIES. The poultry industry is becoming of more and more importance to Ireland every year, and poultry and eggs lend themselves most admirably to cooperative methods. There are about 24 societies buying and marketing their members' poultry and eggs without taking into account the dairy societies which take up this work as an annex to butter making. There is almost as large a business to be done in this branch of the farmer's business as in dairying, and the value of Irish poultry exports is very little less than the value of the Irish butter exports. The annual turnover of the poultry societies is ai present over £70,000, and it is increasing yearly. But these figures do not tell the whole story, for the influence of the societies has extended beyond their sphere of opera- tion and has led to the adoption of their methods of packing, grading, and buying by weight. Buying eggs by weight leads to stocking only good laying breeds of hens. The improvements in packing, cleanhness, and qual- ity have placed the eggs from Irish poultry societies in the front of the market, and removed them from com petition with eggs laid thousands of miles away. It is only the Irish who, by reason of this proximity to the British market, can really supply fresh eggs, and the organization of this trade will secure the highest prices to Irish producers. The societies, through this organization and direct contact with markets, obviate many of the delays which occurred when the trade was conducted by serried phalanxes of middlemen, the local higgler buying from the farmer's wife, seUing to another middleman who sold to somebody else in England, who again sold it to the retailer who sold it to the public, by which time the egg afforded no carnal pleasure to the eater. With organization this old bad method, causing delays and deterioration of quahty, is being superseded. Poul- try and eggs are the great industries of the small farmer and cottager. There is an unhmited market for them, and Ireland could produce three times her present output without glutting the market. If she marketed her poultry and eggs properly she could displace the stale eggs from Russia and other distant countries. The I. A. O. S. is teaching farmers how to market their eggs in a businesshke way. MISCELLANEOUS SOCIETIES. While the I. A. O. S. up to now has chiefly devoted itself to the organization of dairy, agricultural, poultry, and credit societies, it has also brought 15 flax societies into existence, with the object of keeping the scutch- ing and marketing of the flax more directly under the control of the farmer, and while a fair measure of success has been attained already much more is possible. Eventually these societies may introduce into Ireland the practice which works so satisfactorily in Belgium — the sale of the flax crop on foot with the subsequent opera- tions of pullmg, retting, and scutching carried out by a staff of trained and expert workers, who could by this means be kept fairly well employed all the year round. Home industries societies have also been started by the I. A. 0. S. for various purposes, such as the making of lace, embroidery, crochet, and rugs. Unions of societies for various purposes have been promoted. These federations undertake the marketing of butter for the societies, guarantee them against bad debts, and supply dairy requirements, or purchase wholesale for individual agricul- tural societies throughout Ireland their seeds, artificial fertilizers, and feeding stuffs, and by careful analysis and selection provide a source of safe supply for their affiliated societies. The Irish Cooperative Agency Society is a selling federation for dairy societies, and the Irish Agricultural Wholesale Society is the wholesale purchaser. The latter also acts as a seUing agency for poultry societies, markets honey, and performs many other services for its members. Both are increasmg their trade. The capital in both belongs to the farmers, the busmess is under the direction of committees appointed by the farmers, and the only interests consulted by them are the fanners' interests, 888 AGEICtTLTUBAL COOPEBATION IlT ETTKOPB. SELF-HELP. The I. A. O. S. does not pretend that its work is above criticism. The Irish farmers to a great extent are raw material, and have not got, like the German farmers or Danish farmers, a generation of cooperators behind them. But it submits that its work is absolutely necessary and is deserving of the support of all who wish to see Ireland prosperous. When we remember that in Ireland there are 84,869 holdings not exceeding 1 acre and 61,730 holdings over that but not exceeding 5 acres in extent, and 153,299 holdings not exceeding 15 acres, and 136,058 holdings not exceeding 30 acres, it wUl appear that two- thirds of our agricultural population must be deemed very small farmers who individually are altogether unable to market their produce, and who can only meet foreign competition by organization for business purposes. How is their weakness to be made strength ? How are they to be protected from fraud or extortion ? How are they to secure the best business advice ? How are they to manufacture on modern lines ? How are they to influence legislation ? How are they to do any of these things unless they are organized ? It may be urged — it has been urged in some quarters — that this organ- izing should be done by the State. But if the State undertook this work it would be impossible to relieve it from the responsibility of failure from adoption of its advice. The I. A. 0. S. throws the weight of responsibility on the individuals forming the society, and this responsibility provides an effective guaranty of the activity necessary to success. Again, if the State undertook organization it would be constantly led into conflict with the agencies of the old bad methods which the organization of the farmers is to supersede, and it would be in the position of advocating the claims of particular business institutions in preference to others. Agaia, direct organization by the State would kiU out all voluntary effort. The country is limp enough as it is. It has suffered for generations from the worst economic disease any country can suffer from, and that is the constant looking to the State for help in everything. The country has appealed to God, to the State, to humanity, for pity, for sympathy, for aid, for dollars, and has made itself the mendicant nation among humanity. Let us talk no more about State aid. Let us help the country to help itself. It is the more manly way and it will produce infinitely better and more lasting results. We believe £5,000 spent yearlj- in promoting organization of the farmers for purposes of self-help wifl produce better and more permanent financial results than if £500,000 were spent in subsidizing parish committees, in doles for this purpose, or grants in aid of that enterprise, or in the general pauperization of industrialism in Ireland, and we appeal to aU advocates of seK-help m Ireland to help the I. A. O. S. with its work. RESULTS. A few statistics about that work may not prove iminteresting. We can not bring them up to date. The statistics collected by the I. A. O. S. are rather like the shadow of the American express which is reported to have rushed into the station 25 minutes after the train. Our cooperative statistics are always a couple of years behind, but even although this shadowing forth of good work is belated and behind the times, the information is not unimpressive. In 1908 there were 293 dairy societies with 64 auxiliary societies with a membership of 42,404 and a turnover of £1,726,596. There were 166 agricultural societies with a membership of 12,999 and a turnover of £87,045. There were 24 poultry societies with a membership of 6,650 and a turnover of £72,595: There were 268 agricultural banks with a membership of 17,403 and a turnover of £56,004. There were 67 miscellaneous home industries and flax societies and federations with a membership of 6,483 and a turnover of £310,138. The complete turnover in that year was £2,252,380, and the membership totaled 85,939. Since then there has been a great increase in the number of societies, in the membership, and in the turnover, which should this year be very close on £3,000,000. This, we submit, is good work, which the founders of the movement may well look on with pride, and those who gave it support may regard their money as well invested. The hardest part of it is done. The change of feeling in the country has been effected. Rural Ireland is ready to be completely organized, and the officers of the I. A. O. S. are probably the hardest worked people in Ireland. Demands for their services are continually coming up to headquarters, and it is only the lack of funds which prevents societiw being formed in hundreds. There are many developments, like mutual live-stock insurance and cooperative bacon curing, which could be hastened if the organizing body had funds. We write this description of the work of the I. A. O. S. in the hope that it may be used to interest outsiders and explain to them the nature of the revolution in business methods going on in rural Ireland. It ought to be interesting to the townsman, because in Ireland the townsman's prosperity rises and falls with the waxing and waning of agriculture. There is no real conflict between the interests of agriculture and urban interests threatened by this organization. We believe in less than 20 years from this even urban Ireland will recognize how much it owed to this movement among the farmers, and we appeal to the f arsighted urban merchants and manufacturers to give their sympathy to a movement which, by aiding the farmers, will make them better buyers of the things which are produced in the cities, which will make the Irish farmers better business men, more independent, more enterprising, and which will unite them in unpolitical and unsectarian organizations in a true brother- hood of industry. IBELAND. 889 NEED OF RURAL BANKS IN IRELAND.' A farmer can not carry on his work without capital. If he has not got it in the form of ready money he must obtain it in the form of credit. Ready money the farmer has but seldom, but if he is honest and solvent he is always in possession of credit. The needs of his business often compel him to change his credit capital into ready money; and the farmer should see that the change is effected with the least possible expense and in the manner most convenient to himself. It is one of his greatest needs that there should be a method by which he can obtain ready money cheaply on the security of his acknowledged credit. He generally gets his profit from his work at one period of the year, and unless he has money already in his possession he must, for a con- siderable time, buy on credit or borrow money to pay for his seeds, manures, cattle, etc, His rent is often due at a time when the sale of his stock would mean a certain loss, and if he could obtain money to hold them over for a couple of months he could effect a better sale. There are numberless improvements certain to repay their cost which could be made on his holding, such as a drain or a shed; or the opportunity for a cheap pur- chase of pigs, sheep, or cattle often wiU present itself if cash could only be had at the moment. The advantages of being able to obtain money easily and at a low rate of interest are evident. HOW THIS NEED IS MET IN IRELAND. First there are the joint-stock banks. But it is rarely that these will lend the sums which small farmers require at less than 10 per cent interest deducted beforehand. Then there is the cost of a biU with postage and money-order or traveling expenses if the applicant does not live near a bank. Again these banks do not usually lend for a period which enables the farmer to make his profit out of his loan; and a loan which has to be repaid too soon only cripples the borrower instead of being any assistance to him. But even on such terms it is often not easy to obtain a loan and the farmer is forced to apply elsewhere. He may go to the "Gombeen" men, who are the curse of many a parish in Ireland, or apply for moiiey to the much-advertised loan offices, to deal with whom generally means ruin The farmer should avoid the "Gombeen" man and the loan offices unless he wishes to emigrate or end his days in the workhouse. The system, brought about by a lack of capital, by which in many cases m this country goods are obtained on credit and by barter, also entails very severe loss to the farmer. Now what is the remedy proposed for this state of things ? It is — COOPERATIVE CREDIT. This was one of the first forms of cooperation on the Continent and is generally considered the most useful. It has grappled successfully with a condition of things abroad as bad or worse than those described here. In Germany the first agricultural bank, started by Herr Raiffeisen in 1849, has been a prolific parent of associa- tions of its kind; and no greater testimony to their success could be given than the fact that according to the latest returns 2,169 agricultural credit societies of the Raiffeisen type alone exist in Germany whose boast it is, after 46 years of experience, that no one, either member or creditor, has lost by them a single penny. The testimony to their value comes from all quarters, from distinguished economists, from priest and pastor, as well as from the members themselves. "Homes have been made habitable and comfortable, culture has been im- proved; machinery has been puj-chased and the best feeding stuffs; the small peasant can now buy his imple- ments and manures of the best quality at the cheapest wholesale prices; the usurer has been driven out of the field." All this was accomplished by cheap credit. The system has been adopted for Ireland, a hundred banks have been registered already, and we too can say "no man has ever yet lost a peimy by them." Every new district where a bank is started is placed on its honor to safeguard the reputation of the system; and no district can afford to have it said that that was the first place and these the first people amongst whom an agricul- tural bank made a bad debt. MODE OF ORGANIZATION. A locality where money is scarce and could be usefully applied, and where the conditions of borrowing are those described, is a good place to start a bank. The application of the principle of cooperation to credit is identical with its application to other branches of industry. A number of people join together to obtain ad- vantages as a body which they can not obtain by acting separately. By forming themselves into a society they can on their joint unlimited engagement to be responsible for the liabihties of the association, get money enough for their needs. This they can lend again to each other at a slightly higher rate of interest. The dif- ference between the mterest paid and the interest received wiU pay expenses and help to form a reserve fund. It has generally been found possible to borrow money at from 4 to 5 per cent and to lend it at 6 per cent. As » Reprint from a pamphlet issued by the Irish Agricultural Organization Society. 890 AGEICULTUKAL COOPEEATION IN EUROPE. the bank gets better known it will be able to borrow and lend on still easier terms. Wherever such societies have been at work for a little time, it is found that usury disappears from the neighborhood. The societies are democratic in principle. Each member has one vote only. He assists in the management and has a voice in the election of the officials, the committee, the secretary, and the treasurer. The duties of the committee, who ought to be the most substantial and intelligent men in the society, are to admit members, grant loans, and fix the rate of interest for borrowers and depositors. ADMISSION OF MEMBERS. As one of the greatest securities such a bank can offer to outsiders is the good character of its members, no one can be admitted whose honesty, thrift, and general good character are not well known. No improvi- dent person ought to be admitted. To enable the committee to judge upon this accurately, the area of a bank's operations is confined to a parish or to a district, where any possible applicant for membership and his social standing are known to them. To go beyond this and admit strangers would be to invite risk, and the bank can not undertake any risks. An entrance fee of sixpence may be charged to cover the initial expenses, LOANS. Every applicant for a loan must state what he proposes to do with the money, and the term for which it is required. The length of time will be determined by the purpose. Money will never be lent unless for profitable or productive purposes or to effect some economy. He must enter into a bond to apply the loan to the pur- pose for which it is granted. He must convince the bank that he will be able to repay it out of the profits of his loan. It wdl not lend money to squander. But whenever money is lent, the bank wiU accept the borrower's own conditions as to the time or method of repayment. If he buys young pigs early in the year, he wU] want time to fatten them; and it is not fair to ask him to repay before he has made his profit out of his loan. If he repays by installments, the interest is charged only on the money actually in the borrower's possession at any time. For instance, if a member borrows £5, and repays £1 a month, the interest will be charged only on the full amount for one month, on £4 for two months, on £3 for three months, on £2 for four months, and for the full time only on the last pound. The interest is not deducted beforehand, but is payable with the installments of loan. It is usually charged at the rate of 1 penny per pound for each month. DEPOSITS. The bank will receive deposits of savings from its members, and allow them interest at the rate of 4 per cent. That is more than the post office savings bank allows. The security offered is the joint unlimited engage- ment of members to be responsible for the debts of the society. These members are the depositor's own neigh- bors, chosen for their good character and honesty. The depositor has the money always in view, for he can examine the monthly statements and see how the bank stands. The accounts are audited by a public auditor yearly. By putting his savings into the bank a member is helping his neighbors. He keeps the money of the district in the district, where it is always in circulation, doing good and producing more money. It is perfectly safe. The faith that is built upon such a foundation of honest men banded together is built upon a rock. After 46 years' experience on the Continent it has never yet received a blow. SHARES ARE NOT NECESSARY. As the bank will lend to the honest but poor man who becomes a member, it would be absurd to ask him to pay for a share when he already may be in want of money. And having no shares, the bank declares no dividend of its profits. Members are expected to make a profit from their loans outside the bank. Whatever profit the bank has, after the payment of expenses, is put to a reserve fund, which it ought to be the constant aim of the bank to increase. It will finally give absolute confidence to outsiders who may deal with the bank. There are little banks on the Continent which started with only borrowed capital, and which have now, by the slow accumulation of profits, several hundred pounds of their own. This is never divided, but is used so as to make it possible for the bank to lend on still easier terms. If there is a cooperative agricultural society in the neighborhood, the bank will be found a useful auxiliary. It will advance money to enable its members to get the benefit of cash payment for their seed or manure, and it will wait for repayment until their crops are sold. A great educational influence is exercised by the bank in its insistence upon good character, upon proper invest- ments, punctuality of repayment, and by the instruction it gives as to the proper value of money. The mate- rial advantages are evident to all, but great as they are, the moral benefit resulting from this cooperation .of man and man, each helping the other, is really of as great importance, for In these societies, more than in any IBBLAND. 891 others based on cooperation, is it made evident to all the members — by the fact of their common liability — that in brotherly feeling among them lies their greatest hope of success; and with this spirit there can not be failure or loss. Many thousands of such societies exist, based on this principle, and what is possible with the Germans or the Italians is possible with us. BY-LAWS OF IRISH COOPERATIVE FARM IMPLEMENT SOCIETIES. 1. All implements the property of the society shall be hired to members and nonmembers of the society at such rates and on such conditions as the committee in consultation with the agricultural expert of the I. A. 0. S. shall decide. 2. Applications for the hire of implements shall be made to an official of the society appointed by the society to receive same. The person making the application shall sign an undertaking to abide by the society's by-laws, a copy of which should be supplied to him. The applicant shall also state the amount of work to be done, or the period for which he wants to hire the implement, or both. (a) The person appointed by the society to receive applications for the hire of implements shall always give precedence for the hire of implements to members of the society over nonmembers. (i) If the committee consider that the applicant has understated the amount of work, they shall be empowered to appoint some independent person to survey the work performed. The expenses of the person so appointed shall be paid either by the society or the applicant, whichever is proved to be in the wrong. (c) Subject to the conditions stated -in the previous clause, he shall hire out the respective implements in the same order as applica- tions for same are received. If he receives two or more applications for the hire of the same implement at the same time he shall give precedence to the applicant who has the more, or the most, work to perform with the particular implement, {d) If the two or more applicants have an equal amount of work to perform, precedence shall be decided by lot. 3. Any person, member or nonmember, who has been granted the hire of an implement, must undertake, when he has finished with the implement, to convey same to the person who has been granted the hire of the implement next, and must also, when necessary, instruct the latter person in the use of the implement. 4. In case any person after obtaining the hire of an implement is unable to work the implement through lack of horses, or his land or crops being in an unsuitable condition, or for any other sufficient reason, and any other applicant requires the implement for immediate use, the implement must be immediately handed over to the latter. After the latter has finished with the implement, the previous appli- cant may then, if ready to carry out the work specified in his application, claim his right to its use. 5. In the event of any damage occurring to any of the society's implements the following course shall be adopted' (a) A notification must be at once made to the secretary of the society. (6) All implements shall be repaired and kept in good working order at the expense of the society, irrespective of whether the imple- ments are damaged whilst working for a member or nonmember. In case, however, an implement is damaged through what the commit- tee consider to have been culpable negligence, the cost of repairing same shall be borne by the hirer on whose farm the implement was broken or damaged. 6. Any unusual ciscumstance necessitating an alteration in the order of precedence in dealing with applications for the hire of machinery, such as breakage, may be dealt with by the secretary or manager in consultation either with a committeeman or the agricul- tural expert of the I. A. O. S., provided the matter is reported to the next meeting of the committee. 7. Payment shall be made by hirers of machinery and implements at such times and in such manner as the committee may decide. 8. The committee reserve to themselves the right to reject the application of any person other than a member of the society without stating their reasons for so doing. 9. The society shall not be held responsible for any failure on its part to supply its members or other contracting persons with machines or implements provided such failure shall be due to strikes, labor disputes, unavoidable delay in delivery of any machine or implement, or any essential part thereof. PORM OF HIKING AGREEMENT. [To be filled up by the lilrer.] I, the undersigned, have read the foregoing by-laws and agree that they shall form the basis of my contracts with the • Co. operative Farm Implement Society, Umited. Signed, . Witness, ■ 191-. WEIGHTS, MEASURES, AND MONEY. 893 TABLES OF WEIGHTS, MEASURES, AND MONEY. Table I. — The metric system, as used in Italy, Auslria-Hnngaiy, Germany, Switzerland,^ France, Holland, and Belgium, and in other Euro- pean countries {except England) with slight variations? Measure of — Unit. United States equivalent. Length Area Capacity (liquid) Capacity (dry)... Weight fl meter , ... \1 kilometer (1 are 1 hectare , 1 square kilometer f 1 liter \1 hectoliter flliter \1 hectoliter {1 quintal 1 kilogram 39.37 inches. 0.62 mile. 0.024 acre. 2.47 acres. 247 acres. 1.05 quarts. 105 quarts. 0.113 peck. 2.83 bushels. 220.462 pounds. 2.20462 pounds. Table II, — Other measures peculiar to various countries. Measure of- Length Area Capacity (liquid) Capacity (dry)... Weight Country. [Switzerland. . . Russia ' [Great Britian*. Switzerland . Denmark Norway [Spain [Gteat Britain ' [Spain , I Great Britain. Austria. .. Hungary. . Bohemia. . Germany. Denmark. Egypt.... Russia Great Britain * . Unit. 1 toise fl sagfene [1 verst As in United States. 1 arpent \l tondeland. 1 arroba fThe English gallon (The United States gallon . 1 fanega ^ fThe English gallon \The United States gallon. }• 1 centner. ....do.... ..do... n roble {\ cantar 1 pood fl hundredweight. il ton United States equivalent. 11.81 feet. 27 feet. 3,500 feet. 3.55 acres. 1.36 acres. 4.26 gallons. 277.27 cubic inches. 231 cubic inches. 1.6 bushels. 277. 27 cubic inches. 231 cubic inches. 123.46 pounds. 186 pounds. 110.23 pounas. 1 pound. 100 pounds. 40 pounds. 112 pounds. 2,240 pounds. In the case ' These tables are not intended to be exhaustive, but merely to explain the expressions commonly met with in the text, ot money the equivalents given are those commonly accepted by travelers. ' The Greek prefixes, deci, hecto, kilo, indicate 10, 100, and 1,000 fold; the Latin deci, centi, milli, indicate one-tenth, one-hundredth, etc.; e. g., hectometer equals 100 meters; centimeter, equals 1/100 meter. ' A more complete table of Russian measures will be found in the text on p. 236. * Great Britain includes England, Scotland, Ireland, and Wales, all of which countries use the same measures. 895 896 AGKICULTUBAL COOPERATION IN EUKOPE. Table III. — Money. Italy. France Switzerland. Belgium Spain. Austria. . . Hungary. Bohemia. Russia Germany. Denmark - Norway. . . Holland. Great Britain. Country. Unit. 100 centesimi=l lira (franc) 100 centime8=l franc 100 centesimo8=l peseta •100 heller (filler) = 1 krone (crown) 100 kopecks=l ruble 100 pfennigs=l mark •100 ore=l krone 100 cents=l florin, guilder, or gulden. 12 pence=l shilling '20 shillings=l pound sterling (£1) United States equivalent. SO. 190 .190 .190 .245 .505 . .240 .265 .400 .240 INDEX 14174"— S. Doc. 214, 63-1 57 897 I]SrDEX. Page. Agrarian Credit Institute oi Latium 28 Agricultural Central Loan Bank, Berlin, Germany 330-332 Agricultural colleges, Hungary 166-169 Agricultural cooperative associations. See Cooperation, Societies. Agricultural Credit Association of Saxony at Dresden 435-437 Agricultural District Society, Krems, Austria 214 Agricultural education: Austria 192-193 Belgium 490 France 688-692, 760 Germany 343-344, 369, 373-375, 451 Holland 527 Hungary 127, 166-169 Ireland 852-857 Italy 43, 53 Rhine Province 344, 347-348 Spain 614, 640 Switzerland 470-471 Wales 809-810 Agricultural experiment stations, Spain 640-641 Agricultural insurance. See Insurance. Agricultural laborers. See Labor and laboring classes. Agricultural organization: Bavaria 288—289 Germany 440-444,450-453 Hungary, Government participation in 125-126 Ireland 882—888 Agricultural organizations: Alsace-Lorraine 314r-318 Germany 314-318, 320-322 See also Cooperation, Societies. Agricultural products: Austria 187 Holland 527 Agricultural Savings and Loan Bank of Niemberg, Ger- many 352-354 Agricultural societies. See Cooperation, Societies. Agricultural Syndicate, Chateauroux, France 755-756 Agricultural Syndicate for Chartres, Chateaudun, and Nogent-le-Kotrou 721-723 Agricultural Syndicate of Loir-et-Cher 750-753 Agriculture: Austria — Cooperative societies an aid 185 Government aid 216, 219-222 Government protection 186-188, 201-203 Bavaria 267-269 Belgium 513-515 Bohemia, statistics 214-215 Essex 791-792 France 762-769 Germany 269-270, 399-400, 414-415 Holland 524-527 Hungary — Government aid 126-127 Statistics 121-125 Agriculture — Continued. Page. Oldenburg 454 Russia 234 Saxony 425^29 Verzy, France 759-760 Agriculture, Cooperative: Austria 177-193,219-222 Encouragement by University College of Wales 810-812 England 773-787 France 664-666, 669-675 Holland 526-529 Ireland, Ardmire dairy farm. . .-. 867 Lombardy 46-47 Rhine Province 344-348 Russia 236-244 Saxony 429-434 Switzerland 467 Wales 784-787, 801-806, 812-816 Albegnasego, Italy, rural banks 70-71 Albert Agricultural College 853-857 Alpe, Prof., statement 46-47 Alsace-Lorraine : Agricultural organizations 314-318 Central Association of Agricultural Societies of Alsace- Lorraine 311-314 Altedo, Italy: Cooperative farm 61-62 Rice cultivation 62-63 Anderson, R. A. (secretary Irish Agricultural Organization Society), statement 842 Anglesey: Cooperative credit 807 Cooperative societies 808 Ardmire dairy farm 867 Aries, France, cooperative irrigation power plants 679-680 Aries Regional Bank of Mutual Agricultural Credit 677-679 Artelles. See Cooperation, societies. Association for Milk Control, Oldenburg 453 Auction markets, cooperative, HoUand 527-528 Augsbin, Dr. M., address 390-394 Aupetit, M. (chief of department of economic studies to Bank of France), address i 651-653 Austria: Agricultural education 192-193 Agricultural products 187 Agriculture — Government aid 216, 21 9-222 Government protection 186-188, 201-203 Legislation 186-188,201-203 Statistics of Bohemia 214-215 Banks — Austro-Hungarian Bank 180, 184 Austro-Silesian Realty Credit Institute of Silesia, Troppau 180 Bohemian Raiffeisen Bank of Stransnice 222-224 Credit Foncier of France, system adopted by 180 Mortgage 180-181, 188-190, 197-200, 216 Mortgage Bank of Kingdom of Bohemia, Prague 180 900 INDEX. Austria — Continued. Page. Banks — Continued . Eaiffeisen 211-214, 222-224 Savings 179 Birds 187 Cattle- Delivery organizations 188 Disposal of 187-188 Live-stock and meat foundations 191-192 Protection by legislation. . . ^ 187 50-51 Cooperation — Farming 102-103 Oil-cake factory at Piacenza 56-57 Pontecorvo 87-88 Report by Dr. Giulio Costanzo 90-106 Societies , 32-33, 84-35, 51, 52-53 Cooperative dairy at Soresina 80-83 Cooperative farm of Altedo 61-62 Cooperative stores in Cornaredo 52-53 Costanzo, Dr. Giulio, report 90-106 Dairy societies 29-30, 80-83, 100 Delia Volta, Prof, (vice president of the Royal Academy of the Patrons of Agriculture), statement. 43 Distilleries, cooperative 100 Ermenego, Zanon (president Rural Bank at Vigonovo), statement 71-72 Italy — Continued. Page. Farming — Cooperative 50-51 Rome 86-87 Tuscany 85-86 Ferrari, Prof, (director of the Agricultural Associations and Mutual Insurance Association Against Accidents), statement 43-46 Fornaciari, Dr. Luigi (director Agricultural Society of Cremona), evidence 79 Graziani, Prof, (professor of political economy, Univer- sity of Naples), statement 35-37 Humanitarian Society of Bergamo 84-85 Insurance — ■ Cooperative 25, 30-31, 45-46 Mutual societies 103-104 International Institute of Agriculture 90 Land credit 35-37, 90-98 Land mortgage institutions 24 Land tenure .' 22-24 'Little Credit Society of Bergamo 83 Lombardy, agricultural conditions in 49-50 Luzzatti, Hon. Luigi, address 21-31 Metayer system in Tuscany 43-45 Minister of Agriculture, statement 24 Miraglia, Mr.' (director general of the Bank of Naples), statement 34 Montanelli, Prof. Cori, statement 43 National League of Cooperative Societies 104 Ponti, Marquis, statement 52-53 Production societies, cooperative 99-102 Pm'chase societies, cooperative 98-99 Raiffeisen system 34 Rice cultivation at Altedo 62-63 Roggi, Mr. (secretary general of the Italian Society of Agriculturists), address 27 Rossi, Mr. (director Agricultural Cooperative Society of Cremona), evidence 79 Rural credit 47-48 Rural Life 27 Tuscany land-tenure systems 43 Venti, G. (director Agrarian Credit Institute of Latium), statement 28 Wine presses, cooperative 100 WoUemborg, Hon. Leone (ex-minister of the treasury), address 25-26 Jewett, Milo A. (United States consul at Kehl, Germany), statement 314-318 Johannsen, Dr. (director Hanoverian Chamber of Agricul- ture), evidence 450-453 Johnson, E. A., statement 870 Jones, E. W. (secretary North Wales Branch Agricultural Organization Society), statement 817 Jones, Prof. C. Bryner, statement 810-812 Kapp-Konigsbeig, Dr. (general director), address 381-389 Kaumanns, Dr. Nikola (sometime German imperial special commissioner of agriculture to United States), address.. 269-270 Kharkoft, Russia: Agricultural society 251-253 Banks — Nobility Land Mortgage Bank 256 Peasants Land Mortgage Bank 255-256 Credit institutions 253-254 Private land mortgage systems 255 Kiev, Russia: Agricultural society 257 State bank, branch at 257-258 Koch, P. Van (director department of agriculture, Holland), address 524-527 INDEX. 911 Koranyi, Baron (director general Central Cooperative Credit Page. Bank), e\ddence 164-165 Kraus, Prof., evidence '. 288-289 Erema, Austria, Raiffeisen bank 211-214 Erems Agricultural District Society 214 Kur, Germany, Manorial Land Mortgage Bank 411-413 Labor and laboring classes: France, accident insurance 734-739, 748-749 Hungary 126,151-153 Land Bank of Wiesbaden. See Nassau Mortgage and Savings Bank. Land credit. See Credit. Land Credit Bank. See Hungarian Mortgage Credit Bank. Land Credit Bank of France. See Credit Foncier. Land credit banks. See Banks. Land mortgage banks. See Banks. Land registry, Austria 201 Land tenure: Ireland 850-851 Spain 619-620 Tuscany 43 Landenburg, Dr. Paul (of the Joiat^Stock Discount Bank, Hannhiem, Germany), evidence 348-349 Landers, Dr. (of chamber of agriculture, HaUe, Germany), statement 367-370 Landesgenossenschaf tskasse, Hanover 446-449 Landschaft banks: Germany 363-366 Halle, Germany 363-364 Saxony 363-364 Landschaft system: Germany 354-366 Organization of Prussian Landschaften 381-389 United States, adaptability. 355, 362 Langeais, France, local agricultural credit bank 747-748 Laiaen, H. C, statement 554-555 La Sarthoise Farm Laborers' Accident Insurance Society. 734-739 Latium, Agrarian Credit Institute of 28 Laur, Dr. (of Brugg), address 461-462 LeaBeholdings, Austria 178-179 Leases, Italy 50-51 Leeuwarden, Holland, cooperative steam dairy 540-542 Legislation, agricultural, Austria 186-188, 201-203 Leipzig, Germany, Hereditary Estates Credit Society 434-436 Le Mans, France, Regional Bank of 729-730 Lemburg, Austria, Galician Realty Credit Society 180 Leutewitz, Otto Steiger, address 425-429 Liege, Belgium: Central Cooperative Agricultural Credit Society of Liege 507-509 Rural Cooperative Bank of Liege 509-513 Live-stock. See Cattle. Live-stock and meat foundations, obligatory, Austria 191-192 Live-stock disposal societies. See Cattle. Live-stock insurance. See Insurance. Loans: Bohemian Raiffeisen Bank of Stransnice, Austria 223 France- Long-time 698, 704-705, 708-709 Short-time 698 German Central Association of Cooperative Agricultural Societies in Bohemia 225, 226 Government, Denmark 551 Hungarian Central Cooperative Credit Society 144 National Small Holdings Land Mortgage, Hungary (table) 162 Popular banks, Roumania ' 117-118 Raiffeisen Bank of Krems, Austria 211 Loans — Continued. page. Schulze-Delitzsch Bank at Wiesbaden, Germany 342 See also Farm loans — Mortgage loans. Lohnis, F. B. (inspector of agriculture in Holland), stat«- ment 519-524 Loir-et-Cher: Agricultural credit 751 Agricultural syndicate 750-753 Cooperative purchasing society 751 Regional Bank of 753-754 Loiret, Regional Bank of 754-755 Lombardy: Agricultural conditions 49-50 Cooperative agriculture 46-47 Federation of Rural Cooperative Societies 51 Lord Lieutenant of Ireland 845-846 Lucas, Jules (chief of bureau, office of secretary-general), evi- dence 655-655 Luzzatti, Hon. Luigi, address 21-24 Lyngby, Denmark, People's High School 555 Lynn, P. (manager Drombanna Cooperative Creamery), evidence 876-878 McCuan, J. N. (United States consul at Gla^ow), state- ment 824-826 Machine societies: France 765 Hanover, Germany 443 Hungary — Sewing-machine societies 145 Steam-plow societies 145-146 Thrashing-machine societies 145 Ireland 891 Machinery, agricultural, Spain 620-621 Madrid, Spain: Causes of high prices 629-630 Meat supply 625-634 Madsen, C. T. (manager Cooperative Egg Export Society of Denmark), statement 547-548 Maimendorf, Baron Fuhrer von, evidence 194-197 Manorial Land Mortgage Bank of Kur and Neumark, Ger- many 411-413 Manure works. See Chemical manure works. Marketing: Cooperative, Wales 806-809 Spain 624-625 Markets, organization of, in Spain 633-634 Martin, T. B. (president Association for Reinsurance), statement 748-749 Meat: High prices in Madrid, causes of 629-630 Live-stock and meat foundations, Austria 191-192 Transportation and duty on, in Spain 634 Meat supply of Madrid 625-626 Merchandise, cooperative purchase in Austria 185 Metayer system in Tuscany 43-45 Miklos, Odon, statement 165 Milan, Italy, agricultural high school 53 Milk, supply in Barcelona 638 Milk associations. See Dairy societies. Milk-selling societies. See Dairy societies. Miraglia, Mr. (director general of the Bank of Naples), state- ment 34 Money (tables) 895-896 Monor, Hungary, Raiffeisen bank 169-171 Montanelli, Prof. Cori, statement 43 Monte Dei Paschi Credit Institute 42-43 Moos, Prof., statement 467 Mortgage Bank of Kingdom of Bohemia, Prague, Austria. . . . 180 912 iiEx. Mortgage banks. See Banks. Pase. Mortgage bonds: Hungary — Laws relating to 131-132 Loans on 133-134 Mortgage credit. See Mortgage loans. Mortgage loans: Austria 188-189, 194-195 Bohemia : 216-219 Denmark 551 France 653-654 Hungary 133-134 Joint-stock banks and savings banks 136-137 Mortgages: Belgium 500-502 Private land mortgage systems of Kharkoft, Bussia 255 Moscow, Russia: Central Union of Distributive Societies 259 Credit association near 261-263 Imperial Bank 259-260 Peoples Cooperative Bank 258 Rural credit bank of district 260 Zemstvo 260-261 Miiller, Dr. Hugo (assistant secretary of Mortgage Bank of Kingdom of Bohemia), statement 217-219 Mutual Agricultural Society, Chartres, France 723-724 Nassau Mortgage and Savings Bank 337-342 Nassau Union of Baiffeisen Rural Cooperative Societies. . . 329-337 National Central of Christian Cooperative Societies... 148, 150-151 National Federation of Hungarian Land Mortgage Insti- tutes 130,143-144 National Hungarian Agricultural Union 127-128 National League of Cooperative Societies, Italy 104 National Mortgage Bank, Austria 180 National Small Holdings Land Mortgage Institute, Hungary. 130, 135-136, 156-157, 159-162 Neilson, F. (manager Cooperative Society of Denmark), statements 545-547, 548-550 Netherlands. See Holland. Neumark, Germany, Manorial Land Mortgage Bank 411-113 Niemberg, Germany, Agricultural Savings and Loan Bank. 352-354 Nobility Land Mortgage Bank, Kharkoff 256 Nogent-le-Rotrou, France, Agricultural Syndicate 721-723 Norway: Banks — Credit 593-598 Mortgage 590-593 General conditions 589-590 Rochdale principles 590 Workmen's Credit, Norwegian Bank for 593-598 Norwegian Bank for Workmen's Credit 593-598 Nikolskoe-Troizkoe, Russia, cooperative institutions, evi- dence of officials 249-251 OU-cake factory, cooperative, at Piacenza, Italy 56-57 Oldenburg: Agriculture 454 Association for Milk Control 453 Cooperative movement 456—457 Cooperative societies 456-457 Egg societies 453^54 State Credit Institution 455-456 Pap G6za, Baron, statement 143 Peasant Bank, German. See German Peasant Bank. Peasants Land Mortgage Bank, Kharkoff 255-256 Peasants' League. See Belgian League of Peasants. Penllyn Cooperative Society, Wales 817 Peoples Cooperative Bank, Moscow, evidence of officials 258 Perche, Regional Bank of Beauce and Le Perche 719-721 Piacenza, Italy: ^"Bo. Banks — People's 54 Savings 55-56 Cooperative oil-cake factory 56-57 Piedmont, agricultural conditions in 88 Pien, Louis (Department of Agriculture), statement 489-490 Pilkington, Henry (member executive committee North Wales Branch Agricultural Organization Society), state- ment 803-806 Plant diseases, control of, in Spain 641 Plants, Austria, protection by legislation 186 Plunkett, Right Hon. Sir Horace (president Irish Agricul- tural Organization Society), address 831-841 Poitou, Central Cooperative Dairy Association 717-719 Pontecorvo, cooperation in 87-88 Ponti, Marquis, statement 52-53 Popular banks. See Banks. Posen, German Middle Class Bank 393-394 Positos, Los, Spain 609-610 Poultry, raising of, in Barcelona 638 Poultry societies: Hanover, Germany 443 Ireland 887 Prague, Austria: Francis Joseph Credit Institution at Prague 226-229 Mortgage Bank of Kingdom of Bohemia 180 Preussenkasse. See Prussian Central Cooperative Bank. Production, cooperative, Belgium 490 Production societies. See Supply societies. Property. See Real property. Prouais-Rosay, France, Farmers' Cooperative Electrical Soci- ety 727-729 Provincial Bank of Royal Saxon Margraviate Oberlausitz 435- 436, 437-438 Provincial banks. See Banks. Provincial Cooperative Bank, Hanover 446 Provincial Mortgage Institution of Lower Austria, Vienna.. . 188- 190,197-200 Prussia: Banks — Annuity 392 Central Cooperative Bank, Prussian 415-419 Landschaften, organization of 381-389 Public life insurance, organization of 386-389 Prussia, West, German Peasant Bank 393-394 Prussian Central Cooperative Bank 415-419 Prussian Central Land Credit Co 408-411 Prussian Central Land Credit Joint-Stock Co., Berlin 404-408 Purchase societies. See Supply societies. Raabe, Dr., statement 372-373 Ragon, Germany, Raifteisen bank 394-395 Raiffeisen, F. W 21, 330, 333, 843-844 Baiffeisen banks. See Banks. Raiffeisen organizations. See Raiffeisen societies. Raiffeisen societies: Austria 181-183, 185, 194, 195, 200, 209-210, 211-214, 216 Bohemia 216 Denmark 552 Germany 327, 328, 329-337, 345, 355, 400-^03, 415, 846, 847, 848, 889 Ireland 889-891 Italy 34 Switzerland 462, 464-465 United States, adaptability 362,363 See also Banks. Rayleigh farms, England , 796-798 INDEX. 913 Real property, Austria , , 177-171 Realty credit organizations. See Banks, Provincial. Bedl, Friedrich (director of Provincial Mortgage Institute of Lower Austria), statement 197-200 Reggio-Emilia, Peoples' Bank of 63-64 Regional Bank of Beauce and Le Perche 719-721 Regional Bank of Chateauroux 755-756 Regional Bank of Cooperative Credit of the Girondei. 699-717 Regional Bank of Indre-et-Ij3ire,Tours,evidence of officials. 746-747 Regional Bank of Loir-et-Cher " 753-754 Regional Bank of I/oiret, evidence of officials 754-755 Regional Bank of Rheims, statement by presidfint 757-759 Regional Bank of the Rhonje 675-676 Regional banks. See Banks. Reichel, Sir Harry R 8O9 Reichertsliausen, Bai-on von Cetto-. See Cetto-Reicherts- hausen. Baron von. Reuschi Mr. (councillor), statement 337-342 Rheims, France, Regional. Bank of 757-759 Rheinbach, Germany, agricultural winter school 347-348 Rhenish Mortgage Bank 322-323 Rhine Province: Agricultural education 344, 347-348 Cooperation- Agriculture 344-348 Dairies 346-347 Experiment .station farms 344 Rhone, Reginal Bank of the 675-676 Rice, cultivation at Altedo, Italy 62-63 Riehe, D. L. (secretary and general manager Irish Co- operative Agency Society), statement; 878-882 Eiederer von Paar zu SchOnau, Baron, address^ 273-276 Risler, Georges (president Central Society for Real Estate Credit and Cheap Dwellings), statement 660-661 Ritzan; Saxony, organization and operation of locail rural bank , 375-377 Riverain, M, (president Agricultural . Syndicate of Loir-et- Cher), statement 750-753 Roads, public, improvement in Spain 639-640 Rochdale principles, Norway 590 Roddick, John, evidence 826-828 Roggi, Mr. (secretary general of the Italian Society of Agri- culturists), address. 27 Romagna, credit banks 59^61 Rome, Italy; Farming near 86-87 Landieclamation 27-28 Roos, EmU . (councillor of Provincial Diet . ol Bohemia), address , 214-217 Roscommon, Ireland, small holdings. 8657-867 Rossi, Mr. (director Agriicultural Cooperative Society; of Cremona), evidence. 79 Rotation of. crops. See. Crop, rotation. Bou mania:. Banka-^ Central Bank for . People's. Banks ami , Gooperaitive Societies 117 Popular 117-118 Cooperative movemeat. 117-118 Bnesco, Fobin (director general of Rounjama,!}. Popular Banks), special statement 117-118 Popular bank loans .- 117-118 Royal Hungarian Department of Agriculture, statepient 121- 154, 166 Ruj:.al„banke. See Banks. ^iiral Cooperative Bank of Liege - - 509-513 Rural cooperative- societies. See Cooperation. ' 14174"— S. Doc. 214, 63-1 68 Page. Rural credit. See Credit. Rtiral schools, Dieskau, Germany 349-351 Russell, George W. (editor the Irish Homestead), address. 857-864 Russia: Agricultural credit 233 Agriculture 234 Banks^ — Imperial Bank of Moscow 259-260 Nobility Land Mortgage Bank, Kharkoff 256 Peasants Land Mortgage Bank, Kharkoff 255-256 People's Cooperative Bank, Moscow 258 Raiffeisen 253-254 Rural credit bank of district of Moscow 260 Schulze-Delitzsch 253-254 Small credit, statistics (tables) 244-248 State bank, branch at Kiev 257-258 Brunst, V. E. (of Department of Agriculture, Russia), statement 234 Central Union of Distributive Societies, Moscow. 259 Cooperation — Agriculture 236-244 Butter and cheese factory 251 Butter factories in western Siberia 240-243 Societies 236-240, 243-244, 249-253, 257 County bank and store at Volschansk, . . : 256-257 Credit association near Moscow 261-263 General Administration of Small Credit, functions 237-238 General demographic and economic statistics. '. 234-236 Private land mortgage systems of Kharkoff 255 Treasury Department, evidence of officials 233 Zemstvo of Moscow 260-261 St. Foy, France, bank, 709-710 St. Georges Cooperative Wine Producers' Society, France. 680-685 Samoggia, Prof., statement 50-51 Sarthe: Credit- Agricultural 732-734 Long-time 734 Farmers' syndicate 730-731, 739-746 Insurance for horses 743-746 Mutual insurance associations against death of animals 739-742 Regional Bank 733-734 Sarthoise, La. See La Sarthoise. Savings banks. See Banks. Saxony: Agricultural cooperation 429-434 Agriculture 425-429 Cattle breeding 426^27 Chamber of agriculture at Halle 367-372 Cooperative societies 372-.373, 429^39 Credit — Agricultural 432-437 Long-time 434-435 Mortgage 432 Personal 432-434 Hereditary Estates Credit Society, Leipzig. 434-436 Landschaf t Bank 363-364 Provincial Bank of Royal Saxon Margraviate Oberlau- sitz 435^36,437-438 Soil and climate 426 Trading Society of the Cooperative Union 375 Schillinger, Mr. C. (director agricultural winter school, Rheinbach, Germany) 347 Schlesinger, Dr. A. (United States vice consul and deputy consul general at Munich), statement 276 SchooU. See Dbmestic science schools — Rural schools. 914 INDEX. Schorn, Baron von Herman-. See Herman-Schorn, Baron von. PBge. Schonau, Baron Riederer von Paar zu. See Riederer von Paar zu Schonau, Baron. Schramli, Mr. (business director East Swiss Associations), statement 468-469 Schrattenhofen, Mr. von Schullern von. See SchuUern. Schullern von Schrattenhofen, Mr. von, statement 201-203 Schulze, Mr. (manager of Steam Dairy of Stennowitz, Ger- many), evidence 351-352 Schulze-Delitzsch 21 Schulze-Delitzsch banks. See Banks. Schulze-Delitzsch Federation of Baden 307-311 Schulze-Delitzsch societies: Austria 183, 194, 200 Germany 302-305,307-311,345 United States, adaptability 362 Schulze-Delitzsch system. See Schulze-Delitzsch societies. Schurman, Herr von, statement 411-413 Schwartz, Herr (director Prussian Central Land Credit Co.), evidence 408-411 Scotland: Commercial banks 826-828 Cooperative societies 821-824 Douglas, Charles (president Scottish Agricultural Or- ganization Society), address 821-824 McCunn, J. N. (United States consul at Glasgow), state- ment 824-826 Roddick, John, evidence 826-828 Rural credit 824-826 Seed purveyors, Denmark 578-580 Seidl, Ambrus, statement 163 Seitz, Mr. von (managing director Credit Union of Wurttem- berg), address 300-301 Selling organizations, live stock, Austria 188 Service societies, compulsory, Hungary 128-129 Siberia, cooperative butter factories 240-243 Sicily: Bank of Sicily, statement of manager 37-41 Rural credit 37^1 Silesia, Austro-Silesian Realty Credit Institute of Silesia, Troppau 180 Sindicatos agricolos, Lob, Spain 609 Sitta, Prof., statement 47-48 Skinner, Robert P. (United States consul), statement. .. . 438-440 Slangerup, Denmark, cooperative store 555-556 S laughterhouses : Germany 438 Spain 633-634 Small Farmers' National Land Credit Institute, Hungary. . . 128 Small holders' credit associations, Denmark 551, 557 Small holdings, Roscommon and Castlereagh, Ireland .... 865-867 Soresi, Prof., statement 49-50 Soresina, Italy: Butter manufacture 81-83 Casein production 80-83 Cooperative dairy 80-83 Sowing-machine societies. See Machine societies. Spain: Agricultural education 614, 640 Agricultural production 602, 621-623 Banco Hipotecario 606, 607-608 Banking system," defects. 604 Banks — Bank of Spain 605-606,613 Laborers' (cajas rurales) 610-611 Land mortgage ' 606-608 Spain — Continued. Banks — Continued. page, Mortgage '. 603-608 Caciquismo 642 Calbeton, Fermin, proposed rural-credit law 614-619 Cattle 621,627-629 Cattle societies.... 625 Church, influence of 642 Citrus-fruit industry 634-637 Climate 620 Cooperation 601-642 Credit- Agricultural 601-642 Long-time 603-604 Rural 603-616 Distribution and marketing 624-625 Emigration 641-642 Farm produce distribution 602-603 Federacion naranjera at Valencia 634-638 Flower markets 641 Foodstuffs, high cost of 626 Freight rates 631-632 Granjas agricultural experiment stations 640-641 Irrigation 601-602 Land tenure 619-620 Machinery, agricultural 620-621 Meat — High price in Madrid 629-630 Supply of Madrid 625-634 Transportation and duty 634 Milk supply in Barcelona 638 Organization of markets and abattoirs 633-634 Plant diseases, control of 641 Positos, Los 609-610 Poultry raising in Barcelona 638 Public road improvement 639-640 Rural conditions 638-642 Stock-raising industry 627-629 Supply societies 609 Thrift associations 640 Spoettle,Prof.Dr. (imperial councillor), statement. 281-282, 289-290 Spretti, Count (superior councillor), address 284-288 Stapleton-Cotton, R. (member executive committee North Wales Branch Agricultural Organization Society), state- ment 806-809 State Credit Institution, Oldenburg 455-456 Steam-plow societies. See Machine societies. Steenwikerwold, Holland, farmers' cooperative bank and trading society 537-539 Steiger, H. (counsellor of economy), address 445-449 Steinbruck, Prof., evidence 363 Stennowitz, Germany, cooperative dairies 351-352 Stettin, Germany, warehouses and credit society 425 Stores, cooperative, Deimiark 555-556 Stransnice, Austria, Bohemian Raiffeisen Bank of Strans- nice 222-224 Strtickhausen, Germany, cooperative dairy 457-458 Supply societies: Belgium 489^90 Dossenheim, Germany 319 Germany 402-403 Hanover, Germany 442 Italy 98-102 Loir-et-Cher 751 Spain 609 Switzerland 468-469 Wexford, Ireland :.,. 871 Surgeres, Fraifce, cooperative creamery (table) 719 INDEX. 915 Page. Swiss Brown-Cattle Cooperative Breeding AsBociation 484^85 Swiss credit system 461-462 Swiss farmer associations 470 Switzerland: Agricultural education 470-471 Banks — Canton 462-466 Raiffeisen 468 Savings 464-466 Cattle 471-485 Cooperative societies 467 Dutterwiller, Prof, (director Canton Bank of Zurich), evidence 462-464 Farmer associations 470 Hofer, Mr. (director Mortgage Bank of the Canton of Aargau), statement 464-466 Laur, Dr. (of Bmgg), statement 461^62, 469-470 Legislative foundations of the Swiss credit system 461-462 Milk and cheese associations 469 Moos, Prof., statement 467 Raiffeisen credit system 462, 464-465 Schramli, Mr. (director East Swiss Association), state- ment 468-469 Supply societies, wholesale and provision 468-469 Traber, Pastor T. (founder of the Raiffeisen system in Switzerland), statement 468 Szill, Coloman de (vice president National Small Holdings Land-Mortgage Institute), evidence 159-162 Teichmann, William C. (United States consul at Mannheim, Germany), evidence 320-322 Telgman, Dr. Hans '. 342 Teltow, Germany, savings bank 419-124 Terbanck Raiffeisen Bank 491 Terling farms. See Rayleigh farms. Thiel, Dr., statement 414-415 Thrashing-machine societies. See Machine societies. Totmegyer, Hungary, cooperation 174 Toulouse, France: Cooperative bakery 765 Cooperative sale stable for horses 765 Tourman, M. (member of Chamber of Deputies), statement. 650-651 Tours, France, Regional Bank of Indre-et-Loire 746-747 Traber, Pastor T. (founder of the Raiffeisen system in Switz- erland), statement 468 Trading societies: Saxony 375 Steenwikerwold, Holland 537-539 Traveling Agricultural Domestic Science School, France.. 688-692 Treasury department, Russia, evidence of officials 233 Troppau, Silesia, Austro-Silesian Realty Credit Institute of Silesia 180 Tunze, Mr. (principal of rural school at Dieskau, Germany), evidence 349-351 Turin, agricultural conditiona in 88-89 Tuscany: Farming 85-86 Land tenure systems 43 Metayer system 43-45 United Irishwomen 864-865 United States: Landschaften system, adaptability for use in 355, 362 Raiffeisen societies, adaptability for use in 362, 363 Schulze-Delitzsch societies, adaptability for use in 362 University College of North Wales, department of agri- culture ; 809-810 University College of Wales, agricultural department 810-812 Usury, laws relating to, in Hungary 130 Valencia, Spain: , Page. Citrus-fruit industry 634-637 Federacion Naranjera, La 634-637 Venti, G. (director Agrarian Credit Institute of Latium), statement 28 Veragua, Duke of. The Problem of Foodstuffs 626 Verzy, France: Agriculture 759-760 Domestic science school 760 Veterinary police, Austria 187 Vienna, Austria: General Society for Disposal of Live Stock 188 Imperial and Royal Agricultural Society of Vienna. . . 190-191, 20.3-207 Imperial and Royal High School for Agriculture 192-193 Provincial Mortgage Institution of Lower Austria 188-190, 197-200 Vienna Central Cattle Market 207-209 Vienna Dairy. 191 Vieth, Prof, (director Dairy Institute of Hameln), evi- dence 450-453 Viger, Albert (senator, president National Federation Mutual Agricultural Cooperative Associations), statement. . 645, 651, 660 Vigonovo, Italy, rural banks 71-79 Villa OanaU, Catholic rural banks 65-69 Vinreux, M. (of Credit Fonder) , statement 648-649, 653-654 Vital statistics, Russia 234r-235 Vogt, Mr. (treasurer Holzweiler-Ringener Credit Society).. 345 Volschansk, Russia, county bank and store 256-257 Von Schurman, Herr. Sec Schurman, Herr von. Von Seitz, Mr. See Seitz, Mr. von. Waage, Mr., statement 551 Wales: Cooperation^ Agriculture 801-803, 812-816 Marketing 806-809 Societies 784-787, 801-809, 812-816, 817 Ellis, Rupert (chairman North Wales Branch Agricul- tural Organization Society), statement 801-803 Farm produce, marketing 806-809 Harris, J. Nugent (secretary of Agricultural Organization Society), statement 784-787 Joint-stock banks 780 Jones, E.W. (secretary North Wales Branch Agricultural Organization Society), statement 817 Jones, Prof. 0. Bryner, statement 810-812 Penllyn Cooperative Society 817 Pilkington, Henry (member executive committee North Wales Branch Agricultural Organization Society) , statement 803-806 Rural credit 784-787 Stapleton-Cotton, R. (member executive committee North Wales Branch Agricultural Organization Soci- j ety), statement 806-809 University College of North Wales, agriculture depart- ment of 809-810 University College of Wales, agricultural department. 810-812 Williams, Walter (organizer for Wales, Agricultural Or- ganization Society) , statement 812-816 Warehouses and Credit Society, Stettin, Germany 425 Waterford County, Ireland, cooperation 871-873 Wauters, Mr. (Department of Agriculture, Belgium), state- ment 490 Wed en, Dr. Moritz (attorney at law), address 219-222 Wegener, Herr (director Prussian Central Land Credit Joint- Stock Co.), statement 404-408 Weights and measures (tables) 895-896 916 INDEX. West Prussia. See Prussia, West. Westerdyk, J. B.. (president board of supervisora of Utrecht Bank), evidence 531-534 Wexford County, Ireland,' cooperation 867--871,i873 Wexford Meat Supply and Bacon Factory 871 White, Prof. R. G 809 Wholesale Society, Cooperative: Denmark 545-547 England 787-791 Wiesbaden, Germany: Land Bank of Wiesbaden. See Nassau Mortgaget and Savings Bank. Schulze-Delitzsch bank 342-343 WiUdams, Walter (organizer for Wales Agricultural Organi- zation Society), statement 812-816 Willsgorey, Ireland, Doyne farm^ 868 Wine presses, cooperative, in Italy 100 Wine, societies: Prance — Cooperative wine cellar at Frontignan 680 St. Georges Cooperative Wine Producers' Society. 68Gf-685 Woertmann, Dr. (director Geisenheim Horticultural School), statement 343-344 Wohltmann, Dr. (president of Agricultural Institute of Uni- page. versity of Halle), address 373-375 Wolf,' Mr. , statement ' 322-323 Wolff, H. W. (authoBof "People's Banks"), address 846-848 Wollemborg, Hon. Leone (ex-minister of the treasury), address 21, 25-26; 72, 97 Wollemborg banks. See Banks. Woolsey, Theodore S., jr. (assistant district forester, United States Forest Service), address 766-769 Worms, Ilen6 (chief Bureau of Information, Ministry of Agriculture, France), statement 647; 649^50 Wurttemberg: Banks — Central Cooperative Bank 294-296 Raiffeisen 291, 297^300 Schufee-Delitzsch 291, 297, 299-300 Consolidated Rural Cooperative Association 294-296, 297 Cooperative dairy associationa 292-293 Credit Union 300-301 Rural cooperative system: 290-300 Z^mstvo, Moscow 260-261 63i> CoNGHEss 1 oww A TT? " / Doc. No. 214 IstSemon ; - • SENATE | p^^2 AGRICULTURAL COOPERATION AND RURAL CREDIT IN EUROPE INFORMATION AND EVIDENCE SECURED BY THE AMERICAN COMMISSION, CONSIS^HNG OF DELEGATES FROM DIFFERENT STATES IN THE UNITED STATES AND DIFFERENT - PROVINCES OF CANADA, ASSEMBLED FOR THE PURPOSE OF IN- VESTIGATING IN EUROPEAN COUNTRIES COOPERATIVE AGRICUL- TURAL HNANCE, PRODUCTION, DISTRIBUTION, AND RURAL LIFE; AND THE UNITED STATES COMMISSION, APPOINTED BY PRESIDENT WILSON "TO COOPERATE WITH THE AMERICAN COMMISSION ASSEMBLED UNDER THE AUSPICES OF THE SOUTHERN COMMERCIAL CONGRESS TO INVESTIGATE AND STUDY IN EUROPEAN COUNTRIES COOP- ERATIVE LAND-MORTGAGE BANKS, COOPERATIVE RURAL CREDIT UNIONS, AND SIMILAR ORGANIZATIONS AND INSTITUTIONS DEVOTING THEIR ATTENTION TO THE PROMOTION OF AGRICULTURE AND THE BETTERMENT OF RURAL CONDITIONS" (H. R. 28283. APPROVED MARCH 4, 1913) PART 2 BIBLIOGRAPHY WASHINGTON GOVERNMENT PRINTING OFFICE 1914 63d Congress \ sts'tjatt!' / Doc. No. 214 IstSemon I bJ^JNAlJi -^ Part 2 AGRICULTURAL COOPERATION AND RURAL CREDIT IN EUROPE INFORMATION AND EVIDENCE SECURED BY THE AMERICAN COMMISSION, CONSIS'HNG OF DELEGATES FROM DIFFERENT STATES IN THE UNITED STATES AND DIFFERENT PROVINCES OF CANADA, ASSEMBLED FOR THE PURPOSE OF IN- VESTIGATING IN EUROPEAN COUNTRIES COOPERATIVE AGRICUL- TURAL FINANCE, PRODUCTION, DISTRIBUTION, AND RURAL UFE; AND THE UNITED STATES COMMISSION, APPOINTED BY PRESIDENT WILSON "TO COOPERATE WITH THE AMERICAN COMMISSION ASSEMBLED UNDER TWE AUSPICES OF THE SOUTHERN COMMERCIAL CONGRESS TO INVESTIGATE AND STUDY IN EUROPEAN COUNTRIES COOP- ERATIVE LAND-MORTGAGE BANKS, COOPERATIVE RURAL CREDIT UNIONS, AND SIMILAR ORGANIZATIONS AND INSTITUTIONS DEVOTING THEIR ATTENTION TO THE PROMOTION OF AGRICULTURE AND THE BETTERMENT OF RURAL CONDITIONS" (H. R. 28283, APPROVED MARCH 4, 1913) PART 2 BIBLIOGRAPHY WASHINGTON GOVERNMENT PRINTING OFFICE 1914 Ix THE Senate of the United States, October 20, 1913. Resolved, That there be printed as a public document the evidence secured by the American commission in cooperation with tlae United States commission on their inquiry into the agricultural credit and cooperative systems of European countries, made between April 26 and July 26, 1913, including special reports of sub- committees, statements and addresses pertaining to the subjects, submitted to the commissions, or either of tliem, all printed matter prepared for the commissions, or either of them, a hibliograpTiy of any literature used as material for the reports of said commissions, translations of laws and statutes under which the various institu- tions studied operate in the different countries, translations of constitutions, by-laws, rules and regulations and business forms of institutions investigated, special statistical data showing the extent to which each system or set of institutions is found to exist in each country, and other material bearing on the work of the commissions. Attest: James M. Baker, Secretary. 3 ORGANIZATION OF THE COMMISSIONS. THE UNITED STATES COMMISSION. Duncan TJ, Fletcher, Florida, Chairman. John Leb Couweb, Minnesota, Secretary. Thomas P. Goee, Oklahoma. Kenton L. Btttteetield, Massachusetts. Ralph W. Moss, Indiana. Clarence J. Owens, Maryland. Harvie Jordan, Georgia. THE AMERICAN COMMISSION. EXECUTIVE OFFICERS. Duncan U. Fletcher, Florida, Chairman. Kenyon L. Butterfield, Massachusetts, Vice Chairman. Harris Weinstock, California, Vice Chairman. Thomas S. Southgate, Virginia, Vice Chairman. S. A. Lindsey, Texas, Vice Chairman. Clarence J. Owens, Maryland, Director General. Harvie Jordan, Georgia, Secretary Treasurer. California: Harris Weinstock. E. J. Wickson. Connecticut: Edward Chapman. Colorado: Grordon Jones. Florida: Duncan U. Fletcher. John G. Ruge. F. J. H. von Engelken. Georgia: C. W. Hillhouse. Harvie Jordan. Illinois: George W. Woodruff. Indiana: Ralph W. Moss. Massachusetts : Kenyon L. Butterfield. J. Lewis Ellsworth. Charlotte Barrell Ware. Maryland: Clarence J. Owens. Michigan : William B. Hatch. Minnesota: James C. Caldwell. John Lee Coulter. Mississippi: Thomas J. Brooks. Alberta: Alwyn Bramley-Moore. Henry Marshall Tory. members by states. Missouri: Garland B. Miller. Nevada: J. E. Stubhs. New York: Frederick H. Allen. Albert E. Roberts. R. B. Van Cortlandt. C. C. Mitchell. North Carolina: E. L. Daughtridge. John Spnmt Hill. A. E. Tate. Ohio : William M. Brown. John Cunningham. Marshall E. Thrailkill. Oklahoma: Thomas P. Gore. Oregon: Hector MacPherson. H. G. Starkweather. Pennsylvania: Robert L. Munce. James G. McSparran. South Carolina: T. B. Thackston. E. F. Woodsidc. R. I. Woodside. members by canadian provinces. Ontario : Charles F. Bailey. Lionel Smith-Gordon. Nova Scotia: Arthur S. Bamstead. Tennessee: Lilian W. Johnson. H. A. Morgan. Ernestine Noa. James Allen Snlith. Mary Temple. Texas: Charles B. Austin. W. W. Dexter. S. A. Lindsey. Clarence Ousley. J. S. Williams. Francis W. Wozencraft. Utah: Robt. J. Glendinning. Vermont: Charles Otis Gill. Virginia: R. W. Dickenson. LeRoy Hodges. Thomas S. Southgate. Washington: Clark G. Black. Ralph Metcalf . Sarah S. McMillan. West Virginia: Joseph F. Marsh. Wisconsin: Porter L. A. Ferguson. Dmtrict of Columbia: Milton V. Richards. Saskatchewan : John H. Haslam. Edmund Henry Oliver. BIBLIOGRAPHY. CONTENTS, ITALY: Page. Credit 13 Distribution 18 Production 20 Rural life 22 General 24 HUNGARY: Credit 27 Distribution 28 Rural life 28 General 28 AUSTRIA: Credit 29 Distribution. " .' 30 Production 33 General 33 RUSSIA: Credit 35 Distribution 36 Production 37 Rurallife 38 General 38 GERMANY: Credit 39 Distribution 45 Production - 48 Rural life 50 General 51 SWITZERLAND: Credit 52 Distribution 53 Production 54 Rural life 55 General 55 BELGIUM: Credit 56 Distribution 57 31589— S. Doc. 214, 63-1, pt 2 2 BELGIUM— Continued. Page. Production 57 General '. 57 HOLLAND: Credit 58 Distribution 59 Production 59 General 59 DENMARK: Credit 60 Distribution 60 Production 61 Rural life 61 General 61 NORWAY: Credit 62 Distribution 62 SPAIN: Credit 62 General , 63 FRANCE: Credit 63 Distribution 68 Production 70 Rural life 71 General 71 GREAT BRITAIN: Credit. 74 Distribution 74 Production 75 General 76 IRELAND: Credit 77 Distribution 77 Production 78 Rural life 78 General 78 9 INTRODUCTION. COLLECTION AND USE OF THE LITERATURE. In the course of investigations conducted by the American Commission, in cooperation with the United States Commission, into the agricultural cooperative and credit systems in European countries, a large amount of literature was collected. Some of this literature was used by the commissions in the compilation of their report on the subjects studied. The volume containing the information and evidence thus secured has already appeared as Senate Document No. 214, Sixty-third Congress, first session. It was at first planned to incorporate this literature in the volume on information and evidence. But the compilation committee early realized two difficulties: First, that the large amount of material in many different languages would render it impossible to arrange, classify, and prepare for publication this bibliography in the short space of time at its disposal; and, secondly, that such a bibliography would be of value largely to hbraries and students, and would be of little or no popular interest. For these reasons it was deemed advisable to prepare the bibliography and issue it as a supplement in form similar to Senate Document No. 214, so that it could be readily bound with that volume if so desired. The preparation and publication of this document have been carried forward by virtue of a resolution introduced in the United States Senate on October 20, 1913, by the Hon. Duncan U. Fletcher, chairman of the United States and American Commissions. This resolution provides, among other things, for the publication as a public document of " a bibUography of any literature used as material for the reports of said commissions." Notwithstanding the fact that the volume on information and evidence contains some 900 pages of printed matter, only a very small portion of that volume is comprised of the literature collected by the commissions. Senate Document No. 214 consists largely of the evidence secured at the juries of inquiry which were held in the different countries visited. But the literature that was collected includes all phases of agricultural cooper- ation, rural credit, and conditions of country hfe that exist or prevail throughout Europe. Its extent precluded the possibility of incorporating it into the commissions' report. While this could not be done, the collection of the literature forms one of the most valuable features of the work of the commissions. It was only possible to include in the report some typical documents to serve the purpose of enabling students of rural credit and - cooperation to learn how credit and cooperative societies are organized, directed, and controlled in various European countries. These documents have been translated and incorporated in Senate Document No. 214. For further information, the bibliography itself furnishes all available data in the possession of the commissions, and it is expected that these documents will be placed where they can be made available to interested students for many years to come. CLASSIFICATION OF THE BIBLIOGRAPHY. In arranging the material, the simplest and most practical classification has been adopted. The documents have been grouped by countries under five general headings, namely: "Credit," "Distribution," "Production," "Rural Life," and "General." While no sharp line of demarcation differentiates some of these topics — as fre- quently a document could be placed under two or more headings without violating the system of classification — an effort has been made to carry similar publications consistently under the same heading by nationalities. This will enable the student interested in any particular theme, as "rural credit," to see at a glance what literature the conunissions collected on this subject in the different countries visited. Many of the documents thus classified were prepared especially for the commissions by experts or specialists. Together they form a valuable compendium setting forth the present status of the rural life situation in Europe. Some of them have been printed in the report in full. In the bibUography, reference is made to these documents, as well as to others which have been translated and incorporated. The cross reference (with page indicated), which appears in the bibliography, refers to the report. Senate Document No. 214. In that volume, at the page designated, the document will be found printed either as a translation of the original or as presented to the com- 11 12 AGEICULTUEAL COOPERATION IN EUROPE. missions subject to editorial corrections. This method will increase the value of both the bibliography and of the report by enabling the student to turn readily to the material desired. And still another feature is the efifort that has been made to translate the foreign titles into their equivalent English, thus making them available to all persons whether they can read the languages or not. All the material secured by the commissions does not appear by title in this bibliography. Possibly nowhere in the world can a more complete set of blank forms used by the various cooperative societies and banks be found together than is in the possession of the commissions. These forms could not all be noted in detail. Samples of constitutions, rules and regulations, blank forms, etc., used in different countries only have been entered in the bibliography, and these must suffice to indicate the scope of the work attempted in this inquiry. The aim of the commissions has been to set forth clearly the various lines of study carried on and to secure suitable documents to illustrate the work. In this bibliography, therefore, it is hoped these documents will be found in a form that will be serviceable to the great body of American students of the agricultural cooperative and credit systems of Europe. ITALY. CREDIT. Bacoaglini, a. La legislazione italiana sul credito agrario. Cenno storico e critico. Annali del credito e della previdenza anno 1911. Leggi, decreti e regolamenti. Roma, 1911. Pp.371. Notizie statistiche. Estratto dagli annali del credito e della previdenza, anno 1911, No. 90. Roma, 1911. Pp. 220. History of Italian legislation concerning agricultural credit, with critical and statistical notes. LuBiN, D. The International Institute of Agriculture and cooperative banking. Rome, 1909. Pp. 7. Manzabi, G. Agricoltura e credito in Puglia. Palo del Colle, 1911. Pp. 82. An account of agriculture and rural credit in Puglia. PiPiTONE, F. Per il credito agrario in SicUia, in "La Cooperazione SicUiana." Bologna, maggio 1913. Pp.2. Agricultural credit in Sicily. In the issue of "Sicilian Cooperation," May, 1913. Sitta, p. Della missione deUe banche popolari per diffondere nelle campagne le casse rurali e le agrarie. Roma, 1907. Pp. 19. The mission of the people's banks in extending agricultural banks in rural districts. La cattedra ambulanti della previdenza in Italia. Relazione presentata al XVI. congresso del credito popolare tenuto a Limoges dal 12 al 16 ottobre 1911. Roma, 1912. Pp. 16. The traveling professorships of thrift in Italy. A report presented to the sixteenth congress of popular credit held at Limoges October 12-16, 1911. People's banks and rural credit. Milan, 1913. Prepared for the commissions. (See Senate Docu- ment 214, p. 47.) -^ — Progressi recenti deUe banche popolari italiane. Roma, 1909. Pp. 30. Recent progress of the Italian people's banks. Venti, G. Agrarian credit institute of Latium. Rome, 1913. Prepared for the commissions. (See Senate Document 214, p. 28.) WoLLEMBOKG, L. La cassa rurale italiana. (Federazione nazionale deHe casse rurali italiana.) Roma, 1913. Pp. 14. An address on the Italian rural bank system, delivered at a conference of itinerant professors of agriculture at Rome, March 3, 1908. — — Rural banks. Rome, 1913. Pp. 4. Prepared for the commissions. (See Senate Document 214, p. 25.) Banca mutua popolare di Bergamo. Assembleagenerale ordinaria tenutasi il giorno 2 marzo 1913. XLIII. esercizio. Bergamo, 1913. Pp.54; Annual report of the people's cooperative bank of Bergamo presented to the general assembly on March 2, 1913. Statuto della. Bergamo, 1912. Pp. 46. Constitution of the people's cooperative bank of Bergamo. Banca operai, artisti e professionisti. Esercizio sociale 1912. Bergamo, 1913. Pp. 19. Report of the council of administration of the workmen's and professional men's bank of Ber- gamo for 1912, 14 AGEICULTUEAL COOPERATION IN EUROPE. Banca operai, artisti e professionisti. • Relazione del consiglio d'amministrazione sulF undecimo esercizio sociale, 1 gennaio-31 dicembre, 1911. Rapporto dei sindaci e bilancio 1911. Bergamo, 1912. Pp. 19. The report and financial statement of the workmen's and professional men's bank for 1911. Statuto. Bergamo, 1906. Pp. 34. Constitution of the above bank. Banca piccolo credito Bergamasco. Libretto di conto corrente agricolo. Pp. 6. Current account book of the little credit bank of Bergamo. Banca piccolo credito Romagnolo. Society, anonima cooperativa a capitale illimitato con sede centrale in Bologna. ■ Cenni suUa. Bologna, 1913. Pp.15. Brief points concerning the little credit bank of Romagnolo with the chief financial results as. ascertained from the annual balance sheets of the bank from 1896 to 1913. Resoconto dell' anno 1912. XVII. esercizio. Relazioni e bilanci. Bologna, 1912. Pp. 16. Statement and balance sheet of the little credit bank of Romagnolo for 1912, a cooperative societj with unlimited liability, with headquarters at Bologna. Seventeenth report. Banca popolare de credito in Bologna. Diagramma delle oscillazioni dei conti verificatesi dal 1 gennaio, 1900, al 31 dicembre, 1910. Bologna, 1911. Pp. 17. Diagram of the financial fluctuations of the popular credit bank of Bologna, January 1, 1900, to December 31, 1910. Resoconto dell' anno 1912 e atti dell' assemblea generale dei soci tenuta il 9 febbraio, 1913. Bologna, 1913. Pp. 55. Report of the people's credit bank of Bologna for 1912 and the proceediags of the general assembly of February 9, 1913. Banca popolare di Cremona. Memoria riassuntiva della sua azione dal 1 febbraio, 1866, al 31 dicembre, 1905. Cremona. Pp. 33. History of the people's bank of Cremona from 1866 to 1905. Banca di Napoli, Cassa di Risparmio. Direzione generale, No. 47290. Credito agrario con i fondi della cassa di risparmio. Relazione suUa gestione del 1902. Napoh, 1903. Pp. 107. Bank of Naples, general report No. 47290. Agricultural credit with the funds of the savings bank. Report of operations in 1902. ■ Similar reports for 1903, pp. 93; 1904, pp. 138; 1905, pp. 71; 1906, pp. Ill; 1907, pp. 85; 1908, pp. 103; 1909, pp. 94; 1910, pp. 204, with an addenda on the principal differences between the several regional laws for agricultural credit published from 1901-1910, pp. 162; 1911, pp. 132; and 1912, pp. 256. Guida contabile per le casse agrarie di prestiti nel mezzogiorno, anno 1911. Napoli, 1911. Pp. 143. System of bookkeeping for the rural loan banks of the south of Italy. Guida pratica per I'agricoltore che desidera contrarre prestiti agrari. NapoH, 1911. Pp. 93. Practical guide for farmers wishing to contract loans. II credito agrario nel mezzogiorno continentale d'ltalia e nell' isola di Sardegna, esercitato dalla. Ordi- namento-sviluppo, 1902-1912. Napoh, 1913. Pp. 27. An account of the development of rural credit in southern Italy and in Sardinia from 1902 to 1912, ■ Legge del 7 luglio, 1901, N. 334, integrata con le disposizioni posteriormente emanate che autorizza la cassa di risparmio del banco di Napoli ad impiegare due decimi dei suoi depositi in operazioni di credito agrario. Napoli, 1911. Pp.40. Law of July 7, 1901, No. 334, in connection with preceding regulations, which authorized the savings bank of the Bank of Naples to employ two-tenths of its deposits in behalf of agricultural credit. ITALY. 15 Banca di Napoli, Cassa di Risparmio. Legge del 2 febbraio, 1911, N. 70, che affida alia cassa di risparmio del banco di Napoli la gestione delle casse provinciali di credito agrario nel mezzogiorno e regolamento del 4 giugno 1911, N. 995. Napoli, 1911. Pp. 29. The law of February 2, 1911, which entrusts to the savings bank of the Bank of Naples the con- trol over the provincial banks of agricultural credit in the south of Italy, and the regulation of June 4, 1911, No. 995, concerning the carrying out of the law. Principali differenze tra le varie leggi regionali di credito agrario pubblicate dal 1901 al 1910. Napoli, 1910. Pp. 25. The principal differences between the various district laws relating to nu-al credit published from 1901 to 1910. Schema di atto costitutivo e statuto organico per le casse agrarie di prestiti nel mezzogiorno. Napoli, 1909. Pp. 29. Plan of organization and typical statutes for the rural loan banks in southern Italy. Banco di Sicilia. Per il credito agrario in Sicilia. "La Cooperazione Siciliana," periodico quindicinale. Palermo, maggio 15, 1913. Bimonthly periodical devoted to the interests of agricultural credit in Sicily. Rendiconto del consiglio di amministrazione sul servizio del credito agrario e bilanci consuntivi. Eser- cizio 1912. Palermo, 1913. Pp. 91. Regular session of the general council of the Bank of Sicily for 1913. Report of the adminis- trative council relating to agricultiu-al credit and a complete financial statement. Calendario deUa cassa S. Giacoma. Palermo, 1912. Pp. 56. Historical account of the bank of St. James, Palermo. Cassa di risparmio di Bologna, statuto della. 1837-1891. Bologna, 1908. Pp. 24. Statutes of the savings bank of Bologna, 1837-1891. Cassa di risparmio in Bologna. Atti della assembles generale degli azionisti tenutasi il giorno 30 marzo 1913,. e resoconto del 1912. LXXVI° anno di esercizio. Bologna, 1913. Pp.97. Proceedings. of the general assembly of the savings bank of Bologna, held March 30, t913, and the 76th annual report for 1912. Cassa di risparmio in Bologna e credito fondiario. Operazioni e saggi in vigore al 30 aprile 1913. Bologna^ 1913. Pp. 4. The savings bank of Bologna and land credit. Transactions and current rates in force on April 30, 1913. Cassa rurale di Bologna, statuto della. Bologna, 1910. Pp". 11. Constitution of the rural bank of Bologna. Cassa rurale di deposit! e prestiti di ViUa Canali, statuto deUa. Reggio-Emiha. Pp. 10. Constitution of the rural bank for deposits and loans of Villa Canali. (See Senate Document 214^ p. 65.) Cassa rurale di Melzo. Libretto a risparmio. Varese, 1912. Sample blank savings-bank book of the rural credit society of Melzo. Cassa rurale di prestiti di Casola Canossa, statuto della. Reggio-Emilia, 1908. Pp. 21. Constitution of the rural loan bank of Casola Canossa. Cassa rurale di prestiti di Vigonovo, statuto della. Dolo, 1891. Pp. 12. Constitution of the rural loan bank of Vigonovo. • (See Senate Document 214, p. 72.) Ccnni suUa Banca Piccolo Credito Romagnolo. Bologna, 1913. Pp. 8. Statement on the little credit bank of Romagnolo. Prepared for the commissions. 16 AGEICULTUEAL COOPERATION IN EUROPE. Comizio-coiisorzio agrario cooperativo distrettuale. Statistica triennale del movimento merci e del credito agrario dal gennaio 1910 al dicembre 1912. Conselve, 1913. Pp. 3. Triennial statistics of business and agricultural credit transactions from January, 1910, to Decem- ber, 1913, of the agricultural cooperative district association committee. Cooperative bank of Bologna. Special credit transactions in favor of the agricultural cooperative societies of the province and of the society of agricultural cooperatives. Bologna, 1913. Pp. 8. A statement of the transactions of the bank prepared for the commissions. Cooperative rural bank with unlimited liabUity, sample constitution. (See Senate Document 214, p. 104.) Federazione delle casse rurah a popolari della provincia di Bologna. Bologna, 1913. Pp. 19. Federation of rural and people's banks of the Province of Bologna. History and financial state- ment of the federation prepared for the commissions. Federazione delle casse rurali della diocesi di Padova, statuto della. Padova, 1912. Pp. 10. Constitution of the federation of rural banks of the diocese of Padua. Federazione nazionale delle casse rurali italiane. Dove, come, perchfe si debbono constituire le casse rurah. Roma, 1913. Pp. 7. Where, how, and why rural banks should be organized. Elenco delle casse rurali a societS, cooperative agricole di credito in nome coUettivo esistenti in Italia il 31 dicembre 1912. Spoleto, 1913. Pp. 19. List of the rural banks and agricultural cooperative societies of unlimited habUity existing in Italy on December 31, 1912. (For a summary in Enghsh, see International Institute of Agriculture Bulletin, June, 1913, p. 36.) La cassa rurale italiana. Conferenza detta a Roma il 3 marzo 1908, al congresso dell' associazione fra le cattedra ambulanti d'agricoltura. Roma, 1913. Pp. 14. The Italian rural bank. Conference held at Rome March 3, 1908, at the congress of association of the traveUng professors of agriculture. Relazione sommaria del direttore C. de Carohs sul lavoro compiuto negli anni 1909-1912. Roma. Pp. 53. A summarized report by the director, C. Carolis, concerning the work done in the years 1909-1912. Statuto. Roma, 1910. Pp. 8. Constitution of the national federation of Italian rural banks. Statuto di una cassa rurale di prestiti. Roma, 1910. Pp. 38. Sample constitution for a local rural loan bank affiliated with the national federation of Italian rural banks. International Institute of Agriculture. Agricultural credit and cooperation in Italy. Rome, 1913. Pp. 35. Short guide to rural cooperation in Italy. Prepared for the commissions. (See Senate Docu- ment 214, p. 90.) An outline of the European cooperative credit systems. Rome, 1913. Pp. 72. Special edition prepared for the commissions. Istituto di credito per le cooperative sede in Milano. Notizie sul suo funzionamento dal 1 luglio 1904 al 30 giugno 1911. Milano, 1911. Pp. 6. Credit institute for cooperative societies. Notes of its activities from July 1, 1904, to June 30, 1911. Relazioni e bilancio approvati dall' assemblea degli azionisti dal 31 marzo 1913. Ottavo esercizio. Milano, 1913. Pp. 21. Eighth report and financial statement approved by the assembly of shareholders March 31, 1913. La Banca Mutua Popolare e il credito agrario nella provincia di Bergamo. Bergamo, 1913. Pp. 20. An account of the people's cooperative bank and of agricultural credit in the Province of Bergamo. ITALY. 17 La Banca Popolare di Cremona come istituzione di credito agrario. Cremona, 1912. Pp. 4. The people's bank of Cremona as an agricultural credit institution. Prepared for the commissions. La caisse d'6spargne de Bologne au 31 D6cembre, 1912. Bologne, 1913. Pp. 94. General financial statement, administration and transactions of the savings bank of Bologna to December 31, 1912. La cassa di risparmio in Imola. Nel decennio 1888-1897. Appendice ai cenni storico-statistici dall' anno 1855 al 1887. Contributo all' esposizione generate italiana in Torino nel 1898. Imola, 1898. Pp. 186. Keport of the savings bank of Imola for the 10 years 1888-1897. Appendices to the historical and statistical notes from 1855 to 1887. Contributed to the general Italian exposition at Turin in 1898. Nelottanata 1898-1905. Seguito alle monografie pubblicate nel 1888 e nel 1898. Contributo all' esposi- zione di Milano, 1906. Imola, 1906. Pp. 73. Report of the savings bank of Imola for the years 1898 to 1905. Contributed to the exposition at Milan in 1906. Nel quinquennio 1906-1910. Seguito alle monografie pubblicate nel 1888, nel 1898 e nel 1906. Con- tributo air esposizione internazionale in Torino nel 1911. Imola, 1911. Pp. 67. Report of the savings bank of Imola for the years 1906 to 1910. Contributed to the Turin expo- sition in 1911. "La Cooperazione Rurale." Roma, aprile 1913. Pp. 77-96. Monthly publication of the national federation of Italian rural banks and the official publication of the federation of Italian agricultural cooperative societies. Le piccolo credito Bergamasco et sa fonction dans 1' agriculture et dans I'industrie. Communication faite au XXIX congrds de la soci6t6 d'economie sociale a Paris dans la seance du 9 juin, 1910. Bergame, 1911. Pp. 16. The httle credit bank of Bergamo and its work in agriculture and industry. Report to the twenty-ninth congress of social economy at Paris at the meeting of June 9, 1910. Lo stato della succursale di Firenze dell' istituto di credito per le cooperative e le casse di risparmio doUa Toscana. Firenze, 1912. Pp. 27. The condition of the Florence treasury of the credit institute for cooperative societies and savings banks of Tuscany. Monte dei Paschi di Siena. Rendiconto della gestione 1911, approvato con deliberazioni della deputazione amministratrice dei, di 21 e 23 maggio 1912. Siena, 1912. Pp. 104. Report for the year 1911 of the exchange bank of Paschi di Siena. Mutual popular banks and agricultural credit in the Province of Bergamo. Bergamo, 1913. Pp. 17. People's bank of Bologna. Notes on the operations of agricultural credit to December 31, 1912. Bologna, 1913. Pp. 4. Statement with charts showing sums advanced to farmers in the Province of Bologna. Prepared for the commissions. Savings bank in Imola. Short hints for the universal exposition at St. Louis, Mo., in 1904. Imola, 1904. Pp. 39. Society anonima cooperativa per la stagionatura e I'assaggio delle sete ed aflini in Milano. Servizio di deposito fruttifero di somme a risparmio ed in conto corrente. Milano, 1913. Pp. 16. Notes on the activity of the section for interest-bearing savings deposits of the cooperative silk- workers' society of Milan. Society cooperativa popolare di mutuo credito in Cremona. Rendiconto 1912. Esercizio XLVII. Cremona, 1913. Pp. 30. People's cooperative society of mutual credit in Cremona. Complete statement for 1912, forty- seventh year. 31589— S. Doc. 214, 63-1, pt 2 8 18 AGRICULTTJEAL COOPEBATION IN EUEOPB. The little credit bank of Bergamo. Bergamo, 1913. Pp. 2. Statement about the bank prepared for the commissions. Unione cattolica agricola reggiana di Reggio-Emilia. Sez. VI. Credito e risparmio. Regolamento della cassa agricola di depositi e prestiti. Reggio-Emilia, 1908. Pp. 10. Rules of the agricultural bank of deposits and loans of the agricultural catholic union of Reggio- Emiha, authorized in March*, 1908. Situazione al 30 aprile 1913. Folio. Financial statement of the agricultural cathoUc union of Reggio-Emilia to April 30, 1913. DISTRIBUTION. Benassi, p. Unione agricola Bergamasca. Bergamo, 1913. Pp. 3. Brief sketch of the Bergamo agricultural union. Cannello. Agricultural cooperative associations. Rome, 1913. Prepared for the commissions. (See Senate Document 214, p. 32.) Casalini, M. Cooperative dairying in Italy. Rome, 1913. Prepared for the commissions. (See Senate Document 214, p. 29.) Kehrig, R. J. II vino presso il consumatore. Casale, 1913. Pp. 12. Practical advice on distributing wine direct from producer to consumer. Consorzio agrario Bolognese. Agricultural society of Bologna. Bologna, 1913. Pp. 15. Statement of the work of the agricultural society of Bologna. Prepared for the commissions. Bollettino del. Bologna, 1913. Pp. 23. Report and financial statement of the board of directors of the agricultmral society of Bologna. Consorzio agrario cooperativo Bergamasco, 1897-1912. Bergamo, 1913. Pp. 17. An account in English of the agricultural cooperative society of Bergamo. Prepared for the commissions. Consorzio agrario cooperativo di Este. (Sezione del comizio agrario.) Regolamento. Este, 1908. Pp. 7. Regulations of the agricultural committee of the Este agricultural cooperative association. Consorzio agrario cooperativo di Monselice. Relazione sull' operate. Este, 1913. Pp. 6. Report of the work of the first agricultural cooperative society of Monselice. Consorzio agrario cooperativo Lodigiano, 1 gennaio 1903 al 30 giugno 1906. Lodi, 1906. Pp. 15. Agricultural cooperative society of Lodi. Statement from Jan. 1, 1903, to June 30, 1906. Selezione deUe sementi. Milano. Pp. 62. The selection of seeds of various crops. Consorzio agrario cooperativo per la provincia di Cremona. Catalogo macchine agricole. Pp. 32. A catalogue of agricultural machinery for sale by the agricultural cooperative association of the Province of Cremona. Libretto di conto corrente. Pp. 4. Sample of current account book of the above society. Rendiconto dell' anno 1912. Esercizio XVI. Cremona, 1913. Pp. 32. Complete statement for 1912 of the work of the agricultural cooperative association of the Province of Cremona. ITALY. 19 Consorzio agrario per I'acquiato di materie utili in agricoltura. Sezione del comizio agrario di Firenze. Bollettino del 22 gennaio 1913. Acquisti di soli'ato rame, concimi, semi e solfi, primavera 1913. Firenze, 1913. Pp. 16. Bulletin of the Florence association for the purchase of agricultural necessary supplies. Price list of copper sulphate, fertilizers, seeds, sulphur, eic, in the spring of 1913. Relazione suUa gestione 1912. Anno XXIV. Firenze, 1913. Pp.12. Report for 1912 of the Florence association for the purchase of agiicultural necessary materials. Twenty-fourth annual report. Consorzio per la ferrovia Reggio-Emilia a Ciano ed a Barco-Montecchio. Reggio-Emilia, 1912. Pp. 24. Illustrated guide and time table of the cooperative railway of Reggio-Emilia. Consorzio provinciale Bolognese delle cooperative agricole, Bologna. La cooperazione agraria in provincia di Bologna. Imola, 1911. Pp. 52. Agricultural cooperation in the Province of Bologna. Cooperative aderenti alia diocesi di Padova, statuto federale delle. Padova, 1912. Pp. 11. Constitution of the federation of cooperative societies of the diocese of Padua, Federazione agricola interprovinciale, statuto della. 1911. Pp. 4. Constitution of the interprovincial agricultural federation. Federazione delle cooperative di consumo in Milano, statuto della. Como, 1912. Pp. 8. Constitution of the Milan consumers' cooperative society. Federazione delle cooperative rurali della provincia di Milano, statuto. Milano, 1909. Pp. 14. Constitution of the federation of rural cooperative societies of the Province of Milan. Federazione italiana dei consorzi agrari, Piacenza. Assemblea generale della. (In L'ltalia Rurale, anno XXI, 10 marzo, 1913, N. 510.) Piacenza, 1913. Pp. 19. Report of the officers of the Italian federation of agricultural cooperati^'e societies to the general assembly of 1913. Secondo annuario, 1911. Le society agrarie di acquisto in Italia fino al 1910. Milano, 1911. Pp. 505. The history of the Italian federation of agricultural cooperative societies from its foundation to the end of 1910. International Institute of Agriculture. Agricultural credit and cooperation in Italy. Rome, 1913. Pp. 35. Short guide to rural cooperation in Italy. Prepared for the commissions. Monographs on agricultural cooperation in various countries. Vol. I. Rome, 1911. Pp. 451. A summary, with additions bringing them up to date,- of the three numbers of the Bulletin of Economic and Social Intelligence issued in 1910, containing monographs on the organization of agri- culture (economic, administrative, and political) in 19 countries. This volume contains monographs on Germany, Belgium, Denmark, British India, France, Great Britain and Ireland, Norway, Holland, Russia, and Sweden. Primo sindacato agrario cooperativo di Milano. Catalogo generale, 1911. Pp. 80. General catalogue of supplies issued by the first agricultural cooperative society of Milan. Relazione per la giuria all' esposizione internazionale di Milano, 1906. Pp. 5. Report of the jury at the international exposition of Milan in 1906. - — Relazioni del consiglio d'ammistrazione e del coUegio dei sindaci. Esercizio 1911-12. Milano, 1912. Pp. 8. Reports of the board of directors and the council of supervision of the above society for the fiscal year 1911-12. 20 AGEICULTURAL COOPERATION IN EUROPE. Primo sindacato agrario cooperative di Milano. Statute del. Milano. Pp. 14. Constitution of the first agricultural cooperative society of Milan. Sindacato agricola oooperativo Padovano. Atti del. Vol. I— esercizi XVII-XIX, anni 1906-1908. Padova, 1910. Pp.50. Vol. II— esercizi XX, XXI, anni 190?-1910. Padova, 1911. Pp. 48. Vol. Ill-^esercizio XXII, anno 1911. Padova, 1912. Pp. 52. Kendiconto della gestione 1912, esercizib XXIII. Padova, 1913. Pp. 41. Reports of the agricultural congress of Padua, 17th to 23rd years, inclusive. Attocostituto del. Padova, 1911. Pp.10. Statute del. Padova, 1911. Pp.16. Constitutions of the agricultural cooperative society of Padua. Society, orticola Bergamasca, statute della. Bergamo, 1912. Pp. 8. Constitution of the horticultural society of Bergamo. Uniene agricola Bergamasca. Bellettino, periodico mensile, luglio 1912; aprile 1913. Pp. 4 each. Copies of the monthly journal issued by the agricultural union of Bergamo. Relazioni e bilanci. VI esercizio, 1906. Bergamo, 1907. Pp. 15. Report of the Bergamo agricultural union for 1906. Similar reports for 1907, pp. 15; 1909, pp. 15; 1910, pp. 15; 1911, pp. 17; and 1912, pp. 17. Statute della. Bergamo, 1905. Pp. 14. Constitution of the agricultural union of Bo: g ime. Unione cattolica agricola reggiana di Reggie-Emilia. — Resoconte, 1912. Reggie-Emilia, 1913. Pp. 19. Report of the catholic agricultural union for 1912. Sez. I. Agricola. Norme che regelano la vendita delle merci. Reggio-Emilia, 1907. Pp. 5. Rules governing the sale of goods of the cathohc agricultural union of Reggie-Emiha. Sez. II. Sericoltura. Regolamente per I'esercizie dell' essiccateie bozzeli. Reggie-Emiha, 1907. Pp.7. Rules for the drying of sUk cocoons prescribed by the catholic agricultural union of Reggio- Emilia. Sez. III. Enologica. Norme regolamentari per I'esercizie della cantina. Rules for the management of wine cellars as prescribed by the above catholic agricultural union of Reggio-Emilia. Statute del. Reggio-Emilia, 1907. Pp. 21. Constitution of the above cathohc agricultural imion, authorized 1900. PRODUCTION. Casalini, M. Come organizzare le mutue bestiame ? Statute modelle per le societsi mutue di assicurazione contra la mertalita del bestiame. Roma. Pp. 4. How can mutual cattle insurance societies be organized? Sample constitution for a mutual cattle insurance society. Cooperative insurance. Rome, 1913. Prepared for the commissions. (See Senate Document 214, p. 30.) Statuti della federazione nazionale e delle federazieni regionali delle mutue bestiame. Piacenza, 1911. Pp. 30. The constitution of the national and regional federations for mutual cattle insurance. LxJzzATTi et al. Le affittanze coUettive. Studi, discussieni, veti, preposte. Lega nazionale delle cooperative itahane, Milano. Ravenna, 1909. Pp. 51. Papers by various authors on the cooperative farms in Italy. ITALY. 21 Maboiietti, U. Le cooperative agricole (cooperative di contadini per I'assunzione di affittanze dirette). Cenni sulla loro costituzione, organizzazione e funzionamento per i cooperatori del Milanese e della Lom- bardia. Milano, 1906. Pp. 71. The agricultural cooperative societies of farmers for the direct control of farms. Notes on the constitution, organization, and operation among the cooperators of Milan and Ijombardy. Samoggia, Prof. Collective leases and cooperative farming. Milan, 1913. Prepared for the commissions. (See Senate Document 214, p. 50.) Vassallo, C. La difesa contro la mortality del bestiame. Istruzioni sull' organizzazione e sul funzionamento delle societa di mutua assicurazione del bestiame. Milano, 1911. Pp. 126. The defense against cattle mortality. Instructions concerning the organization and foundation of a society for mutual cattle insurance. Comizio agrario di Este. Relazione della giuria mostra bovina interdistrettuale razza Pugliese, 30 settembre, 1905. Este, 1906. Pp. 47. Report of the judges of the interdistrict cattle show of the Pugliese breed, September 30, 1905. Relazione 3 mostra bovina periodica biennale di pura razza Pugliese, Este, 24-25 settembre, 1909. Este, 1910. Pp. 27. ■ Report of the third biennial cattle show of thoroughbred Pugliese stock. Consor2ao della societa cooperative di lavoro e produzione della provincia di Reggio-EmiUa. Notizie intorno alia subconcessione della ferrovia Reggio-Ciano con diramazione Barco-Montecchio, assunta dal. Reggio-EmiUa, 1909. Pp. 19. An account of the subconcession of the railway from Reggio to Ciano to the cooperative union of labor and production of the Province of Reggio-EmUia. Statuto. Reggio-Enulia, 1911. Pp.15. Constitution of the cooperative union for labor and production of the Province of Reggio-Emilia. Cooperativa agricola di Altedo, statuto della. Medicina, 1906. Pp. 16. Constitution of the agricultural cooperative farming society of Altedo. Cooperativa cremonese per la fabbricazione dei concimi chimici. Rendiconto dell' esercizio 1911-1912. Cremona, 1912. Pp. 19. Annual statement of the cooperative chemical fertilizer factory of Cremona for the year 1911-12. Statuto. Cremona, 1908. Pp. 24. Constitution of the cooperative chemical fertilizer factory of Cremona. IV congresso nazionale dei lavoratori deUa terra, Bologna 2-5 marzo, 1911. Raccolta della deliberazioni. Ravenna, 1911. Pp. 41. Report of the proceedings of the fourth national congress of farm laborers at Bologna, March 2-5, 1911. La giornata della delegazione americana. La visita alia cooperativa di Altedo. "Cronaca di Bologna," 17 maggio, 1913. P. 1. An account of the visit of the American commissions to the cooperative farm at Altedo. La reale scuola di zootecnia e di caseificio "A. ZaneUi," in Reggio-Emiha nei primi 25 anni di vita, 1880-1905. Reggio-Emilia, 1906. Pp. 223. Nel quinquennio 1906-1910. Reggio-Emilia, 1911. Pp. 162. Two reports on the royal school of animal husbandry and cheese-making at Reggio-Emilia for the fu-st 25 years 1880-1905, and also for the five-year period from 1906-1910. Programma di apertura deU' anno scolastico 1912-13. Reggio-Emiha, 1912. Pp. 14. Program of the royal school of animal husbandry and cheese-making for the school year 1912-13. 22 AGKIOULTUEAL COOPERATION ITH EUROPE. Latteria Soresinese. Notizie sulla. Pubblicate in occasione del IV congresso nazionale delle latterie sociale tenutosi in Cremona, settembre, 1912. Pp. 51. An account of the Soresina cooperative creamery published on the occasion of the fourth national congress of creameries held at Cremona in September, 1912. Regolamento. Soresina, 1912. Pp. 18. B3^-laws of the above cooperative creamery at Soresina. Statuto. Soresina, 1913. Pp. 19. Constitution of the Soresina cooperative creamery. Sindacato provinciale dei contadini, statuto del. Societa cooperativa in nome collettivo per gli afRtti diretti. Reggio-Emiha, 1909. Pp. 21. Constitution of the farmers' association of the province of Reggio-Emilia for the direct leasing of farms. Societa anoninia cooperativa per la stagionatura e I'assaggio delle sete ed affini in Milano. Alcuni cenni suU' attivita del laboratorio di studi ed esperienze sulla seta. Milano, 1911. Pp. 8. Some laboratory notes on studies and experiments made on silk and other fibers by the coopera- tive silk-workers' society of Milan. Funzionamento dei vari servizi. Milano. Pp. 24. Transactions of the various branches of the above society. Relazione della presidenza per I'anno 1912. Milano, 1913. Pp. 19. Report of the president for 1912. Resoconto delle operazioni, 1912. Milano, 1913. Pp. 27. Annual business statement for 1912. Ricerche eseguite nel 1912 per conto degli industrials Milano, 1913. Pp. 8. Inquiries into the industrial conditions of silk manufacture in 1912. Statuto. Milano, 1910. Pp. 12. Constitution of the cooperative silk-workers' society of Milan. Societa cooperativa di lavoro e produzione della provincia di Reggio-Emilia. Notizie intorno al sub-concessione della ferrovia Reggio-Ciano con diramazione Barco-Montecchio. Reggio-Emiha, 1909. Pp. 19. An illustrated account of the building of a railway by the Reggio-Emilia cooperative union for labor and production. Societa Lago di Garda (Gargano) . Regolamento per I'oleificio anaministrato dalla. Salo, 1907. Pp. 10. Regulations for the olive-oil factory operated by the Garda society. Society, lauriva amministrata dalla. Salo, 1907. Pp. 7. The regulations prescribed by the above society for the bay-rum factory. - — Statuto della. Salo, 1907. Pp. 16. Constitution of the Garda society. Societa umanitaria di Milano, ufficio agrario della. Modulo di statuto per societa cooperativa di produzione. Varese, 1908. Pp. 17. Sample constitution for cooperative producing societies as formulated by the agricultural office of the Humanitarian Society of Milan. RURAL LIFE. Cambray-Digny, L. G. de. Cattedra ambulante di agricoltura per la provincia di Firenze. Relazione del presidente della commissione di vigilanza. Firenze, 1904. Pp. 53. Report of the president of the vigilance committee of the traveling professorships of agriculture for the Province of Florence. ITALY. 23 Casalini, M. Federazione nazionale delle mutue incendi. Le "casse mutue incendi" e la lore organizzazione. Istruzioni, modello di statute, di polizza, di libri contabile ad uso di promotori di mutue incendi. Piacenza, 1911. Pp. 24. National federation for mutual fire insurance. The mutual fire insurance companies and their organization. Instructions, model constitution, policy, account books, etc. CoNTiNi, C. Les graves agricoles en Lombardie. Paris, 1904. Pp. 28. Agricultural strikes in Lombardy. Ferrabi, p. La mezzadria e I'agricoltura moderna. Firenza, 1903. Pp. 20. The share-tenant system and modern agriculture. A report presented to the seventh international congress of agriculture held at Rome, April, 1903. I.,ORENzoNi, G. Inchiesta parlamentare suUe condizioni dei contadini nelle provincie meridionali e neUa Sicilia. Vol. VI — Sicilia. Tomo I (Parte I e II). Relazione del delegato tecnico. Roma, 1910. Pp. 911. A parliamentary inquiry concerning the condition of farmers in the southern provinces and in Sicily. Vol. VI on Sicily. A report by the expert delegate. Maggi, C. Cattedra ambulante di agricoltura per la provincia di Firenze. Relazione sull' operato della cattedra dal 1 gennaio 1904 al 31 decembre 1908. Firenze, 1909. Pp. 54. The traveling school of agriculture for the province of Florence. A report on the work of the school from Jan. 1, 1904, to Dec. 31, 1908. RoGGi. Italian rural life. Rome, 1913. Pp. 2. Prepared for the commissions. (See Senate Document 214, p. 27.) Cassa mutua dei proprietari di fondi rustici in Toscana per I'assicurazione del personale delle aziende agrarie contro gli infortuni sul lavoro. Istruzioni e norme. Firenze, 1912. Pp. 11. Instructions and rules of the mutual society of farm owners in Tuscany for the insurance of their employees against accidents at their work. Relazione, anno IV, dal 1 marzo 1912 al 28 febbraio 1913. Firenze, 1913. Pp. 24. Fourth annual report of the society of farm owners in Tuscany for the year 1912-13. Convenzione fra le istituzione agrarie della provincia di Padova. Padova, 1913. Pp. 11. Report of a convention of the agricultural institutions of the Province of Padua. Presented to the commissions. Consorzio provinciale bolognese della cooperative agricole Bologna. La cooperazione agraria in provincia di Bologna. Relazione di Egido Bernaroli al comitate della federazione provinciale Bolognese dei lavoratori della terra. Imola, 1911. Pp. 52. The congress of the agricultural cooperative societies of the Province of Bologna. A discussion of the status of cooperation in the province, and a report by Egido Bernaroli to the committee of the federation of the Province of Bologna on the condition of farm laborers in Bologna. FamighaagricoladiCornaredo euniti (poderePonti). SezioneA. Forno sociale. Reggio-Emiha, 1913. Pp.11. Constitution of cooperative farms (agricultural family) on the Ponti estates. (See Senate Docu- ment 214, p. 52.) Federazione nazionale lavoratori della terra Bologna. I problemi della mezzadria e 1' organizzazione dei mezzadri. Bologna, 1913. Pp. 15. The national federation of farm laborers in the region of Bologna. Problems of the share-tenant system and organization of the share-tenant farmers. Relazione morale e finanziaria 1908-1910 della federazione nazionale. Bologna, 1911. Pp. 69. Moral and financial report of the national federation of farm laborers for the years 1908 to 1910. Federazione nazionale lavoratori della terra, statuto federale modificato dal III. congresso nazionale di Reggio- Emilia, marzo 1908. Reggio-Emilia, 1908. Pp. 7. Constitution of the national federation of farm laborers as amended by the third national congress. 24 AGEICULTXJEAL COOPERATION IN BUEOPE. Federazione provinciale bolognese tra le leghe dei laToratori della terra, statute della. Bologna. P. 1, Constitution of the federation of agricultural laborers' unions of the Province of Bologna. Federazione provinciale dei lavoratori della terra, statuto. Bologna, 1913. Pp. 5. Constitution of the federation of farm laborers in the Province of Bologna. Federazione provinciale lavoratori della terra, Bologna. XI. consiglio generale 18-19 marzo 1912. Relazione morale e finanziaria, 1911. Deliberazioni. Prospetti e diagrammi. Dieci anni di vita federale. Bologna, 1912. Pp. 93. The eleventh general assembly of the federation of farm laborers of the Province of Bologna, held March 18 and 19, 1912. Moral and financial reports for 1911, the proceedings and aims, and a review of the 10 years of life of the federation. La cattedra ambulante d'agricoltura per la provincia di Milano, dalla sua fondazione, aprile 1899 al decembre 1910. Milano, 1911. Pp. 22. An account of the traveling professorships of agriculture in the Province of Milan from their foundation in April, 1899, to December, 1910. Lega nazionale delle cooperative italiana Milano. Le afhttanze coUettive. Studi, discussioni, voti, proposte. Ravenna, 1909. Pp. 51. The national league of Italian cooperative societies. Studies, discussions, decisions, and pro- posals regarding the cooperative leasing of farm lands. Prima cattedra ambulante della mutuality agraria e. della previdenza, denominata "Comitato nazionale della mutuality, agraria" con sede in Roma. Atti del primo congresso nazionale per la mutuality, agraria. Milano, 14-15-16 gennaio 1912. Como, 1912. Pp. 142. Report of the first congress of the traveling school of agricultural mutuality and thrift, called "the national committee of agricultural mutuality." Relazione dell' opera svolta nel biennio 1911-12. Roma, 1912. Pp. 16. Report of the above national committee of agricultural mutuality for the biennial period 1911 and 1912. Society, Umanitaria di Milano. Le biblioteche popolari in provincia di Milano. Milano, 1908. Pp. 18. People's libraries in the Province of Milan, an account issued by the rural office of the Humani- tarian Society of Milan. GENERAL. BiGAZZi, G. Libreria Giovanni Dotti. Catalogo generale, opere varie. Edizioni del secolo XV e XVI — arte, curiosita, etc. Firenze. Pp. 461. General catalogue of the bookstore or library of John Dotti, containing listed titles, price, etc., of 6,443 volumes relating to the fifteenth and sixteenth centuries. BoNOOMPAGNi, Prince. Land reclamation in the Roman campagna. Rome, 1913. Prepared for the commis- sions. (See Senate Document 214, p. 27.) Casalini, M. Le piccole mutue contro i danni degli incendi. Piacenza, 1911. Pp. 34. Small mutual societies against fire losses. Da Molin, E. La cooperazione nel suo contenuto economico. Vicenza, 1909. Pp. 60. Cooperation in its economic aspects. Report of a conference held at the royal business school of Venice, March, 1906, and presented by the Padua chamber of commerce to the commissions. GoRiA, G., preface by Luzzatti. La cooperazione di classe tra i lavoratori in Italia. Torino, 1909. Pp. 291. Study of the various forms of organization among the different classes of workingmen in Italy. LuBiN, D. Price fluctuations in the staples; their influence on the welfare of the State. Reply to a commu- nication from H. E. 0. Molina, minister of agriculture of Mexico. Rome, 1910. Pp. 7. ITALY. 25 LuBiN, D. The International Institute of Agriculture. A proposal: National organizations for utilizing its information. Committee of twelve. Rome, 1911. Pp.4. LuzzATTi, L. Address before the commissions at the International Institute of Agriculture, Rome, May, 1913. Pp. 4. (See Report, p. 21.) Maffi, A. Venticinque anni di vita della cooperazione in Italia, 1886-1911. Milano, 1911. Pp.202. Report on the cooperative movement in Italy during its first 25 years as presented at the twenty- fifth anniversary of the Italian national cooperative league. Manzari, G. Agricoltura e credito in Puglia. Palo del CoUe, 1911. Pp. 82. An account of agriculture and rural credit in Puglia. MuLLER. International Institute of Agriculture. Division of agricultural statistics. Report presented to the general assembly. Rome. Pp. 30. SiTTA, P. Conquiste e speranze della cooperazione italiana. Roma, 1911. Pp. 25. The successes and aspirations of cooperation in Italy. SoREsi, Prof. Agricultural conditions in Lombardy. Milan, 1913. Prepared for the commissions. (See Senate Document 214, p. 49.) Stringer, V., e Dkaqoni, C. Organizzazione agraria ia Italia. (Estratto dal volume "L'Iniziativa del Re d'ltaUa e I'lstituto Internazionale di Agricoltura. Studi e documenti.") Roma, 1905. Pp. 178. A history of agricultural organization in Italy, being an abstract from the volume entitled "The Initiative of the King of Italy and the International Institute of Agriculture." TuRATi, N. Le biblioteche popolari in provincia di Milano. Societa Umanitaria, ufficio agrario. Milano, 1908. Pp. 18. An account of the popular libraries of the Province of Milan, including lists of locations and num- ber of volumes. Valeri, F. M. Milano, parte seconda, con 140 illustrazioni. Italia artistica No. 26. Bergamo, 1906. Pp. 162. An illustrated descriptive text of the city of Milan. Comizio agrario di Este. Attiva dal 1 geimaio 1905 al 31 dicembre 1906. Relazioni. Este, 1913. Pp. 18. Report on the activities of the agricultural committee of Este for 1905-1906. Cariche sociali e personale. Ordinamento, amministrativo, contabile bilanci consuntivi. Este, 1910. Pp. 23. Officers, personnel, administrative regulations, and annual financial statement of the agricultural committee of Este. Statuto organico. Este, 1908. Pp. 14. Constitution of the agricultural committee of Este. Storia delle istituzione agrarie Atestine dalla fondazione al febbraio, 1913. Este, 1913. Pp. 11. Report of the work of the agricultural institutions of Este from .their foundation to February, 1913- Consiglio provinciale di Piacenza. Relazione morale sulF andamehto dell' azienda provinciale. Note e chiari- menti sul progetto di bilancio preventive per I'esercizio finanziario 1913. Piacenza, 1912. Pp. 55. Provincial council of Piacenza. Social service report on the progress of the provincial manage- ment. Notes and explanations of the preliminary budget for 1913. Contratto di mezzadria. Amministrazione del conte Emo-Capodahsta, Pernumia. Padova. Pp. 7. Share-tenant contract, estate of Count Emo-Capodalista, Pernumia, Padua. International Institute of Agriculture. Annuaire international de legislation agricole. Heme annee, 1912. Rome, 1913. Pp. 994. Second, annual yearbook of agricultural legislation. BuHetin of agricultural statistics, January, 1911, to March, 1912. Rome, 1912. Pp. 12 each. 31589— S. Doc. 214, 63-1, pt 2 4 26 AGEICULTUEAL COOPEEATION IN EUROPE. International Institute of Agriculture. Bulletin of the Bureau of Economic and Social Intelligence. September, 1910, to date. Issued monthly with about 140 pages to each issue. The purpose of this publication "is to collect and publish all information bearing upon the working of cooperative societies and other agricultural associations, in order to facilitate their organization and development, and to throw light upon the most pressing problems connected with economic and social matters." Bureau de la statistique generale. Annuaire international de statistique agricole, 1910. Rome, 1912. Pp. 375. Yearbook of international agricultural statistics for 1910, issued hy the bureau of general statistics of the International Institute of Agriculture. Further papers on. London, 1911. Pp. 30. L' organisation des services de statistique agricole dans le divers pays. Tome I. Rome, 1909. Pp. 446. The organization of the service for gathering agricultural statistics in various countries as ascer- tained by the International Institute of Agriculture, Rome, Italy. Italy. A supplement to "The Standard" (London), containing a number of articles on Italy, one of which is by Luzzatti. London, 1912. Pp. 48. La missione nord-americana visita la nostra citta. "Cronaca Cittadina," Padova, 18-19 maggio 1913. P. 1. An account of the visit of the commissions to Padua as reported in the "Citizen Chronicle" of Padua. La Nuova Fede. Mutualita, previdenza, cooperazione. 1 gennaio al dicembre 1912. Roma, mensile. Pp. 4 each. "The New Faith," a monthly publication devoted to mutual insurance, thrift, and cooperation. Bound volume of the first year of publication. L'agricoltura nel Bolognese. Cenni e dati statistici. Le tenute Bentivoglio e S. Martino. Bologna, 1913. Pp. 19. Agriculture in Bologna, with an account of the estates of Bentivoglio and San Martino. State- ment and statistics. Prepared for the commissions. L'Institut International d' Agriculture. Son organization, son activity, ses resultats. Rome, 1912. Pp. 50. Briefer statement. Rome, 1913. Pp. 14. Summarized accounts of the organization, work, and results of the International Institute of Agriculture. Statistique des superficies cultiv6es, de la production vegetale et du betail dans les pays adherents. Rome, 1910. Pp. 168. Statistics of area under cultivation and of plant and animal production in the various countries adhering to the International Institute of Agriculture. L'ltalia Rurale. Organo della federazione "italiana dei consorzi agrari. Periodico trimestrale. Anno XXI, 10 marzo 1913. N. 510. Piacenza, 1913. Pp. 20. "Rural Italy." Journal of the Italian federation of agricultural societies. Issue of March 10, 1913, contains an article on William Haas, statements of the directors and supervisors to the general assembly of the federation, etc. Provincia di Piacenza. Bilancio di previsione dell' entrata e della spesa per I'esercizio finanziario 1913. Piacenza, 1912. Pp. 140. Provisional statement of the provincial deputation of Piacenza on the prospective income and expenditures for the fiscal year 1913. Relazione della deputazione provinciale sul bilancio di previsione dell' entrata e della spesa per I'esercizio finanziaro 1912. Piacenza, 1911. Pp. 22. Similar statement for 1912. Societa anonima cooperativa itahana per I'assicurazione contro I'incendio. Milano, 1913. Pp. 2. The Itahan cooperative fire insurance society. HUNGARY. 27 Society, umanitaria di Mlano, ufiicio agrario delia. Circolo operaio (o agricolo), modulo di statute per. Varese, 1908. Pp. 18. Sample constitution for laborers or farmers' unions, issued by the agricultural office of the Human- itarian Society of Milan. Cooperative edificatrici. Varese, 1913. Pp. 19. Cooperative building societies. Information furnished by the agricultural office of the Humani- tarian Society of Milan. La Disoccupazione. Relazioni e discussioni del 1 . congresso internazionale per la lotta contro la dis- occupazione 2-3 ottobre 1906. Milano, 1906. Pp. 583. Reports and discussions at the first international congress for the consideration of the subject of unemployment. L'opera della societa umanitaria dalla sua fondazione ad oggi, 1 maggio 1911. Milano, 1911. Pp. 152. L'umanitaria e la sua opera. Milano, 1906. Pp. 124. The work of the Humanitarian Society of Milan since its foundation. Modulo di statute per society cooperativa di consumo. Varese, 1908. Pp. 18. Sample constitution for consumers' societies, prepared by the Humanitarian Society of Milan. Otto anni di attivita dell' ufficio agrario della societa umanitaria, 1905-1912. Milano, 1913. Pp. 103. Report of the eight years' work (1905 to 1912) of the agricultural office of the Humanitarian Society of Milan. Societa cooperativa di lavoro, modulo di statuto per. Varese, 1908. Pp. 18. Sample constitution for workingmen's cooperative societies, prepared by the agricultural office of the Humanitarian Society of Milan. Unione delle istituzioni sociali cattoliche nella diocesi e provincia di Bergamo. Affittanze collettive. Bergamo, 1913. Pp. 3. The cooperative farms in the Province of Bergamo. — — Latterie sociali. Bergamo, 1913. Pp. 3. The cooperative dairies in the Province of Bergamo and their work for the year 1911-12. Societa d'assicurazione del bestiame bovino. Bergamo, 1913. Pp. 3. The cattle insurance societies in the Province of Bergamo. HUNGARY CREDIT. HoYOS, Count. The Hungarian land credit institution. Budapest, 1913. Prepared for the commissions. (See Senate Document 214, p. 155.) A Magyar Foldhitelint^zet Aiapszabalyai. Budapest, 1911. Pp.45. The constitution of a Magyar land-mortgage institute. Bericht des ungarischen Bodenkreditinstitutes an die Generalversammlung uber das Geschaftsjahr 1912. (Unterbreitet in der am 16. Marz 1913 abgehaltenen Generalversammlung. Aus dem Ungarischen iibersetzt.) Budapest, 1913. Pp. 33. Report for 1912 of the Hungarian land credit institute to the general assembly held March 16, ~ 1913. Translated from the Hungarian. Landes Zentralkreditgenossenschaft fur Ungarn. Bericht des Direktoriums an die am 2. April 1913 abzuhaltende XIV. ordenthche Generalversammlung der Griinder unter der dem Verbande angehorigen Genossenschaften. Budapest, 1913. Pp. 14. Report of the directors of the central rural cooperative credit society to the fourteenth regular convention of the parent society and its affihated local societies on April 2, 1913. 28 AGEICTJLTUBAL COOPEEATION IN EUROPE. Landes Zenttralkreditgenossenschaft fiir Ungarn. Bericht iiber die zehnjahrige Tatigkeit (1899-1908). Budapest, 1909. Pp. 70. Report of 10 years of activity of the Hungarian central cooperative credit society and its affiliated local societies. Blank forms, samples of mortgage bonds, and other documents used by the Hungarian central rural cooperative credit society. Budapest, 1913. Samples 16. Statuten der. Budapest, 1913. Pp. 39. Constitution and by-laws of the Hungarian central rural cooperative credit society. ^ — Statuten der Kreditgenossenscliaft als Mitglied der Zentral Land es-Kreditgenossensch aft. Budapest,. 1910. Pp. 25. Sample constitution and by-laws of a local society affiliated with the central rural cooperative credit society. Rural credit and cooperation in Hungary. A pubUcation of the royal Hungarian minister of agriculture. Buda- pest, 1913. Pp. 99. A complete statement on agricultural credit and cooperation in Hungary prepared for the com- missions. (See Senate Document 214, p. 121.) Soci6t6 de credit foncier du royaume de Hongrie, 1912. (Traduit du Hongrois.) Budapest, 1913. Pp. 20., The land mortgage credit society of Hungary in 1912. Statuten des imgarischen Bodenkreditinstitutes. (AusdemUngai-ischen iibersetzt.) Budapest, 1897. Pp. 135> Constitution of the Hungarian land credit institute, translated from the Hungarian. The national small land-holdings mortgage institute. Budapest, 1913. Pp. 3. A summary of the work of the institute from 1880-1912. Prepared for the commissions. XXIII. Gesetz-Artikel vom Jahre 1898 liber die wirtschaftlichen und gewerblichen Kreditgenossenschaftene>, Budapest, 1899. Pp. 36. Law XXIII of 1898 relating to the economic and industrial cooperative credit societies. DISTRIBUTION. Blazek, a. O dru^stevni organisaci zemfedSlstvI. Olomouc, 1913. Pp. 39. The cooperative organization of agriculture. Hatden, J. Cooperative distributive societies. Budapest, 1913. Prepared for the commissions. (See Senate Document 214, p. 171.) Mailath, Gkof JozsEF. ASzovetkezetiUgyFejlodeseMagyarorszagon (1851-1912). Budapest, 1913. Pp.37. The development of cooperation in Hungarj'- from 1851 to 1912. The development of cooperation m Hungary (1851-1912), by Count Joseph Mailath. A translation of the preceding paper prepared for the commissions. Budapest, 1913. Pp. 43. RURAL LIFE. Dubbavszky, R. Higher agricultural education in Hungary. Budapest, 1913. Prepared for the commissions. (See Senate Document 214, p. 166.) GENERAL. Bbrnat, S. American farmers in Hungary. Translated from the Hungarian "Farmers' Review" for May^ 1913. Pp. 11. An interesting article inspired by the visit of the commissions to Himgary. MiKLOS O. Negyedsz^zad A Magyar K6z61etben. Sajto ala rendezte Rdcskay Gyiila. II. Kotet. Buda- ' pest, 1906. Pp. 455. AUSTRIA. 29 Takgha, J. DE. Hungary: A sketch of the country, its people, and its conditions. Budapest, 1910. Pp. 80. A Magyar Korona Orsz4gamak Kozigazgatfisi T6rk6pe az uj Helynevekkel 6s az Osszes Vasutvonalakkal. Budapest. Folder. A large map in colors presenting data on Hungary. Agricultural Hungary. A pubhcation of the royal Hungarian minister of agriculture. Budapest, 1908. Pp.135. Das ungarische System der staathchen Fursorge fiir verlassene Kinder. Anlasslich der intemationalen Hygiene Ausstellung Dresden 1911. Herausgegeben von der Kinderschutz-Hauptsektion des koniglich ungarischen Ministerium des Innern. Pp. 8. The Hungarian system of State provision for abandoned children, issued by the office of children's protection of the royal Hungarian ministry of the interior. Die Jahresversammlung des Bundes der imgarischen Landwirte. Pp. 57. The annual general assembly of the Hungarian Farmers' Union. ■Geschaftsordnvmg und Dienstanweisung fiir die Direktion, den Aufsichtrat und die Beamten der Genossenschaft. Budapest. Pp. 18. Business regulations and instructions for boards of directors, coimcils of supervision, and other officials of local cooperative societies. Hungary: An illustrated fortnightly society journal printed in English. Budapest, May 15, 1913. Vol. XI, No. 10, pp. 157-172. Magyar Gazddk Szemleje. A Magyar gazdaszovetseg folyoirata. Szerkeszti Bem4t Istvan. Budapest, May, 1913. Pp. 273-336. The Hungarian "Farmers' Eeview," a monthly pubhcation edited by Stephen Bernat, which contains articles on various subjects relating to agriculture. The present number contains an article on the visit of the American commissions to Hungary. Revue de Hongrie. Couronnee par I'Academie Fran^aise. Organe de la Societe Litt6raire Fran^aise de Budapest. Budapest, 15 d^cembre, 1912. Pp. 401-480. The Hungarian Eeview, the journal of the French literary society of Budapest. AUSTRIA. CREDIT. Blazek, a. Agricultural credit in the Kingdom of Bohemia. Prague, 1913. Pp. 3 and chart which gives the movement of the interest rates on loans of the Austria-Hungary Bank, the central association of the Cechish agricultural cooperative societies, and the Raiffeisen banks in Bohemia during the years 1897-1913. Gyuekovics, M. von. Der bauerliche Kredit in Bosnien und der Herzegowina. Wien. Pp. 4. Credit for peasants in Bosnia and Herzegovina. Hattingberg, J. E. VON. Das osterreichische Entschuldungsprogramm. Sonderabdruck aus der "Ostjr- reichischen landvirtschaftlichen Genossenschaftspresse." Wien, 1910. Pp. 103. The plan of relieving the Kingdom of Austria from indebtedness. A separate from the "Austrian Agricultural Cooperative Press." Die landwirtschaftlichen Kredite dargestellt fiir die niederosterreichischen Spar- und Darlehenskassen nach dem System Eaiffeisen. Wien, 1899. Pp. 28. Agricultural credit arranged for the savings and loan banks of Lower Austria in accordance with the Raiffeisen system. 30 AGBICULTUEAL COOPERATION IN EUKOPE. MuLLER, H. Agricultural mortgage credit in Bohemia. Prague, 1913. Prepared for the commissions. (See Senate Document 214, p. 217.) Kedl, F. The provincial mortgage institute of Lower Austria. Vienna, 1913. Prepared for the commissions. (See Senate Docmnent 214, p. 197.) Roos, E. Organization of rural credit in Bohemia. Prague, 1913. Prepared for the commissions. (See Senate: Document 214, p. 214.) Ein Bodenentschuldungsgesetz. Sonderabdruck aus der Nr. 168 der " Osterreichischen landwirtschaftliclien Genossenschaf tspresse " vom 7. September, 1910. Pp. 11. A proposed law for relieving the land of indebtedness by a system of annuities. Geschafts-Ordnung des Kaiser und Konig Franz Josef I. Landes-Jubilaums-Kreditfondes zur Unterstutzung^ von kleinen landwirtschaftlichen Produzenten genehmigt mit dem Beschliissen des Landesausschusses des Konigreiches Bohmen vom 8. Marz, 1899, Z. 16,676, und vom 24. Janner 1906, Z. 108,352 ai 1905. Prag. Pp. 24. Business rules and regulations of the Emperor and King Francis Joseph I. Jubilee Credit Insti- tution established for the benefit of small agricultural producers and in accordance with the recom- mendations of the provincial committee of the Kingdom of Bohemia. Kaiser und Konig Franz Josef I. Landes-Jubilaums-Kreditfondes zur Unterstiitzung von kleinen landwirt- schaftliche Produzenten, Statuten des. Prag, 1909. Pp. 14. Constitution of the Emperor and King Francis Joseph I. Jubilee Credit Institution established for the benefit of small agricultural producers. (See Senate Document 214, p. 226.) Niederosterreichischen Landes-Hypothekenanstalt. Rechnungsabschluss der. Mit 31. Dezember 1911. Wien, 1912. Pp. 87. Financial statement of the Lower Austria mortgage institution to December 31, 1911. Statut der. Genehmigt mit Allerhochstor Entschliessung vom' 18. Juni, 1912; L. 6. Bl. Nr. 127 v. 20. August, 1912. Wien, 1912. Pp. 15. Constitution of the above mortgage institution formulated in accordance with the resolution of the highest ofl&cial authority of June 18, 1912. Thatigkeitsbericht des Curatoriums der, fiir das Jahr 1900 und Rechnungsabschluss der Anstalt mit 31. December 1900. Wien, 1901. Pp. 209. Report of the activity of the above mortgage institution for the year 1900, together with the annual financial statement to December 31, 1900. Spar- und Darlehenskassen-Vereines, Statuten des. (Registrierte Genossenschaft mit unbeschrankter Haftung.) Prag, 1913. Pp. 47. Wien, 1887. Pp. 32. Model constitutions for cooperative savings and loan banks with unlimited liability. Statistik der Sparkassen in den im Reichsrate Vertretenen Konigreichen und Landern fiir das Jahr 1910. Bear- beitet von dem Bureau der K. K. Statistischen Zentral-Kommission. Wien, 1912. Pp. 93. Statistics of the various savings banks in the Kmgdom and Provinces of Austria for the year 1910. DISTRIBUTION. Eetl, M., et al. Das landwirtschaftliche Genossenschaf tswesen in einigen osterreichischen Landern mit besonderer Beriicksichtigung der Mittelstandsfragen. Sammlung von beim Zweiten Internationalen Mittelstandskongress Wien 1908 erstatteten Referaten. Wien, 1909. Pp., 296. The agricultural cooperative movement in a few of the Austrian Provinces, with especial refer- ence to the problems relating to medium-size holdings. A collection of papers by the appointed referees presented at the second international congress held at Vienna in 1908. FuBER, R. VON. Das landwirtschaftliche Genossenschaftswesen in Osterreich. Wien, 1912. Pp. 46. The agricultural cooperative movement in Austria. AUSTEIA. 31 Hausleb, Prof. Imperial and royal agricultural society of Vienna. Vienna, 1913. Prepared for the com- missions. (See Senate Document 214, p. 203.) Nbudoefbb, O. Skizzen aus der Entwicklungsgeschichte des Genossenschaftsgedankens. Sonderabdruck aus der "Osterreichischen landwirtschaftUchen Genossenschaftspresse." Wien, 1910. Pp. 42. Brief sketches from the history of the development of the cooperative idea. Separate from the "Austrian Agricultural Cooperative Press." Stobck, Count P. von. tJberblick uber den Stand des landwirtschaftUchen Genossenschaftswesens in Oster- reich. Erstattet am II. Osterreichischen landwirtschaftlichen Genossenschaftstage in Wien, am 14- September, 1910. Wien, 1910. Pp. 25. Review of the condition of the agricultural cooperative movement in Austria. Abstracted from a report made to the second Austrian agricultural cooperative congress at Vienna, September 14, 1910. TtJEK, E. Die Kreditanspruche der landwirtschaftlichen Genossenschaften und die osterreichisch-ungarische Bank. Sonderabdruck aus der "Osterreichischen landwirtschaftlichen Genossenschaftspresse" vom 20. April 1911 und 4. Mai 1911, Nr. 184 und 185. Wien, 1911. Pp. 22. The credit claims of the agricultural cooperative societies and the Austria-Hungary Bank. Sep- arate from the "Austrian Agricultural Cooperative Press" for April 20 and May 4, 1911. Weden, M. Das landwirtschaftliche Genossenschaftswesen in Deutsch-Bohmen. Vortrag, gehalten auf dem II. Internationalen Mittelstandskongresse in Wien am 5. Oktober 1908. Prag, 1909. Pp. 36. The agricultural cooperative system in German-Bohemia. Address before the second inter- national congress at Vienna of medium-size farmers. Agricultural cooperation and government aid in Austria. Prague, 1913. Prepared for the commissions. (See Senate Document 214, p. 219.) Allgemeiner Verband landwirtschaftHcher Genossenschaften in Osterreich. Anleitung zur Grundung und Geschaftsfuhrtmg von Oelbaugenossenschaften. Im Auftrage des K. K. Ackerbauministeriums und unter Mitwirkung des Konsulenten im Ackerbauministerium Ferdinand Artmann. Wien, 1910. Pp.32. Information concerning the organization and business management of oil-producing cooperative societies affiliated with the general association of agricultural cooperative societies in Austria. — — Anwaltschaftliche Konferenz veranstaltet am 20. September 1911 in Wien. Wien, 1911. Pp. 47. Report of the managers' conference of the general association of agricultural cooperative societies held at Vienna September 20, 1911. Aus den Vortragen des Generalanwalts Dr. Paul Freiherr von Storck iiber Begriff , Bedeutung und allge- meine Grundsatze des landwirtschaftlichen Genossenschaftswesens. Wien, 1910. Pp. 19. An abstract from the report of Count Paul von Storck, attorney general of the association of agricultural cooperative societies, concerning the purpose, significance, and principles of agricultural cooperation. Aus der einleitenden Vorlesung des Sekretars Dr. Otto Neudorfer tiber Geld- und Kreditwesen. Wien, 1910. Pp. 8. An abstract from the paper of Dr. Otto Neudorfer, secretary of 'the general association of co- operative societies, on the money and credit movement. Bericht des, iiber seine Tatigkeit in den Jahren 1905, 1906 und 1907. I. Teil. Wien, 1908. Pp.207. Part I of the report of the general association of agricultural cooperative societies for the years 1905, 1906, and 1907. Bericht des, iiber seine Tatigkeit in den Jahren 1908 und 1909. I. Teil. Wein, 1910. Pp. 140. Similar report for the years 1908 and 1909. Der erste osterreichische landwirtschafthche Genossenschaftstag Wien 1906. Wien, 1907, Pp. 123. The first Austrian agricultural cooperative congress held at Vienna in 1906. Qenossenschafthches Jahrbuch des. (Berichtsjahr 1901.) Wien, 1902. Pp. 154. Annual report for 1901 of the general association of agricultural cooperative societies. 32 AGEICULTUEAL COOPERATION IN EUROPE. Allgemeiner Verband landwirtschaftlicher Genossenschaften in Osterreich. Genossenschaftliches Jahrbuch des. (Berichtsjahr 1902.) Wien, 1903. Pp. 83. Annual report for 1902 of the said association of cooperative societies. Geschaftsordnung des. Wien, 1909. Pp. 19. The rules and regulations of the above general association of cooperative societies. Jahresbericht des, fur das Jahr 1903. Wien, 1904. Pp. 116. Aiuiual report for 1903 of the general association of cooperative societies. Mitteilungen aus der Statistik der landwirtschaftlichen Genossenschaften in Osterreich, herausgegeben im Auftrage des k. k. Ackerbauministeriums von dem. 2. Band. Wien, 1912. Pp. 469. Contributions from the statistics of the agricultural cooperative societies in Austria, abstracted from the publications of the royal minister of agriculture. Revisorenkonferenz veranstaltet am 22. und 23. September 1911 in Wien. Wien, 1911. Pp. 52. A revision conference held at Vienna on September 22 and 23, 1911, by the general association of agricultural cooperative societies. Satzungen des. Wien, 1909. Pp. 15. Constitution of the general association of agricultural cooperative societies in Austria. Thatigkeitsbericht der Anwaltschaft und Verhandlungen des II. Vereinstages des. Wien, 1901. Pp 66. The business management and the transactions of the second congress of the general association of agricultural cooperative societies in Austria. Central-Verband der deutschen landwirtschaftliche Genossenschaften in Bohmens. (Registrierte Genossen-^ schaft mit beschrankter Haftung.) Funfzehnter Geschaftsbericht des genossenschaftliches Jahrbuch. Filr das Jahr 1910. Kgl. Wienberge, 1912. Pp. 207. The fifteenth annual report for 1910 of the central federation of German agricultural cooperative societies with limited liability in Bohemia. Landwirtschaftliches Genossenschaftsblatt fur Deutschbohmen, Organ des. Erscheint am 5. und 20. jeden Monats. Prag, 5. Mai 1913. Pp. 176-194. A copy of the "Agricultural Cooperative News" for German-Bohemia, May 5, 1913. Revisions-Protokoll. Pp. 12. Blank forms of various kinds, including forms for creameries, machinery, etc. Satzungen des. Prag, 1912. Pp. 27. Constitution of the central federation of agricultural cooperative societies in Bohemia. Certain aspects of cooperative agriculture in Austria. Vienna, 1913. Pp. 58. Prepared for the commissions. (See Senate Document 214, p. 177.) II. Jahressession des Landtages des Konigreiches Bohmen von Jahre 1908. Bericht des Landesausschusses iiber die Forderung von genossenschaftlichen Unternehmungen, welche die Hebung der Landwirtschaft bezwecken, mit einem Ausweise der diesbeziiglich bis Ende des Jahres 1908 bewilligten Landesbeitrage. Prag, 1910. Pp. 145. Report of the provincial committee concerning the promotion of cooperative enterprises which tend to the advancement of agriculture, together with a statement of the provincial advances which are to be made to the different societies up to the end of 1908. Bericht des Jahr 1909. Prag, 1911. Pp. 146. A similar report and financial statement for the year 1909. Imperial-Royal Agricultural Society of Vienna. Organization and activity. Vienna, 1913. Pp. 121. Pre- pared for the commissions. (See Senate Document 214, p. 203.) K. K. Landwirtschafts-Gesellschaft in Wien. Das arbeitsamt der. Vermittelt Saisonarbeiter und Gesindepersonen aller Kategorien zu jeder Zeit des Jahres. Wien, 1913. Folios 5. Various forms, time schedules, work blanks, etc., for laborers and domestics for use at any time of the 3'ear. AUSTEIA. 33 K. K. Landwirtschafts-Gesellschaft in Wien. ^ Kraftfutterfabrik Bruck a. d. Leitha. Wien, 1913. Pp. 6. Feeding-stuff factory at Bruck. Normal-Milchlieferangs-tfbereinkoromen. Wien, 1908. Pp. 6. Standard milk supply agreement distributed by the Imperial-Royal Agricultural Society. ■ Vermogensaufnahme ftir 31 Dezember, 191 — . Forms and blank books for farm bookkeeping. Questionnaire for cooperative dairies. Prague, 1913. Pp. 6. Vyrocni Zprfi,va Ustr6dni jednoty ceskych hospod&fsk^ch spole6enstev v kr&lovostvl Ceskem, zapsanfiho spoleCanstva s obmezenym ru6enim v Praze, z4 dtm^cty sprfivnl rok 1910. Praze, 1911. Pp. 187. Annual report of the central federation of agricultural societies of the Kingdom of Bohemia, an organization of cooperative societies with limited liability. PRODUCTION. BuTZ, A. Die Entwfissung tiefgriindiger Moore. System des Ingenieurs A. Butz, Vorstand des Meliorations- amtes des Landeskulturrates fiir Karnten zu Klagenfurt. Karnten, 1913. Pp. 9. The deep drainage of moor lands. The system of A. Butz, agricultural engineer and president of the reclamation land improvement ofBce for Carinthia. Raffat, O. R. von. Einiges iiber die Weidewirtschaft. Wien, 1907. Pp. 22. A few suggestions concerning the management of pastures. Landesausschuss des Konigreiches Bohmen. Ausweis uber den Stand der im Grunde des Gesetzes vom 9. AprU, 1873, R.-G.-Bl. No. 70 errichteten Erwerbs- und Wirtschaftsgenossenschaften, welche landwirtschaftlichen Interessen dienen und gemass §14 des Gesetzes vom 10. Juni, 1903, R.-G.-Bl. Nr. 133 der Revision des Landesausschusses des Konig- reiches Bohmen unterstehen. Jahr 1907. Prag, 1909. Pp. 209. Detailed statement for the year 1907 concerning the condition of the purchasing and trading cooperative societies, established on the basis of the law of Apiil 9, 1873, which serve the interests of agrictdture and which conform to section 14 of the law of June 10, 1903, as revised by the provincial committee of the Kingddm of Bohemia. Ausweis fiir das Jahr 1908. Prag, 1910. Pp. 231. Similar report for the year 1908. Ausweiss fur das Jahr 1909. Prag, 1911. Pp. 318. Similar report for the year 1909. Ausweiss fur das Jahr 1910. Prag, 1911. Pp. 314. Similar report for the year 1910. GENERAL. Blazee, Cis-eada Ant. O dru&tevnl organisaci Zemgdelstvi. Praze, 1913. Pp. 39. The agricultural cooperative organizations. Gargas, S. Die osterreichische Auswanderung und die heimische Landwirtschaft. Wien, 1910. Pp. 33. Austrian emigration and agriculture at home. Pakak, a. Uber den Stand der Viehversicherung in Osterreich. Wien, 1910. Pp. 52. Concerning the condition of cattle insurance in Austria. ScHULLEBN VON ScHEATTBNHOFEN, Mr. VON. Government measures for the protection of agriculture. Vienna, 1913. Prepared for the commissions. (See Senate Document 214, p. 201.) Sfegbl, E. Bilder aus Alt-Krems. Seche Photo-Lithographien nach Federzeichnungen. Krems, 1906. Pp. 14. Photo-engravings of ancient Krems with descriptive text. 3158&— S. Doc. 214, 63-1, pt 2 5 34 AGRICULTURAL COOPERATION IN EUROPE. Guide to Vienna, published by the association for promoting the city's interests. Vienna. Pp. 168. Illustrated guide to Prague and to the Kingdom of Bohemia. Prague. Pp. 105. Instruktion fur die osterreichischen Buchstellen. Wien, 1912. Pp. 13. Instructions for bookkeeping. Kralovske Hlavni Mesto Praha, 1911. Pp. 25. A description, with 30 illustrations, of Prague. Presented to the commissions. Nied-Osterreich, Landes-, Wein und Obstbauschule in Krems, Jahresbericht und Programm, und Statut der N.-O. Landes- Winterschule fur Wein und Obstbau in Langenlois fur die Schuljahre 1909, 1910, und 1911. Krems, 1912. Pp. 32. Lower Austria provincial wine and fruit school, annual report and program. Also the consti- tution of the Lower Austria winter school for wine and fruit at Langenlois. Osterreiche Statistik. Band LVI. Ergebnisse der Grundbesitzstatistik in den im Reichsrathe vertretenen Konigreichen und Landern nach dem Stande vom 31. December 1896. Heft 1. Nieder-Osterreich. Wien, 1902. Pp. 79. Hefts. Steiermark. Wien, 1901. Pp. 60. Heft 6. Tirol und Vorarlberg. Wien, 1907. Pp.85. Volume 56 of Austrian statistics. The results of the census of land ownership in the various sections and provinces of the kingdom as ascertained to December 31, 1896. Part 1 on Lower Austria. Part 3 on Steiermark. Part 6 on the Tyrol and Vorarlberg. Band LXXXIII. Ergebnisse der landwirtschaftlichen Betriebszahlung vom 3. Juni 1902 in den im Reichsrate vertretenen Konigreichen und Landern. Nebst Anhang, enthaltend die summarische Daten fur das Reich, die Verwaltungsgebiete und Lander. Heft 2. Bezirksiibersichten fur Nieder- osterreich, Oberosterreich, Salzburg, Steiermark. Wien, 1908. Pp. 99. Heft 3. Bezirksuber- sichten fiir Karnten, Krain, Triest und Gebiet, Gorz und Gradisca, Istrien, Dalmatien, Tirol und Vorarlberg. Wien, 1908. Pp. 108. Volume 83 of Austrian statistics. Results of the agricultural census of June 3, 1902, in the dif- ferent sections and provinces of the kingdom, together with an appendix which presents the summa- rized data for the kingdom, the census districts and the provinces. Part 2 is for Lower Austria, Upper Austria, Salzburg, and Steiermark. Part 3 is for Carinthia, Krain, the city and district. of Triest, Gorz and Gradisca, Istria, Dalmatia, the Tyrol, and Vorarlberg. Band LXXXIII. Ergebnisse der landwirtschaftlichen Betriebszahlung vom 3. Juni 1902 in den im Reichsrate vertretenen Konigreichen und Landern. Heft 4. Bezirksiibersichten fiir Bohmen, Mahren, und Schlesien. Wien, 1907. Pp. 109. Heft 5. Bezirksiibersichten fiir Galizien und die Bukowina. Wien, 1908. Pp. 72. Volume 83 of Austrian statistics. Results of the agricultural census of June 3, 1902, in the dif- ferent sections and provinces of the kingdom. Part 4 is for Bohemia, Mahren, and Silesia. Part 5 is for GaUcia and Bukowina. Band XC. Statistische Nachweisungen iiber das zivilgerichtHche Depositenwesen, die gemeinschaftlichen Waisenkassen und iiber den Geschaftsverkehr der Grundbuchsamter (Veranderungen im Besitz- und Lastenstande) im Jahre 1909. Heft 2. Der "Statistik der Rechtspflege" in den im Reichsrate ver- tretenen Konigreichen und Landern fur das Jahr 1909. Wien, 1911. Pp. 182. Volume 90 of Austrian statistics. Statistical data concerning the movement of civil court deposits, the general orphans bank, and of the business transacted by the land registry office in the year 1909. (Changes in ownership and valuation.) Part 2 contains the statistics for the different sections and provinces of the kingdom for the year 1909. Osterreichisches statistisches Ilandbuch fiir die im Reichsrate vertretenen Konigreiche und Lander. Nebst einem Anhange fiir die gemeinsamen Angelegenheiten der Osterreichisch-Ungaiischen Monarchie. Neunundzwanzigster Jahrgang 1910. Wien, 1911. Pp.484. The Austrian statistical handbook for the diiferent sections and provinces of the Idngdom, together with an appendix containing the total affairs of the Austria-Hungary monarchy. Twenty-ninth yeer 1910. Wien und Umgebung. Eine Auswahl von Stadt- und Landschaf tsbildern. Wien. Pp.211. Vienna and vicinity through a camera, with illustrations and notes. EUSSIA. 35 RUSSIA. CREDIT. Babantsov, M. How the inhabitants of the village of Pokrovski secured money for agriculture. St. Peters- burg, 1910. Pp. 32. BoRODAiEVSKY, S. Handbook of small credit. St. Petersburg, 1909. BosKRESENSKi, B. Where and how to procm-e credit more easily and cheaply. St. Petersburg. Pp. 160. Kbainskt, V. Organization of small credit in Tiu-kestan. St. Petersburg, 1909. Makgoldste, S. O. The Jewish cooperative credit societies. St. Petersburg, 1908. SHAPOSHrNOW, H. T. Concerning rural cooperative banks. Kharkov, 1913. Pp.11. ToHOUPKOW, A. F. Small credit and cooperation. Moscow, 1909. Agricultural credit in Kussia. Pubhcation of the General Management of Agriculture and Agricultural Organi- zation. St. Petersburg, 1910. Annual report of the Kiev Small Credit Association for 1911. Kiev, 1912. Pp. 32. Annual report of the Kiev Small Credit Association for 1912. Kiev, 1913. Pp. 10. Annual report of a savings association. 1913. Annual report of the Peasants' Land Bank. St. Petersburg, 1912. Pp. 89. Condition of small rural credit in the Government of IQev. Pp. 4. Kharkov Agricultiiral Society. A plan for a small cooperative credit society. Kharkov, 1909. Pp. 21. Report on small rural credits for 1908. St. Petersburg, 1912. Pp. 200. — ^ Report on the condition of peasant organizations of small credit. St. Petersburg, 1912. Pp. ,220. Report on the credit institutions. St. Petersburg, 1912. Pp. 335, 175, 13, 13, and 9. The St. Petersburg branch of the .committee on rural credits. Sample charter of the cooperative society. Approved by the minister of finance. September, 1904. Pp. 4. Kharkov land-bank reports for 1910. Pp. 84. ■ Report for 1911. Pp. 92. Report for 1912. Pp. 86. Kharkov Small Credit Society, report for 1911. Kharkov, 1912. Pp. 68. - Report for 1912. Kharkov, 1913. Pp. 67. Kiev Association for Small Credit. By-laws. Charter. Pp. 30. Kiev Small Credit Bank. Balance sheet (typewritten) . Short history (typewritten). Pp. 2. Law of June 7, 1904, on small credit institutioiis. Present condition of small credit in Russia. Publication of the St. Petersburg branch of the committee of the Moscow Agricultural Society for matters in connection with the agricultural loan and savings associa- tions and the industrial associations. St. Petersburg, 1909. Report of the Talnovski Credit Association for 1912. Pp. 15. Short accoimt of credit cooperation in the Government of Kiev. (Typewritten). Pp. 4. Suggestions to members of credit associations. Leaflet. 36 AGEIOULTUEAL COOPERATION IN EUKOPB. DISTRIBUTION. Balakohine, a. The Siberian cooperative butter-making societies. Moscow, 1908* BoBTLBW, D. M. The Zemstvo and cooperation. Peron, 1910. BoEODAiEVSKY, S. Proposcd law on cooperative associations. St. Petersbxirg, 190S. DoBROKOTOV, N. Cooperative selling of grain. Pp. 35. KovALEVSKY, L. T. Coopcration and the Artelle. Moscow, 1908. Krainsky, V. The rural conunune and cooperation. St. Petersburg, 1907. KuPEiANOV, L. P. Cooperation in the French village. Kharkov, 1912. Pp. 16. Makaeow, N. The cooperative movement among the peasants of West Siberia. Moscow, 1910. Manuelow, a. a., et al. Studies in cooperation. Vol. I. Moscow, 1912. Pp. 289. Vol. II. Moscow, 1913. Pp. 563. PoDOLSKi, I. M. Cooperation. Pp. 64. ToTOMiANTS, V. Agricultural cooperation. St. Petersburg, 1908. A digest of practical information for the establishment and management of consumers' societies. Moscow, 1913. Pp. 324. A review of the condition of cooperative institutions in the city and Government of Kiev. Typewritten reports for 1909, 1910, and 1911. Agricultiu-al cooperation in Russia. Reprinted from the "Monographs on Agriculutral Cooperation" issued by the International Institute of Agricultiu-e. (See Senate Document 214, p. 236.) Brief manual of bookkeeping and accoimting in consumers' societies. Kharkov, 1912. Pp. 24. Central office of agriculture. Cooperative dairy industry in the Baltic States. Yekaterinoslav, 1912. Pp. 111. Information about agricultural societies. St. Pertersburg, 1911. Pp. 434. Information about agricultural societies. St. Petersburg, 1912. Pp. 77. List of societies, associations, and other cooperative organizations. St. Petersburg, 1913. Pp. 103. Collection of laws and regulations relating to agricxiltural organization. St. Petersburg, 1908. Constitution of the Kharkov Agricultural and Manufacturing Society. Kiarkov, 1912. Pp. 16. Cooperation for Hebrews, a brief guide. Moscow, 1912. Pp. 232. Kharkov Agricultural Society: A new form of cooperation for supplying the village with electric light. Moscow, 1912. Pp. 38. Account of its exhibit at the Yekaterinoslav Exposition. 1910. Pp. 52. Account of the activity of the seed association. Kharkov, 1912. Pp. 13. Collection of articles on cooperation. Book I, 1912, pp. 15; Book II, 1912, pp. 19; Book III, 1913, pp. 16. Charter of the machine association. Pp. 4. Charter of the society for the sale of dairy products and eggs, feathers, etc. Kharkov, 1913. Pp. 16. Consumers' League of South Russia. Constitution. Kharkov, 1912. Pp. 14. Instructions to organizers of agricultural cooperative societies. Kharkov, 1913. Pp. 24. — — Library of the rural cooperator. Disposal of agricultural products. 1912. Pp. 24. Sample charter for local agricultural societies. Approved May, 1911. Pp. 4. Sample charter for small rural societies. Kharkov, 1909. Pp. 8. Society for the disposal of eggs. Extracts from regulations of similar societies in Finland. Pp. 3. Report of the Volchansk stores of agricultural products. Volchansk, 1912. Pp. G2. RUSSIA. 37 Sample charter of an apiary association. Pp. 4. Sample charter of a flax growers' association. Pp. 7. Sample charter of a poultry association. Pp. 6. Sample charter of the cooperative dairy society. Vologda, 1912. Pp. 6. Southern Russia Agricultural Association's calendar for 1913. Kharkov, 1912. Pp. 306. "The Ant Hill." A weekly cooperative magazine from December, 1912, to May, 1913. The peasants' seed supply. Issued by the agricultural division of the Kiev local government. Kiev, 1913. Pp. 13. PRODUCTION. Chirvinski, N. p. Diseases of sheep. Kiev, 1909. Pp. 303. DusHEOHKiN, A. The results of field experiments of the Russian society of sugar producers. A study of the nutritive substances of the sugar beet. 10th ed. Kiev, 1911. Pp. 90. Frankfurt, S. L. Account of the experiment station of the South Russian Association for the encourage- ment of agriculture. Kiev, 1911. Pp. 11. Culture of the sugar beet. Kiev, 1912. Pp. 86. Results of experiments by the Russian society of sugar producers, connected with the laboratory of the South Russian society for the encouragement of agriculture and rural industry. 3d ed. Kiev, 1905. Pp. 558. Frankfurt, S. M. Object and results of experiments in the culture of the sugar beet. Reprint of articles in the Yearbook of the Department of Agriculture, 1901-1910. 1910. Pp. 57. The chemical station of the South Russian society for the improvement of agriculture, 1901-1910. Pp. 13. UsovsKi, B. Agricultural implements. Kharkov, 1913. Pp. 24. Annual report of the Uman Agricultural Society for 1911. Uman, 1912. Pp. 105. Brief sketch of governmental, local, and cooperative aid to the agricultural population of Russia. Pp. 24 (typewritten) . "Commercial Sheet," May 11, 1913. Pp. 4. "Economic Journal," 1913. Pp.116. Kharkov Agricultural Society : Activities of the society in 1910 and 1911. Kharkov, 1912. Pp. 99. Announcement of its different activities. Catalogue for 1912 and 1913. Pp. 56. Charter of the society of fruit and vegetable growers. Cooperative live-stock insurance. Kharkov, 1913. Pp. 79. Index of books on agricultural and similar subjects. Kharkov, 1913. Pp. 111. Journal of American agency, January to April, 1913. Pedigrees of certain meat cattle in Kharkov. Kharkov, 1913. Pp. 112. Proceedings of the first convention of persons interested in plant industry. Kharkov. Vol. I, pp. 366; Vol. Ill, pp. 43; Vol. rV, pp. 94; Sup., pp. 31. Report of agricultural experiments for 1910-11. Kharkov, 1912. Pp. 113. Report of the division of animal husbandry, 1911-12. Kharkov, 1913. Pp. 19. Report on the feeding of animals by G. Ivanov. Kharkov, 1913. Pp. 33. Results of experiments in the cultivation of potatoes. Kharkov, 1912. Pp. 68. ■ Results of experiments of the Russian society of sugar producers. 18th ed. Kiev, 1912. Pp.98. 38 AGEICULTUBAL COOPEBATION IN EUROPE. Kharkov Agricultural Society: Results of field experiments of the Russian society of sugar producers, by A. K. PhiUippovski. Results of experiments in the cultivation of potatoes, 1905-1911. 20th ed. Kiev, 1912. Pp. 151. Kiev Agricultural Experiment Station: Charter. Pp. 10. — — Organization. Kiev, 1911. Pp.253. List of agricultural societies and other cooperative organizations, issued by the Central Agricultural Office. St. Petersburg, 1913. Pp.103. List of agricultural societies in the Government of Kiev. Pp. 3 (typewritten), Rus'sian Sugar Growers' Association: Detailed study of nutriments. Kiev, 1912. Pp. 77. Laboratory experiments, 1901-1911. Kiev, 1911. Pp.223. Observations on the growth of the sugar beet. Kiev, 1911. Pp. 95. ^r- Program of the activities of the central experiment station for the cultivation of the beet. Kiev, 1912. Pp. 20. Study of cereals harvested. Kiev, 1913. Pp. 32. Study of fertihzers. Kiev, 1911. Pp. 34. Study of fertihzers. Kiev, 1912. Pp. 32. — — Study of the effects of cultivation of the soil on the yield of cereals. Kiev, 1911. Pp. 35. — — Technical study of cereals. Kiev, 1913. Pp. 17. The biology of the sugar beet. Kiev, 1913. Pp. 13. — - — What a farmer should know in order to successfully cultivate sugar beets. Kiev, 1913. Pp. 94. Sample charter of a cooperative implement association. Pp. 6. Sample charter of an agricultural improvement society. Pp. 11. Sample charter of small agricultural societies. Pp. 4. The works of the Kharkov Plant Selective Association. Pp. 16. RURAL LIFE. Yevdokimov, a. a. The use and importance of cooperation for rural societies. The library of the niral cooperator. No. 2. Kharkov, 1912. Pp. 23. A manual of agricultural societies. History and present status of agricultural cooperative societies in Russia and in foreign countries. Kharkov, 1913. Pp. 152. Balance sheets of certain local governments, Jan. 1 and July 1, 1912. Pp. 9 each. Budget of the local government of the county of Volchansk. Volchansk, 1912. Pp. 230. "Housekeeping," a weekly agricultural journal for May 16, 1913. Kiev, 1913. Pp. 42. Map of the Government of Kiev. South Russian Society for Encouraging Agriculture. Annual report. Kiev, 1913. Pp. 6. Charter. Kiev, 1907. Pp. 93. The undertakings of the Kiev local government in aid of cooperation. (Typewritten). GENERAL. Egeet, B. p. The conflict between the United States and Russia. St. Petersburg, 1912. Pp. 50. ToBNATJW, Baron N. Statistical notes on the Russian Empire. St. Petersburg, 1913. Pp. 18. GERMANY. 39 General demographic and economic statistics. Reprinted from "Monographs on Agricultural Cooperation" issued by the International Institute of Agriculture. (See Senate Document 214, p. 234.) "Khliborod," 1913. Pp. 95. "South Russia Agricultural Journal," Feb. 4, 1913. Pp. 27. The local government of Yekaterinoslav. Two articles on agriculture in the United States, Kharkov, 1912. Pp. 79. GERMANY. CREDIT. AuGSBiN, M. Mortgage and other cooperative banlis. Berlin, 1913. Prepared for the commissions. (See Senate Document 214, p. 390.) Bach. Agricultural credit and cooperation in Saxony. Dresden, 1913. Prepared for the commissions. (See Senate Document 214, p. 432.) Beodnitz. The Landschaft system. HaUe, 1913. Prepared for the commissions. (See Senate Document 214, p. 354.) BuBCHARD-BiiTzow. Fordcrung und Nutzbarmachung des Sparsinns durch die Raiffeisen-Vereine. Neuwied. Pp. 20. The promotion and profitable employment of savings through the Raifl^eisen societies. BussEN et al. Savings and loan banks and the provincial cooperative bank. (In the document on " Informa- tion with regard to the system of Hanover agricultural associations.") Hanover, 1913. Pp. 11-19. Prepared for the commissions. Cetto-Reichertshausen, Baron von. The nature of real-estate credit in Bavaria. Munich, 1913. Pp. 4. Prepared for the commissions. (See Senate Document 214, p. 267.) Eucken-Addenhausen, G. von. Die Raifleisenschen Spar- und Darlehnskassen-Vereine segensreiche Werk- statten christHcher Nachstenhebe. Neuwied, 1909. Pp. 18. The Raiffeisen savings and loan banks. Etermann. The savings and loan banks of the Nassau union of rural cooperative societies, the financial and market division of the Raiffeisen union, and the agricultural central credit bank, Frankfurt-on-the- Main. Frankfurt, 1913. Pp. 11. Prepared for the commissions. Fricke, a. German savings and loan banks. Hanover, 1913. Prepared for the commissions. (See Senate Document 214, p. 445.) Geauee, K. Fiinf Jahre Raiflfeisenarbeit des Spar- und Darlehnskassen-Vereins Grossbademeusel bei Forst. Berhn, 1910. Pp. 8. Five years of work of the Raiffeisen savings and loan society of Grossbademeusel. GuTSTADT, Baron von. The Landschaft of the Province of Saxony. HaUe, 1913. Prepared for the com- missions. (See Senate Document 214, p. 363.) Haecker, R. The supplying of agricultural credit in the Grand Duchy of Baden. Baden, 1913. Pp. 4. Prepared for the commissions. (See Senate Document 214, k. 302.) Hartmann. Prussian central cooperative bank. Berhn, 1913. Prepared for the commissions. (See Senate Document 214, p. 415.) Heeman-Schorn, Baron von. Agricultural credit, short-term credit, cooperative societies, insurance, council of agriculture. Munich, 1913. Pp. 4. Prepared for the commissions. (See Senate Docmnent 214, p. 270.) 40 AGRICULTUBAL COOPERATION IN EUROPE. Kapp. Lecture on the organization of the Prussian Landschaften (land-mortgage credit) and public life insur- ance, delivered before the commissions June 19, 1913. Berlin, 1913. Pp. 24. (See Senate Docu- ment 214, p. 381.) Koth-Wanscheid, D. von. Sind die landlichen Spar- und Darlehnskassen-Vereine nach Raiffeisenschem System besser als andere Genossenschaften und Kassen? Berlin, 1911. Pp. 16. Are the rural savings and loan bdnks of the Raiffeisen type better than other societies and banks t Paab zu Schonatj, Baron R. von. The Bavarian Central Cooperative Bank. Munich, 1913. Pp. 5. Pre- pared for the commissions. (See Senate Document 214, p. 273.) Petersilie, E. Sparkasse des Kxeises Teltow von 1858-1908. Auf Anregung des Kreisausschusses verfasst. Berlin, 1908. Pp. 106. History, statistics, constitution, etc., of the savings bank of the district of Teltow from 1858-1908. Remt, a. Das Hypothekenrecht fur den Landmann, vornehmlich die Spar- und Darlehnskassen-Vereine. Berlin, 1911. Pp. 201. The mortgage rights of peasant farmers, especially the savings and loan bank societies. Schick. Die Darlehnskassen-Vereine in ihrer wirtschaftUchen, sozialen und sittlichen Bedeutung. Neuwied, 1895. Pp. 21. Lecture by Mr. Schick on the economic, social, and moral aspects of savings banks. Schlesingee, a. Mortgage credit in Bavaria. Munich, 1913. Prepared for the commissions. (See Senate Document 214, p. 276.) Seitz, Mr. von. Credit imion of Wurttemberg. Stuttgart, 1913. Prepared for the commissions. (See Senate Document 214, p. 300.) Sell, P. R. Gtlterhandel und Giiterschlachterei. Berlin, 1910. Pp. 158. The buying, selUng, and foreclosure of estates. Skinnee, R. p. German financial methods. Hamburg, 1913. Prepared for the commissions. (See Senate Document 214, p. 438.) Spare, K. Wegweiser ftir die Geschaftsfiihrung der landlichen Spar- und Darlehnskassen. Stettin, 1913. Pp. 239. Directions for the business management of rural savings and loan banks. Spretti, Count. Bavarian savings banks. Munich, 1913. Prepared for the commissions. (See Senate Document 214, p. 284.) Steiqer, H. Central bank of the national associations. Hanover, 1913. Prepared for the commissions. (See Senate Document 214, p. 445.) Wegener. Prussian central land credit joint-stock company. Berlin, 1913. Prepared for the commissions. (See Senate Document 214, p. 404.) Wolf. Land mortgage bank of the Rhine. Mannheim, 1913. Prepared for the commissions. (See Senate Document 214, p. 322.) Allgemeine Borsen-Zeitung. Berlin, 1. Juni 1913. Pp. 4. A copy of the "Exchange Times" for June 1, 1913. Bavarian agricultural bank. History and constitution. Munich, 1913. Pp. 11. Prepared for the com- missions. Bavarian savings banks. Munich, 1912. Pp. 12. Prepared for the commissions. Bayerischen Hypotheken- und Wechsel-Bank. Revidiertes Statut der, nach Beschluss der Generalversammlung vom 3. Marz 1913. Munich, 1913. Pp. 19. Revised constitution of the Bavarian mortgage and note bank, adopted at the close of the general assembly of March 3, 1913. GERMANY. 41 Bayerischen Hypotheken- und Wechsel-Bank. Siebenundsiebzigster Recbenscbafts-Bericht der Verwaltung der, fiir das Gescbaftsjabr 1912. Municb, 1913. Pp. 47. Annual report and financial statement of tbe Bavarian mortgage and note bank for 1912. Bayeriscben Landesverband landwirtschaftlicbe Darlebenskassenvereine und sonstiger landwirtscbaftliche Genossenscbaften mit unbescbrankter Haftung (e. V.) und der Bayeriscben Zentral-Darlebenskasse in Miinchen. Was muss der Landwirt von einem Darlebenskassenverein wissen'< Municb, 1912. Pp. 24. Wbat sbould tbe farmer know about a loan bank society? Issued by tbe Bavarian provincial association of loan bank societies and tbe Bavarian central loan bank in Municb. Bayeriscben Landwirtscbaftsbank. Reglement fiir das Hypotbekengescbaft der. Municb, J900. Pp. 22. Rules for tbe mortgage division of tbe Bavarian agricultural bank. Statut der. Municb, 1909. Pp. 15. Constitution of tbe Bavarian agricultural bank. Prepared for the commissions. Befriedigung des landwirtscbaftlicben Realkredits in Bayern durch die bayeriscben Aktienbypotbekenbanken. Municb, 1913. Pp. 20. Tbe mobilization of agricultural land credit in Bavaria tbrougb tbe Bavarian joint-stock banks. Prepared for tbe commissions. Bericht uber die Landesgenossenscbaftsbank fiir Brandenburg, Pommern und Mecklenburg (eingetragene Genos- senscbaft mit bescbrankter Haftpflicbt), Berlin, fiir das Gescbaftsjabr 1912. Neuwied, 1913. Pp. 7. Report of tbe State cooperative bank for Brandenburg, Pomerania, and Mecklenburg (society witb limited liabiUty) for tbe year 1912. Das landwirtscbaftlicbe Genossenscbaftswesen in Bayern. Miincben, 1913. Pp. 11. Tbe agricultural cooperative movement in Bavaria. Deutscbe Bauernbank fiir Westpreussen (Gesellscbaft mit bescbrankter Haftung). Giro-Konto. Danzig, Juni 1912. Pp. 2. Statement of tbe German farmers' bank of West Prussia, a society witb limited liabiUty, for 1912. Nacbweisung V, der durcb Vermittelung der, zu Danzig im Besitz gefestigten bauerUcben Grundstiicke und grosseren Giiter. Abgescblossen am 31. Marz 1912. Danzig, 1912. Pp. 89. Tbe transactions of a limited liability society at Danzig in possession of small boldings and large farms. Die bayeriscbe Landwirtscbafts-Bank. Munich, 1913. Pp.11. Tbe Bavarian farmers' bank. Prepared for the commissions. Die bayeriscbe Zentral-Darlehnskasse. Munich, 1913. Pp. 15. Tbe Bavarian central loan bank. Prepared for tbe commissions. Die bayeriscben Sparkassen. Municb, 1913. Pp. 12. Tbe Bavarian savings bank. Prepared for the commissions. Generalverband landlicber Genossenscbaften fiir Deutscbland. Anleitung zur Gescbafts- und Buchf iibrung der Raiffeisenschen Spar- und Darlebnskassen-Vereine. Berlin, 1913. Pp. 431. Instructions for the business management and tbe bookkeeping of the Raifleisen savings and loan societies. . Kleine Anleitung zur Geschaftsfiihrer der Raiffeisen-Vereine. Berlin, 1913. Pp. 296. Brief instructions for the management of Raiffeisen societies. Geschaftsbericbt des Vorstandes der landwirtscbaftlicben Zentral-Darlehnskassen fur Deutscbland, zu Berlin, fiir die Zeit vom 1. Januar bis 31. Dezember 1912. Neuwied, May 14, 1913. Pp. 27. Journal of the rural societies. Annual report of tbe agricultural central loan bank of Germany. 31589— S. Doc. 214, 63-1, pt 2 6 42 AGRICULTURAL COOPERATION IN EUROPE. Holzweiler-Ringener Darlehnskassen-Vereins, Statut des. Eingetragene Genossenschaft mit unbeschrankter Haftpflicht. Ahrweiler, 1892. Pp. 24. Constitution of the Holzweiler-Ringener loan society, a registered society with unlimited liabihty. Jahresbericht der Direktion der Nassauischen Landesbank iiber die Verwaltung und die Geschaftsergebnisse der Nassauischen Landesbank und der Nassauischen Sparkasse im Jahre 1912. Wiesbaden, 1913. Annual report of the directors of the Nassau provincial bank concemiag the management and business of the bank and of the Nassau savings bank in 1912. Jahreeberichte des Verbands landwirtschaftlicher GenossenSchaften ia Wiirttemberg e. V., seiner Kaufstelle und der landwirtschaftUchen Genossenschaftszentralkasse. Statistik 1911. Stuttgart, 1913. Pp.57. Annual report of the association of agricultural cooperative societies in Wurttemberg, its stores, and of the central agricultural cooperative banks. Statistics for 1911. Kur- und Neumarkischen Ritterschafthchen und des Neuen Brandenburgischen Kredit-Instituts nach dem Stande vom 31. Dezember 1912. Berhn, 1913. P. 1. Statement of business and resources of the new Brandenburg credit institute to December 31, 1912. Landlichen Kreditvereins Sparhausen, Statut des. Eingetragene Genossenschaft mit unbeschrankter Haftung. Ausgabe 1905. Karlsruhe, 1913. Pp. 24. A model constitution of an agricultural credit society and savings bank with unlimited liability. LandHchen Spar- und Darlehnskasse zu Niemberg, Statut der. Eingetragene Genossenschaft mit beschrankter Haftung. Pp. 12. A model constitution for rural savings and loan banks with limited liabihty affiliated with the association of agricultural cooperative societies of the Province of Saxony. Landschaft der Provinz Sachsen. Bericht der Direktion der, iiber die Geschaftsergebnisse der landschaftlichen Bank der Provinz Sachsen im Geschaftsjahr 1912. Halle, 1913. Pp. 8. Report of the directors of the land mortgage bank of Saxony for the year 1912. Die Beleihung des landhchen Grundbesitzes durch die. Halle. Pp. 4. Investment in rural holdings through the land mortgage system of Saxony. Neue Satzungen der. Halle, 1912. Pp. 36. New constitution of the land mortgage bank of the Province of Saxony. Rechenschaftsbericht des Ausschusses der, iiber das Geschaftsjahr 1912. Halle, 1913. Pp. 6. Financial report of the committee of management of the Saxony land mortgage bank for 1912. LandschaftUchen Bank der Provinz Sachsen, Statut der. Halle, 1912. Pp. 19. Constitution of the agricultural bank of Saxony. Landwirtschaftlichen Zentral-Darlehnskasse f iir Deutschland. Bericht iiber das Jahr 1912. Neuwied, 1913. Pp. 5. Report of the German central agricultural loan bank for 1912 Satzungen der. Neuwied, 1912. Pp. 15. Constitution of the German central agricultural loan bank. Nassau Raiffeisen Messenger, No. 10, 15th year. Semimonthly rural paper. Business report of the central rural savings bank of Germany for 1912. Frankfort, May 17, 1913. Pp. 8. Pommersche Landesgenossenschaftskasse zu Stettin. Geschaftsbericht fiir 1912. Stettin, 1913. Pp. 12. The report of the Pomeranian provincial cooperative bank at Stettin for 1912. . The character and work of the bank. Typewritten statement prepared for the commissions. Stettin, 1913. Pp. 4. GERMANY. 43 Preussische Central Bodenkredit Aktiengesellschaft in Berlin. Anweisung liber die Werthermittelung fur die hypothekarischen Beleihungen der. Berlin. Pp. 16. Instructions concerning the valuation of mortgage investments by the Prussian central land credit joint-stock company. Jahres Bericht 1870-1894. Berlin. Pp. 39. Keport on the business of the company for the years 1870-1894. Jahres Berichte 1895-1912. Berlin. Pp. 448. Reports for each year from 1895-1912. Statistical review of its development, prepared for the commissions. Berlin, 1913. Pp. 7. Statut der. Fassung von 1910. Berlin. Pp. 26. Constitution of the above society adopted in 1910. Preussische Central-Genossenschaf ts-Kasse . Bericht iiber das XVIII. Geschaftsjahr vom 1. April 1912 bis 31. Marz 1913. (Etatsjahr 1912.) Ber- Hn, 1913. Pp. 77. Report of the Prussian central cooperative bank for the 18th business year, April 1, 1912, to March 31, 1913. Statut. BerUn. Pp. 27. Constitution and historical notes of the Prussian central cooperative bank. Reichsverband der Deutschen landwirtschaftlichen Genossenschaften in Darmstadt. Statut der Spar- und Darlehnskasse (eingetragene GenossenschaftmitunbeschrankterHaftung). Darmstadt, 1910. Pp.11. Model constitution of a savings and loan bank (a registered society with unhmited UabUity) that would affihate with the imperial association of German agricultural cooperative societies in Darmstadt. Spar- imd Darlehnskassen-Vereins (eingetragene Genossenschaft mit unbeschrankter Haftung), Satzung des. Pp. 28. A sample constitution of an unlimited liabihty savings and loan bank. Spar- und Darlehnskassen-Vereins (eingetragene Genossenschaft mit unbeschrankter Haftung) zu Dossenheim. Rechnung und Bilanz des, ftir das Jahr 1913. Pp. 4. Statement of the income and expenditures of the Dossenheim unhmited habihty savings and loan bank for 1913, copied for the commission during a visit to the bank. - — Satzung des. Dossenheim, 1913. Pp. 19. Constitution of the Dossenheim savings and loan bank. Schuldurkunde uber ein Darlehen auf langerer Frist (2 Jahre und dariiber) mit Abzahlung in jahrlich gleichen Kapitalraten gegen Hypothek und Burgschaft. Neuwied. Pp. 3. Blank form for a long-time loan (two years or more), with repayment in annual installments against a mortgage and guaranty. Spar- und Kreditverein Baden-Lichtental (eingetragene Genossenschaft mit unbeschrankter Haftung). Ge- schafts-Bericht uber das Jahr 1912, 33. Geschaftsjahr. Baden-Lichtental, 1913. Pp. 12. Annual report for 1912 of the savings and credit society of Baden-Lichtental, a registered cooper- ative society with unUmited habihty. Sparkasse des Kreises Teltow in Berlin. AusfuhruAgsbestimmungen betreffend Nebenstellen und Nebenkassen. Berlin, 1911. Pp. 30. Definite information concerning the forms and entries of the savings bank of the Teltow district of Berlin. . Bedingungen fiir die Vermietung von eisemen Schrankfachem in der Stahlkammer der. Berlin, 1912. Pp. 8. Regulations for the rental of safety deposit boxes in the Teltow savmgs bank. Darstellung der Einrichtungen der. Verbuchung der Sparemlagen und Zinsen sowie iiber die Ftihrung der Tages-, Monats- und Jahres-kontrollen. BerUn, 1909. Pp. 23. A plan of entry for savings and interest as arranged by the savings bank of the Teltow district, Berlin. 44 AGBICULTUBAL COOPERATION' IN EUROPE. Sparkasse des Kreises Teltow in Berlin. Geschaftsbericht fiir das Kalendarjahr 1912. 55. Geschaftsjahr. Berlin, 1913. Pp. 23. Fifty-fifth annual report of the savings and loan bank of the Teltow district, Berlin. Satzung. Berlin. Pp. 17. Constitution of the savings bank of the Teltow district, Berlin. The savings bank of the Teltow district at BerHn. Prepared for the commissions. Berlin, 1913. Pp. 7. (See Senate Document 214, p. 419.) Staatliche Kreditanstalt des Herzogtums Oldenburg. Anhang zu den Vorschriften fur die. Oldenburg, 1912. Pp. 16. Appendix to the report of the State credit institute of the Duchy of Oldenburg. Anstaltsgesetz. Ausfuhrungsbestimmungen zum Anstaltsgesetze. Geschaftsordnung. Oldenburg, 1912. Pp. 45. Law establishing the institute. Additional regulations for the execution of the law. Business rules of the institute. Geschafts-Bericht fiir das Jahr 1912. Oldenburg, 1913. Pp. 19. Annual business report for 1912. Schuldbuchgesetz. Ausfuhrungsbestimmungen zum Schuldbuchgesetz. Oldenburg, 1913. Pp. 23. Law authorizing a register for recording indebtedness. Statut des Darlehnskassenvereins. Stuttgart, 1912. Pp. 16. A model constitution for loan banks. The organization of cooperation for credit, for supply and sale of goods, and for united action on Raiffeisen principles. Issued by the general union of rural cooperative societies for Germany. Berlin, 1913. Pp. 14. Prepared for the commissions. Verband der landwirtschaftlichen Kreditgenossenschaften im Grossherzogtum Baden. Rechenschaftsbericht fiir das Geschaftsjahr 1912. Sonder-abdruck fiir die studienkommission der amerikanischen Land- wirte anlasslich des Besuchs am 6. Juni 1913. Karlsruhe, 1913. Pp. 16. Federation of agricultural cooperative societies of Baden. Financial statement for 1912. Spe- cial edition presented to the commissions on the day of their visit, June 6, 1913. Verband landlicher Genossenschaften fur Elsass-Lothringen, eingetragener Vereia zu Strassburg. Jahres- bericht 1912. Filiale Strassburg der landwirtschaftlichen Zentral-Darlehnskasse fiir Deutschland und der Elsass-Lothringer Genossenschaftsbank. Neuwied, 1913. Pp. 43. Annual report for 1912 of the Alsace-Lorraine association of rural cooperative societies. The Strassbiu-g branch of the agricultural central loan bank of Germany and of the Alsace-Lorraine cooperative bank. Verband landlicher Genossenschaften Raiffeisenscher Organisation in Nassau, Frankfurt-am-Main. Frank- furt, 1913. Pp. 11. The Nassau union of rural cooperative societies of the Raiffeisen type. Prepared for the commissions. Verband landwirtschaftlicher Genossenschaften in Wiirttemberg. Anlietung zm- Geschaftsfiihrung der Darlehenskassen-Vereine. Stuttgart, 1908. Pp. 96. Information for the business management of savings banks affiliated with the association of agricultural cooperative societies in Wurttemberg. Vorschuss-Verein zu Wiesbaden. Alphabetisches Verzeichnis der Vereins-Mitglieder nach dem Stande vom 1. Januar 1913. Wiesbaden, 1913. Pp. 230. Alphabetical list of members of the loan society of Wiesbaden to January 1, 1913. Geschafts-Bericht fiir das Jahr 1912. Wiesbaden, 1913. Pp. 28. Annual report of the loan society of Wiesbaden for 1912. GEEMANY. 45 DISTRIBUTION. Bach, F. Vortrage iiber das landwirtschaftliche Genossenschaftswesen, bei dem teckniscli-wirtscliaftlicheii Lehrgang fur Verwaltimgs- und Justizbeamte im Monat Marz 1912 zu Dresden. Dresden, 1912. Pp. 77. Dissertation concerning the agrictJtural cooperative movement delivered by Ferdinand Bach at Dresden in March, 1912. Bahbe. Das landwirtschaftliche Genossonschaftswesen in Wurttemberg. Stuttgart, 1913. Pp. 12. The agricultural cooperative system in Wurttemberg. Prepared for the commissions. Rural cooperative system in Wiu-ttemberg. Stuttgart, 1913. Pp. 10. A translation of the above paper. Prepared for the commissions. (See Senate Document 214, p. 290.) BuoHBUCHER, A. Aulcitung fiir eingetragene Genossenschaften zum Verkehr mit dem Registergericht. Neu- wied, 1906. Pp. 227. Instructions for cooperative societies for purchase and sale registered with the court. The organization of cooperation for credit, for supply and sale of goods, and for united action on Raiffeisen principles. Prepared for the commissions. Berlin, 1913. Pp. 14. (See Senate Document 214, p. 400.) BuKMEiSTEE. Bericht des Verbandes landlicher Genossenschaften Raiffeisenscher Organisation fiir Branden- burg, Pommern imd beide Mecklenbiirg, e. V., zu Berlin fiir das Jahr 1912. Neuwied, 1913. Pp. 54. Report of the rural cooperative association belonging to the Raiffeisen organization for Branden- biu-g, Pomerania and the two Mecklenburgs for the year 1912. BiJsiNG, R. Neuerungen in der Molkerei Striickhausen. Hildesheim. Pp. 8. Innovations introduced into the Striickhausen creamery. BussEN et al. Information with regard to the system of Hanover agricultural associations. Hanover, 1913. Pp. 19. Prepared for the commissions. (See Senate Document 214, p. 440.) Eyermann. The Nassau union of rural cooperative societies of the Raiffeisen type. Frankfort, 1913. Pp. 11. Prepared for the commissions. (See Senate Document 214, p. 329.) Feeoh. Die Badische Bauem-Vereins-Organisation. Bibliothek des Badische Bauem-Vereins, Stilck 17. Baden Baden, 1913. Pp. 23. An account of the Baden organization of peasant societies by Mr. Freeh, the agricultural teacher and business manager of the Baden farmers' union. Grabein, Dr. Cooperative organization. Frankfort, 1913. Prepared for the commissions. (See Senate Document 214, p. 327.) Heeman-Schoen, Baron von. Cooperation in Bavaria. Munich, 1913. Prepared for the commissions. (See Senate Document 214, p. 270.) Landees and Goede. The chamber of agriculture at Halle. Halle, 1913. Prepared for the commissions. (See Senate Document 214, pp. 367, 370.) Meyenschein, p. a. Die landlichen Genossenschaften im Kampfe mit der wirtschaftlichen Not. Neuwied, 1898. Pp. 14. The rural cooperative societies in conflict with economic necessity. WuTTiG A. Friedrich Wilhelm Raiffeisen und die nach ihm genannten landUchen Darlehnskassen-Vereine. Neuwied. Pp. 84. Frederick William Raiffeisen and the rural loan societies named after him. Agricultural cooperation in the Kingdom of Saxony. Dresden, 1913. Prepared for the commissions. (See Senate Document 214, p. 429.) Central association of agricultural societies of Alsace-Lorraine. By-laws. Strassburg, 1913. (See Senate Document 214, p. 312.) Central-Genossenschaft HaUe-a.-S. Zweiundzwanzigstes Geschaftsjahr 1. Juli 1911 bis 30. Juni 1912. Halle, 1912. Pp. 55. Twenty-second annual report of the central cooperative society at Halle, from July 1, 1911, to June 30, 1912. 46 AGEICTJLTUBAL COOPEEATION IN EUBOPE. Das landwirtschaftliche Vereinswesen in Bayern. Munich, 1913. Pp. 13. The system of agricultural cooperative societies in Bavaria. Prepared for the commissions. Der Molkerei-Verband der Provinz Pommern zu Stettin. . Jahrbuch fiir 1911. Stettin, 1912. Pp. 51. Yearbook for 1911 of the creamery association of the Province of Pomerania. Seine Einrichtungen und En twickelung. Stettin, 1911. Pp.18. The establishment and development of the Pomerania creamery association. Deutsche Landwirtschafts-Gesellschaft. Bezug der Schriften seitens der Mitglieder. BerUn. Pp. 15. List of publications by members of the German agricultural society. Die Leitung der, vom 1. Oktober 1912 bis 30. September 1913. Berlin, 1913. Pp. 32. The management of the German agricultural society from Oct. 1, 1912, to Sept. 30, 1913. Fiihrer, 26. Wander-Ausstellung und 28. Wander-Versammlung zu Strassburg i. Elsass, vom. 5. bis 10. Juni 1913. Berlin, 1913. Pp. 190. Guide to the 26th annual exhibition and 28th general assembly of the German agricultural society at Strassburg, June 5-10, 1913. Grundgesetz, Geschaftsordnung und Grundregeln fiir Abteilungen und GeschaftsteUen. Berlin, 1913. Pp. 49. Constitution, business management, and regulations for divisions and business establishments of the German agricultural society. Jahrbuch 1913. Berlin, 1913. Pp. 331. Yearbook of the German agricultural society for 1913. Werden und Wirken. Mitgeteilt vom Vorstande. Berlin, 1912. Pp. 38. Report of the president concerning the condition and work of the German agricultural society. 70. Hauptversammlung (zugleich Festsitzung zur Feier des Regierungs-jubilaums S. M. des Kaisers), am Freitag, dem 6. Juni 1913. Jahresbericht fur 1912. Berlin, 1913. Pp. 35. Seventieth convention, held by the German agricultural society in connection with the Emperor's jubilee, on June 6, 1913, and the annual report for 1912. Die landwirtschaftliche Genossenschaften auf der Gewerbe-, Industrie-, und Landwirtschafts-Ausstellung Koslin, 22. Mai bis 11. August 1912. Stettin, 1912. Pp. 48. The agricultural cooperative societies' exposition at Koslin for trade, industry, and agriculture from May 22 to August 11, 1912. Garantie-Vereinigung Oldenburger Molkerei-Genossenschaft. Bremen. Pp. 8. The guaranty union of Oldenburg cooperative creameries. Generalverband landlicher Genossenschaften fiir Deutschland. Die Raiffeisen-Organisation. Neuwied, 1912. Pp. 30. The Raiffeisen organization, published by the federation of German rural cooperative societies at Neuwied. Jahresbericht fiir 1912. Neuwied, 1913. Pp. 200. Annual report of the German federation of rural cooperative societies for 1912. Jahresbericht 1912 fiir Brandenburg, Pommern und beide Mecklenburg e. V., der landwirtschafthchen- Zentral Darlehnskasse fiir Deutschland im Verbandesbezirk Berlin, der Handelsgeschaft landlicher Genossenschaften, Aktiengesellschaft, und der Landesgenossenschaftsbank fiir Brandenburg, Pom- mern, Mecklenburg. Neuwied, 1913. Pp. 112. The German federation of agricultural cooperative societies. Annual report for 1912 for Branden- burg, Pomerania and the two Mecklenburgs, and reports of the central agricultural loan bank of Ger- many in the Berlin district, of the agricultural trading cooperative societies, joint-stock companies, and of the State cooperative bank for Brandenburg, Pomerania, and Mecklenburg. Kleine Anleitung zur Geschaftsfiihrung der Raiffeisen-Vereine. Berlin, 1913. Pp. 296. Brief instructions for the business management of Raiffeisen societies. GERMANY. 47 Generalverband lundlicher Genossenschaften fiir Deutschland. Landwirtschaftliches Genossenschaftsblatt. Hauptblatt der Raiffeisen-Organisation. Neuwied, 14. Mai 1913. Pp. 32. Copy of the "Journal of Agricultural Cooperation," being the official paper of the Raiffeisen societies. Geschaftsbericht der Handelsgesellschaft landlicher Genossenschaften, Aktiengesellschaft zu Berlin iiber das 3. Geschaftsjahr vom 1. Januar 1902 bis 31. Dezember 1912. Neuwied, 1913. Pp. 31. Report for 1912 of the Berlin rural cooperative joint-stock trading society. Gewidmet vom Verband pommerscher landwirtschaftlicher Genossenschaften von 1892-1908 und Molkerei- Verband der Provinz Ponunern von 1890-1908. Stettin, 1909. Pp. 38. An illustrated text of the development of the Pomeranian association of agricultural cooperative societies from 1892 to 1908, and of the creamery association from 1890 to 1908. Imperial federation of German agricultural cooperative societies at Darmstadt. Darmstadt, 1913. Pp. 11. Prepared for the commissions. (See Senate Document 214, p. 323.) Jahresbericht des Reichsverbandes der deutschen landwirtschaftHchen Genossenschaften im Jahre 1912. Neuwied, 1913. Pp. 15. Annual report for 1912 of the imperial federation of German agricultural cooperative societies. Lagerhausgenossenschaft, Satzung der, eingetragene Genossenschaft mit beschrankter Haftung. Strassburg, 1913. Pp. 11. Constitution of a cooperative storehouse society with hmited liability. Molkerei-Genossenschaft Striickhausen im Grossherzogtum Oldenburg. Striickhausen, 1900. Pp. 29. An illustrated descriptive account of the cooperative creamery at Striickhausen in the Duchy of Oldenburg. Geschafts-Bericht ftir das Jahr 1909 und Rtickblicke aufdas erste Vierteljahrhundert des Bestehens. Oldenburg. Pp. 20. Annual report for 1909 and a review of the first 25 years of existence of the Striickhausen coop- erative creamery. Geschafts-Bericht fiir das Jahr 1912. Oldenburg, 1913. Pp. 7. Similar report for 1912. Zum Besuch der Herren Molkerei-Instruktoren gelegenthch des 22. deutschen landwirtschaftUchen Gen- ossenschafttages in 01(;ienburg i. Gr. am 16. bis 18. August, 1906. Struckhausen, 1906. Pp. 11. Descriptive text presented on the visit of the creamery instructors at the twenty-second agri- cultural cooperative congress in Oldenburg, August 16-18, 1906. Nassauer RaifiFeisen-Bote. Frankfurt-am-Main, 17 Mai 1913. Pp. 8. Copy of the "Nassau Raifi'eisen News," May 17, 1913, a semimonthly paper devoted to coop- eration. Reichsverband der deutschen landwirtschaftliche Genossenschaften in Darmstadt. Empfehlenswerte genossenschafthche Schriften. Darmstadt, 1913. Pp. 3. List of pubHcations of the imperial association of German agricultural cooperative societies in Darmstadt. Kurze statistiche Unterlagen. Darmstadt, 1913. Pp. 2. A short statistical statement of the imperial association of German agricultural cooperative societies. Sample statutes of the union of rural cooperative associations of the Province of Saxony, etc. Registered cooperative society with hmited habihty. Halle, 1913. Spiritus-Zentrale. Genossenschaft mit beschrankter Haftung. Beriin, 1913. Pp. 12. The nature and the organization of the Spiritus-Zentrale, a cooperative society with limited hability. Uber Wesen und Organisation der Spiritus-Zentrale. Berlin, 1913. Pp. 12. The above account in German, prepared for the commissions. 48 AGEICULTUBAL COOPERATION IN EUROPE. "The Farmers' Union." Appears Saturdays with a monthly illustrated edition. In issue of March 1, 1913, is the report of the board of directors. Berlin, 1913. Pp. 7. Verband der landwirtschaftlichen Genossenschaf ten der Provinz Brandenburg. Jahres-Bericht fur 1910. Berhn, 1911. Pp. 62. Annual report for 1910 of the association of agricultural cooperative societies of the Province of Brandenburg. Jahres-Bericht fiir 1911. Berhn, 1912. Pp. 43. Annual report of the above association for 1911. Verband der landwirtschaftlichen Genossenschaften der Provinz Sachsen und der angrenzenden Staaten zu Halle. Statut der landhchen Spar- und Darlehnskasse Niemberg, eingetragene Genossenschaft mit beschrankter Haftung, zu Niemberg. Halle, 1913. Pp. 12. Federation of agricultural cooperative societies of Saxony. Statutes of the limited liabiUty savings arid loan bank of Niemberg. Verband der Rheinpreussischen landwirtschaftliche Genossenschaften, eingetragener Verein zu Bonn, Satzung fur den. Bonn. Pp. 15. Constitution of the Rhine-Prussian association of agricultural cooperative societies, a registered society at Bonn. Verband hannoverscher landwirtschaftlicher Genossenschaften, eingetragener Verein zu Hannover, Jahres- bericht des. Erstattet auf dem 24. ordentlichen Verbandstage am 28. Mai 1913 in Hannover vom Verbandsdirektor. Hannover, 1913. Pp. 20. Annual report of the Hanover association of agricultural cooperative societies, presented to the twenty-fourth general assembly held at Hanover May 28, 1913. Verband landlicher Genossenschaften Raiffeisenscher Organisation in Nassau zu Frankfurt, Satzung fur den. Limburg, 1905. Pp. 14. Constitution of the Frankfurt society affiliated with the Nassau federation of rural cooperative societies of the Raiffeisen type. Verband pommerscher landwirtschaftlicher Genossenschaften zu Stettin. Jahrbuch fiir 1911. Stettin, 1912. Pp.87. Yearbook for 1911 of the association of agricultural cooperative societies of Pomerania. Jahresbericht fiir das Zeit vom 1. Januar bis 31. Dezember 1912. Stettin, 1913. Pp. 18. Annual report of the above association for 1912. Verwaltungsbericht des Vieh- und Schlachthofs der Stadt Stuttgart fiir das Jahr 1911. Stuttgart, 19 13. Pp. 22. Report for 1911 of the management of the cattle market and slaughterhouse of Stuttgart. PRODUCTION. Dbttmers, H. G. Den Herrenehmern der Reise Teiln-Gesellschaft erlaubt sich der Milchkontrollverein Roden- kirchen im Oldenburg, bei Gelegenheit des Aufenthaltes in Rodenkirchen eine Anzahl Milchkontroll- vereinskiihe vorzufiihren. Oldenburg, 1913. Pp. 8. Records of a number of cows as determined at the milk control station at Rodenkirchen in Olden- burg. Fischer G. Die Entwicklung des landwirtschaftlichen Machinenwesens wahrend der letzten 25 Jahre. Machinen Zeitung, Berlin, 15. Juni 1913. Pp. 10. The development of agricultural machinery during the last 25 years. Article in the "Machinery Journal" for June 15, 1913. Haag H. R. von. Das bayerische Gesetz betreffend die Landeskultur-Rentenanstalt vom 21. April 1884 und 24. Marz 1908. Miinchen, 1911. Pp. 205. The Bavarian law concerning the State improvement institution of April 21, 1884, and March 24, 1908. GEBMANY. 49 LiBEKB, E., and Inkster, W. The potash supply with special reference to the United States. Berlin, 1913. Pp. 59. Prepared for the commissions. Eabb. Kritische Beleuchtung der historischen Entwicklung der landwirtschaftlichen Interessenvertretung in Preussen unter besonderer Berucksichtigung der Landwirtschaftskammer fiir die Provinz Sachsen. Mtinchen. Pp. 21. A critical exposition of the historical development of the interests devoted to agricultural pro- duction in Prussia with especial reference to the chamber of agriculture of the Province of Saxony. Spoettle, Prof., and Brand, Dr. Eoyal land improvement institute of Bavaria. Munich, 1913. Prepared for the commissions. (See Senate Dociiment 214, pp. 281, 282.) Wagner, J. P. Etwas uber Arbeitergarten. Luxemburg, 1912. Pp. 8. Information about workmen's gardens. Beet-breeding at Klein Wanzleben. Issued by the sugar factory at Klein Wanzleben, formerly Rabbethge & Giesecke. Leipzig. Pp. 40. Das landwirtschaftliche Vereinswesen in Bayem. Miinchen, 1913. Pp. 13. The agricultural society movement in Bavaria. Prepared for the commissions. Das staatliche Kulturbauwesen in Bayem. Munchen, 1913. Pp. 12. The State land improvement system in Bavaria. Der wahre Wert der deutschen Landwirtschaft fiir unsere Volkwirtschaft, 1909. Folio. Diagrammatic and statistical data on the value of agricultural and industrial products in 1909. Die Besitzfestigung bauerlicher Gtiter in der Provinz Posen. Berlin, 1913. Pp. 5. The promotion of the ownership of peasant small holdings in the Province of Posen. Die Besitzfestigung grosserer Guter in der Provinz Posen. Berlin, 1913. Pp. 2. The promotion of the ownership of large farms in the Province of Posen. Dippe Bros., seed growers and merchants, Quedlinburg. Catalogue. Berlin. Pp. 54. Trade catalogue of flower and garden seeds offered in 1912-13. Quedlinburg, 1912. Pp. 46. Generalverband landlicher Genossenschaften fur Deutschland. Leitfaden der Diingerlehre. Neuwied, 1904. Pp. 78. A guide to the application of fertilizers, issued by the German general association of agricidtural cooperative societies. Leitfaden der Futterungslehre. Neuwied, 1904. Pp. 73. Similar instructions for cattle feeding by the same association. Information with regard to the system of Hanover agricultural associations. Published by the union of Han- over agricultural associations and prepared for the commissions. Hanover, 1913. Pp. 19. Kleinkugel, die Waltherische Saatzuchtwirtschaft. HaUe, 1913. Pp. 9. The Walter's seed-breeding station at Kleinkugel, Province of Saxony. Koniglich Bayerische Landeskulturrentenanstalt. Munchen, 1913. Pp. 19. The imperial Bavarian land improvement institute. Prepared for the commissions. KonigUche Wiirttembergische landwirtschaftliche Anstalt, Hohenheim. Wirtschaftsplan des Hohenheimer Gutes ftir das Jahr 1913. Vaihingen, 1913. Pp. 57. Fertilizing and cropping plans of the Hohenheim farms, under the direction of the Wurttemberg royal agricultural institute, for 1913. 31589— S. Doc. 214, 63-1, pt 2 7 50 AGRICULTURAL COOPERATION IN EUROPE. RURAL LIFE. KiRCHNER, W., und WoHLTMANN, F. Landwiitschaftliches Unterrichtswesen in Deutschland und in ausser- deutschen Staaten. Separat-Abdruck aus dem Handworterbuch der Staatswissenschaften. Jena, 1910. Pp. 17. Agricultural education in Germany and other countries. A separate from the Cyclopedia of Social and Political Science. Oels, p. Raifteisen, ein landlicher Sorgenbrecher und christlich sozialer Segenstifter. Neuwied, 1907. Pp. 24. Raiffeisen, a rural comforter and a Christian social benefactor. WoHLTMANN, F. Uuiversitat zu Halle. Agricultural education in the German Empire. Halle, 1913. Prepared for the commissions. (See Senate Document 214, p. 373.) Amtlicher Jahresbericht fiir die Zeit vom 1. April 1912 bis 31. Marz 1913. Halle, 1913. Pp. 3. Official annual report of the University of Halle from April 1, 1912, to March 31, 1913. Das landwirtschaftliche Institut der. Seine Entwickelung und Neugestaltung. BerUn, 1911. Pp. 59. The development and present condition of the agricultural institute of the University of Halle. Winterungs- und Sommerungs-Sortiment samt den Ztichtungen auf der Pflanzenzuchtstation des landwirt- schaftlichen Institutes der. Halle, 1913. Pp. 166. Winter and summer varieties of plants, together with the breeding tests by the plant-breeding station of the agricultural institute of the University of Halle. Der landwirtschaftliche Unterricht in Bayern. Mlinchen, 1913. Pp. 14. Agricultural education in Bavaria. Prepared for the commissions. Koniglich landwirtschaftliche Akademie Bonn-Poppelsdorf. Besondere Mitteilungen iiber das geodatisch-kulturtechnische Studium und die Priifungen fur Landmesser und in Kulturtechnik an der. Bonn, 1912. Pp. 18. Various contributions concerning studies of a geodetic-technical nature and practical tests in land surveying and soil cultivation by the royal agricultural academy of Bonn-Poppelsdorf. Besondere Mitteilungen uber das landwirtschaftliche Studium und die Priifungen fiir Landwirte an der. Bonn, 1913. Pp. 52. Various contributions concerning agricultural studies and tests for farmers at the above academy. Institut fiir Boden- und Pflanzenbaulehre. Bestellungsplan der Versuchsfelder fiir 1912-13. Bonn, 1913. Institute for instruction in soils and plants. Sowing plans on the experimental fields for 1912-13. Jahres-Bericht fiir das Kalendar jahr 1912. Bonn, 1913. Pp. 45. Annual report of the royal agricultural academy of Bonn-Poppelsdorf for 1912. Nachrichten fiir die Studierenden. Bonn, 1913. Pp. 27. Notice to students, spring 1913. Satzungen. Bonn, 1900. Pp. 14. Constitution of the royal agricultural academy of Bonn-Poppelsdorf. Koniglich Lehranstalt fiir Wein-, Obst- und Gartenbau zu Geisenheim am Rhein, Satzungen der. Geisenheim, 1910. Pp. 28. The royal institution at Geisenheim for instruction in winemaking, gardening, and fruit culture. Landwirtschaftliche Winterschule der Landwirtschaftskammer fiir die Rheinprovinz zu Rheinbach. Sechster Bericht, Win terhalb jahr 1912-13. Rheinbach, 1913. Pp. 22. Sixth report for the winter half-year, 1912-13, of the agricultural winter school of the chamber of agriculture for the Rhine province at Rheinbach. GERMANY. 51 Landwirtschaftliches Unterrichtswesen. Sonder-Abdruck aus dem Worterbuch des deutschen Staats- iind Verwaltungsrechts. Tubingen, 1913. Pp. 5. Agricultural education. Separate from the Cyclopedia of German Political and Social Science. Royal Wurttemburg agricultural experimental farm and school at Hohenheim. Farm plan of the Hohenheim estate for 1913. Stuttgart, 1913. Pp. 57. Verein fur wirtschaftliche Frauenschulen auf dem Lande. Sitz: Reifenstein bei Birkungen (Provinz Sachsen). Frauenschule Weilbach. Gotha. Pp. 6 and 3 blanks for answering entrance questions. The domestic science school for girls at Weilbach, estabhshed by the society for estabhshing rural domestic science schools with headquarters at Reifenstein, near Birkungen, Saxony. Landwirtschafthche Fachklasse, Weilbach bei Fl6rsheim-am-Main. Gotha. Pp. 4. The agricultural classes at the Weilbach domestic science school near Florsheim on the Main. GENERAL. Englebt, Dr. von* Crop and live-stock insurance in Bavaria. Munich, 1913. Prepared for the commissions. (See Senate Document 214, p. 279.) Jewett, M. a. Agricultural organizations in Alsace-Lorraine. Strassburg, 1913. Prepared for the com- missions. (See Senate Document 214, p. 314.) Kaumanns, N. Development of German agriculture. Munich, 1913. Pp. 7. Prepared for the commissions. (See Senate Document 214, p. 269.) Leutewitz, O. S. Agriculture ia Saxony. Dresden, 1913. Prepared for the commissions. (See Senate Document 214, p. 425.) Metenschein, p. Raiffeisens Leben. Neuwied, 1902. Pp. 17. The hfe of Raiffeisen. ScHiLLiNGEE, C. Die Entwickelung der Landwirtschaft im KJreise Rheinbach in dem funfzigjahrigen Zeitraum 1862-1912. Festschrift zum 50. jahrigen Bestehen der Lokalabteilung Rheinbach des landwirt- schaftlichen Vereins fur Rheinpreussen. Rheinbach, 1913. Pp. 157. The development of agriculture in the district of Rheinbach for the 50 years 1862-1912. Fiftieth anniversary of the establishment of the Rheinbach local branch of the agricultural society for Rhine Prussia. Uhlfeldek, H. The new eastern harbor at Frankfort-on-Main. Frankfort. Pp. 10. Address of welcome by the president of the royal central office for agriculture at the reception of the commis- sions in Stuttgart, June 4, 1913. P. 1. Addresses delivered before the American Commission, Munich, Germany, June 2, 1913. Munich, 1913. Pp. 20. Badischen Landwirtschaftskammer im Jahre 1912, Bericht tiber die Tatigkeit der. Baden Baden, 1913. Pp. 80. Report of the activities of the Baden chamber of agriculture in 1912. Deutsche Landwirtschafts-GeseUschaft. Die Leitung der, vom 1. Oktober 1912 bis 30. September, 1913. Berlin, 1913. Pp. 32. The management of the German agricultural society from October 1, 1912, to September 30, 1913. DeutscherLandwirtschaftsrat. 41. Plenarversammlung, 1913. Statut. Geschafts-Ordnung. Verzeichnis der Delegierten und stellvertretenden Delegierten. Charlottenburg, 1913. Pp. 35. The German council of agriculture. Forty-first general meeting. Constitution; order of busi- ness; instructions to delegates and to alternates. Die Bayerischen Landesanstalten fur Brand-, Hagel-, Vieh- und Pferdeversicherung. Munchen, 1913. Pp. 10. The Bavarian provincial institutions for fire, hail, cattle, and horse insurance. 52 AGEICULTTJKAL COOPERATION IN EUEOPE. Ein Kaiffeisen-Dorf. Vortrag, gehalten auf dem Verbandstage der pommerschen RaifFeisen-Vereine in Koslin am 16. Mai 1905 von Pfarrer Wendt in Mtitzgnow. Pp. 14. A Raiffeisen viUage. A report presented at the congress of the Raiffeisen societies of Pomerania at Koshn on May 16, 1905. Generalverband landlicher Genossenschaften fiir Deutschland. Die Viehgewahrschaft nach dem burgerlichen Gesetzbuch, mit erlauternden Bemerkungen von einem praktischen Juristen. Neuwied. Pp. 10. Cattle insurance under municipal law, with explanatory notes by a practical lawyer. Dlustrierte Landwirtschaftliche Zeitung, Organ des Bundes der Landwirte. Kaiser-Jubilaums-Nummer. Ber- lin, 14. Juni 1913. Pp. 13. The "Illustrated Agricultural Gazette," the journal of the farmers' union. Number celebrating the twenty-fifth anniversary of the Emperor's reign. Koniglich bayerische Landes-Hagelversicherungsanstalt. Hagelversicherungsgesetz und allgemeine Versiche- rungsbedingungen. Munchen, 1913. Pp. 36. The royal Bavarian provincial hail insurance institute. The hail insurance law and general insurance conditions. Koniglich bayerischen Versicherungskammer, Geschaftsbericht fiir das Jahr 1911. Miincheil, 1912. Pp. 40. Business report for 1911 of the royal Bavarian insurance council. Landwirtschaftliche Umschau. Blatter fiir den neuzeitlichen Landwirtschaftsbetrieb. Erscheiut wochentlich. Magdeburg, 23. Mai 1913. Pp. 20. The "Agricultural Survey," a journal devoted to modern agriculture as an industry. Landwirtschaftskammer und die Zentral-Organisationen des landwirtschaftlichen Genossenschaftswesens zu Halle a. S., Fuhrer durch die. Halle, 1913. Pp. 8. Guide to the chamber of agriculture and the central organization of the agricultural cooperative association at Halle. Pferdeversicherungsgesetz und Normalstatut fur Pferdeversicherungsvereine. Anhang: Die Gewahrleistung bei Viehverausserungen. Miiachen, 1912. Pp. 30. The horse insurance law and a sample constitution for horse insurance societies, with an appendix on the system of valuation of cattle. Pflanzenzuchtstation des landwirtschaftlichen Instituts an der Universitat Halle. Getreideziichtung — Indivi- dualsucht und Stamm-Priifungs-Register. Pp. 3 each. Forms for recording results of tests of individual plants and varieties. Praktischer Wegweiser. Wiirzburg, 5. Juni 1913. Pp. 44. The "Practical Guide," a weekly newspaper. Viehversicherungsgesetz und Normalstatut fur Ortsviehversicherungsvereine. Miinchen, 1912. Pp. 30. The law of cattle insurance and a sample constitution for local cattle insurance societies. SWITZERLAND. CREDIT. Dtjtteewiller. Canton banks. Zurich, 1913. Prepared for the commissions. (See Senate Document 214, p. 462.) HoFER. Savings banks. Zurich, 1913. Prepared for the commissions. (See Senate Document 214, p. 464.) Laue. (o) The legislative foundations of the credit system in Switzerland. (&) The organizationof the credit system in Switzerland. Pp. 4. (See Senate Document 214, p. 461.) Addresses before a subcommittee of the commissions June 4, 1913. SWITZERLAND. 53 Tbabeb, J. Raiffeisenkassen, RaifPeisenverband und Zentralkasse in der Schweiz. Frauenfeld, 1912. Pp. 67. Raiffeisen banks and associations and the central bank in Switzerland. L'union suisse des caisses Raiffeisen. Rapport sur les onze premieres anndes 1900-1910. Pp. 15. Report of the Swiss union of Raiffeisen banks for the 11 years 1900-1910. Rapport sur I'exercice de 1911. Pp. 14. Annual report for 1911. Statuts. Lausanne, 1909. Pp. 19. Constitution of the Swiss union of Raiffeisen banks. Statuts normaux adopt^s par. St. Maurice, 1910. Pp. 12. A model constitution adopted by the union. Schweizerischen Raiffeisenverband. Statu ten des Darlehenskassenvereins (eingetragene Genossenschaft mit unbeschrankter Haftpflicht). Normalstatuten, aufgestellt vom I. Verbandstag des, 21. Sept., 1903. Frauenfeld, 1907. Pp. 13. A model constitution for loan banks (societies with unlimited liability), adopted by the first assembly of the Swiss union, held September 21, 1903. VIII. Jahresbericht iiber den. (Eingetragene Genossenschaft mit beschankter Haftpflicht.) 1910. Winterthur, 1911. Pp. 26. Eighth annual report of the Swiss Raiffeisen Cooperative Union for 1910. IX. Jahresbericht iiber das Jahr 1911. Pp. 15. Ninth annual report for 1911. Verband ostschweizerischer landwirtschaftliche Genossenschaften in Winterthur, XXV Jahresbericht, umfas- send den Zeitraum vom 1. Januar bis 31. Dezember 1911. Brugg, 1912. Pp. 42. Twenty-fifth annual report of the Eastern Switzerland union of agricultural cooperative societies for the year 1911. DISTRIBUTION. Abt R. Beitrage zur Geschichte der Entwicklung des landwirtschaftlichen Genossenschaftswesens in der Schweiz. Brugg, 1910. Pp.135. Contributions to the history of the development of the Swiss agricultural cooperative systems. Moos. Development of agricultural cooperative societies. Zurich, 1913. Prepared for the commissions. (See Senate Document 214, p, 467.) Establishment of the agricultural aid societies and cooperative systems. Pp. 6 (written). June, 1913. Report of one of the members of the Swiss entertainment committee to the subcommittee of the commissions. Schweizerischen landwirtschaftlichen Verein. Jahresbericht pro 1912. Brugg, 1913. Pp. 70. Annual report for 1912 of the Swiss agricultural society. Statuten des. (Nach dem Beschliissen der Abgeordnetenversammlungen vom 2. Juni 1888 und 18. Oktober 1890.) Pp. 7. Constitution of the Swiss agricultural societies in accordance with the resolutions of the extra- ordinary assemblies of June 2, 1888, and of October 18, 1890. Schweizerischen Raiffeisenverbandes, Statuten des, beschlossen am 12. Juni 1902. Frauenfeld, 1902. Pp. 18. Constitution of the Swiss union of Raiffeisen societies adopted June 12, 1902. Verband ostschweizerischer landwirtschaftlicher Genossenschaften. Das landwirtschaftliche Genossenschaftswesen als wirksamstes Mittel zur Hebung des Bauernstandes unter Hinweis auf den. Zur Aufklarung und Belehrung der Landwirte. Brugg, 1909. Pp. 72. The agricultural cooperative movement as the best means of improving the condition of the peasantry. Directions of the eastern Swiss union of agricultural cooperative societies for the instruc- tion of farmers. 54 AGEICULTUKAL COOPERATION IN EUEOPE. Verband ostschweizerischer landwirtschaftlicher Genossenschaften. Der Genossenschafter, obligatorisclies Publikationsmittel fiir den. Zum 25-jahrigen Bestande des. Die Grmxder und Leiter. 1886-1911. Brugg, 29. Juni, 1912. Pp. 8. "The Cooperator," organ of the Eastern Switzerland agricultural union of cooperative societies. Twenty-fifth anniversary number. An account of the founders and leaders. Festschrift zur Feier seines 25-jahrigen Bestandes, 1886-1911. Brugg, 1911. Pp. 286. The twenty-fifth anniversary number, 1886-1911. Statuten-Entwurf fur landwirtschaftlichen Konsumgenossenschaften. Pp. 8. Sample of a constitution for agricultttral cooperative piu-chasiag societies. PRODUCTION. Abt, H. Das schweizerische Braimvieh. Eine Monographie, herausgegeben vom Verband schweizerischer Braunviehzucht-Genossenschaften. Frauenfeld, 1905. Pp. 106. The Swiss Brown Cattle. A monograph issued by the Swiss Union of Brown Cattle breeding cooperative societies. L6 betail Suisse de race brune. Monographie publiee par la federation Suisse des syndicats d'616vage de la race brune. Traduit de I'aUemand par Ed. Jacky, du department f6d6ral de I'agriculture. Frau- enfeld, 1908. Pp. 119. The Swiss Brown Cattle. Monograph published by the Swiss federation of Brown-cattle breeders and translated from the German by Ed. Jacky. Kappeli, J. Das Simmentalervieh der Schweiz. Eine Monographie, herausgegeben vom Vorstande des Ver- bandes schweizerischer Fleckviehzucht-Genossenschaften. Bern, 1913. Pp. 114. The Swiss Simmental cattle. Issued by the federation of Swiss Spotted Cattle breeding societies. KoNiG, A. Das eidgenossisches Stammzuchtbuch fiir Braunvieh, bearbeitet im Auftrage des schweizerischen Landwirtschaftsdepartements. I. Einleitung. II. ZuchttafeLn. III. TierbUder. Bern, 1910. Pp. 924. The Brown cattle register arranged from the records of the Swiss Department of Agriculture. Part I, introductory information. Part II, tables of antecedents. Part III, cuts of the live stock. Wild, A., and Wehkli, J. Regulativ fiir die Thmgauische milchwirtschaftliche Station. Frauenfeld, 1906. Pp. .3. Regulations concerning the Thurgau dairying station. Wtssmann, E. Die Milchwirtschaft im Kanton St. Gallen. Separat-Abdruck aus der Festschrift der Kanton- alen landwirtschaftlichen Ausstellung in St. Gallen, 1907. Pp. 13. The milk industry in the canton of St. Gall. Anleitimg zur Zuchtbuchfiihnmg fur Rindviehzucht-Genossenschaften. Pp. 61. Instructions for the guidance of Black cattle breeding cooperative societies. Beschluss des Regienmgsrates zur Ausfiihrung von 6 Abs. 2 des Gesetzes betreffend die obligatorische Viehversicherung, etc. Zurich, 1895. Pp. 8. Directions for carrying out the provisions of the law relating to obligatory cattle insurance. Die Grundziige des Gesetzes betreffend die obligatorische Viehversicherung des Kantons Zurich vom 19. Mai 1895. Pp. 2. Distinctive features of the law_ relating to obligatory insurance of cattle in the Canton of Zurich. Direktion der Volkwirtschaft. Gesetz betreffend die obligatorische Viehversicherung, die Entschadigung fiir Viehverlust durch Seuchen und der Viehverkehr. April 15, 1913. Pp. 14. Law concerning obUgatory cattle insurance; damages for cattle losses through epidemics and the sale of cattle. Eidgenossisches Stammzuchtbuch fiir Braunvieh. (a) Verzeichniss der Famihen. (b) Verzeichnis der im St. Z. B. eingetragenen Zuchtstiere. (c) Verzeichnis der im St. Z. B. eingetragenen weiblichen Tiere. Bern, 1910. Pp. 164. The Brown Cattle register, (a) Detailed records of famiUes. (6) Detailed records of the regis- tered breeding stock, (c) Detailed records of the registered bulls. SWITZERLAND. 55 Gesetz betreffend die obligatorische Viehversicherung und die Entschadigung fiir Viehverlust durch Seuchen. (Vora 19. Mai 1S95.) Zurich, 1895. Pp. 8. The text of the law of May 19, 1895, relating to the obligatory insurance of cattle in Switzerland. Kreisschreiben an die Vorstande der Viehversicherungskreise. Zurich, 1896. Pp. 4. instructions to presidents of cattle insurance districts. Regulativ betreffend das Verfahren zur Ausmittlung der Entschadigung bei Viehverlust durch Seuchen. (Vom 15. Dezember 1904.) Zurich, 1904. Pp. 2. Regulations for carrying out the means of securing damages for losses of cattle through diseases. The bovine breed of Switzerland. Dedicated to all those interested in the raising and breeding of cattle by the Swiss unions of cattle breeders. Bern. Pp. 36. (See Senate Document 214, p. 471.) Untersuchungen betreffend der Rentabilitat der schweizerischen Land wirtsch aft im Emtejahr 1911-12 (1. Marz 1911 bis 29. Februar 1912). Bericht des schweizerischen Bauemsekretariates an das schweizerischen Landwirtschaftsdepartement. Bern, 1913. Pp.211. Inquiries concerning the profitableness of agriculture in Switzerland for the year 1911-12 (Mar. 1, 1911, to Feb. 29, 1912). Report of the Swiss farmers' secretary to the department of agri- culture. Verband schweizerische Braunviehzucht-Genossenschaften. Statuten. Wadenswil. 1913. Pp. 7. Constitution of the association of Swiss Brown cattle cooperative breeding societies. (See Senate Document 214, p. 484.) XIV. Geschaftsbericht pro 1910. Bern, 1911. Pp. 38. Annual report of the above association for 1910. XV. Geschaftsbericht fiir das Jahr 1911. Bern, 1912. Pp. 47. Annual report of the above association for 1911. XV. Zuchstier-Markt mit Ausstellungscharakter in Zug den 11, 12, und 13. September 1912. Verzeichnis der angemeldeten Stiere. Luzern, 1912. Pp. 295. The fifteenth annual breeding-buU market with their exposition records, held September 11-13, 1912. Detailed information of the bulls on exhibition. RURAL LIFE. Thurgauische landwirtschaftMche Schule und Milchwirtschaftliche Station Arenenberg. Bericht und pro- graram 1911-12. Berichtsperiode 1. April 1911 bis 31. Marz 1912. Frauenfeld, 1912. Pp. 43. Thurgau agricultural school and dairying station at Arenenberg. Report and program for 1911-12. GENERAL. Bundesgesetz betreffend die Erganzung des Zivilgesetzbuches. Fiinfter Teil: Obhgationenrecht (vom 30. Marz 1911). Pp. 309. A combined law relating to the supplement of the civil law. Fifth part — obligations. Publications du Secretariat suisse des Paysans. No. 44. Enqudte sur I'^tat de I'association dans ['agriculture Suisse au l^'' Janvier 1910. Berne, 1912. Pp. 138. An inquiry into the condition of agricultural associations in Switzerland to January 1, 1910. Schweizerisches Zivilgesetzbuch vom 10. Dezember 1907. Pp. 227. The Swiss civil code of December 10, 1907. 56 AGEIOULTUKAL OOOPEKATION IN EUEOPE. BELGIUM. CREDIT. Mbllaerts, J. F. Un aper^u sur le Boerenbond de Beige, et fondation et organisation d'une caisse mrale d'apres le syst6me Kaiffeisen. Louvain. Pp. 36. A sketch of the Belgian Farmers' Union and the foundation and organization of a Raiffeisen rural bank. Organization of a rural bank of the Raiffeisen system in Belgium. (See Senate Document 214, p. 491.) Caisse centrale de credit du Boerenbond k Louvain. Aim6e 1912. Compte rendu de I'assemblee g6n6rale tenue k Louvain, le 25 Mars, 1913. Louvain, 1913. Pp. 53. Central credit bank of the farmers' vmion. Minutes of the general assembly held at Louvain, March 25, 1913. Caisse g6n6rale d'^pargne et de retraite, institute sous la garantie de I'^tat. PrSts agricoles. Manuel des soci6t6s cooperatives de credit agricole. Bruxelles, 1911. Pp. 71. General savings and loan bank founded under State guaranty. Agricultvu-al loans. Manual of cooperative riu-al credit societies. Central agricultural cooperative credit society of Lifege. By-laws. (See Senate Document 214, p. 507.) Complete Hst of 23 kinds of blank forms used by local riu-al credit societies in Belgium. Ligue des Paysans (Boerenbond). Caisse d'6pargne et de credit (soci6t6 cooperative). Livret de membre et statuts de la. Louvaia. Pp.22. Sample constitution of a cooperative savings and loan bank. Livret d'emprunt, pour remboiu'sements sur avances. Louvain, 1912. Pp. 12. Borrower's book for the entry of repayments on loans. Livret d'6pargne. Louvain, 1912. Pp. 16. Member's savings deposit book. Statuts. Liege, 1912. Pp. 10. Constitution of the farmers' union. — Statuts de la society centrale de credit de. (Caisse centrale de credit.) Society cooperative. Louvain, 1905. Pp. 10. Constitution of the central credit society of the farmers' cooperative imion. Rural cooperative bank of Li&ge. By-laws. (See Senate Document 214, p. 509.) Societe cooperative centrale de credit agricole. Liege, 1896. Pp. 8. Central cooperative agricultural credit society. DISTRIBUTION. LuYTGAERENS, E. Belgische Boerenbond. Dienstjaar 1912. Verslag in beknopten vorm voorgedragen op de Algemeene Vergaderiug van 12 Mei, 1913, te Leuven. Ijeuven, 1913. Pp. 166. Report of the Belgian Farmers' Union for 1912, presented in abbreviated form to the general assembly at Leuven. Boerenbond Beige ou Ligue des Paysans. Exercice 1911. Rapport presente k I'assemblee generale du 27 Mai, 1912. Louvain, 1912. Pp. 160. Report for 1911 of the Belgian Farmers' Union, presented to the general assembly of May 27, 1912. BELGIUM. 67 Belgische Boerenbond. De grondkeure van den. Gesticht den 20 Juli, 1890. Leuven, 1911. Pp. 8. Constitution of the Belgian Farmers' Union. De keure van de parochiale boerengilde aangesloten bij den Belgischen Boerenbond. Leuven, 1911. Pp. 12. Sample constitution for a district farmers' society adopted by the Belgian Farmers' Union. Grondkeure van den Belgischen Boerinnenbond afdedling van den Belgischen Boerenbond. Leuven, 1911. Pp-7. Constitution of the Belgian farm women's federation aflBliated with the farmers' union. Keure van de parochiale boerinnengilde sangesloten bij den Belgischen Boerinnenbond. Leuven, 1911. Pp.9. Sample constitution for a district farm women's society affiliated with the Belgian Farmers' Union. Godsdienstige en Maatschappilijke. Inrichtingen Januari, 1913. Ter-Banck, 1913. Pp. 64. Keligious and cooperative arrangements, adopted January, 1913. Maatschappij van Onderlingen Bijstand tegen de Sterfte der in den Landbouw Gebruikte Paarden. Paarden- verzekering van Ter-Banck gevestigd te Ter-Banck (Heverlee, Braband) erkend door koninklijk besluit van 11 Juli, 1903. Standregelen. Brussel, 1903. Pp. 10. Constitution of the horse insurance society of Ter-Banck, Brabant. Maatschappij van Onderlingen Bijstand tegen de Sterfte der Verkens. Verkensverzekering van Ter-Banck gevestigd te Heverlee (Ter-Banck), Braband. Erkend door koninldijk besluit van 24 December, 1903. Standregelen. Leuven, 1906. Pp. 14. Constitution of the pig insurance society of Ter-Banck at Heverlee, Brabant. Parochiale Boerengilde van Ter-Banck (Leuven). Beroepsvereeniging gevestigd te Ter-Banck (Leuven). Standregelen. Leuven, 1907. Pp. 16. Constitution of the farmers' district society at Ter-Banck. PRODUCTION. Ministre de I'agriculture et des travaux publics. Administration de I'agriculture. Expose statistique de la situation des associations d'intSrSt agricole pendant I'armee 1910. Bruxelles, 1912. Pp. 56. Statistics of agricultural associations in 1910. — — Administration de I'agriculture. Ofl&ce rurale et oflB.ce horticole. Royaume de Belgique. Notice sur 1' Economic rurale et 1' organisation administrative de I'agriculture. Bruxelles, 1913. Pp. 86. Rural and horticultural ofl&ces. Notes on rural economics and the administrative organization of agriculture. OflBce rurale. Rapport et communications. No. 4. Bruxelles, 1913. Pp. 183. Reports and communications. Office rurale. Statistique agricole de 1912. Repartition et rendement des cultures. Repartition du nombre d' existences des animaux domestiques. Bruxelles, 1913. Pp. 183. Agricultural statistics for 1912 pubhshed by the ministry of agriculture. The acreage and yield of crops and the number and kinds of domestic animals. GENERAL. Agricultural Belgium. Statistics furnished by the Belgian Department of Agriculture. Ghent, 1913. Prepared for the commissions. (See Senate Document 214, p. 513.) Agriculture. Extrait de l'expos6 de la situation du Royaume de Belgique de 1 876 a 1900. Bruxelles. Pp. 111. Condition of Belgian agriculture from 1876 to 1900. 31589— S. Doc. 214, 63-1, pt 2 8 58 AGEICTJLTUEAL COOPERATION IN EUROPE. Exposition internationale de Gand, 1913. X*. congrSs internationale d'agriculture sous le haut patronage de S. M. le roi des Beiges. Gand, 1913. Pp. 56. ' Program of the tenth international congress of agriculture held under the patronage of the King of Belgium at Ghent in 1913. Guide to Brussels. Pp. 96. Le Mus6e International. Catalogue g6n6ral sommaire. Bruxelles, 1912. Pp.34. A summary of the general catalogue of the international museum at Brussels. Notice sommaire. Bruxelles. Pp. 6. Descriptive circular of the above international museum. L'Union des Associations Internationales. Constitution du centre international. CongrSs mondial. Office central. Mus6e international. Documentation universelle. Bruxelles, 1912. Pp. 168. The federation of international associations and the constitution of an international center. Declarations and opinions concerning the international organization. List of the international asso- ciations. Documents, notices, and illustrations. HOLLAND. CREDIT. LoHNis, F. B. Survey of agricultural credit in the Netherlands. The Hague, 1913. Prepared for the com- missions. (See Senate Docmnent 214, p. 519.) Van den Huek, C. Organization of a peasants' cooperative loan bank. The Hague, 1913. (See Senate Document 214, p. 534.) Boeren-Hypotheekbank te Eindhoven (Naamlooze vennootschap). Verslag over het vierde boekjaar, 1912. Koermond, 1913. Pp. 16. Farmers' cooperative mortgage bank at Eindhoven. Fourth annual report for 1912. Cooperatieve Centrale Boerenleenbank te Eindhoven. Verslag over het veertiende boekjaar 1912. Roer- mond, 1913. Pp. 79. Fourteenth annual report for 1912 of the farmers' cooperative central loan bank of Eindhoven. Cooperatieve Centrale Raifleisen-Bank te Utrecht. De Oprichting van eene Cooperatieve Boerenleenbank. Derde druk. Utrecht. Pp. 12. The organization of a peasants' cooperative loan bank affiliated with the central cooperative Raiffeisen bank of Utrecht, including a sample constitution. Inspectie-Rapport omtrent de Cooperatieve Boerenleenbank te Utrecht. Pp. 13. Blank form for report of inspection of a farmers' cooperative loan bank by an inspector from the central bank. Landbouwcredit door middel van Raiffeisen-Banken. 8e. druk. Utrecht, 1912. Pp. 38. Agricultural credit by means of Raiffeisen banks. Information disseminated by the central cooperative Raiflfeisen bank at Utrecht. Verslag over 1912, het veertiende boekjaar. Utrecht, 1913. Pp. 112. Fourteenth annual report of the central cooperative RaifiFeisen bank at Utrecht. Cooperatieve Landbouwersbank en Hondelsvereeniging, Statuten der. Gevestigd te Steenwijkerwold. Steen- wijk, 1901. Pp. 12. Constitution of the farmers' cooperative bank and trading society at Steenwijkerwold. (See Senate Document 214, p. 537.) HOLLAND. DISTRIBUTION. 69 Cooperatieve Vereemging tot Aankoop en Bewerking van Landbouwbenoodigdheden voor Friesland, gevestigd te Leeu warden. Huishoudelijk Reglement van de. Leeuwarden. Pp. 8. Regulations for the management of the cooperative society for the purchase and manufacture of agricultural requirements for Friesland. (See Senate Document 214, p. 539.) Statuten der. Leeuwarden. Pp. 15. Constitution of the said society. Verslag over het boekjaar 1911-12. Leeuwarden, 1912. Pp. 23. Annual report of the said society for 1911-12. Friesche Cooperatieve Zuivel-Export — ^Vereeniging te Leeuwarden. Jaarverslag, boekjaar 1911-12. Leeu- warden, 1912. Pp. 48. Annual report for 1911-12 of the Frisian cooperative export dairy society at Leeuwarden. Vereeniging Cooperatieve Stoomzuivelfabriek te Leeuwarden. Huishoudelijk reglement der. Leeuwarden. Pp. 10. Regulations for the management of the cooperative steam creamery at Leeuwardeii. Statuten der. Leeuwarden. Pp. 18. Constitution of the said creamery. (See Senate Document 214, p. 540.) PRODUCTION. De Veeteelt in Oostfriesland. Geschilderd door de Vereeniging van Oostfriesche Stamboekveehouders en de Landbouwkundige Hoofdvereeniging voor Oostfriesland, Proviucie Hannover iu Pruisen. Norden, 1906. Pp. 54. The breeding of live stock in East Frisia. Described by the Breeders' Association of East Frisian registered cattle and by the Central Association of Agriculture for East Frisia, Province of Hanover, Prussia. Translated by J. G. Eimers. (In English and Dutch.) East Frisian Horse and Cattle types. Norden, 1913. Pp. 112. Prepared for the conunissions. Het Zuivel-Consulentschap voor de provincie Zmd-Holland. Lactatieperiode 1909. Pp. 8. The dairy coimcil's record for the lactation period of 1909 for the South Holland provinces. Horticultvire in the Netherlands, an account by the board of agriculture of the Netherland department of agri- culture, mdustry, and trade. The Hague, 1912. Pp. 32. Some partictilars about dairying in the Netherlands. Prepared for the members of the British Dairy Farmers' Association excursion in May, 1911. The Hague, 1911. Pp. 68. GENERAL. SooTT J. W. R. A free farmer in a free state: A study of rural life and industry and agricultural politics in an agricultural country. London, 1912. Pp. 355. Van Koch, P. Agriculture in Holland. The Hague, 1913. Prepared for the commissions. (See Senate Document 214, p. 524.) Wegner et al. Ostfrieslands Lage, Klima, Boden und Bewirtschaftung. In "Deutsche Landwirtschaftliche Tierzucht," Hannover, Germany, 10. Marz 1911. Pp. 16. East Frisian lakes, climate, soil, and farm management, an article in theissue of the "German Agricultural Stock Breeder" for March 10, 1911. 60 AGEICULTUEAL COOPERATION IN EUROPE. Guide through the Netherlands. Compiled by the Economic Geographic Society of the Netherlands, in con- junction vnth. the central committee for the arrangements for 1913. Rotterdam. Pp. 81. Verslag over den Landbouw in Nederland over 1911. Departement van Landbouw, Nijverheld en Handel. Verslagen en Mededeelingen van de directie van den landbouw 1912. No. 4. The Hague, 1912. Pp. 136. Report on agriculture in the Netherlands for 1911. Reports and communications by the board of agriculture of the department of agriculture, industry, and commerce. DENMARK. CREDIT. Bi.EM, M. p. The Danish credit societies with revised by-laws of the credit society of estate owners in the Danish island (diocese) districts. Reprint from "Alwed." Pp. 8. (See Senate Dociunent 214, p. 556.) De Danske kreditforeninger. Festkrift i anledning af halvhimdredaarsdagen for lov af 20. Juni 1850 om oprettelse af kreditforeniuger. Udgivet af kreditforeningeme. Copenhagen, 1901. Pp. 234. The Danish credit societies. Published on the occasion of the fiftieth anniversary of the law of Jime 20, 1850, concerning the establishment of credit societies. Issued by the credit societies. Kreditforeningen af grundejere i de Danske 0stifter. Festskrift i anledning af foreningens 50-aarige jubilseum. Copenhagen, 1901. Pp. 131. The mortgage credit societies of lando\vners in the Danish island districts, 1851-1901, published on the occasion of the fiftieth anniversary jubilee of the society's organization. 60'*° beretning til reprsesentantskabet. Aflagt af foreningens direktion for regnskabsaaret fra 1°" April 1910 til 31*' Marts 1911. Copenhagen, 1911. Pp. 133. Sixtieth annual report to the general assembly of the above credit society of landholders, from April 1, 1910, to March 31, 1911. 61'^* beretning til reprsesentantskabet. Aflagt af foreningens direktion for regnskabsaaret fra 1"® April 1911 til 31*« Marts 1912. Copenhagen, 1912. Pp. 132. Sixty-first annual report of the above society from April 1, 1911, to March 31, 1912. Law and constitution of cooperative mortgage banks. (See Senate Document 214, p. 580.) Reviderede Statutter for kreditforeningen af grundejere i de Danske 0stifter. Copenhagen, 1911. Pp. 86. Revised statutes for mortgage credit societies of landowners in the Danish island districts. Revidierte Statuten des Bodenkreditvereins von Gnmdbesitzern ia den danischen Inselstiftem. Copenhagen, 1904. Pp. 90. Revised statutes for mortgage credit societies of landowners in the Danish island districts. DISTRIBUTION. CoHN. Statistics of agricultural cooperation. Copenhagen, 1913. (See Senate Document 214, p. 565.) Neilson, F. Cooperative wholesale society. Copenhagen, 1913. Prepared for the commissions. (See Senate Document 214, p. 545.) Sbqni, C. R. L'Organizzazione agraria in Danimarca. Estratto dal boUetino del minis tero degli affari esteri del mese di settembre, 1905. No. 319. Roma, 1905. Pp. 106. Agricultural organization in Denmark. Notes by Count Cesare Ranuzzi Segni; abstracted from Bulletin No. 319 of the minister of foreign affairs for the month of September, 1905. Produzione e conunercio delle ova in Danimarca. Ministero di Agricultura, Industria e Commercio, divisione industria e commercio. Roma, 1902. Pp. 56. The production and sale of eggs in Denmark, issued by the industry and trade division of the ministry of agriculture, industry and commerce. DENMAEK. 61 Betingelser for Levering af Mselk til "Trifoliums" Maelkeforsyning. Pp. 10. Requirements for the delivery of milk at the "Trifoliums" milk depot. Dansk Andels .ffigexport. "Vor Eksport," 20. Marts, 1911. Pp. 60-62. An account of the Danish farmers' cooperative egg export association. Drifts-Regnskab for Roskilde Andels-Svineslagteri 1912. Roskilde, 1913. Pp. 23. Fiaancial report for 1912 of the Roskilde cooperative pig slaughterhouse. Fsellesforeningen for Danmarks Brugsforeninger. Copenhagen, 1913. Pp. 64. Cooperative supplies for Denmark's cooperative supply associations. Porslag til Lov om Andelsforeninger. Copenhagen, 1912. Pp. 14. Proposed law concerning cooperative societies. Le mouvement coop^ratif en Danemark. Public k 1' occasion du premier congres international des associations agricoles et de demographic rurale. Bruxelles, 1910. Copenhague, 1910. Pp. 41. The cooperative movement in Denmark. Published for the first international congress of agri- cultural associations and rural demography held at Brussels in 1910. Odense ofifenthige Slagtehuse og Exportslagteri. Odense, 1913. Pp. 24. Catalogue of the cooperative slaughter and general export house for 1913. PRODUCTION, Agreement between the Danish agricultural associations' seed purveyors and the cooperative societies of Den- mark. History of the association. Roskilde, 1913. Pp. 12. (See Senate Document 214, p. 578.) Guide through L. Dsehnfeldt's nurseries near Odense, 1913. Odense, 1913. Pp. 13. Landbrugsforhold i Danmark siden midten af det 19. aarhundrede. Copenhagen, 1911. Pp. 170. Agriculture in Denmark from the middle of the nineteenth century. RURAL LIFE. RosENDAL, H. Grundtvigs H^jskole ved Lyngby. Kongens Lyngby. Pp. 8. Grundtvig's high school at Lyngby, If miles from Copenhagen. Stats-Husmandsbrug oprettede i finansaarene 1901-1911. Copenhagen, 1912. Pp. 44. Small farms established by the government during the years 1901 to 1911. Undervisningsplan for Dalum Landbrugsskole ved Odense, 1913. Odense, 1913. Pp. 30. Course of instruction at the agricultural school of Dalum, near Odense, for 1913. GENERAL. Laesen, H. C. Land0kononiiskAarbog for 1913. Oversigt over det Danske Landbrugs organisation. Udgivet ' af det Kgl. Danske Landhusholdningsselskab. Copenhagen, 1913. Pp. 126. Fourteenth annual rural economy yearbook for 1913, being an account of the Danish agricultural organizations issued by the royal Danish agricultural society. Lov om iEndringer i og Tillseg til de nugseldende Regler for den kommunale Beskatning samt oin Statstilskud til Konununeme. Copenhagen, 1903. Pp. 16. Law concerning the changes in and additions to existing methods of communal taxation, together with government aid to the communes. 62 AGEICULTUEAL COOPERATION IN EUROPE. Lev cm Indkomst- og Formueskat til Staten. Copenhagen, 1912. Pp. 25. Law concerning the income tax and property taxes of Denmark. Statistisk Aarbog, 17^» aargang, 1912. Copenhagen, 1913. Pp. 229. Seventeenth statistical yearbook for 1912. The Danish milking machine "Heureka," in use at the central standard dairy at Riga, Russia. Copenhagen, 1913. Pp. 14. Descriptions and testimonials regarding the new Danish milking machine. NORWAY. CREDIT. Mortgage bank of the Kingdom of Norway. Laws and constitution. Christiania, 1913. (See Senate Docu- ment 214, p. 590.) Norwegian bank for workmen's credit. By-laws. Christiania, 1913. (See Senate Document 214, p. 593.) Om Arbeiderbruk- og Boligbanken. Finans- og Told-departementetes indstilling av 3^^ mars 1910, som er bifaldt ved kongelig resolution av samme dag. Pp. 51. Concerning workingmen's and householders' banks. Report of the treasury and customs depart- ment of March 3, 1910, which was approved by royal order of the same date. Reglement for Kongeriget Norges Hypotekbank fastsat ved kongelig resolution av 12 November, 1907. Kri^ tiania. Pp. 4. Regulations for the Imperial Norwegian Mortgage Bank established by royal order of November 12, 1907. DISTRIBUTION. Kristiania Slagtehus, 1913. Kristiania, 1913. Pp. 50. Report of the public slaughterhouse of Christiania for 1913. Landhusholdningsselskapernes Faelleskj^p. Retledning ved dannelse av indkj0p slag. Pp. 10. Agricultural cooperative organizations. A guide for the establishment of purchasing societies. Samvirke. Meddelelser fra Landhusholdningsselskapernes Fselleskj0p. Kristiania, 15''® juni 1913. Pp. 24. "Cooperation." A journal of communication between agricultural cooperative societies. Issue of June 15, 1913. SPAIN. CREDIT. Calbeton, F. Apuntes para el estudio del proyecto de ley de cr^dito agrario, presentado & les Cortes por el excmo. Sr. Ministro de Fomento. Madrid, 1910. Pp. 533. Data for the study of the proposed law of agricultural credit, presented to the Parliament by his honor, Fermin Calbeton, minister of agriculture, commerce, and industry. FKANCB, 63 GuLLON, E. Delegacion regia de p6sitos. Memoria que eleva al Gobiemo de S. M. Madrid, 1911. Pp.481. Report prepared on the public credit grain warehouses or "positos" and presented to the govern- ment of Spain. Delegacion regia de positos. Ap6ndice & la memoria que eleva al Gobierno de S. M. Madrid, 1912. Pp. 370. An appendix to the above report. Delegacion regia de positos. Ap^ndice fi. la memoria que eleva al Gobierno de S. M. Madrid, 1913. Pp. 315. An additional appendix to the above report. Agricultural credit and cooperation in Spain, 1913. Prepared for the commissions. (See Senate Document 214, p. 601.) GENERAL. Boletin de las Cdmaras de Comercio, Industria y Navegacion y de las Cftmaras Agricolas. Revista mensual dedicada al estudio y fomento del comercio, la industria y la agricultura nacionales. Madrid, Septi- embre, 1912. Pp. 20. Bulletin of the chamber of commerce, industry and navigation and of the chamber of agricul- ture. A monthly journal devoted to the study and promotion of national commerce, industry, and agriculture. Granja-escuela practica de agricultura regional de Valencia. Breve resena de su historia y de sus principales trabajos desde su fundacion hasta 1. de marzo de 1911. Madrid, 1911. Pp. 46. The practical farm school of the agricultural district of Valencia. Brief notes on its history and chief work since its foundation to March 1, 1911. FRANCE. CREDIT. AsTiEE, F. Instructions pratiques pour messieurs les presidents et administrateurs des caisses locales affililes k la caisse regionale de credit agricole mutuel du Midi. Montpellier, 1905. Pp. 25. Practical instructions for the presidents and administrators of local banks afiiliated with the regional bank of mutual agricultural credit of Midi. La solidarity dans les caisses locales de credit mutuel du Midi. Congres national de credit agricole (Bor- deaux, 22 juillet 1907). Bordeaux. Pp. 16. Collective responsibility among the local banks of mutual credit of Midi, as presented at the national congress of agricultural credit at Bordeaux, July 22, 1907. Recueil de documents pour servir k I'histoire du credit agricole en France. Montpellier, 1905. Pp. 32. A review of documents which have a bearing on the history of agricultural credit in France. AupETiT. Relations of the Bank of France with agricultural credit. Paris, 1913. Prepared for the com- mission. (See Senate Document 214, p. 651.) Berthonneatt, J. Monographie du syndicat des agriculteurs et des caisses de credit mutuel agricole de Loir-et- Cher. ' Blois, 1905. Pp. 54. A monograph on the farmers' association and mutual agricultural credit banks of Loir-et-Cher. CoDET, J. History of agricultural credit. Paris, 1913. Prepared for the commissions. (See Senate Docu- ment 214, p. 645.) 64 AGEICULTTJKAL COOPEEATION IN EUROPE. Dop, L. Agricultural credit in France as compared with other countries. Paris, 1913. Prepared for the commissions. (See Senate Document 214, p. 661.) MoEBL et Clos, J. Compte rendu pr6sent6 au nom du conseil d'administration du Credit Foncier de France. Exercice 1912. Paris, 1913. Pp. 82. Financial and business statement presented to the council of administration of the Credit Foncier of France for the year 1912. Agricultural credit in the department of Sarthe. Le Mans, 1913. Prepared for the commissions. (See Senate Document 214, p. 732.) Caisse de credit agricole mutuel, statuts. Soci6t6 .&, capital variable et k responsabilit^ limit^e. Brignais. Pp. 24. Sample constitution for a local bank of mutual agricultural credit with limited liability. Caisse de credit agricole mutuel, statuts. Soci6t6 k capital variable et k responsabilit^ soUdaire et illimitee. Brignais, 1907. Pp. 12. Sample constitution for a local bank of mutual agricultural credit with unlimited liability. Caisse locale de credit agricole de la Mutuelle-Agricole-Incendie de I'Ouest. Statuts et livret. Niort, 1911. Pp. 12. Constitution and blank account book to serve as models for a local bank of cooperative agricultural credit. Caisse locale de credit agricole mutuel, statuts. Melle, 1913. Pp. 19. Sample constitution of a local bank for mutual agricultural credit. Caisse r^gionale Arlesienne de credit agricole mutuel, statuts. Aries, 1910. Pp. 11. Constitution of the Aries regional bank of mutual agricultural credit. Caisse regionale de credit agricole mutuel de Chalons-sur-Marne. Statuts. ChS,lons-sur-Marne, 1912. Pp. 11. Constitution of the regional bank of mutual agricultural credit of Ch&lons-sur-Marne. Caisse regionale de credit agricole mutuel de la Gironde. Assemblee g6n6rale annuelle du 17 F6vrier, 1908. Pp. 16. Report to the general assembly of February 17, 1908, of the condition of the Gironde regional bank of mutual agricultural credit. Exercice 1908. Bordeaux, 1909. Pp. 11. Exercice 1910. Bordeaux, 1911. Pp.15. Exercice 1911. Bordeaux, 1912. Pp.17. Similar reports for the years 1908, 1910, and 1911. Caisse r6gionale de credit agricole mutuel de I'lndre. Caisses locales afEhees. Modeles des statuts, proc^s-verbal d'assembl6e gSn^rale constitutive, demande d'admission, feuille de renseignements, etc. Indre, 1913. Pp. 12, foUos 18. Sample constitution and 18 blank forms in use by the local banks affiliated with the regional bank of mutual agricultural credit of Indre. Prfets £1 long terme. (Loi du 19 Mars 1910.) Credit k long terme en faveur de la petite propri6t6 rurale, r6glement int6rieur sur les pr^ts individuels k long terme, etc. Indre, 1913. Pp. 68, folios 19. Long-term credit in favor of small rural proprietors, the bank's regulations concerning individual long-term loans, and 19 blank forms in use by the regional bank of Indre for granting these loans. Statuts de la caisse r6gionale, reglement intSrieur entre la caisse regionale et les caisses locales affih6es, conseQ d'administration, advances de I'^tat, bulletin donnant le compte rendu de I'assemblee g6n6rale de 1913, etc. Indre, 1913. Pp. 70. Constitution of the regional bank of Indre, the arrangements between the regional and local banks, the council of administration, advances by the Government, bulletin giving the financial statement presented to the general assembly of 1913, etc. FBANGB, 65 Caisse rfigionale de credit agricole mutuel d'lndre-et-Loire. Instructions pour rfitablissement r6guKer d'un mandat ou billet h, ordre. Tours, 1909. Pp. 3. * Instructions for the proper drawing and execution of a note of hand as issued by the regional bank of mutual agricultural credit of Indre-et-Loire. Rapport pr6sent6 par le secr^taire-trfeorier sur I'exercice 1912 a I'assembl^e g^n^rale du 1" Mars 1913. Tours, 1913. Pp. 8. Report to the general assembly on March 1, 1913, of the regional bank of mutual agricultural credit of Indre-et-Loire concerning the business transacted in 1912. Statuts. Tours, 1912. Pp. 4. Constitution of the regional bank of mutual agricultural credit of Indre-et-Loire. Caisse r^gionale de credit agricole mutuel des Basses-Pyr6n6es. Comptes rendus des operations et des assem- blies g6n6rales des dix derniers exercices, 1903-1912. Pau, 1904-1913. Pp. 200. Complete financial reports of the regional bank of mutual agricultural credit of Bass-Pyr^nfies presented annually to the general assembly for the years 1903 to 1912, inclusive. Caisse rigionale de credit agricole mutuel des Deux-Sevres. Compte rendu des operations de I'ann^e 1912. Niort, 1913. Pp. 21. A report to the general assembly regardiag the condition of the regional bank of mutual agri- cultural credit of Deux-Sevres for 1912. Caisse r^gionale de credit agricole mutuel du centre de la Normandie. Note propos6e h, I'attention des caisses locales aflSh^es pour servir k I'^laboration du r^glement int6rieur. Lisieux, 1913. Pp. 24. Notes for the guidance and for the management of local banks affiliated with the regional bank of mutual agricultural credit for central Normandy. Caisse r^gionale de credit agricole mutuel du Ddpartement de Seine-et-Oise et des Arrondissements de Melun et de Fontainebleau. Notice r^digde par Lesage, president du conseil d' administration, pour §tre annex^e au rapport sur les operations de I'exercice 1909. fitampes, 1910. Pp. 50. A report made by the president of the council of administration of the regional bank as an appendix to the annual report for 1909. Statuts. fitampes, 1904. Pp. 4. Constitution of the regional bank of mutual agricultural credit of the Department of Seine-et- Oise and of the districts of Melun and Fontainebleau. Statuts de la caisse locale du credit agricole mutuel. Etampes, 1909. Pp. 4. Sample of a constitution of a local bank of mutual agricultural credit affiliated with the regional bank of Seine-et-Oise. Caisse regionale de credit agricole mutuel du Loiret. Assemble gen^rale du 18 Mars 1911. Orleans, 1911. Pp. 17. Report to the general assembly of the regional bank of mutual agricultural credit of Loiret held on March 18, 1911. Assembiee ggn^rale du 30 Mars 1912. Origans, 1912. Pp. 19. The report presented to the general assembly on March 30, 1912. Assembl6e g6n6rale du 15 Mars 1913. Orieans, 1913. Pp. 21. The report presented to the general assembly on March 15, 1913. Caisse regionale de credit agricole mutuel du Maine. Assembl6e g6n6rale du 4 Mars 1910. LeMans, 1910. Pp. 44. Report of the general assembly of the regional bank of mutual agricultural credit of Maine, held March 4, 1910. Assembl6e ggnerale du 17 F6vrier 1911. LeMans, 1911. Pp. 42. Similar report of the general assembly held February 17, 1911. 31589— S. Doc. 214, 63-1, pt 2 9 66 AGEIOTJLTUEAL COOPEKATION IN EXJBOPB. Caisse r^gionale de credit agricole mutuel du Maine. — =— Assembl6e g6ii6rale du 23 Fevrier 1912. LeMans, 1912. Pp. 32. Similar report of the general assembly held February 17, 1912. Assembl6e generate du 21 Mars 1913. LeMans, 1913. Pp. 22. Similar report of the general assembly held March 21, 1913. Statuts. LeMans, 1900. Pp. 15. Constitution of the Maine regional bank of mutual agricultural credit. Caisse rSgionale de credit agricole mutuel du Midi. Assembl^e g6nerale annuelle du 5 Mars 1912. Montpellier, 1912. Pp. 53. Keport of the general assembly of the Midi regional bank of mutual agricultural credit held March 5, 1912. Assembl6e g6n6rale annuelle du 12 Janvier 1913. Montpellier, 1913. Pp. 39. Similar report of the general assembly held January 12, 1913, of the Midi regional bank of mutual agricultural credit. Note de service. Montpellier. Pp. 6. Notes on the service of the regional bank of mutual agricultural credit of Midi in the use of agri- cultural warrants and of judgments secured against members who disposed of their goods without paying off the warrants to their local banks. ■ Rdglement interieur pour les pr§ts individuels k long terme en conformite de la loi du 19 Mars 1910. Pp. 7. Regulations of the bank for individual long-time loans in conformity with the law of March 19, 1910. Statuts. Montpellier, 1910. Pp. 12. Constitution of the regional bank of mutual agricultural credit of Midi. • Warrants agricoles. Loi du 30 avril, 1906, modifiant la loi du 18 juillet 1898 sur les warrants agricoles, et decree du 7 September 1906 fixant les allocations dues aux greffiers des justices de paix pour I'execu- tion de la loi du 30 avril 1906 sur les warrants agricoles. Montpellier, 1906. Pp. 8. The law and decree relating to agricultural warrants and their execution by the justices of the peace. Caisse r6gionale de credit agricole mutuel du Rhone. Compte rendu des operations de 1911. Lyon, 1912. Pp. 18. Financial statement of the operations of the regional bank of mutual agricultural credit of the Rhone for the year 1911. Principales operations. Lyon, 1913. Pp. 7. A resume prepared for the commissions of the principal methods of conducting business by the local banks of mutual agricultural credit aflBliated with the regional bank of the Rhone. Statuts. Lyon, 1913. Pp. 6. The constitution of the regional bank of mutual agricultural credit of the Rhone. Caisse r6gionale de credit agricole mutuel du Sud-Est. Assembl6e g^nSrale ordinaire du 6 Fevrier 1912. Lyon, 1912. Pp. 19. The general assembly of the regional bank of mutual agricultural credit of the Southeast, held February 6, 1912. Assemblies g6n6rales ordinaire et extraordinaire du 27 F6vrier 1913. Brignais, 1913. Pp. 20. Reports of the ordinary and extraordinary general assemblies of the regional bank of the South- east held February 27, 1913. R^glement general. Lyon, 1913. Pp. 10. General rules and regulations of the regional bank of the Southeast. Prepared for the com- missions. ■ Statuts. Lyon, 1913. Pp. 16: Constitution of the above regional bank of the Southeast. I'BANCB. 67 Caisse r6gionale de credit mutuel agricole de la Haute-Normandie. Compte rendu des operations de I'ann^e 1912. Rouen, 1913. Pp. 18. Financial statement of the work of the regional bank of mutual agricultural credit of Upper Normandy for the year 1912. "\ Caisse r^gionale de credit mutual agricole de Loir-et-Cher. Assembl6e g^nerale annuelle du 11 F6vrier 1911. Compte rendu des operations de I'ann^e 1910. Blois, 1911. Pp. 15. Financial statement for the year 1910 of the regional bank of mutual agricultural credit of Loir- et-Cher, presented to the general assembly held February 11, 1911. Assembl6e g6n6rale annuelle du 10 F^vrier 1912. Compte rendu des operations de l'ann6e 1911. Blois, 1912. Pp. 14. Financial statement of the work of the regional bank of mutual agricultural credit of Loir-et-Cher for 1911, presented to the general assembly February 10, 1912. Assembl^e g6n6rale annuelle du 22 Mars 1913. Compte rendu des operations de l'ann6e 1912. Blois, 1913. Pp. 14. Financial statement of the regional bank of mutual agricultural credit of Loir-et-Cher for 1912, presented to the general assembly March 22, 1913. Statuts. Blois, 1913. Pp. 7. Constitution of the regional bank of mutual agricultural credit of Loir-et-Cher. Congr^s des caisses de credit agricole mxituel tenu h Montpellier les 8, 9, et 10 Janvier 1904. Societe departe- mentale d' encouragement k I'agriculture de I'Herault. Montpellier, 1904. Pp. 278. Report of the congress of the banks of mutual agricultural credit held at Montpellier January 8-10, 1904, imder the auspices of the society for the encouragement of agriculture in the Department of Herault. Credit Foncier de France. Histoire. Paris, 1911. Pp. 44. An outline of the origin and development of the Credit Foncier (land bank) of France. Operations. Paris, 1913. Pp. 47. An outline of the operations and business practices of the Credit Foncier. Statuts. Paris, 1912. Pp. 30. The constitution imder which the Credit Foncier is operated. Statuts et legislation. Paris, 1913. Pp. 192. The constitution and legislation relating to the Credit Foncier. Miaistfere de I'Agriculture. Caisse locale de credit agricole mutuel, statuts. Pp. 11. Sample constitution issued by the minister of agriculture for a local bank of mutual agricultural credit. — — Caisse regionale de credit agricole mutuel et caisse locale. Paris, 1912. Pp. 36. Information concerning agricultural credit and model constitutions for local and regional banks. Dix ans de credit agricole, 1900-1909. Paris, 1911. Pp. 477. Ten years of agricultural credit. Guide pratique pour la tenue de la comptabOite d'lme caisse locale de credit agricole mutuel. Paris, 1913. Pp. 55. Practical instructions for keeping accovmts in local mutual credit banks. Le credit agricole. But; commentaire de la legislation; resultats obtenus. Creation et fonctionnement des caisses locales et regionales. Le credit individuel k court terme. Paris, 1912. Pp. 120. An account of the aim of agricultural credit, a digest of legislation on the subject, and the resiilts obtained by local and regional banks with short-term individual credit. 68 AGBIOULTXJEAL COOPERATION IN EUBOPE. MinistSre de I'Agriculture. Le credit agricole. Credit coUectif en faveur des soci6t4s coop&'ativea de production et de vente, des syndicats agricoles, et des soci6t6s d'assurances mutuelles contre les risques agricoles. Paris, 1913. Pp. 114. Collective agricultural credit in behalf of cooperative societies for production and sale, agricul- tural associations, and of mutual insurance societies against agricultural risks. Le credit agricole. Encouragements k la petite propri^te rurale. Le credit individuel k long terme. Paris, 1912. Pp. 114. Individual long-term credit for encouraging small rural landowners. Regional bank of Rheims. Rheims, 1913. Prepared for the commissions. (See Senate Document 214, p, 757.) Rules of the regional bank of cooperative agricultural credit of the Gironde. Bordeaux, 1913. Prepared for the commissions. (See Senate Document 214, p. 699.) '^ Soci6t6 de credit agricole mutuel du syndicat des agriculteurs de la Sarthe. Statuts. Le Mans, 1900. Pp. 15. Constitution of the mutual agricultural credit society of the farmers' association of Sarthe. Soci6t6 locale de credit agricole mutuel de I'union vinicole des propri^taires d'lndre-et-Loire. Statuts. Tours. Pp. 4. Constitution of the local society of mutual agricultural credit of vine growers' proprietors union of Indre-et-Loire. Soci6t6 locale de credit agricole mutuel, statuts. Tours, 1911. Pp. 4. A sample constitution for a local society of mutual agricultural credii. Syndicat agricole local de Frontignan (H6rault). Caisse rurale locale de credit agricole mutuel. Statuts. Frontignan, 1909. Pp. 9. Constitution of the local mutual agricultural credit bank of the agricultural society of Frontignan, department of H^rault. Troisieme congrSs national du credit, des assurances et de la cooperation agricoles tenu k Montpellier les 1, 2, 3 et 4 septembre 1909. Compte rendu des travaux et des excursions. Montpellier, 1909. Pp. 403. Third national congress of agricultural credit, insurance and cooperation held at MontpeUier Sep- tember 1-4, 1909. Complete report of transactions and excursions. DISTRIBUTION. Riverain, A. Agricultural syndicate of Loir-et-Cher. Prepared for the commissions. (See Senate Docu- ment 214, p. 750.) RozERAT, A. Les laiteries cooperatives dans les Deux-S^vres. Communication faite au congr^s international d'agriculture de Rome en 1903. Niort, 1903. Pp. 16. The cooperative dairies in Deux-Sevres. A communication presented at the international agri- cultural congress at Rome in 1903. L'industrie mulassiere dans le Poitou. Communication faite au congres international d'agriculture de Rome en 1903. Niort, 1903. Pp. 15. The mule industry in Poitou. A communication presented to the international agricultural congress at Rome in 1903. Stopfokd, E. a. Notes on agricultural cooperation in France. Dublin. Pp. 32. Tardy, L. Cooperation in French agriculture. Paris, 1913. Prepared for the commissions. (See Senate Document 214.) Agricultural syndicate for Chartres, Chateaudun and Nogent-le-Rotrou. Chartres, 1913. Prepared for the commissions. (See Senate Document 214, p. 721.) Annuaire des syndicats agricoles 6tabli h I'aide de documents r6unis par le ministfere de I'agriculture (service du credit mutuel et de la cooperation agricoles). Paris, 1911. Pp. 423. Yearbook of agricultural associations compiled by the aid of documents furnished by the minister of agriculture (service of mutual credit and of agricultural cooperation). FRANCE. 69 Assemblfies g6n6rales du syndicat des agriculteurs de la Sarthe pour l'ann6e 1911. Le Mans, 1912. Pp. 15. Report of the operations of the farmers' association of Sarthe for the year 1911. Association des eleveurs, des agriculteurs et des viticulteurs de I'lndre. March6 berrichon de laines Fran^aises, Soci6t6 anonyme r6gie par les lois du 24 juillet 1867 et du premier aofit 1903. Statuts. Chateauroux. 1909. Pp. 11. The association of breeders, farmers, and vine growers of Indre. Constitution of the society organized for the public sale of French wools, a society formed in accordance with the laws of July 24, 1867, and August 1, 1903. Bulletin de I'union du Sud-Est des syndicats agricoles et du syndicat agricole de Tournon. Lyon, octobre k novembre 1910; Janvier h mai 1911. Pp. 20 each. Copies of the bulletin of the union of agricultural association of the Southeast and of the agricul- tural association of Tournon. Central cooperative dairy association of Charentes and Poitou. Niort, 1913. Prepared for the commissions. (See Senate Document 214, p. 717.) Cooperative creamery of Gault St. Denis. Chartres, 1913. Prepared for the commissions. (See Senate Docu- ment 214, p. 725.) Farmers' cooperative electrical society of Prouais-Rosay. Chartres, 1913. Prepared for the commissions. (See Senate Document 214, p. 727.) Farmers' syndicate of Sarthe. Le Mans, 1913. Prepared for the commissions. (See Senate Document 214, p. 730.) F6d6ration nationale de la mutuality et de la cooperation agricoles. VI. congr^s national. Rapports et compte-rendu. Paris, 25-30 octobre, 1912. Agen, 1913. Pp. 458. Report and financial statement of the federation of mutuality and agricultural cooperation held at Paris, October 25-30, 1912. Sixth national congress. Mutual agricultural society of Chartres. Chartres, 1913. Prepared for the commissions. (See Senate Docu- ment 214, p. 723.) Soci6t6 cooperative de laiterie de la Creche. Extrait du tableau r6capitulatif de la 20* ann6e du 1" avril 1912 au l" avril 1913. Niort. Pp. 3. The Crfeche cooperative creamery. Summary of the business for the twentieth year from April 1, 1912, to April 1, 1913. Society cooperative de ramassage et de vente des oeufs. Echire (Deux-Sevres) . Extrait recapitulatif de la 2» annee du 1" octobre 1910 au 30 septembre 1911. Niort, 1911. P. 1. The cooperative society of fichir^ for the collection and sale of eggs. Financial statement for the second year, October 1, 1910, to September 30, 1911. Societe cooperative pour le ramassage et la vente des oeufs. Statuts. Niort, 1912. P. 1. Constitution of the cooperative society of fichire for the collection and sale of eggs. Societe d'approvisionnements et de production des agriculteurs de Loir-et-Cher. Statuts. Blois, 1911. Pp. 10. Constitution of the farmers' purchasing and manufacturing society of Loir-et-Cher. Societe de laiterie cooperative d'fichire. R^glement pour la traite, la conservation et la livraison du lait. Niort, 1911. Pp. 16. The fichire cooperative dairy. Rules for the care, preservation, and delivery of milk, together with blanks for recording the milk for each day of the year. Statuts (nouveaux, troisiSme periode). Niort, 1905. Pp. 14. The new constitution of the above cooperative dairy at fichir6. Statuts du syndicat agricole et de la caisse locale de credit agricole mutuel. Pp. 46. Sample constitution for an agricultural society and for a local bank of mutual agricultural credit connected therewith. 70 AGBIOULTUBAL COOPERATION IN EUBOPB. Syndicat des agriculteurs de Loir-et-Cher. Compte rendu des operations de l'ann6e 1910. Rapports pr6sent6s h l'assembl6e g6n6rale du 1. Avril 1911 . Blois, 1911. Pp. 31. Financial report of the operations of the farmers' association of Loir-et-Cher for 1910, presented to the general assembly held April 1, 1911. Statute. Blois, 1912. Pp. 4. Constitution of the farmers' association of Loir-et-Cher. Union des proprietaires des Grands Crus de Saint-Georges (Hdrault). Statuts. Montpellier. Pp. 18. Constitution of the union of proprietors of St. George, department of H^rault, a cooperative society for the sale of vineyard and farm products. Union of the agricultural syndicates of the southeast provinces. Lyons, 1913. Prepared for the commissions (See Senate Document 214, p. 669.) PRODUCTION. Fallot, B. Principes de vinification pratique. I. La vendange. Transformation du raisin en vin. Vinification en rouge. Vinification en blanc. Blois, 1907. Pp. 56. II. Soins d'entretien des futailes. Traitements g6n6raux des vins. D6fauts naturels et aooidentels. Alterations dues aux maladies. Blois, 1911. Pp. 64. The principles of practical wine making. Vol. I discusses the vintage, transformation of the grape into wine, and the making of red and white wines. Vol. II discusses the care of the casks, general treatment of the wines, natural and accidental defects, and changes due to diseases. R^GNiEB, P., et Lantz, C. Aviculture pratique (recueil de conseils et recettes sur labasse-cour). Blois, 1910. Pp. 87. Information and directions for the practical raising of poultry, together with remedies for the treatment of diseases. RozEKAY, A. fitude sur les races bovines Normande et Parthenaise. Niort, 1900. Pp. 58. A study of the Normandy and Parthenaise breeds of cattle. Association des eleveurs, des agriculteurs et des viticulteurs de I'Indre. Statuts de 1' association, bulletin d' ad- mission, composition du bureau et de la chambre syndicale, oeuvres de 1' association, progression des adherents et des merchandises, bulletin mensuel contenant le compte rendu de I'assembl6e gen6rale de 1913, resume des operations de I'annee 1912, etc. Chateauroux, 1913. Pp. 90. Constitution of the association of breeders, farmers, and vine growers of Indre, together with in- formation on the method of admission of members, the names and addresses of the officials, the different branches of the association, growth in membership and in the sale of merchandise to members, the financial statement made to the general assembly of 1913, a summary of the business transacted in 1912, etc. La station agronomique de la Seine-Inferieure. Son organisation — :Son r61e. Rouen, 1909. Pp.27. The organization and work of the agronomy station of the department of Seine-Inferieure. Society cooperative anonyme k capital variable de producteurs de Muscats de Frontignan. Statuts. Frontig- nan, 1910. Pp. 22. Constitution of the Frontignan cooperative society of producers of Muscat grapes for the manu- facture and sale of wine. Societe d' appro visionnements et de production des agriculteurs de Loir-et-Cher. Compte rendu de I'exercice 1911. Blois, 1912. Pp. 10. Annual financial report for 1911 of the farmers' purchasing and manufacturing society of Loir-et- Cher. Compte rendu de I'exercice 1912. Blois, 1913. Pp. 12. Similar report for 1912. Statuts. Blois, 1911. Pp.10. Constitution of the farmers' purchasing and manufacturing society of Loir-ot-Chor, PBANCE. 71 St. Georges cooperative wine producers' society, an abstract of the by-laws of the society. St. Georges, 1913. Prepared for the commissions. (See Senate Document 214, p. 680.) Station agronomique de la Seine-Inf6rieure. Rfeglement et tarif. Rouen, 1909. Pp. 20. The regulations and charges for making analyses by the agronomic station of the department of Seine-Inf6rieure. Syndicat agricole d'£chir6, statuts. Niort, 1906. Pp. 4. Constitution of the £lchir6 agricultural association. Syndicat d'elevage et de controle laitier du pays de Bray. R&glement interieur. Rouen. Pp. 8. Rules for the management of the breeding and milk control station of Bray. — — Statuts. Rouen, 1913. Pp. 7. Constitution of the breeding and milk control station of Bray. Sjmdicat des agriculteurs de Loir-et-Cher. Compte rendu des operations de I'ann^e 1912. Rapports pr6sent6s k I'assembl^e g^n^rale du 26 Aviil 1913. Blois, 1913. Pp. 20. Financial statement of the operations of the farmers' society of Loir-et-Cher for the year 1912, containing reports presented to the general assembly April 26, 1913. F§te du 25. anniversaire, 5 Juillet 1908. Blois, 1909. Pp. 52. Addresses and proceedings of the twenty-fifth meeting of the farmers' society of Loir-et-Cher. — — F6te du 25. anniversaire de la presidence de M. A. Riverain, 18 Novembre 1911. Blois, 1911. Pp. 15. Addresses and proceedings at the twenty-fifth anniversary of the presidency of A. Riverain of the farmers' society of Loir-et-Cher. Syndicat des agriculteurs et viticulteurs de la region de Saint-Genis-Laval. I. XXV. anniversaire c61eb?6 & Momant le Dimanche 28 Juillet 1912. IL Reglements et renseignements concernant les oeuvres annexes. Lyon, 1912. Pp. 49. The farmers and vine-growers society of the region of St. Genislaval. I. — The twenty-fifth anni- versary exercises held on July 28, 1912. II. — The rules and regulations concerning the societies and works connected with the association. RURAL LIFE. RrvERAiN, A. Rapport sur le role moral et social des syndicats agricoles. VII. congres national de la mutuality et de la cooperation agricoles Clermont-Ferrand, 20-24 AoM, 1913. Clermont-Ferrand, 1913. Pp. 8. Report on the moral and social effect of agricultural societies, presented to the seventh national congress of agricultural mutuaUty and cooperation, held at Clermont-Ferrand August 20-24, 1913. Syndicat des agriculteurs de Loir-et-Cher. Recompenses attribuees aux m^res de famille qui ont eleve une nombreuse famille agricole. Concours de 1913, arrondissement de Vend6me. Blois, 1913. Pp. 12. The farmers' society of Loir-et-Cher, congress of 1913, district of Vendome. The rewards made to mothers who had raised large rural families. Travehng school of domestic science. Pau, 1913. Prepared for the commissions. (See Sena,te Document 214, p. 688.) GENERAL. Beeger, C. Legislation for the prevention of infringements of trade-marks. Report prepared for the ninth international cotton congress at Scheveningen, June, 1913. Pp. 7. DuPOUECQ. Federation of farmers' mutual fire insurance associations of Basses-Pyrenles. Pau, 1913. (See Senate Document 214, p. 685.) Glas, J. Simples notes sur les assurances centre les accidents agricoles. Cooperative agricole du Sud-Est. Grenoble, 1905. Pp. 32. ' Brief notes on insurance against accidents in agricultural pursuits, as carried out by the agricul- tural cooperative societies of the South-east. 72 AGEICULTUBAL COOPERATION IN EUEOPE. Kopp, L. La pr6voyance contre la mortality du b6tail dan runion du Sud-Est des syndicats agricoles. Statuts et commentaires d'apr&s L6011 Riboud.. Revus, conipl6t6s, et mis en harmonie avec la loi du 4 Juillet 1900 relative a la constitution des soci6t6s ou caisses d'assurances mutuelles agricoles. Brignais, 1908. Pp. 52. Provision against the losses of cattle by the union of agricultural societies of the South-east. Constitution and comments after L6on Riboud. A complete review put in harmony with the law of July 4, 1900, relating to the formation of societies or banks of mutual agricultural insurance. Plesst, L. Tuberculose bovin6. Petite bibliothSque agricole et viticole du syndicat des agriculteurs de Loir-et-Cher. Blois, 1911. Pp. 47. Bovine tuberculosis, being one of the publications of the agricultural library of the farmers' society of Loir-et-Cher. RiVEEAiN, A. M^thode pratique de comptabilite agricole. Blois, 1913. Pp. 64. A practical method of agricultural bookkeeping. WooLSEY, T. S. Forest conservation and agriculture. Paris, 1913. Prepared for the commissions. (See Senate Document 214, p. 766.) Annales de la mutuality et de la cooperation agricoles, Aotit 1913, No. 8. Commission am6ricaine d'etudes agricoles. Compte-rendu des seances de travail et de la reception en France, 29 Juin-7 Juillet 1913. Paris, 1913. Pp. 42. A report of the meetings, work, and receptions in France of the American Commission, from June 29 to July 7, 1913, in the issue of the "Annals of Mutuality and Agricultural Cooperation," August, 1913. Assembl6e g6n6rale de la Mutuelle-Agricole-Incendie de I'ouest. Niort, 1913. Pp. 12. Report and financial statement of the agricultural mutual fire insurance society of the West for the year 1912. Assemblies g6n6rales de la Sarthoise, caisse d'assurance agricoles mutuelles contre les accidents du travail pour I'annee 1911. Le Mans, 1912. Pp.10. Notes of the general assembly of the Sarthe agricultural mutual insurance society against accidents at agricultural labor for the year 1911. Association des eleveurs, des agriculteurs et des viticulteurs de I'lndre. Mutuelle accidents agricoles (Lois du 21 Mars 1884 et 4 Juillet 1900). Statuts de la mutuelle accidents agricoles, tableau k remplie par I'assur^, police d'assurance, registre de declarations de sinistres, tableau des assures au 30 Juin 1913. Pp. 37. The association of breeders, farmers, and vine growers of Indre. Constitution of the mutual agricultural accident society, application form, policy, declaration form regarding the accident, and a table of the number and acreage insured to June 30, 1913. Caisse de reassurance contre la mortality du b6tail des Deux-S6vres. Assembl6e g6n6rale du 6 f^vrier 1913. Niort. Pp. 11. Report and financial statement of the cattle reinsurance society of Deux-Sfevres, made to the general assembly February 6, 1913. Statuts. Niort. Pp. 10. Constitution of the cattle reinsurance society of Deux-Sfevres. Caisse locale d'assurances agricoles mutuelles contre I'incendie. Statuts. Niort. Pp. 2. Sample constitution of a local agricultural society for mutual insurance against fire. Caisse mutuelle de reassurance contre la mortalite du b^tail du D6partement de la Marne. Statuts. Chalons- sur-Marne, 1913. Pp. 11. Constitution of the mutual reinsurance society against cattle losses of the Department of Marne. Federation des societes mutuelles agricoles contre I'incendie des Basses-Pyrenees. Assembiee generale du Lundi 4 Mars 1912. Pau, 1912. Pp. 20. Report and financial statement made to the general assembly of the federation of mutual agri- cultural fire insurance societies, March 4, 1912. PEANCE. 73 F6d6ration des soci6t6s mutuelles agricoles centre I'incendie des Basses-Pyr6n6es. Premiere assembl6e g^n^rale du Lundi 20 F^vrier 1911. Pau, 1911. Pp. 4, Report of the above society made to the first general assembly February 20, 1911. Statuts. Constitute d^finitivement le 24 Juin 1910. Pau, 1910. Pp. 16. Constitution of the above society adopted June 24, 1910. L' Agriculture Pratique du Centre, organe de I'enseignement agricole et du sjmdicat des agriculteurs de Loir- et-Cher. Blois, June 1, 1913, pp. 16; June 22, 1913, pp. 16. Copies of "Practical Agriculture," for June 1st and 22d, the journal of agricultural education and of the farmers' society of Loir-et-Cher. La mutuelle chevaline de la Sarthe. Statuts. Le Mans. Pp. 16. Constitution of the Sarthe mutual horse insurance society. (See Senate Document 214, p. 743.) La Sarthoise. Caisse d'assurance agricoles mutuelles contre les accidents du travail. Statuts. Le Mans. Pp. 31. Constitution of "The Sarthoise," a mutual agricultural insurance society against accidents at farm labor. (See Senate Document 214, p. 735.) Notes sur le syndicat des agriculteurs de Loir-et-Cher, la soci6t6 d'approvisionnements et de production des agriculteurs de Loir-et-Cher, et la caisse r^gionale de credit mutuel de Loir-et-Cher. Pp. 7. Notes on the farmers' society, the farmers' society for purchasing and manufacturing supphes, and the regional bank of mutual credit of Loir-et-Cher. Soci6t6 centrale d' agriculture du D^partement de la Seine-Inf6rieure. Bulletin trimestriel. Avril-Juin, 1912, pp. Ill; Juillet-Septembre, 1912, pp. 192; Octobre-D6cembre, 1912, pp. 140; Janvier-Mars, 1913, pp. 125. Copies of the trimonthly bulletin of the central agricultural society of the department of Seine- Inf^rieure, from April, 1912, to March, 1913, inclusive. Son pass6, son programme. Rouen. Pp. 26. Review of the history and an outline of the proposed work of the central agricultural society of the department of Seine-Inf 6rieure. Soci6t6 d'assurance mutuelle agricole contre I'incendie. Statuts. Pau, 1910. Pp. 16. Sample constitution for a mutual agricultural fire insurance society. Soci6t6 d'assurance mutueUe contre la mortaUt^ du b^tail pour I'esp^ce bovine. Statuts. Rouen, 1912. Pp. 12. Sample constitution of a mutual insurance society against the loss of bovine cattle. Soci6t6 de secours mutuels contre la mortality des bestiaux. Statuts recommandes par le syndicat des agri- culteurs de la Sarthe. Le Mans, 1911. Pp. 16. Sample constitution recommended by the Sarthe farmers' society for mutual aid against the loss of live stock. (See Senate Document 214, p. 740.) Soci6t6 mutueUe r^gionale de reassurance contre les accidents du travail agricole. Assemblee g6n6rale du 1. Mars, 1913. Tours, 1913. Pp. 8. Financial statement presented to the general assembly March 1, 1913, of the regional mutual reinsurance society against accidents at agricultural labor. Statuts de la caisse de reassurance mutuelle du Rhone contre la mortahte du b6tail. Lyon, 1913. Pp. 8. Constitution of the mutual reinsurance society of the Rhone against the loss of cattle. Syndicat d'assurance mutuelle contre la mortality des chevaux. Statuts. Rouen, 1912. Pp. 12. Sample constitution for a mutual horse insurance society against loss by death. 31589— S. Doc. 214, 63-1, pt 2 10 74 AGBICULTUEAL COOPEEATION IN" EUROPE. GREAT BRITAIN. CREDIT. Cahill, J. R. An inquiry into agricultural credit and cooperation in Germany; with some notes on German live stock insurance. Report to the Board of Agriculture and Fisheries. London, 1913. Pp. 648. Deans, J., Macintosh, R. and Hart, J. Papers on cooperative finance. Glasgow, 1906. Pp. 16. Geay, J. C. Loan capital: How to deal with it. Manchester. Pp. 8. • Notes of importance for the use of committees and officials. Loans and deposits, share capital, the use of receipt stamps, and the importance of efficient auditing. Manchester. Pp. 12. Harris, J. N. Cooperative agricultural credit in England and Wales. London, 1913. Prepared for the commissions. (See Senate Document 214, p. 784.) MoCtjnn, J. N. Rural credit in Scotland. Glasgow, 1913. Prepared for the commissions. (See Senate Document 214, p. 824.) Wolff, H. W. Cooperative b,anking: Its principles and practice, with a chapter on cooperative mortgage credit. London, 1907. Pp. 317. DISTRIBUTION. Abbott, E., and Buttbrworth, T. B. The early days of a cooperative society. Some hints on rules and man- agement. Manchester, 1909. Pp. 23. Cahill, J. R. An inquiry into agricultural credit and cooperation in Germany; with some notes on German live stock insurance. Report to the Board of Agriculture and Fisheries. London, 1913. Pp. 548. Comtns-Lewee, E. The FramUngham Egg Collecting Depot. A lesson in cooperation. Reprinted from the "Feathered World." London, June 6, 1913. Pp. 3. Deans, J. The amalgamation of societies as a means of consohdating the cooperative movement. Manchester, 1910. Pp. 11. Douglas, C. Agricultural organization in Scotland. Dublin, 1913. Prepared for the commissions. (See Senate Document 214, p. 821.) Ellis, R. Development societies in agricultural organization. Bangor, 1913. Prepared for the commissions. (See Senate Document 214, p. 801.) Gray, J. C. Self-help for the people. A brief review of some of the benefits which cooperation has conferred on the working classes. Manchester. Pp. 7. Harris, J. N. Agricultural cooperation and its relation to cooperative distributive societies. The cooperative union, limited. Address at the forty-first annual congress, held at Newcastle-on-Tyne, May 31 to June 2, 1909. Manchester, 1909. Pp. 28. EngUsh agricultural organization society. London, 1913. Prepared for the commissions. (See Senate Document 214, p. 773.) Hopkinson, G. H. Best system of leakage for a country cooperative store. Manchester. Pp. 8. Jones, C. B. The University College of Wales, Aberystwyth, and agricultural cooperation. Aberystwyth. Pp. 4. (See Senate Document 214, p. 810.) MacGreqor, D. H. Cooperation in relation to the trust movement. Manchester, 1911. Pp. 21. Openshaw, W. Store management. Manchester, 1908. Pp. 18. Pilkington, H. Cooperation and business organization of agriculture. Bangor, 1913. Prepared for the commissions. (See Senate Document 214, p. 803.) GBEAT BRITAIN. 75 Schmidt, A. International federation of master cotton spinners' and manufacturers' associations. Statistics of the stocks of cotton in spinners' hands on March 1, 1913, with previous years' tables for comparison. Manchester, 1913. Pp. 12. SooTTON, A. The duty of members to the store and of the store to the movement. Manchester, 1899. Pp. 8. Stapleton-Cotton, R. Importance of cooperative marketing of farm produce. Bangor, 1913. Prepared for the commissions. (See Senate Document 214, p. 806.) Stoddakt, a. Cooperation as a remedy for unemployment. Manchester, 1909. Pp. 12. Warben, E. G. a highly successful egg-collecting society, Framlingham and district agricultural cooperation society, ltd. Pp. 8. Webb, C. Should cooperative employees understand the principles of the movement, and if so, how are they to be taught? Manchester. Pp.24. Williams, W. Promotion of agricultural cooperation. Bangor, 1913. Prepared for the commissions. (See Senate Document 214, p. 812.) Wilson, R. J. The position of employees in the cooperative movement. Manchester, 1907. Pp. 14. Wolff, H. W. Cooperation as a thrift institution. Manphester, 1907. Pp. 16. Wood, T. The advisability or otherwise of having transferable shares, and the question of reserve funds and depreciation. Manchester, 1904. Pp. 22. Cooperative Wholesale Society (Ltd.). Annual for 1913. Pp. 374. Illustrated account of the present position of the cooperative wholesale society to-day. Manchester, 1913. Pp. 32. Program of visit of American commissions, July 10, 1913. List of hosts of American commissioners and statistics of cooperative wholesale society. Pp. 8. - — Statement. London, 1913. Prepared for the commissions. (See Senate Document 214, p. 787.) Eastern Counties Farmers' Cooperative Association (Ltd.). Portman Road seed warehouse. Pp. 3. Rules. Nottingham, 1907. Pp. 46. Seed store. Price Mst of clover, grass, and root seeds. Ipswich, 1913. Pp. 12. ■ Statement. Terhng, 1913. Prepared for the commissions. (See Senate Document 214, p. 792.) Framlingham and District Agricultural Cooperative Society (Ltd.). Report and statement of accounts for the year ending December 31, 1912. Framlingham, 1912. Pp. 4. (See Senate Document 214, p. 793.) PRODUCTION. Gavin, W. Studies in milk records: On the accuracy of estimating a cow's milking capabiUty by her first lactation yield. Journal of Agricultural Science, Vol. V, pt. 4. Cambridge, 1913. Pp. 377-390. Studies in milk records: The influence of foStal growth on yield. Journal of Agricultural Science, Vol. V, pt. 3. Cambridge, 1913. Pp.11. The interpretation of milk records. Royal Agricultural Society of England, London, 1913. Pp. 22. ScHANZ M. Cotton in Egypt and the Anglo-Egyptian Sudan. Submitted to the 9th International Cotton ' Congress, Scheveningen, June 9-11, 1913. Manchester, 1913. Pp. 143. Board of Agriculture and Fisheries. Acreage and Uve stock returns of Great Britain with summaries for the United Kingdom. Agricultm-al statistics, 1911, vol. 46, pt. 1. London, 1912. Pp. 97. Imports and exports of corn, Uve stock, and other agricultural produce and trade m live stock with Ireland Agricultural statistics, 1911, vol. 46, pt. 4. London, 1912. Pp. 100. 76 AGMCULTUBAL COOPERATION IN EUROPE, Board of Agriculture and Fisheries. Leaflets. No. 26. Farmers and the income tax, pp. 8. No. 27. Remission of tithe rent charge, pp. 4. No. 97. Farmers' cooperative societies, pp. 4. No. 189. Insurance of farm stock against fire, pp. 6. No. 197. Agricultural education and research in England and Wales, pp. 16. No. 214. Cooperative agricultural credit banks, pp. 8. No. 215. How to obtain an allotment or a small holding, pp. 4. No. 216. The administration of the small holdings act, pp. 8. No. 217. The administration of the allot- ment act, pp. 4. No. 218. Associations for the creation of small holdings, pp. 8. No.' 221. Mutual insurance of hve stock, pp. 8. No. 240. Farm bookkeeping, pp. 8. No. 260. Statistics of agricultural cooperative credit societies in England and Wales, pp. 8. No. 261. The Scawby agricultural credit society, pp. 8. Pubhcations of the Board of Agriculture and Fisheries pp. 16. Notes on Essex agriculture. Excursion of the American commissions to Ipswich and Hatfield Peveral, July 9, 1913. Pp. 3. (See Senate Document 214, p. 791.) Prices of com, live stock, and other agricultural produce in Great Britain. Agricultural statistics, 1911, vol. 46, pt. 3. London, 1912. Pp. 88. Returns of produce of crops in Great Britain, with summaries for the United Kingdom. Agricultural sta- tistics, 1911, vol. 46, pt. 2. London, 1912. Pp. 88. Visit of the American Commission on Agricultural Credit and Cooperation to Lord Rayleigh's farms, Terling, Essex, July 9, 1913. Witham, 1913. Pp. 10. Prepared for the commissions. (See Senate Docu- ment 214, p. 796.) Rothamsted Experimental Station, Harpenden. Annual report for 1911 with the supplement to the "Guide to the Experimental Plots," containing the yields per acre, etc. Harpeqden, 1912. Pp. 23. Annual report for 1912, etc. Harpenden, 1913. Pp. 26. GENERAL. Gavin, W. On the effects of the administration of extracts of pituitary body and corpus luteum to milch cows. Quarterly Journal of Experimental Physiology, Vol. VI, No. 1. London, 1913. Pp. 16. HiNCKES, R. T. The Farmers' Outlook. A review of home and overseas agriculture, 1880-1913. London, 1913. Pp. 140. Riley, M. J. Infringement of trade-marks and unfair competition in the making up of yarns and pieces. Paper for the 9th International Cotton Congress of the International Federation of Master Cotton Spinners and Manufacturers' Associations, at Scheveningen, June 9-11, 1913. Manchester, 1913. Pp. 15. Ipswich in 1912. Souvenir of Ipswich commemorating the opening of the King Edward Memorial Sanatorium. East Anghan Daily Times, June 14, 1912. Pp. 46. Royal Agricultural Society of England. Catalogue of live -stock, poultry, farm and dairy produce, implements, and other exhibits at the seventy- fourth annual exhibition at Bristol, July 1-5, 1913. London, 1913. Pp. 630. Great Western Railway time tables and general information. London, 1913. Pp. 48. The Agricultural Organization Society. Agenda of the first meeting of the governors to be held on October 9-11, 1912. London, 1912. Pp. 188. Dublin Joint Conference, July 12-15, 1913. English and Scottish Agricultural Organization Society evi- dence before the American commissions. Edinburgh, 1913. Pp. 42. Eastern counties. Conference at Terling, July 9, 1913, with the American commissions. London, 1913. Pp. 12. Method of organizing cooperative societies. London. (See Senate Document 214, p. 782.) Wales. Bangor conference, July 11, 1913, with the American commissions. London, 1913. Pp. 34. IRELAND. 77 IRELAND, CREDIT, FiNLAT, T. A. Rural credit in Ireland. Dublin, 1913. Prepared for the commissions. (See Senate Docu- ment 214, p. 843.) Wolff, H. W. General review of rural credit. Dublin, 1913. Prepared for the commissiona. (See Senate Document 214, p. 846.) Central Cooperative Credit Society (Ltd.). Rules. Dublin, 1913. Pp.43. Irish Agricultural Organization Society. Agricultural Societies. Finance. Instructions and suggestions for committee of management. Leaflet No. 58. Dublin, 1902. Pp. 2. Cooperative credit. Leaflet 4. Dublin. Pp. 4. Leaflets on agricultural credit. Dublin. Need of rural banks in Ireland. (See Senate Document 214, p. 889.) Rules for credit society. Dublin, 1912. Pp. 24. Rural banks (in Gaelic). Dublin. Pp. 8. Samples of application blanks, etc. DISTRIBUTION. Anderson, R. A. Our creameries, some suggested reforms. Paper read at annual general meeting of the Irish Agricultural Organization Society, December 10, 1909. Dublin, 1910. Pp. 15. Phelan, T. Agricultural cooperation. Address at a conference of cooperative societies in Kilkenny, December 14, 1911. Irish Agricultural Organization Society Leaflet No. 2, new series. Dublin. Pp. 6. Plunkett, Sir Hoeace. The new movement in Ireland. Address before the economic society of Newcastle- on-Tyne, October 27, 1898. Dublin, 1899. Pp. 19. Riche, D. L. Irish cooperative agency society. Limerick, 1913. Prepared for the commissions. (See Senate Docimient 214, p. 878.) Cooperative creamery (Ltd.). Sample rules. Dublin, 1913. Pp. 34. Cooperative farm implement society (Ltd.). By-laws. Dublin. Pp. 3. Rules. Dublm, 1913. Pp. 43. Drombanna cooperative creamery (Ltd.). Rules. Dublin, 1912. Pp.32. Irish Agricultural Organization Society. Leaflets : No. 3 (new series), Cooperative creameries, pp. 4. No. 3a — Auxiliary creameries, pp. 2. No. 5 — Cooperation among poultry keepers, pp. 4. No. 6 — Cooperative agricultural and poultry societies, pp. 4. No. 24— Cattle insurance, pp. 7; and cooperation in bee- keeping, pp. 3. No. 59 — Trade federation: The Irish Agricultural Wholesale Society, pp. 4; No. 60 — Trade federation: The Irish Cooperative Agency Society, pp. 4; No. 61— Cooperation: To all agri- cultural laborers, pp. 4. Pamphlet No. 6— Cooperation and flax cultivation, pp. 8. Why you should buy Irish produce. The Irish Homestead Association, Dublin, 1909. Pp. 64. 78 AGRIOULTXJEAL COOPEEATION IN EUEOPE, PRODUCTION. Pltjnkett, Sir Horace. Plain talks to Irish farmers. An examination of the changes which must be made by Irish farmers in the management of their private and public affairs if the land settlement is to bring prosperity to Ireland. Dublia, 1910. Pp. 46. State aid and self-help in agricultural development. A memorandum submitted by the joint board of agricultural organization to the development commission. London, 1911. Pp. 19. WiBBEKLEY, T. Profitable production. Dublin. Pp. '16. Cooperation and flax cultivation. Pamphlet No. 6 of the Irish Agricultural Organization Society publications. Dublin. Pp. 8. Cooperative live stock insurance society. Rules. Dublin, 1910. Pp. 15. Ireland as a field of investment. Dublin. Pp. 8. RURAL LIFE. Aberdeen, Countess. The Work of the Women's National Health Association of Ireland. Dublin. Pp. 42. Barbour, H. The work of the Irish Agricultural Organization Society. Why agricultural organization was necessary in Ireland. Dubhn, 1910. Pp. 12. (See Senate Document 214, p. 884.) Brooks, S. An Irish worker and his work. From the Fortnightly Review. Wexford. Pp. 8. Gill, T. P. Department of agriculture and technical instruction. Dublin, 1913. Prepared for the com- missions. (See Senate Document 214, p. 850.) O'DoNOVAN, J. Village libraries. Dublin, 1902. Pp. 16. Plunkett, Sir Horace. A country life institute. A suggested Irish-American contribution to rural progress. Dublin, 1909. Pp. 30. A suggested solution of the rural problem. Address before the commissions, Plunkett House, July 12, 1913. Dublin, 1913. Pp. 32. (See Senate Document 214, p. 831.) The Irish Agricultural Organization Society and its aims. Leaflet No. 1 addressed to the farmers of Ire- land. Dublin, 1911. Pp. 4. The neglect of country life. A plea and a policy. Address delivered at the formal opening of the Plunkett House, November 11, 1908. Dublin, 1909. Pp. 16. Russell, G. W. The building up of a rural civilization. Address at the annual general meeting of the Irish Agricultural Organization Society, December 10, 1909. Dublin, 1910. Pp. 11. The rural community. Address before the commissions, Plunkett House, July 15, 1913. Dublin, 1913. Pp. 20. (See Senate Document 214, p. 857.) Albert agricultural college, Glasnevin. Prospectus. Department of Agriculture and Technical Instruction for Ireland. Dublin, 1911. Pp. 39. Organization of agricultural education in Ireland. Dublin, 1913. Prepared for the commissions. (See Senate Document 214, p. 852.) GENERAL. Cox, H. Ireland's interest in free trade. Dublin, 1910. Pp. 23. Cattle insurance. Leaflet No. 24 of the Irish Agricultural Organization Society. Dublin, 1910. Pp. 7. Department of Agriculture and Technical Instruction for Ireland. (a) Agricultural statistics, Ireland, 1912. Report and tables relating to Irish agricultural laborers. Lon- don, 1913. Pp. 46. (6) Twelfth annual report 1911-12. Details of the department's operations. I. Agriculture. London, 1913. Pp. 124. IRELAND. 79 Irish Agricultural Organization Society (Ltd.) Its origin, objects and methods. A memorandum prepared for the commissions. Dublin, 1913. Pp. 4. (See Senate Document 214, p. 882.) Eeport for the year ending June 30, 1912. Dublin, 1913. P. 143. Rules. Dublin. Pp. 34. Reception of the commissions in Dublin. Conference at Plunkett House, Dublin. Address by Sir Horace Plunkett, etc. "The Irish Times," July 14, 1913. P. 1. State aid and self-help in agricultural development, being a memorandum submitted by the joint board for agricultural organization to the development commission; with an introduction by the Right Hon. Sir Horace Plunkett, K. C. V. O., chairman of the joint board. London, 1911. Pp. 19. The Irish Homestead, a weekly newspaper, the organ of Irish agricultural and industrial development. Copies for September 21 and 28, October 5, December 28, 1912; and January 4 to March 29, 1913. Pp. 20 each. Ulster branch of the Irish Agricultural Organization Society. Address by the Marchioness of Londonderry at the annual meeting April 18, 1910. Dublin, 1910. Pp. 8. ^ 63DeoNOEEss\ SENATE fDod No. 214 Jst Session / \ Part 3 AGRICULTURAL COOPERATION AND RURAL CREDIT IN EUROPE INFORMATION AND EVIDENCE SECURED BY THE AMERICAN COMMISSION, CONSIS'nNG OF DELEGATES FROM DIFFERENT STATES IN THE UNITED STATES AM) DIFFERENT PROVINCES OF qANADA, ASSEMBLED FOR THE PURPOSE OF IN- VESTIGATING IN EUROPEAN COUNTRIES COOPERATft^ AGRICUL- TURAL nNANCE, PRODUCTION, DISTRIBUTION. AND RURAL UFE; AND The UNITED STATES COMMISSION, APPOINTED BY PRESIDENT WILSON "TO COOPERATE WITH THE AMERICAN COMMISSION ASSEMBLED UNDER THE AUSPICES OF TIffi SOUTHERN COMMERCIAL CONGRESS TO INVESTIGATE AND STUDY IN EUROPEAN COUNTRIES COOP- ERATIVE LAND-MORTGAGE BANKS, COOPERATIVE RURAL CREDIT UNIONS, AND SIMILAR ORGANIZATIONS AND INSTITUTIONS DEVOTING THEIR ATTENTION TO "THE PROMOTION OF AGRICULTURE AND THE BETTERMENT OF RURAL CONDHIONS'' (H. R. 28283, APPROVED MARCH 4. 1913) PART 3 AMERICAN EVIDENCE WASHINGTON GOVEiyaHENT PRINTING OFHCE 1914 63d Congkbss 1 a-c.T.y . T,T, / Doc. No. 214 IstSeision f SENATE | p^^^ 3 AGRICULTURAL COOPERATION AND RURAL CREDIT IN EUROPE INFORMATION AND EVIDENCE SECURED BY THE AMERICAN COMMISSION, CONSISTING OF DELEGATES FROM DIFFERENT STATES IN THE UNITED STATES AND DIFFERENT PROVINCES OF CANADA, ASSEMBLED FOR THE PURPOSE OF IN- VESTIGATING IN EUROPEAN COUNTRIES COOPERATIVE AGRICUL. TURAL FINANCE, PRODUCTION, DISTRIBUTION, AND RURAL UFE; AND THE UNITED STATES COMMISSION, APPOINTED BY PRESIDENT WILSON "TO COOPERATE WITH THE AMERICAN COMMISSION ASSEMBLED UNDER THE AUSPICES OF THE SOUTHERN COMMERCIAL CONGRESS TO INVESTIGATE AND STUDY IN EUROPEAN COUNTRIES COOP- ERATIVE LAND-MORTGAGE BANKS, COOPERATIVE RURAL CREDIT UNIONS, AND SIMILAR ORGANIZATIONS AND INSTITUTIONS DEVOTING THEIR ATTENTION TO THE PROMOTION OF AGRICULTURE AND THE BETTERMENT OF RURAL CONDITIONS" (H. R. 26283, APPROVED MARCH 4, 1913) PART 3 AMERICAN EVIDENCE WASHINGTON GOVERNMENT PRINTING OFTICE 1914 REPORTED BY MR. FLETCHER. In the Senate of the United States, October 20, 1913. Resolved, That there be printed as a public document the evidence secured by tbe American commission in cooperation with the United States commission on their inquiry into the agricultural credit and cooperative systems of European countries, made between April 26 and July 26, 1913, including special reports of sub- committees, statements and addresses pertaining to the subjects, submitted to tbe commissions, or either of them, all printed matter prepared for the commissions, or either of them, a bibliography of any literature used as material for the reports of said commissions, translations of laws and statutes under which the various institu- tions studied operate in the different countries, translations of constitutions, by-laws, rules and regulations, and business forms of institutions investigated, special statistical data showing the extent to which each system or set of institutions is found to exist in each country, and other material hearing on the worTc of the commissions. Attest James M. Bakeb, Secretary. ORGANIZATION OF THE COMMISSION. THE UNITED STATES COMMISSION. Duncan U. Fletcher, Florida, Chairman. John Lbb Coulter, Minnesota, Secretary. Thomas P. Gore, Oklahoma. Kenyon L. Butterpield, MassachusetlB. Balfh W. Moss, Indiana. Clarence J. Owens, Maryland. Harvie Jordan, Georgia. THE AMERICAN COMMISSION. EXECUTIVE OFFICERS. Duncan U. Fletcher, Florida, Chairman. Kenyon L. Butterfield, Massachusetts, Vice Chairman. Harris Weinstock, California, Vice Chairman. Thomas S. Southgate, Virginia, Vice Chairman. S. A. Lindsey, Texas, Vice Chairman. Clarence J. Owens, Maryland, Director General. Haarvie Jordan, Georgia, Secretary Treasurer. California: Harris Weinstock. E. J. Wickson. Connecticut: Edward Chapman. Colorado: Gordon Jones. Florida: Duncan U. Fletcher. John G. Ruge. F. J. H. von EngeLken. Georgia: C. W. Hillhouse. Harvie Jordan. Illinois: George W. Woodruff. Indiana: Ralph W. Moss. Massachusetts: Kenyon L. Butterfield. J. Lewis Ellsworth. Charlotte Barrell Ware. Maryland: Clarence J. Owens. Michigan: William B. Hatch. Minnesota: James C. Caldwell. John Lee Coulter. Mississippi: Thomas J. Brooks. Alberta: Alwyn Bramley-Moore. Henry Marshall Tory. members by states Missouri: Garland B. MiUer. Nevada: J. E. Stubbs. New York: Frederick H. Allen. Albert E. Roberts. R. B. Van Cortlandt. C. 0. Mitchell. North Carolina: E. L. Daughtridge. John Sprunt Hill. A. E. Tate. Ohio: William M. Brown. John Cunningham. Marshall E. Thrailkill. Oklahoma: Thomas P. Gore. Oregon: Hector MacPherson. H. G. Starkweather. Pennsylvania: Robert L. Mtmce. James G. McSparran. South Carolina: T. B. Thackston. E. P. Woodside. E. I. Woodside. members by canadian provinces. Ontario: Charies F. Bailey. Lionel Smith-Gordon. Nova Scoha: Arthur S. Bamstead. Tennessee: Lilian W. Johnson. H. A. Morgan. Ernestine Noa. James AUen Smith. Mary Temple. Texas: Charles B. Austin. W. W. Dexter. S. A. Lindsey. Clarence Ousley. J. S. WilUams. Francis W. Wozencraft. Utah: Robt. J. Glendinning. Vermont: Charles Otis Gill. Virginia: R. W. Dickenson. Le Roy Hodges. Thomas S. Southgate. Washington: Clark G. Black. Ralph Metcalf. Sarah S. McMiUan. West Virginia: Joseph F. Marsh. Wisconsin: Porter L. A. Ferguson. District of Columbia: Milton V. Richards. Saskatchewan: John H. Haslam. Edmund Henry Oliver. AMERICAN EVIDENCE. X 7 CONTENTS. Introduction 11 Reports of committees: Resolution adopted by American Oommission 12 Letter to governors of States and Provinces 12 Alaska 12 Alabama 13 Arizona 13 Arkansas 14 Connecticut 15 Delaware 16 Florida 17 Georgia 18 Idaho 21 Dlinois 23 Iowa, 24 Kentucky 27 Louisiana 30 Maine *. 31 Maryland 32 Massachusetts ' 32 Michigan 33 Minnesota .'-. 33 Mississippi 38 Montana 40 Nevada 40 New Jersey 41 New Mexico 44 New York '. 49. North Carolina 49 North Dakota 54 Oklahoma - 55 Oregon 59 Pennsylvania 59 Rhode Island 60 South Carolina 61 South Dakota 62 Tennessee 62 Texas ; - 64 Utah 64 Virginia 65 Washington 65 West Virginia - 67 • Wisconsin ^9 New Brunswick - 82 Nova Scotia -^ ^^ Ontario ^3 Saskatchewan °^ Rural credit unions, Legislation: Texas 84 Wisconsin °° New York ^^ Massachusetts Riural Credit Unions, organizations : The Jewish Agricultural Aid Society 94 9 INTRODUCTION. This bulletin, part 3 of Senate Document No. 214, completes the joint report of the American and United States Commissions. In the first section of this bulletin will be found letters from the governors and premiers in reply to the request from the American Commission for the appointment of committees to report on the agricultural needs of the States and Provinces, and copies of reports of the committees. In the second section of this bulletin wUl be found reprints of credit-union laws found in AmericaiU States, collected by the secretary of the United States Commission, as follows : Texas. — This law was approved by the governor of Texas March 31, 1913, to take effect 90 days after adjournment of the legislature of that State. On January 23 the conmaissioner of the department of insurance and banking of Texas advised that at that date there had not been formed in Texas any rural credit union. He advised further that no appUcation for organization had been made, and stUl further that no steps had been taken by the department of insurance and banking to draw up uniform constitution, by-laws, the forms to be used, etc. WiscoTisin. — The Wisconsin law was approyed August 1, 1913, and provision was made that the act should take effect and be enforced from and after its passage and publication. In a letter dated January 21 statement was made that no associations had at that date been formed under the act and, further, that no one had formu- lated uniform by-laws for prospective organizations. New York. — The New York act to amend the banking laws in relation to credit unions became a law May 17, 1913, with the approval of the governor. According to the act, the law became effective immediately. No credit unions were formed, however, and gentlemen who were particularly interested in the success of the credit-union movement, after thoroughly studying the act, found a small number of defective sections and made some important recommendations, resulting in concerted action on the part of the commissioner of banks, the governor of the State, and others to amend the act as quickly as possible. The copy printed herewith is the finally approved act. Massachusetts. — The Massachusetts law was chapter 419 of the acts of 1909. This is the oldest and best- known law on the subject. Replying to a request made upon the bank commissioner of the Commonwealth of Massachusetts, statement was made that the last report received from credit unions formed under this law was as of the close of business October 31, 1913, and on that date there were 34 unions doing business, with 4,529 members, $185,151 in assets, and with loans outstanding amounting to $146,740. The bank commissioner of the Commonwealth of Massachusetts has prepared a set of by-laws, which are recommended by the department. These by-laws are not prescribed by the department, and they may be changed or added to in accordance with the needs in each case. The activities of the Jewish Agricultural and Industrial Aid Society are well known. In view of the fact that this organization has been instrumental in organizing credit unions in different parts of the United States, brief reference should be made to these small societies. A three-page report showing the status of the various credit unions according to statement submitted upon September 30, 1913, is attached as part of the "evidence" pertaining to credit unions. REPORTS OF COMMITTEES. RESOLUTION ADOPTED BY THE AMERICAN COMMISSION IN GENERAL ASSEMBLY, LONDON, ENGLAND, JULY 8, 191S. That the headquarters of the American commission call upon the governors of States and the premiers of Provinces aflBliating with the commission, to authorize a State or Provincial committee to ascertain the agricultural needs of the respective States and Provinces and to file copies of their findings with the headquarters office of the American Commission not later than October 1, 1913. LETTER FORWARDED TO GOVERNORS OF STATES AND PREMIERS OF PROVINCES OF DOMINION OF CANADA. The American Commission, representing 36 States and 5 Canadian Provinces, has com- pleted its investigation of agricultural finance, distribution, production, and rural life in Euro- pean countries. Inclosed you will find copy of the preliminary statement unanimously adopted by the commission. You will note in the concluding paragraphs that a compilation committee and an advisory committee have been elected to brief the material and that the full commission will meet in Washington on or about November 18 to adopt the report that is to be submitted to the Congress of the United States, to the States and Provinces, and to the organizations aflSliating with the body. I am directed by a unanimous vote of the American Commission to request you to appoint a committee of three to prepare a brief statement as to the agricultural needs of your State, in order that the American Commission may consider the needs of our States and Provinces as they endeavor to reach the solution of our economic problems through the use of the findings of the commission in European countries. Please advise this office if you will take immediate steps for the appointment of such a committee and favor us by forwarding the names and addresses of your appointees. Yours, very truly. ALASKA. Cooperative stores owned and managed by natives are fostered wherever possible in Alaska by the United States Bureau of Education, which has charge of education for the natives of Alaska. In this way the bureau helps the natives protect themselves from those traders who charge exhorbitant prices for food and clothing and pay as Httle as possible for native products. In the small villages even legitimate marketing expenses are a heavy burden unless there is some form of cooperation. These cooperative attempts have been a decided success. At Hydaburg, in southeastern Alaska, where the United States school-teacher has general oversight of the cooperative stores, the natives were able, after 12 months of business, to declare a cash dividend of 50 per cent and still have funds available for the erection of a larger store building. The Klawock Commercial Co., also under native management, was able after nine months of existence, to erect a new store building from its surplus. At Klukwan also the natives have organized a cooperative store. Native stores have for several years been in successful operation at Cape Prince of Wales and on St. Law- rence Island, where the natives buy food at reasonable prices and are assured of an equitable exchange for their furs and other products. A more recent example of cooperation is at Atka, a remote island in the Aleutian chain. Formerly rough lumber cost $50 per thousand and shingles $8 a thousand on this island, and clothing and food supplies were correspondingly high. On the other hand, the natives were poorly paid for their labor. For each of the few blue-fox skins the natives could catch they received from the trader goods averaging $8 in value. Sold at public auction in Seattle these sktos brought $17.10 to $66.50 each, according to quality. In April of this year, 12 ARIZONA. 13 with the help of Seattle merchants and officers of the Revenue-Cutter Service, a cooperative company was organized under the direction of the United States public-school teacher, and now the natives are doing their own buying and sellifig with considerable advantage to themselves. Eskimos on the shore of Bering Sea and the Arctic Ocean have until recently had to market through local traders. Now many of them are sending by mail packages of fox, lynx, mink, and hair seal to the Alaska division of the Bureau of Education at Seattle, and the Government officials sell the furs for the natives at public auction to the highest bidders. Natives in Tatitlek cooperated in salting and exporting salmon during the past season, under the Instruc- tion of the local Government teacher, with the result that they have not only netted $1,000 in cash, but have also put away 76,000 pounds of smoked sklmon for winter use. Cooperation in Alaska has been aided by the policy of reserving tracts of land for the exclusive use of the natives. On this land the natives build up their own industries, safe from the evil influence of unprincipled white men. Hydaburg is a reservation settlement; Klukwan has recently obtained a similar reservation upon which to conduct its cooperative enterprises, and Eiawock hopes to secure reservation land in the near future. ALABAMA. State of Alabama, Executive Depaetmeni, Montgomery, Odder 22, 1913. I shall take pleasure in appointing the committee suggested from the State of Alabama with instructions that they expedite their work as rapidly as possible. Yours, very truly, Note. — Report has not been submitted. Emmet O'Neal, Governor. ARIZONA. The Governor's Office, State House, PJwenix, August 25, 1913. Dear Sir: I am in receipt of your letter of the 14th instant, suggesting that I, as governor of Arizona, appoint a commission of three members to prepare a brief statement as to the argicultural needs of Arizona. In accordance with your request, at the instance of the American Commission, I have deemed it advisable to assign these duties to the regularly existing State commission of agricultm'e and horticulture, consisting of the following members: Hon. Andrew Kimball, Thatcher, Ariz.; Hon. W. K. Bowen, Mesa, Ariz.; Prof. R. H. Forbes, Tucson, Ariz. I have requested the three gentlemen named above to prepare, at their earhest convenience, such a report as your commission desires, and have no doubt that the matter will be satisfactorily handled at an early date. Yours, very respectfully, w t, tt Geo. W. p. Hunt, "Governor of Arizona. NEEDS OF THE ARIZONA FARMER. 1. It is not less than the truth to say that the Arizona farmer, surrounded by new conditions of soil, of irrigation, of climate, of insect pests and plant diseases, needs the service first of all of those agencies for inves- tigation which will inform him along the many new developments of farming with which he finds himself in contact. His needs are so urgent and so critical oftentimes than an ever ready source of information, both publications and personal advice, are a necessity. Assistance of this kind wUl, in many cases, save time and loss so likely to be incurred by the recent emigrant to the region. Agencies for investigation m the State, therefore, although they have been highly developed in proportion to the age of the State, must be advanced and strengthened in order to perform the service required of them. These agencies at present consist of the State agricultural experiment station, of the various branches of the Federal Department of Agriculture, efforts of the State commission of agriculture and horticulture operatmg m the Southwest, and, to some extent, also, of purely scientific organizations operating in the southwestern field, such as the Carnegie Institution for Scientific Research. 14 AGKICULTUEAL COOPEEATION IN EUROPE. 2. Another requirement of the Arizona farmer is for systematic education, both for long and short terms, to meet the needs of all sorts and conditions of men. The farmer himself must be reached by means of farm- ers' institutes, farmers' and fruit-growers' conventions under direction of the State commission of agricultiu"e and horticulture, which are conducted in his home community whenever and wherever within the State a few may be gathered together to listen to the messages brought them by university lectiurers, members of State commissions, etc. Institutes of several days' duration may also be held in classes organized to meet univer- sity lecturers in schools and academies through the State. Also, the two weeks' short course offered once each year at the State university, Tucson, gives a still better opportunity for the farmer to acquire a large amount of useful information at a smaU cost of time and of money. This feature of educational effort has been especially successful. The further development of two and four year college courses is also needed within the State, the uni- versity having only recently endowed and organized its agricultural courses. 3. The organization of farmers is necessary in Arizona, whose producing centers are usually situated at great distances from markets. This fact makes especially necessary the organization of small farmers, so that they may deal through competent business managers with transportation and selling agencies. Such organization to some extent already exists, as fruit growers', citrus growers', cantaloupe growers', bee keep- ers', and various live-stock growers' associations; but there is opportunity and need for a much closer and more extensive organization of agricultural interests within the State. 4. A very urgent need of the farmer in Arizona, as elsewhere in the Union, is better business facilities in connection with his farming operations. It is usually the case that a farmer, like other business men, needs money from time to time with which to tide over his business while he is waiting for crops, to mature or while he is holding crops for the best market prices. It is usual almost everywhere for commercial agencies to take advantage of the needs of the farmer and either force him to sell his products at a disadvantage or to borrow money at excessive rates of interest, or under conditions fraught with peril to hknself . The rates of interest on agricultural loans in Arizona may safely be stated to be from 2 per cent to 4 per cent higher than in the case of business men in the same districts. This condition manifestly discriminates unfairly against the farmer, and it is suggested that, as in Europe, Government agencies should afford loans on proper seciu-ity to the farmer, which will at least place him at an equal advantage with other borrowers. 5. Other needs of Arizona farmers are: (a) Governmental aid in the construction of reservoirs and diversion dams and main-line canals; in the conservation of flood waters ; in the conservation of artesian waters now allowed to go to waste. (6) Aid to overcome the alkali threatening the lower lands in some rich and fertile districts of the State. (c) Organization of an immigration bureau, with sufficient appropriations to enable its agents to aid the landless man to get upon the manless land, and to encourage the home seeker to settle in our country. This is the method used by Canada and Australia, which countries are getting thousands of our best American citizens. Summing up, therefore, we feel that the principal needs of our farmers in Arizona are for fuller investiga- tional service in connection with the many and new agricultvu-al conditions of the Southwest; for a development of educational facilities along agricultural lines; for closer and more complete organization of, the farmers into associations for the purpose of water development, marketing of crops, and mutual improvement; for better credit facilities in connection with the marketing of crops and the conduct of general farming opera- tions ; and for special service in solving local problems in irrigation, reclamation of alkali and other lands, and colonization. Committee appointed by Gov. G. W. P. Hunt to report on the agricultural needs of Arizona. Andrew Kimball, Chairman. E.. H. FoEBEs, Secretary. W. K. BowEN, Member. ARKANSAS. State of Arkansas, Little Rock, August 22, 1913. Dear Sir: I am just in receipt of yours of the 14th instant asking that I appoint a committee of three to prepare a brief statement as to the agricultural needs of Arkansas. In reply beg to advise that I have this day designated Mr. F. W. Brodnax, of Van Duzer, Ark., Prof. G. A. Cole, RussellviUe, Ark., and Dr. M. F. Dickin- son, Walcott, Ark. Yours, very truly, Geo. W. Hats. Note. — Report has not been submitted. AGBICULTUKAL COOPERATION IN EUBOPE. 15 CONNECTICUT. Lyme, Conn., December 2^, 1913. The committee of three appointed by his excellency S. E. Baldwin, governor of Connecticut, with instruc- tions to report directly to your commission upon agricultural conditions and needs in Connecticut, has attended to its duties, and would respectfully report as follows: The first settlers to make permanent homes in Connecticut seem to have been attracted by the river and the fertility of its valley, and for 200 years the principal industries of the colony and State were either agri- cultural or maritime. Mechanical pursuits were always congenial to the people, however, and during the nineteenth century, with the rise of the factory system, these attained to a prominence which has made Con- necticut, in spite of its relatively small area, one of the great manufacturing States of the Union. The assurance of steady work, good wages, and the chance of advancement naturally tended to win enterprising and ingenious men from the farm to the factory. Thus it has happened that causes within the State have tended to diminish interest in farming. Meanwhile causes without tended to discourage it. Hay, for instance, and other products of new western lands came into competition with home produce which, though of excellent quaUty, had to be laboriously and expensively cultivated; and the fattening of cattle for market, which in the period of the Civil War was a thriving industry in some parts of the State, could not compete with the highly organized methods of the great packing houses. Furthermore, large portions of the State have become in a sense suburbanized, farms along the seashore and among the lulls have given place to the large estates or small holdings of summer residents, and consider- able numbers of men skilled in farming have been employed in their care. These men are stiU engaged in rural pursuits, but agriculture as a means of Uvelihood has become a secondary matter with most of them. These and other causes brought about a steady decrease in both the quantity and quahty of Connecticut farming during the later decades of the nineteenth century. In 1910, 70.9 per cent of the land area of the State was in farms; but there had been a decrease in total farm acreage from 2,312,083 to 2,185,788 acres since 1900. There had also been a decrease in the acreage of the average farm from 85.8 to 81.5 acres — a change by no means unfortunate in itself. At the same time, however, the value of farm property, including land, buildings, implements, and animals, had materially increased from $113,305,580 to $159,399,771. This change in values may be said, roughly, to indicate the change in the attitude of the people toward agriculture. Within the last decade there has been a marked awakening to the need of better farming and the chance which it offers for making not only a Uving but a life. Connecticut farms are generally cultivated by the owners. In 1910, 23,234 farms were managed by their owners, 942 by salaried managers, and 2,632 by tenants. Dairying is- upon the increase; renewed attention, thanks to the persistent teaching of the State's agricultural college and experiment station, is being given to orchard products, which climate and soil both favor, but which have been generally neglected. The raising of sheep and the fattening of cattle are also being widely advocated, and when the problems of a proper pro- tection of the former from the ravages of dogs, and adequate marketing facilities for both are solved, there is bound to be a substantial increase in the number and value of live stock. Connecticut has an admirable system of mutual savings banks, no joint-stock company being permitted to use the name "savings bank," and these have long been a chief resource of the farmer and small householder desiring loans on real estate. Furthermore, mortgages on Connecticut real estate are free from both State and local taxes, an arrangement which inures to the general advantage of borrowers. The rate at which savings banks lend on mortgage is about 5 per cent, and on good security money from private leaders can generally be had at a rate varying from 5 to 6 per cent. The mortgage note is usually a demand note, and fees o±- commissions are rarely burdensome. Some banks provide that sums of not less than $100 may be paid at any time upon these notes. The facilities of the Connecticut farmer for long-time credit may therefore be said to be fairly adequate— provided he has clear title to his land — except that the long-time loan with provision for amortization is practically unknown. The small farmer's facilities for short-time credit are much less adequate. The chattel mortgage is not in favor either with bankers or reputable private lenders. Some farmers in need of credit are carried by the country merchants during the period of making their crop, but it can scarcely be said that the method prevails as a general makeshift for banking. The frugal and well-to-do farmer usually has Ms bank account, enjoying much the same credit facilities as the merchant, and no man has better standing with his banker. It is, more- over, encouraging to note that some banks are trying to increase then- business among farmers, to their mutual advantage. One strong country bank known to your committee reports that within five years it has doubled its business with farmers; that it is now paying over its counter a million and a quarter of doUars to them every 16 AGEIOULTUEAL COOPEEATION IN EUEOPB. year; that they represent one-half of its customers; that it generally lends at 6 per cent on two-name paper; and that dm-ing this period it has not lost a dollar on these loans. The small credit union of the Raiflfeisen type is, of com-se, almost unknown, except among the Jewish farmers, who have four rural credit associations, situated respectively in Fairfield, Ellington, Lebanon, and Colchester. Authoritative reports are not at hand, but it is understood that the members of these small credit banks are permitted to borrow capital from the Hirsch funds and then to lend it among themselves for productive purposes. It is possible that the key to the problem of this sort of credit for farmera of very small means may thus be furnished by the foreigners, who are steadily taking up the remoter farming lands of the State. There are a few if any cooperative societies in the strict sense for either production or distribution, nor is the nature of these societies generally understood. Schools vary from the very good to the pretty poor, but the quality of the latter is being steadily improved by State supervision, the growth of public opinion, and the general insistence upon professional training for the teachers. The fact that so many children in rural communities are obliged to go to larger centers in order to complete their high-school courses has its unfortunate side. While the training in the larger schools often rouses their ambition, it has also a strong tendency to divorce them from the country when in search of a field wherein to exercise it. These are the conditions. The needs may be summed up as follows: 1. Better acquaintance with the methods of good farming, and the opportunities for it in Connecticut. The agricultural college is doing something to meet this need. Its work should be supplemented by rural schools which should do for country boys and girls what the manual training and trade schools do for the children in towns. 2. Intelligent cooperation among farmers for the purposes of using the most appro ve.d methods and ma- chineries of production, for the standardization of product, and in particular for more efl&cient and economical marketing in the great centers of population which are so near to Connecticut. 3. More careful study by the farmers of the credit problems involved in their work and what farmers else- where are doiag to solve them, and an effort on the part of bankers to cultivate more carefully the field which the farming population offers. It seems to your committee that the credit facilities of Connecticut are already of such a character that a wise extension of their use would go far toward meeting the needs of the people; and that it is doubtful whether credit unions of the Raiffeisen type would find congenial soil among our farming population, especially if these unions were characterized, as is usual, by the unlimited liability of the members. 4. Such modification of both law and custom as wiU make possible long-time loans on land with amortiza- tion, thus encouraging the borrower constantly to better his position by smaU, regular, and required partial payments, and by the prospect of a complete and easy discharge of his debt at the time of his note's maturity. Whether to accomplish this most effectively it will be advisable to organize an institution of the landschaft type and issue bonds against these mortgages the committee does not undertake to say. If this were to be done, a simplification of our methods of land registration and the adoption of something like the Torrens sys- tem would be needful, and there would be need of further simplification of our customary foreclosure proceed- ings. The committee regards the former as desirable in any case; concerning the latter there is room for two opinions. Edward M. Chapman, Walter Learned, E. 0. Smith, Committee. DELAWARE. State of Delaware, Executive Department, Wilmington, Del., October 14, 191S. Dear Sir: In reply to the second paragraph of your letter of August 14, I am inclosing you herewith a letter from the president of our State board of agriculture. Mr. Newton is so well acquainted with the needs and interests of our farming community that his informa- tion alone is as fully comprehensive as any which I might receive from a committee of three, as suggested in your letter. Very truly, yours, Chas. R. Miller, Governor State of Delaware. PLOKIDA. 17 State Board of Agrictilttire, Office op the President, BridgeviUe, Del, September 22, 1913. Hon. Charles Miller, Governor of Delaware. Dear Sir: Replying to your letter of August 20, inclosing communication from the Permanent American Commission, I have the honor to say that in my opinion the agricultural needs of Delaware include the following: First. More capital for the farmer. Second. Cheaper and better transportation for farm products. Third. A better system of education for rural people, including direct instruction for farmers already on the land, and instruction in practical agriculture for the farmers' sons and daughters now in the rural schools. I realize that it is one thing to state a need and quite another thing to offer an adequate solution of the problem of supplying that need. The problem of education is the fundamental one. If the men and women now on the land in Delaware were educated to a high degree of efficiency and to the advantages of cooperation in developing their several communities, and in working together to establish and maintain agencies for securing greater credit and greater capital and better facilities for marketing their produce, all other problems could be solved in a short time. We need a system of education that would give the farmer more direct information that he can apply in his everyday practice on the farm, and that will arouse him to make the best of the oppor- tunities that lie at his door, and give him that breadth of vision that wUl cause him to unite with his fellows in developing community interests, and bind farmers together for financial, social, and moral welfare. Such a system of education needs the direct help of the Federal Government cooperating with State governments and local organizations. This help would be furnished by the passage of what is known as the Page bill in the United States Senate. Transportation facilities include all that is necessary to take the products of the farm to the door of the consumer. This begins with the haul from the farm to the railroad or wharf, and, therefore, includes the neces- sity of good roads. The States need the assistance of the Federal Government, and a liberal appropriation of Federal funds would afford the needed encouragement to the much more general building of permanent roads. There is at present too wide a margin between the price of farm products received by the farmer and the price paid by the consumer. To reduce this difference is a serious problem and one full of difficulties. The Bureau of Marketing, now a definite part of the United States Department of Agriculture, working in con- junction with the Interstate Commerce Commission, seems to complete the Federal machinery necessary for the solving of this problem. The State should enact legislation that wUl make Federal and State coopera- tion effective. An efficient commission, clothed with adequate powers, would probably be the best way to secure the desired results. The problem of more capital for the farmer is a very complex one, but I hope that this country will be able to establish an adequate system of rural credits that will do for the farmers of America what the rural credit systems are doing for the farmers of Europe. Very truly, yours, O. A. Newton, President. FLORIDA. . State of Florida, Executive Chamber, TallaJiassee, November 6, 1913. Dear Sir: Eeplying to your letter of the 23d instant, will say that I have been making some inquiry as to suitable parties to serve upon the committee of three from Florida to make suggestions as to the needs of this State, and think that I now have the three in mind whom I will name. Before naming them, how- ever I would like for you to kindly write me more fully as to the matters to be considered by the committee. I desire this information that I may furnish it to those who are appointed. ' ' Park Trammell, Governor. Note. — Report has not been submitted. 42998°— S. Doc. 214, 63-1, pt. 3 2 18 AGEICULTUEAL COOPEEATION IN EUEOPE. GEORGIA. State of Georgia, Executive Depabtment, Atlanta, October SO, 1913. Ordered, That the following persons be, and they are hereby, appointed a committee from Georgia to work with the Permanent American Commission on Agricultural Finance, Production, Distribution, and Eural Life, the investigations to be made without expense to the State of Georgia: Prof. E. C. Branson, Athens, Ga.; C. W. Hillhouse, Esq., Sylvester, Ga.; I. A. Smith, Esq., Tennille, Ga. John M. Slaton, Governor. By the Governor: A. H. UiM, Secretary Executive Department. THE NEEDS OF GEORGIA FARMERS ALONG THE LINE OF CREDITS, PRODUCTION, MARKETING, AND COOPERATION. [Report of committee appointed by the governor of Georgia on needs of Georgia farmers along tiie lines of credits, production, marketing, and cooperation. Addressed u Hon. John M. Slaton, governor oi Georgia, for transmission to American Conmiission on Finance, Production, Distribution, an i Rurai Lifo. To his excellency Hon. John M. Slaton, Governor of Georgia: We, the undersigned, the committee appointed by your excellency to report on conditions affecting agri- cultural credit, production, marketing, and cooperation in Georgia, beg leave to submit the following report for transmission to the American Commission on Agriculture, Finance, Production, Distribution, and Rural Life: It is evident that there is something wrong with the facilities for borrowing money on farm lands in Georgia. We find that the rate of interest demanded and collected on loans to farmers is higher than is charged to other classes of business. As a rule the farmer is the last to be supplied, and many times he is denied loans that he needs to tide him over his financial difficulties, even at a rate of interest higher than he should pay. No greater blessing could come to the farmers of Georgia than the installation of a system of land mortgages, or land bonding, that would bring money to our farmers and landowners for a long period of years at a low rate of interest, upon the amortization plan of the Old World countries, with the privilege of paying a part or aU of the loan as soon as they desire. Our farmers are willing to pay a reasonable rate of interest on borrowed money, but it is not right that they should be required to pay more than other kinds of bushiess. States, cities, and corporations sell bonds at low rates of interest. Why can not the farmer do so on his lands ? We must admit that lands are the safest security that can be offered. If the farmers of Georgia could get plenty of cheap money to finance their farms, there would not be so many of our young farmer boys leaving the farm for the cities. And this desertion of the farm regions is something that must be checked, or our Georgia farms wiU be left to tenants, which is a bad condition for any country. The best developed and most progressive countries of the world are those that have the most farmers owning their own farms and operating them personally. This was very clearly shown in the investigations made by the American Commission while studying agricultural conditions in Europe this last summer. It was shown that the country that had the most individual landowners was best agriculturally. But also that it was best for all other lines of business as well as best for the State and the Nation. Another fact brought out by the American Commission while in Europe was that land bonds bearing the same rate of interest as Government bonds were quoted higher on the stock exchanges than Government bonds. Why can not the farmers of Georgia float land bonds as cheap as the Government can float its bonds J SHORT-TERM CREDITS. Many of the farmers who own their own lands, as well as thousands of farmers who have very little or no property of any kind, need what is styled short-term credits, say, from 6 to 12 months, at low rates of interest, for purchasing cash supplies, fertilizers, seeds, and implements and to pay for labor. Our farmers need a cheap, safe, and elastic form of credit. If this class of farmers could command short-term loans at low rates of interest, it would work wonders in upbuilding agriculture. In addition it would bring new life to business in every line of commerce. It would add to the general prosperity of Georgia. Georgia is a land of small farmers. One hundred and forty-seven thousand, or more than half of our farms, are less than 50 acres in size. GEORGIA. 19 We believe that short-term, cheap, safe, and elastic credit can be secured by our farmers by the organizing of rural communities into cooperative credit unions. But these credit unions need the help of the Government. At present the cheap money our farmers need can not be borrowed from private lenders or State or national banks. The Governments of the Old World countries are doing for the farmers just what we are here asking for our farmers at home. PRODUCTION AND MARKETING. The production and marketing of farm crops are so closely allied to farm finance that they can not be separated. Our agricultural experts have been giving us lectures and written articles on how to produce more crops per acre, but very little about how to establish better marketing conveniences, arrangements, and facilities. For example, take our Georgia melons. We sell many carloads containing 1,000 melons each for $50, or 5 cents apiece, when the same melons bring in New York, Chicago, or Cincinnati 25 to 50 cents apiece. Georgia cantaloupes often net our farmers only $1 per crate, or, say, 2 cents apiece loaded in cars, but the same melons cost the consumers in the city caf6s and hotels 10 cents for half a melon, or 20 cents each. Our farmers often sell sweet potatoes at from 30 to 40 cents a bushel, while the consumers in large cities pay from $2 to $2.50 per bushel for them. To illustrate further, we quote from an address of Prof. Sidney E. Mezes, president of the University of Texas, on "The gross injustice of our present marketing system." He points out the fact that at Laredo, Tex., in the onion-growing district, one day a short time ago, onions were sold for 2 cents a pound, and the next morning the same onions were sold in the open market at Austin, Tex., at 15 cents a pound. Again, tomatoes were sold by the farmers one day at two-thirds of a cent each in Palestine, Tex., and the next morning consumers paid 5 cents apiece for them in the market of Austin. In each instance cited, the producer received only 13 per cent of the selling price, while 87 per cent was divided between the transporters and the traders. The glaring injustice of such a system is made more apparent by comparison with the result of cooperative marketing in Denmark. In that country the cooperative society collects, sorts, and packs the product for 3| per cent, ships and sells for 4 per cent, and leaves the farmer 92^ per cent of the final price paid by the consumer. Denmark is about one-fourth the size of Georgia, and has about the same population. But Denmark is not only self-sustaining in home-raised food and feedstuff, but exported last year $110,000,000 worth of farm products. Germany is about the size of Texas and contains 68,000,000 people,' or about 17 times the population of Texas. But Germany produces 95 per cent of all products consumed by her people, while Texas imports $2,000,000 worth of meat alone. Georgia and Texas do not begin to raise what the people at home consume. Each State imports millions of dollars worth of food and feedstuffs. All or most of these supplies could and should be produced at home. In Denmark and Germany the farmers are organized and work cooperatively in buying, selling, and banking. Georgia farmers will never speU out the problems of markets and finance without similar organization and effort. The farmers of Georgia every year create wealth amounting to some $300,000,000, but they operate too largely upon credit, pay ruinous rates of interest to bankers and profits to dealers, seD their products at the lowest prices, and buy what they need at the highest prices. As a necessary result the left-over cash balance left in our country counties from year to year is a meager reward for the work and worry, toil and sweat of the year. Our country people get discouraged, young and old, and flee into our cities. THE BETTERMENT OF RURAL LIFE. When Georgia farmers solve their problem of labor, markets, and finance as Denmark, Germany, France, and many other European countries have done, rural life will improve, and not otherwise. Neither Georgia nor any other State can thrive with fat cities and a lean countryside. Farm life in Georgia must be more profitable and prosperous. Being better off does not necessarily mean being better, but no country on earth has ever built a great civilization out of a chronic economic deficit. 20 AGEICXJLTUBAL COOPERATION IN EUROPE. One of the needs of Georgia farmers is capable leadership in the organization of cooperative unions for self- help. Our farmers need to be led into a financial system that can and wiU furnish them with ample capital at low rates of interest; if not through the Government, at least under Government control. Their borrowings ought not to be subject to recall in time of distress. With long-term credits on farm lands, short-term credits on personal securities, and a proper marketing system, our farmers will not only produce wealth more abundantly, but they will have more money in hand at the end of the year for chm-ch and school support, for better roads, for more attention to public health and sanitation, and for more home comforts and conveniences for our farm wives. They will build better homes; they will have better hve stock, better country roads, better schools, and better houses of worship. They will have in their homes more newspapers, magazines, and books, more telephones, and more labor- saving devices to lessen the drudgeries and burdens of wives and mothers. We need some system for the vahdating and registering of land titles — a system that will perfect deeds to land and give them assured value as security for loans. Our bankrupt, homestead, and exemption laws need to be remodeled. Agricultural credit needs to be cheap- ened and facilitated. If imperfect, doubtful deeds to land were eliminated, the farmer could obtain the credit he is now refused, and at lower rates of interest, and hardly so otherwise. SUMMARY. First. We find that credits cost farmers too much. Second. We beheve that some system of rural credit banking, based on European models but adapted to American conditions, should be devised for our farmers. Third. There is great need for short-term credits to enable farmers to make their crops, and lower rates of Luterest, whereby they can work on a cash basis and escape from our present ruinous credit system. Fourth. Also we need a long-term land-credit system, with a low rate of interest, imder an amortization plan, in order to extend and improve our farm operations. Fifth. We believe our system of taxation should be reformed so as to stimulate home and farm ownership; that the inequities of oiu* tax system should be removed as rapidly as possible and the farmer reheved of the unjust share of the tax burden he is now bearing. Sixth. We beheve that our present lack of market arrangements, conveniences, and facihties for all crops whatsoever, save cotton, is largely the cause of our ruinous neglect of home-raised food and feed stuffs. As a result our Georgia farms produce $300,000,000 of wealth every year, and nine-tenths of it — a king's ransom — immediately vanishes to purchase supplies that we could have raised at home. Seventh. We beheve that the main dependence of our farmers must be upon self-help through cooperation, but also that the State, through its agricultural agencies, should educate and stimulate the farmers in their cooperative efforts to solve the problems of farm labor, farm credits, and markets. We beheve that the retention of farm wealth is just as important as the production of farm wealth, that the farmer is fairly entitled to a larger portion of the consumer's dollar, and that the authorities and agencies of Government are righteously bound to aid in freeing the farmer from economic injustices. Eighth. We beheve in the remodeling of all laws that stand in the way of cheaper farm credits. Ninth. We need a system of legal vahdation and registration of land titles, the Torrens law or some such laws as nine other American States now have in force. Tenth. We beheve that money should be current in sufficient volume to serve the needs of every legitimate business that offers safe collateral and that farm land is the best security known among men. Respectfully submitted. E. G. Branson, Athens, Ga., C. W. HiLLHOusE, Sylvester, Ga., By C. W. HiLLHOusE, Tennille, Ga., Committee. AGEICULTUBAL COOPERATION IN EUROPE. 21 IDAHO. State of Idaho, Governor's Office, Boise, October 28, 1913. Mt Dear Sir: I am in receipt of your letter of the 23d instant Avith reference to the naming of a com- mission for the purpose of reporting the needs of this State to the American Commission, which has made a study of the European system of rural credits and is now about to make certain recommendations which are intended to meet the needs of rural America. I am referring this matter to a committee which I have recently appointed for the purpose of studying this question from the point of view of State laws. The chairman of this committee is Mr. Charles A. Sunderlin, of Burley, Idaho, and I shall request him to correspond with you at once and to submit a report as soon as practicable. Yours, very respectfully, John M. Haines, Governor. Moscow, Idaho, January SI, 1914. Mr. Charles A. Sunderlin, Burley, Idaho. Dear Sir: In compliance with your request in asking for a report of the agricultural needs of Idaho, I beg to state that this subject is one to which I have given a great deal of attention and much thought. Idaho, as you know, has many problems peculiar to itself, in that the geography is peculiar, the climatic conditions in the different sections of the State are extreme and variable, the soil, whUe in general the same as some of the adjoiaing States, yet in many instances it is peculiar to Idaho. In addition to all these peculiar and variable factors in our agricultural problems, the past 10 or 12 years has seen our population increased by about 130 per cent. Large bodies of land have been reclaimed by irrigation in the south, and other large bodies of timberland have been cut over, leaving some hundred thousand acres of available agricultural land as soon as the stumps and small timber can be removed. This large development has brought with it a number of serious and peculiar problems. Our greatest development has been in the southern part of the State iu the valley of the Snake River. Not only has several nulhons of acres of land been made available for intensive agriculture through the large irrigation projects that have been completed and under process of completion, but a large number of towns and cities have been buUt in order to accommodate the trade and commerce developed through the largely increased agricultural development. Roads have had to be constructed, schoolhouses built, and all other improvements contingent upon a rapidly growing rural population. The large majority of the settlers who have come to reclaim the land were men who had no previous expe- rience with irrigation farming, and the majority of them with a limited amount of capital. The result has been that while a tremendous effort has been made, the agricultural situation at tl; j present time in this State, in the north as well as in the south, is very critical. Our soil in southern Idaho is lava ash, peculiarly rich in inorganic plant food, but very deficient in organic matter, and particularly the nitrogenous compounds. As this sort of soU, and the climate, and other conditions are very favorable for alfaffa growing, and as this crop more than any other tends to supply the deficiency in nitrogenous compounds, our people have gone very largely into alfalfa growing, with the result that we have had an oversupply of alfalfa hay and no markets to which the surplus could be shipped at a profit. In many sections we have favorable conditions for fruit growing, and many of the new settlers have rushed iato this business. As is well known in the fruit business, particularly the pomological fruits, a number of unprofitable years must be passed while the trees are growing and developing. This particular line of agri- cultural effort, therefore, has not been financially successful up to the present time. As I see the situation at present, the great agricultural needs of Idaho are as follows: First. Some means must be devised whereby settlers on Carey Act projects may receive early title to theu lands, so that they may be enabled to give some security for borrowed capital, which they must have hi order to develop their property and make payments on their water rights. Second. Some means provided whereby the agricultural interests may secure long-time loans at reason- able rates of interest. Third. Increased possibilities for the manufacture of raw material into finished products. Fourth. The working out of some practical scheme for utili2dng the by-products of the stumps on the cut-over lands of north Idaho, so as to lessen the cost of clearmg the land and brmging it under cultivation. 22 AGKIOULTUEAL COOPEEATION IN EUROPE. Fifth. The development of industries other than agriculture, in order to furnish near-by markets for agri- cultural products. Sixth. A marked modification in the long and short haul clause of railroad rates. Seventh. Liberal Federal and State aid in the matter of practical agricultural education for the farmers through demonstration farms, county field agents, county agriculturists, and correspondence courses in prac- tical agriculture. These I believe to be the principal agricultural needs, and it may not be out of place to discuss them briefly. EARLY TITLE TO CAREY ACT LANDS. A very large percentage of the holders of Carey Act lands at the present time are being forced to sell their interest in these lands by the necessity of making regular annual water payments. Having no title to the lands they are not able to secure loans in order to develop their land and bring it under cultivation and crop productiveness. I know of no greater aid that could be rendered to the agricultural interests, particularly of southern Idaho, than that some steps should be taken at once to grant title to these Carey Act lands as soon as final proof of entry has been made. LONG-TIME LOANS. At the present time it is absolutely impossible for the new settlers in Idaho, either in the north or the south, to purchase live stock, to consume their raw products of hay and grain, at the exorbitant rates of interest that is charged them, and also upon the short-time loans that is required by all banks. No farmer can afford to buy dairy cows, or other stock, no matter how favorably he is situated, if he has to borrow money at 12 per cent interest, with notes running three to six naonths. He is doomed to failure under such conditions, though other- wise very favorably situated. THE MANUFACTURE OF RAW MATERIAL INTO FINISHED PRODUCTS. Idaho's population is now, and probably will be for many years, a rural one. It will be many years before we will be in intimate relation with any large center of industry. Freight rates and middlemen's profits on raw material will render it impossible for farmers marketing grain and hay directly from their farms to ever realize a reasonable profit on such a system of farming. Every effort should, therefore, be made to assist the farmers in feeding their grains and fodders to dairy cows for the production of milk, butter, and cheese, and to the growing and finishing of beef cattle, hogs, and sheep, and to supply the State's demand for these finished products, which are now largely shipped from eastern centers. CLEARING STUMP LAND. Our State has probably a larger proportion of timber land at the present time than any other northwest State. A good many thousands of acres of valuable agricultural land is now utterly useless, owing to the fact that the cost of clearing these lands of stumps is greater than can be borne by the settler. In fact, under our present methods, it costs more to clear the land of these large pine, fir, and tamarack stumps than the land itself is worth. Every effort should be made to encourage investigation and research into the matter of perfecting some system whereby a very large percentage of the turpentine, tar, and other by-products contained in these stumps may be utilized and conserved in the eradication and destruction of the stump, and in this way lessen very materially the cost of clearing the land. There are encouraging prospects that something may be accom- plished along this line from the investigation now being undertaken by the State and Federal Government. DEVELOPMENT OF MANUFACTURING AND OTHER INDUSTRIES. The ultimate success resulting from the efforts of our farmers in the State of Idaho must depend upon the building up of other industries within the State. As long as our agricultural products must be shipped such long distances to reach industrial centers of the East, and so long as the products from these industrial centers must be shipped such long distances to supply the demands of our people for manufactured products, just so long will the profits from the farmer's labor and industry be reduced to the minimum. Transportation charges and middlemen's profits will consume the principal part of what should be the producer's profit. Every effort should be put forth to encourage manufacturing, mining, and other industries in the State. Idaho is greatly blessed with an abundance of water power; with tremendous supplies of raw material, particularly in the form of lumber and timber. With proper encouragement, there is no reason why a large number of manufacturing plants and industrial centers should not be developed. ILLINOIS. 23 LONG AND SHORT HAUL CLAUSE IN RAILROAD RATES. The people of Idaho, perhaps, more than any other State suffer from this injustice. It seems to me if there is any kind of class legislation that is reprehensible, it is this. Merely because our people are isolated from large centers they must be charged not only the regular rates for transportation, but that they must be penalized an additional rate, seems to me utterly indefensible. EDUCATION THROUGH DEMONSTRATION AND CORRESPONDENCE. As before stated, the majority of the farmers of Idaho are new settlers. They had little, or no, experience with semiarid agriculture, and in many instances no experience of any kind in agriculture. The mistakes made under these conditions, where they have no counsel and advice, is extremely costly, and in very many instances deadly fatal to their success. In no other State, perhaps, do the farmers so much need and appreciate this help as they do in Idaho. Every county in the State should be provided with a thoroughly trained and experienced agriculturist. Such a man would be worth thousands of dollars annually to the county. The increase in the value of the land itself, from the success which might be attained through his direction, would many times pay his salary through the increase in taxes which would result, to say nothing of the benefits to be derived to the farmers themselves. Owing to the necessity for investigation into the new system of agriculture which must prevail in this State, there is great need for practical demonstrations as to the different methods of handhng our varied soil, the kinds of crop best suited .to the different sections, and the proper rotation of the various crops in order to develop the latent fertility of the soil. These, it seems to me, are the greatest agricultural needs of the State of Idaho, and while they are not given in the order of their importance, yet, all of them must receive attention before the farmers of this State will secure a reasonable profit from the investment of labor and capital that they are now putting into their agricul- tural enterprises. Very truly, yours, W. L. Corltle, Acting President. ILLINOIS. State of Illinois, Executive Department, Springfield, September 6, 191S. Dear Sir: Referring to your favor of the 9th ultimo, I have to state that Gov. Dunne to-day designated the following as members of a committee to prepare a brief statement of the agricultural needs of Illinois, in conjunction with George Woodruff, the present member: S. S. Smith, Mackinaw, lU.; Hon. Peter Scibert, FayettevOle, 111.; Dr. Eugene Davenport, dean, agricultural college of the University of Ilhnois, Urbana, 111. Very truly, yours, Wm. L. Sullivan, Secretary to the Governor. November 29, 1913. Hon. Edw. F. Dunne, Governor State of lUinois, Spring-field, El. Sir: In accordance with your appointment of the undersigned committee to cooperate with the Illinois delegate to the American Agricultural Commission in preparing a statement of the agricultural needs of Ilh- nois, we beg to report as follows: We believe that the interests of agriculture in lUinois can be best advanced by securing legislation look- ing toward better business, better farming, and better hving. We feel that better business on the farm can be brought about by the establishment of improved rural credit facihties and the organization of societies for cooperative distribution and cooperative purchase. To this end we recommend the passage of a State or national law permitting of the organisation of mortgage banks to handle farm mortgages on the long-time amortization basis and in accordance with the principles developed by European mortgage banks. We further suggest the passage of a general State cooperative societies' act, which will permit of the organization of pure cooperative societies for distribution and purchase. Better farming, we think, can be advanced by the passage of a Federal law similar to the original Lever bill or by a State law providing for the employment of a farm demonstrator for each county in the State. Wo beheve that an unproved drainage law would be effective, and also a law makmg it compulsory upon the seUcrs of farm fertilizers to make public the fertilizer contents. The agricultural department of the University of lUinois should unquestionably be given the hearty support of all of the members of the legislature of the State. 24 AGEIGULTUEAL COOPERATION IN EUROPE, Better living involves a better community spirit, better home conditions, better church conditions, better 'school conditions, and better means of communication. A better community spirit will follow as a result of better busiaess. Better home conditions will result from the increased prosperity that wiU come from better business and better farming. Better church conditions wUl doubtless foUow the gradual elimination of the poorer churches and the consolidation of the better ones. Better school conditions demand the atten- tion of the State, and we suggest the necessity for a new State law providing for the modernization of country schools and the introduction of vocational courses of instruction. Any such law should doubtless provide for State aid. Better means of communication are being constantly developed, but the State can aid very greatly in connection with good roads, and we suggest that the hearty support of the people of this State should be given to those who are now engaged in good-road work. All of which is respectfully submitted, sir, for your consideration and that of the American Agricultural Commission, which has requested of you that this information be furnished to it. George Woodruff, Illinois Delegate American Agricultural Commission, E. Davenport, S. S. Smith, Committee. IOWA. State of Iowa, Executive Department, Des Moines, August 25, 191S. My Dear Sir: In compliance with your request that a committee of three be appointed by mo to make a brief report to the American Commission with reference to the agricultural needs of Iowa, I have named as such committee the following: Hon. John Cownie, Des Moines, Iowa; Hon. F. D. Steen, West Liberty, Iowa; Hon. Eugene Secor, Forest City, Iowa. Very truly, yours, G. W. Clark, Governor. THE NEEDS OF AGKICULTUEE IN THE STATE OF IOWA. The governor of the State of Iowa has asked this committee to outline briefly some of the agricultural needs of the State, which needs we herewith set forth along lines of production, distribution, cooperation, marketing, and credits. The 35,000,000 acres of land of the State, taken as a whole, is a body of more uniformly good land than can be found anywhere else on the globe. It reaches within 200 miles of the greatest grain and Uve-stock market of the world. Its eastern and its western boundaries are two mighty rivers capable of bearing immense tonnage of navigation. It is crossed by a number of the trunk lines of very important railway systems. Its soil, rainfall, and climate are such that since its settlement by white people no serious crop failure has been experienced. These same conditions operate to make it possible for most products of the Temperate Zone to be produced here in. abundance. Iowa is the very center of the corn belt and excels in the production of that cereal. Its people are industrious, law-abiding, and intelligent, and will compare favorably with people of any other part of the world. Notwithstanding these many advantages, the agriculture of the State has needs of very far-reaching character. LAND tenancy. The most obvious of these needs is the recasting of the present system of land tenancy. At present 40 per cent of the farms of the State are occupied by tenants. Most of the leases run for but one year; a few are for three years, and some for five years. This system of short-term tenancy is bad for the landlord, worse for the tenant, and worst for the land. The general practice of farm tenancy takes but very Uttle into account the all-important factor of retaining or improving the fertiUty of the land. No strictures too severe can hardly be employed to condemn the very general practice of depleting soU fertility. The greatest offender is the landlord. It is within his power to bring about a change. The tenant is compelled, because of high rent and the short-term lease, to wring from the land all possible returns. He cares but little for returning any fertiUty back to the soil, because next year, doubtless, ho will move elsewhere. Such a system of tenancy robs the land, deprives the landlord of possible returns, and destroys in the tenant the interest he should have in the soil, the buildings, and other improve- IOWA. 25 ments. It makes him careless as to the claims of the school, the church, the roads, and general neighbor- hood welfare. In short, it makes of him, against his will, perhaps, a citizen who can not discharge his high duties as a member of the Commonwealth. We need laws, both Federal and State, that will compel consideration of the land in all leases, making it the chief factor of importance, to be followed later by the claims of the tenant and the landlord. We need mandatory laws providing for compensation to tenants for improvement both of the soil and of buildings. And then we need laws and general practice providing a sane, rational, and intelligent system of land tenure, which must place first in importance the claims of the land. COOPERATION. Another very serious need of the farmers of the State of Iowa is to learn more generally the advantages of cooperation. They are, indeed, reaping the benefits of cooperation in some instances, namely, in mutual insurance, cooperative creameries, and cooperative elevators. But the great body of farmers of the State are strangers even to these, except the first. The western farmers grew up in isolation on the different farms, each family seeking to produce as many of its necessities as was possible. Self-dependence was almost the predominant and all-important virtue. When other lines of activity developed mutuality, cooperation, and finally concentration, then the farmer still held to his individual efforts, and therefore has fallen behind in the race. The advantages of cooperation and concentration in all business activities are certain and bring sure reward. The farmer must master them and appropriate them to his business or else he will degenerate toward peasantry. Nothing is more certain than this. But his training and habit of thought has been in the opposite direction. Hence, it will be a slow and difficult task to have him take advantage of this truth. The great need is for farmers to meet often in social, business, and public meetings, to acquaint themselves more with public procedure of every kind, to develop in themselves more appreciation of their own privileges and power, and then apply modern principles of cooperation and concentration to the management of their business. MARKETING. The reports of the Department of Agriculture show that the farmer receives less than half of the price of hia products which the consumer pays. The reason for this is that the farmer permits it. He is, on the whole, content to receive the price which the other man offers. The need is intelligent cooperation in collecting, grading, packing, and forwarding his farm products. Moreover, cooperation on the part of the farmers is needful for the solution of such problems as the schools, roads, transportation, country church, and other public questions. Then, having learned to labor together with his fellow farmers, he must learn to cooperate with the city man to solve questions of community interest. The farmers must learn to insist that their cooperation be taken and even welcomed in the solution of trans- portation problems, for a great need of Iowa farmers is a more intelligent method of marketing their products. Overabundance of products on certain market days to be followed by other days of dearth of supply is a condi- tion which much harms all the interested parties and also puts the transportation companies severely to the test. A great need is a more evenly distributed supply of products on the market. In this connection it might be pointed out that a very great need of Iowa is the establishment by the rail- roads or by the State of a bureau of marketing, which should furnish information in regard to location and kinds of marketable products in various localities. Also, it should collect and furnish information as to localities needing such products. Thus bringing producer and consumer in touch with each other, much local traffic might be developed to the mutual advantage of consumer, producer, and transporter. In thus increasing the volume of traffic lower freight rates ought to obtain. The working of Iowa farms involves the use of an endless variety and amount of farm machinery. For this the farmers of the State pay out each year an immense amount of money. The manufacture and sale of this machinery and kindred farm supplies is in the hands of an immense combination, which extorts millions of dollars yearly from Iowa farmers beyond what is a paying price. By combination and concentration, both of manufacture and of sales management, there is a great economy of expenditure in the production of this machinery. But through manipulation these great profits go to the stockholders of the concern. The farmers do not share in the lessened cost of manufacture. In this way im- mense fortunes are accumulated in a few hands, and the many are compelled to pay tribute to them. This is fundamentally wrong and does not comport with a sense of common justice. What is true of the Implement Trust is equally true of the Lumber Trust, the Packing Trust, and other combinations. The reason for this is 26 AGRIOTJLTUEAL COOPERATION IN EUEOPE. that the farmers permit this state of affairs. They not only sell their produce at the price the other man offers, but they also pay for their supplies the price exacted by the sellers. The Federal Government owes it to the citizens of the State that above-cited conditions be speedily terminated. This should be done not by abolishing combination and concentration of production, biit by forcing combinations to give to its customers some of the benefits of economical production. And this could easily be brought about if farmers would cooperate and get in live touch with their Congressmen. A very great need is for Iowa farmers to show more intelligent interest in public affairs. ETJRAL CREDITS. Another very great need of the farmers of the State is cheaper working capital. Not only is much capital needed to purchase the land, but much is needed to stock the land with the necessary Uve stock, with buildings, with machinery, with many appliances of various devices looking to more economic and efficient production. It is high time that on Iowa farms the buildings and other improvements partook more of the character of permanency. This would lead to great economy in time. The investigations of the Department of Agri- culture show that for the year 1912 the farmers of the country paid an average of 7f per cent interest for short- time loans. In the division of States of which Iowa is a part the average rate was 8.05 per cent. These rates ought to be and could be nearly cut in half. The census of 1910 shows that the farms of the United States are encumbered to the extent of one-seventh of their value, or a little over 14 per cent. This proves that farm wealth is a very safe foundation for a system of farm credits, if it could only be made possible by sane legal authorization. A system of rural credits similar to the Raffeisen system would prove a great factor in more economic farm production. FARM ORGANIZATIONS. While there are in some sections of the State organizations among farmers with meetings at stated times, either in the homes of the members or in the rural schoolhouses, such organizations are altogether too few, and much good could be derived by having a farmers' club in every township or school district in the State. Cities have their commercial clubs maintained by business men, professional men have their associa- tions, and tradesmen their unions, where their needs are discussed and means taken to promote their own interests. But the farmer stands alone, without any organization whatever, each fighting his battle single handed, and this in the face of organizations in every department with which he transacts business in either buying or selling. As agriculture is the mainstay of our Nation, leading all vocations or pursuits, it seems to us that our National Government should foster and encourage by substantial aid the formation of organizations among farmers. Such organizations would awaken greater interest in restoring and maintaining the fertUity of the soil, the care and feeding of five stock, the marketing of farm products, the purchase of supplies, and would lead to a better social condition among the farmers. To the wives and children especially would these meetings be highly beneficial. While it is true that we have a State agricultural society, district and county fairs, and farmers' insti- tutes, aU largely maintained by farmers, these meetings are held but once a year and can not take the place of local organizations with meetings at least once a month in the busy season, and oftener when farm work is not so rushing. AGRICULTURAL EDUCATION IN RURAL SCHOOLS. In many of our cities manual training is now carried on successfully. Both boys and girls have their eyes and hands trained in practical work that will be of great value to them in after life. There is no training of this kind in our rural schools, and while the children born and reared upon the farms have a wide experience in actual work and owing to their surroundings habits of industry are formed, giving them advantages denied to the children reared in a city, still no provision has yet been made to teach even the simplest elements of scientific agriculture in our rural schools. A large percentage of the teachers in the country schools have been born and educated in the cities and have no knowledge of or love for agriculture. Consequently the children hear more of the pleasures of the city than of their own home. The result is that a desire for city life is formed in the mistaken belief that life would be more enjoyable in the crowded cities than in the country. To offset this condition the teaching of scientific agriculture should be made compulsory in our rural schools. At present there are no teachers qualified for this work who can be secured for the salaries paid. Here is a great opportunity for our National Government to provide the means for training teachers for this KENTUCKY, 27 work. If better salaries were paid to such teachers and more permanent employment afforded, them, they would make a life work of teaching, to the great betterment of the schools. A change of teacher in the rural schools nearly every term is just as vicious as changing the farm tenant every year. The sooner there is a radical change made and more permanency secured, the better for all con- cerned. HIGH COST OF MEATS. That there is a great falling off in the number of live stock on Iowa farms is well known. One of the main reasons for this condition is the short-term farm lease. While the owner lived on his farm there was more profit in raising live stock and feeding aU the grain upon the farm than in selling the grain. By this method much fertilizing matter was returned to the soil and fertility was thereby increased, but the short-term tenant can not afford to keep stock, his tenure being altogether too uncertain. This condition is one of the main factors in the decrease of number of cattle in Iowa, and until there are longer terms in farm leases the shortage will steadily increase, because each year more farm owners leave their farms and move to town. SWINE PLAGUE. The breeding and raising of swine for market has been one of the most profitable parts of farm work in Iowa. Of late the swine plague or hog cholera has so decimated the herds that most serious losses have resulted. Efforts in a small way are being made by the National Government to stamp out this disease, but with only partial success; therefore larger appropriations are absolutely necessary, and a more determined effort should be made to prove the efficacy of the serum treatment. Farmers should also be taught and encouraged to pro- vide better quarters and insure more cleanliness in the care of this animal. When the disease breaks out in any locality strict quarantine should be enforced, the sick should be separated from those not yet affected, and no time lost to treat the entire herd. This is work that our National Government should assume, and with a fixed determination should ascertain the cause and, if at all possible, supply'the remedy. To this end, Congress should make most liberal appro- priations to educate men for the work of eradicating this disease, and thus add to the supply for the Nation at large. CONCLUSION. Recognizing as we do the importance of the work outlined by the Permanent American Commission, and the benefits that may be secured not only by the producer but by the consumer, the former by increased pro- duction at lessened cost and the latter by lower prices through cooperation with the producer, we have in the foregoing report endeavored to point the way to a bette'r realization of the possibilities in Iowa. We must educate the boys and young people on our farms in the principles of scientific agriculture, thereby creating an interest in the work and instill into their minds the great truth that the farm affords opportunity for research and improvement second to no other vocation. John Cownie. Eugene Secob. F, D. Stebn. KENTUCKY. Commonwealth op Kentucky, Executive Department, Frankfort, October 25, 191S. My Dear Sir: Yours of October 23, 1913, was duly received. I note your statement, that the Permanent American Commission planned, through formal resolution, to secure the consensus of opinion as to the agricultural needs of the States of the United States through a com- mittee commissioned by the governors of the States; that 20 governors have appointed committees that have organized to prepare a comprehensive report; and I am requested to appoint a committee of 3 from the State of Kentucky. I have therefore appointed Hon. Johnson N. Camden, of Versailles, Ky.; Hon. H. M. Froman, Frankfort, Ky.; and Hon. Harry Weissinger, Louisville, Ky. EespectfuUy, J^^^s S- McCreary, Governor. 28 AGRICULTURAL COOPERATION IN EUROPE. Permanent American Commission, WashiTigton, D. C: We, the committee appointed by his excellency. Gov. McCreary, to make a report to you upon the agri- cultural needs of Kentucl^, beg leave to submit the following recommendations: RURAL LIFE AND EDUCATION. First. By legislative enactment, elementary agriculture should be required to be taught ia every rural school, and the pubKc schools of the smaller towns, ia the State. Second. To that end schools, or courses, of special instruction should be arranged at the agricultural colleges for the education of the rural teachers, and they should be required by law to quahfy themselves in elementary agriculture, seed testing, etc., domestic science, hygiene and sanitation, and rural sociology and economics. It is our behef that for rural-hfe betterment the open country must undergo a regeneration socially, edu- cationally, and industrially. This demands the most earnest efforts of the best minds of America. AH per- manent betterment must of necessity be the resultant of the highest and best residential forces working together. Extraneous forces may stimulate and direct, but can not lastingly sustain rural uphft. We know of no better method than the "Community Welfare and Progress Association" as now being organized by the Eastern Kentucky State Normal School. In this connection, in an address on Rural Development Centers by its able and earnest president, Dr. Crabbe said: In these organizations it is hoped that the school can be helped to measure up to its responsibilities. Some of the plans are to map a planting plan for the school grounds, make out art plan for interior decoration, show the advantages of directed play, give the fimda- mentals of agriculture, fruit growing, household science, sanitation and hygiene, rural training, etc. It does not stop here, but goes into the home, anywhere to be of assistance. The farmer will be aided in problems of crop rotation, seed selection, variety values, fertilizer requirements, breeding problems. The housewife will be interested in decoration, cooking, sewing, serving, canning, clean milk, care of children, pure water. It will be a rural organization, by rural folk, for the betterment of the rural community. It will be for the young people as well as for the grown-ups. It is a great movement, and we are going to push it to the limit. We hope during the next year to extend it to every county in the eastern district. All of this looks eventually to the consoHdated graded country school, which we strongly recommend. Rational recreation and amusement is essential to stop the drift of the young people from the farm to the cities. The consolidated graded school should have one big room, which in addition to being a school or classroom can be used as an auditorium, where receptions, concerts, and other entertainments can be given. Organized effort should be made to estabhsh musical, hterary, and other useful societies, and to bring them within this sphere. A well-known authority on rural economics states: The farmer has the most scientific job in America. While the average factory makes use of one or two sciences, the average farm makes important use of half a dozen or more. The farmer must make, save, or lose money by the degree of skill with which he applies the sciences of animal nutrition, animal hygiene, soil chemistry, soil physics, plant nutrition, plant hygiene, to say nothing, of ciuing, housing, and preparing his product. Besides, he must be a gardener, a poultryman, and a fruit grower. The conclusion is the job is too big for one man unaided. So all present activities for thus educating the producer deserve maintenance and encouragement. There should be an agricultural expert in each county to advise in soil analysis and restoration, cropping systems, and farm-management problems, and to establish demonstration centers. These soil experts should be further qualified and able to be advisors and assist in directing distributional activities for their counties, manage labor bureaus, organize club work, and centralize and simplify the entire system. There should be a systematic coordination and federation of all the forces and agencies that are capable of bettering farm life. We realize that the strength and power and life of the Nation depends upon the family as a unit. It is essential that the children should have strong home love and their affections entwined in happy home surround- ings. The child who does not love home can not be expected to have a love for town, county. State, or nation. Good homes make good citizens and a strong nation. The country boy or girl moves to the city mainly for two reasons — to make more money and to have a more comfortable and a "better time." In order to stop this, rural social conditions must be improved and made as attractive as city life, and farm wealth must be increased through the channels of productiveness and better facihties for distribution. AGRICULTURAL FINANCE. One of the greatest menaces to the future stability of this country is the congestion of the cities and the decreasing farm population. Any step on the part of our Government that would give the landless man a home in the country and make him a producer instead of a consumer would be wise and patriotic. The increas- ing tendency of the tenant system, with its accompanying train of evils to the land and to the disadvantage of the tenant himself, is another grave menace. KENTUCKY. 29 In 1880, 25.6 per cent of all farms were operated by tenants; in 1910, 37 per cent. In 1890 the improved acres per farm averaged 72.2 per cent of the whole; in 1910 the improved acres per farm averaged 75.1 per cent, an increase in 20 years of only 2.9 per cent of unproved acres. The average debt per farm in 1890 was $1,224, while in 1910 it was $1,715, an increased farm mortgage in 20 years of 39.8 per cent per farm. We therefore recommend that the States buy and reclaim the waste places and sell in lots of 15 to 30 acres at cost and iaterest on long-time payments to the small tenant farmer, so he can own his own farm, Hve on it, and work out the payment. We have investigated the various rural-credit systems as estabhshed in Europe and have come to the con- clusion that, for several basic reasons, they can not be introduced in this country as established there. The basis of farm credits abroad is the combining of all the individual farmers, who place a mortgage on the property of all, upon which money can be borrowed by any member. The American temperament, habit of thought, and shifting population precludes that system. We do feel that some farm-loan system should be worked out and adopted by the Government. It is estimated that the annual interest charges upon all farm indebtedness amounts to $510,000,000, while the entire wheat crop iu the United States in 1911 was about $543,000,000. Agriculture bears the heaviest average interest rate (8.5 per cent) of all business enterprises and is the least able to stand it for the following reasons: It is estimated that every 12 years the value of aU farm buildings is absorbed by interest charges, that interest charges absorb the value of aU live stock every niue years, and every two and one-haK years the value of all farm implements and machinery. As this is a very compUcated subject, requiring trained and perhaps technical ability, we refrain from making a definite recommendation; but, in view of the above statement of facts, we urge a careful consideration for this from the bankers, manufacturers, all business men, and Congress. They should assist to ameliorate this condition. DISTRIBUTION. This seems to be the crying need in the country at the present time. The proper handling of this subject calls for cooperation of the truest and broadest type. We think the large towns and cities have not been alive to the opportunities they might have seized and the advancement they might have made by reacHng country- ward through their commercial clubs and chambers of commerce. The city man and the country man should get together, know each other, and work together with increased production and distribution in view. If any commercial club could increase the corn or wheat yield 5 bushels per acre in their contiguous territory, it would benefit their township more than by giving a bonus to secure some doubtful manufacturing enterprise to locate with them. The growth and prosperity of our agricultural cities are entirely dependent upon the well-being of their surrounding farms. The small individual shipper or buyer can not hope for the business consideration and success that accompanies buying and selling on a large scale. The farmers should thor- oughly organize and have community centers for buying and selling and distributing; have a central marketing bureau in close touch with each community, agency, or exchange, using the parcel post as a medium of exchange and distribution to the large centers of population. Distribution and transportation are inseparable and trans- portation is dependent on suitable roads — steam, troUey, and highways. Kentucky's highway system must be improved before proper distribution can take place, in a State-wide sense. We therefore urge the use of con- vict labor for State highways, and, further, we strongly favor national aid to the State in building highways. PRODUCTION. Owing to our rapidly increasing native population and including immigration amounting to over a miUion souls a year, and with no new lands in the United States for agricultural purposes to speak of, we are rapidly approaching a shortage of food supplies for our own people. The United States Bureau of Census states that in the past decade the total production of aU our cereal crops, such as corn, wheat, oats, barley, rye, rice, etc., increased by only 1.7 per cent. That is, 4,439 mUHon bushels in 1899 as against 4,513 milUon bushels in 1909, whereas the acreage farmed had increased 15.4 per cent during the same 10 years. The same report shows that our wheat export had decreased from 37 to 17 per cent of our total production, and our com exports have decreased from 9 to 3 per cent of our total production. Yet the price of wheat in the same 10-year period has increased 31 per cent, and the average price of corn has increased 91 per cent during the same decade. The latest Yearbook of the Agricultural Department (1908) furnishes the acreage yields of wheat and com for 40 years— from 1866 to 1905. Notwithstanding the vast areas of rich virgin soils brought under cultivation in the great West and Northwest in the past 40 years, notwithstanding the abandonment of great areas of worn- out lands in the East and Southeast in the same period, and not to mention the improvements in selected seeds 30 AGEIOULTUBAL COOPERATION IN EUEOPB. and the implements of cultivation, the average yield per acre of the two great grain crops, corn and wheat, has not been maintained. The average yield of wheat for the United States increased 1 bushel per acre, while the average yield of corn decreased 1 J bushels of corn per acre, according to the 40-year averages. In the meantime the population of the United States has increased from 38,000,000 in 1870 to about 90,000,000 in 1910, or an increase of about 137 per cent in 40 years. We have been able to feed this increase in population by having large areas of virgin land to cultivate and by decreasing our exportation of foodstuffs. The time is within sight of those now Hving when this country will cease to produce enough stuffs to feed its population unless some nation-wide movement is at once inaugurated to restore the fertihty of the soil, not merely conserve it. What is the remedy ? The chemists of our agricultural colleges, and particularly Prof. Cyril G. Hopkins, of Illinois, tell us clearly and plainly that almost all soils, even the barren and waste lands, contain enough of the mineral elements potas- sium, iron, calcium, and magnesium to grow crops. The other necessary elements are obtained through the air and rain, oxygen, hydrogen, and carbon — leaving the two indispensable elements of nitrogen and phosphorus for soil restoration to be supphed by man. The nitrogen and organic matter can be restored to the soil by raising clovers and leguminous crops containing the nitrogen-fixing bacteria in their roots — green crops that can be plowed under thus returning and restoring to the soil the organic matter required for good crops. It is safe to say that almost all of the soils of this country are too acid for the clovers to take hold and flourish. It is demonstrated by Prof. Hopkins beyond dispute or doubt that if crushed and powdered raw lime rock is scat- tered over the ground, 2 or 3 tons to the acre, it will sweeten the soil, so that abundant clover crops can be raised. Many progressive farmers are using the crushed rock, but the class of men who need it most are too poor to avail themselves of it. So we recommend that the State buy large mountains or quarries of limestone advan- tageously situated near railways, and instaU modern crushers; and in order to produce the crushed rock at the lowest possible cost, use the convict labor of the State, and thus sell the product to the farmers at actual cost of production plus transportation. The other remaining element, phosphorus, can be obtained only in a commer- cial or farming sense from the raw phosphate rock. The world's supply of phosphate rock is very limited, and in our opinion should be nationally conserved. It is estimated by Prof. Hopkins that $5,000,000 worth of phosphate rock is sold in the United States yearly for export which, if retained in this country and used on our farm lands, would produce more than $1,000,000,000 worth of wheat. Man can create and restore nitrogen and the necessary organic matter to the soil, but he can not create the indispensable element of phosphorus. We recommend, therefore, that the States or the Government have their lands prospected for phosphate deposits, a careful survey made of all territory, and hold them in reserve for our own use, to be sold to the Ameri- can farmers at cost and interest. We are accustomed to the thought of expending biUions of dollars on the Army and Navy, as a matter of national defense, but have not realized that 86 per cent of all manufactured products come from the farm and the soil in a raw state, and that every manufacturer, every merchant, every business man, all good citizens are vitally interested in restoring and maintaining soil fertility. It means the hfe or death of a nation. Respectfully submitted. J. N. Camden, Chmrman. Harry Missingeh. H. M. Froman. LOUISIANA. State or Louisiana, Executive Department, Baton Rouge, November 15, 191S. Dear Sir: This is to advise you that the governor has, in compliance with your request of October 23 instant, appointed as the committee of three to study and report the agricultural needs of Louisiana the following: Mr. John M. Parker, 816 Union Street, New Orleans; Mr. F. L. Maxwell, Mounds, La.; and Dr. W. R. Dodson, director Experimental Stations, Baton Rouge, La. The governor hopes that these gentlemen will assist you in your work. Respectfully, yours, W. F. Millsaps, Secretary to the Governor. Note. — Report has not been submitted. AGEIOULTTJEAL COOPERATION IN BUEOPB, 3JL MAINE. State of Maine, Executive Chamber, Augusta, August 20, 1913. Dear Sir: The governor wishes me to acknowledge receipt of your letter of the 15th and to inform you that in conformity with your request he has this day appointed the following-named persons as members of the American Commission on Agricultural Finance, etc., to represent the State of Maine: Hon. Harry P. Smith, Augusta; Hon. John J. Koberts, Norway; Edward F. Merrill, Esq., Skowhegan. Yours, very truly, Georgie C. Fales, Personal Secretary. To the Permanent American Commission: Having been appoiated by his excellency the governor of the State of Maine, WiUiam T. Haines, as mem- bers of your commission, and having been requested by your director general to prepare a brief and comprehensive statement of the agricultural conditions and needs of the State of Maine, we beg leave to report: Maine's agricultural conditions. The area of the State is 19,132,800 acres. Of this, 6,296,059 acres are in farms, with only 2,360,657 acres in improved farm lands, which is 124,000 acres less than it was in 1880. We haye 60,016 farms, an increase of 717 in 10 years, with about the same average acreage — 104.9 acres. This farm land, the buildings thereon, with farm machinery and domestic animals, is valued at $199,271,904, an increase over 1900 of 62.8 per cent, or 176,861,094. The average price of farm land rose from about S8 per acre ia 1900 to nearly $14 in 1910. There has been a relative increase in values of farm machiaery and hve stock. Ninety-five and seven-tenths per cent of all of these farms are operated by owners and managers, with only 4.3 per cent in the hands of tenants, and 41,309 of them are free of mortgage. While the average mortgage debt on fkrms seems to have increased in the past 20 years 58.8 per cent the average value of the same farms has increased 97.6 per cent, and while the average mortgage debt was given as 36.7 per cent of the value of these farms in 1900, it was given in 1910 as only 29.5 per cent. Maine's agricultural needs. Our agricultural needs are as wide as the needs of the Nation are measured by the greatness and the frailties of human nature and man's ambition, and can only be met as our people are taught and may learn to use their natural abilities and resources, to think for themselves, and to have their minds open to education and cooperation. Our greatest need is in the expansion of our local market; the greatest development of the State outside of agriculture is bound to be the development of our water powers. In natural water powers Maine leads the world, and we think it has been proven that with the tremendous depletion of the coal fields the natural trend of the movement of manufacturing plants must be toward the supply of natural and cheap power, which we have so abundantly in our imdeveloped streams and rivers. This development is surely coming, and whether in the near or distant future only depends on the wisdom and hberahty of our laws in welcoming and regulating this development. Situated as we are on the border and directly in competition, since the passage of the new tariff bill, with the magnificent farms of that section immediately adjoining us in Canada, and of the great Canadian Northwest now in process of development, our needs for a local market will be even greater than in the past. Our State is about to awaken to an era of cooperation among its rural population, but a wider and more liberal cooperation is needed. The success of the banks and stores of the rural communities is just as essential as the success of our farms. The geographical location of our larger financial institutions is of necessity in the most congested localities in our State and far away from our farming communities, and therefore the officers of some of our banks have been unable to conscientiously supervise and investigate the conditions of the collateral offered in a manner satisfactory to themselves. They, therefore, have declined to loan money on farms, as they know nothing of the business and have' had no means of judging these credits. Our needs along these lines are for trained men, trained in the knowledge of modern agriculture, in farm values, in agricultural finance, who may be in touch with the banks or financial institutions, and whose judgment can be relied upon to fix definite values on farm property on which it would be safe to loan money. 32 AGRICULTUKAL COOPERATION IN EUROPE. \ We need no bounty, no charity, no paternalism; loans are made on money values, and credit is buUt on absolute worth. Honesty, industry, and character are essentials, but our banks must be buUt and based on absolute values. We need these trained experts, who will have the confidence of the financial institutions, whether they be cooperative or not, who can go into a community and advise with the men who will listen to them, as to the best crop to grow, trees to plant, or stock to buy, and by proof of their fitness, by their address and tact, be able to command the bacldng so that the money would be suppHed to do what they advised. This has been done by J. S. Hill in developing the agricultural interests along his railroad lines. It is being successfully done in many States. These solutions which we are offering we realize are ideals, and can only be brought about when the people of the communities have justified themselves for this confidence by showing the necessary integrity and industry and by meeting their promises to pay when due. Our rural communities are listening attentively and profiting by the advice of men of scientific knowledge who have taken for their fife work the study of the needs under discussion. The Grange of our State is doing a great educational work and the State university, with its experiment station, its experimental farms, farm- demonstration work, and corps of earnest and enthusiastic workers, has gained the attention and coromands the respect of our people. More money is needed for this work. The general educational board has given us a good start. The matter of teaching agriculture in our secondary schools has been taken up, and this branch will be car- ried forward as it can be demonstrated that it has a larger place in the education of our children. Our needs at certain seasons of the year are for more laborers, especially during harvest time. Our needs are those of education as to packing our crops properly and marketing them scientifically. Our needs are for more intensive farming and orcharding. Our needs are to build up instead of to deplete the fertihty of the soU. We need to build up our live-stock industry; to raise the meat to feed our own people; to market our feed; and keep our soil productive. We need simpler and cheaper plans to borrow money, but let us first look for security and safety in any new reform. We need good roads, which will be to us as capital invested. We need to keep more accurate and better accounts of our crops and expenses. We need to keep the Ten Commandments and the Golden Rule ever before us. Then we need to work and tMnk for ourselves. maryland. Executive Department, Annapolis, Md., September SO, 1913. Dear Sir: Referring to your letter of August 12, 1913, requesting me to appoint a committee of three citi- zens of this State to work in conjunction with you as a member of the American Commission representing Maryland, in preparing a brief statement as to the agricultural needs of our State, etc., I beg to state that I have appointed the following gentlemen: Mr. F. de Sales Mudd, secretary, bureau of State immigration, Baltimore, Md.; Hon. Henry M. McCullough, Elkton, Md.; Dr. Richard S. Hill, director of farmers' institutes. Upper Marlboro, Md. These gentlemen will be duly notified of their appointment, with the request that they cooperate with you in every manner possible. Yours, truly, P. L. Goldsborough. Note. — Report has not been submitted. MASSACHUSETTS. Commonwealth of Massachusetts, Executive Chamber, Boston, Septemler 4, 1913. Mt Dear Sir: In further reference to your recent letter on the subject of the forthcoming national agri- cultural conference at Washington, I have conferred with Mrs. Charlotte B. Ware, who represents this State in the general conference; and at her suggestion I have designated Mr. WUfrid Wheeler, Mr. Charles M. Gard- ner, and Prof. WUliam D. Hurd to cooperate with her in the matter of transmitting to your board an account of the local needs of this Commonwealth with respect to agricultural development. Yours, very truly, Eugene N. Fobs, Governor. Note. — ^Report has not been submitted. MINNESOTA. 33 MICfflGAN. State of Michigan, Executive Chamber, Lansing, August 12, 1913. Mt Dear Sir: I have your letter of August 9 in relation to appointing a committee of three to work in conjunction with the delegate on the commission from Michigan, Mr. William B. Hatch, of Ypsilanti. Just as soon as James Helme, dairy and food commissioner, arrives in Lansing I will take this matter up with him. The failure on the part of the legislature to pass an appropriation bill for three commissioners has not worked favorably toward making it easy for me to comply with your wish. However, I will give the matter my best consideration. Sincerely, yours, WOODBKIDGE N. FeRRIS, Governor. Note. — Report has not been submitted. MINNESOTA. State of Minnesota, Executive Department, St. Paul, November I4, 1913. My Dear Sir : Gov. Eberhart directs me to advise you that he has appointed the following-named gentle- men as a committee of three, to work in conjunction with the delegates on the commission from Minnesota: Dr. L. D. H. Weld, chief of the division of research in agricultural economics, in connection with the University of Minnesota. His address is Minneapolis. Mr. Hugh J. Hughes, editor Farm Stock and Home, Minneapolis. Mr. James A. Valentine, banker, of Breckenridge, Minn. Very truly, yours, George F. Anthier, Secretary to the Governor. THE SITUATION IN MINNESOTA WITH REGARD TO AGRICULTURAL CREDIT, MARKETING, AND COOPERATION. To his excellency Hon. A. O. Ebeehart, Governor of Minnesota: We, the imdersigned committee appointed by your excellency to report on conditions affecting agricultm'al credit, marketing, and cooperation in Minnesota, for the purpose of making recommendations to the American Commission on Agricultural Finance, Production, Distribution, and Rural Life, hereby submit our report. The time has been too short for a complete investigation of the problems involved, and our report deals with them only in a general way. The report is divided into two parts: Part I deals with agricultural credit, and Part II with marketing and cooperation. Each part contains its own separate set of conclusions. I. Agricultural Credit. The sources of the statements here made are threefold : An investigation by G. P. Warber, of the University of Minnesota, an independent personal investigation by Dr. Weld, also of that institution, and two separate investigations conducted by Farm, Stock, and Home. From these three sources the following facts are derived and the conclusions drawn are based solely upon them: In 1912 and again in 1913, Farm, Stock, and Home made an investigation of rural-life conditions in the Northwest. The accompanying booklet, Exhibit A, is the result of the 1912 investigation. The 1913 investigation went into the matter of acreage values and the kind and stability of the business done by the northwestern farmer. The figures for Minnesota show (142 reports) an average of 192 acres per farm and an average value of $67.05 per acre, or a total average valuation per farm of $12,871.60. This valua- tion per acre is somewhat higher than the 1912 figures, which show $53.50 per acre; this is for land and buildings alone and does not take into account live stock and machinery. These figures agree approximately with the census figures as given in the United States Census reports of 1910. Of 160 Minnesota farms reported in 1913, 78 are reported mortgaged. Of this number 33 report the mort-^ gages decreasing. The average rate of interest paid on the mortgage is 6.4 per cent. This rate per cent cor- responds fairly well with that reported in 1912 (see Exhibit A), 6.8 per cent for the State average. 42998°— S. Doc. 214, 63-1, pt. 3 3 34 AGRICULTUKAL COOPEBATION IN EUROPE. As for the general business and credit of the State may be gathered the following facts of crop yield for 1913: The State agricultural college reports wheat, $63,000,000; barley, $17,000,000; flaxseed, $9,000,000; potatoes, $15,000,000; dairy products, $55,000,000; poultry products, $35,000,000; vegetables, $25,000,000. These are the chief cash sources of income of the Minnesota farm. Referring to the Farm, Stock, and Home investigation of the farmers' business, we found that of 155 farmers reporting, 122 pay their store bills as they go, and that 25 run bills from early spring until harvest. It is possible that a more complete investigation would show a larger per cent of farmers tha;n is here shown carrying accounts from spring until harvest time. This is especially true in the census report for 1910. Twenty-seven report that the store-bill system is satisfactory, and 54 report that it is not. Of those who pay their bills regularly, 83 use dairy money, 34 use the income from poultry, and 16 draw upon their general farm iacome to cover this expense. This general survey is necessary to an understanding of the credit conditions which obtain throughout the western and northwestern parts of the State whei-e grain farming is stUl the prevaiUng mode of agriculture. RATES OF INTEREST. Long-time loans. — Our study of credit conditions shows a marked variation in rates in different parts of this State, with rates varying from a minimum of 5.5 per cent in the southern part to 10 per cent in the north- em part. In fact, the State may be roughly divided into two parts : In the southern half the prevailing rate on long-time loans is from 6 to 7 per cent, with the area of comparatively low rates extending toward the north- west into the Red River valley ; in the northern half of the State the prevaiHng rate averages about 8 per cent, with many loans at 10 per cent. The latter rate appUes especially to newly settled lands which have been or are being cleared of stumps. In addition to the interest, it often happens that a bonus or commission is required when the loan is made. In other cases interest is deducted in advance. Practice in this respect varies greatly, but it is evident that country bankers often take advantage of farmers by demanding commissions when they believe they can get them. The rates on long-time loans vary not only in different sections of the State but to a surprising extent even in any given section. For instance, in the southern half of the State, where agriculture is well developed and where diversified farming is the rule, the rates vary from 5.5 per cent (in a few cases 5 per cent) to 7 and 8 per cent. Practice varies even in locahties a few miles apart, depending partly on whether there is competi- tion between the banks of the locahty, the extent to which landowners predominate over tenants, and the activities of land agents and speculators in boosting the price of land and bringing in new settlers. Short-time loans. — The variation in interest rates on short-time loans is even more marked than in the case of long-time loans. In general the rate of interest varies from 6 per cent in the southern part of the State to 12 per cent in the northern part. Again, the State may be roughly divided into a southern half, where the pre- vailing rate is from 6 to 7 per cent, and a northern half, where the prevailing rates are 8 to 10 per cent. Further- more, there is some extreme variation of rates within a comparatively narrow area. In the case of one bank in the extreme southern part of the State, it was found that the rates on short-time loans to farmers varied from 6 to 10 per cent. The 10 per cent was charged on small loans. There seems to be no discrimination against farmers and in favor of local merchants in the matter of interest rates on short-time loans. The mere fact that a merchant is a business man does not entitle him to a low rate of interest; the inefficient merchant is charged as much as the inefficient farmer. The fact has been brought out by bankers that the rates to both merchants and farmers in the older parts of the State are fully as low as the interest rates paid by the leading merchants of both Minneapohs and St. Paul on short-time paper. Agencies from which farmers secure long-time Zoans.^Although farmers secure their long-time loans mainly through the banks, the funds furnished by the banks come largely from insurance companies and investment companies. There are also many private loaning agencies which handle the funds of insurance companies. Most significant of all, however, as bearing on the question of rural credit is the fact that in the southern half of the State it is very common for farmers to secure their long-time loans from each other. In some old-estab- hshed sections farmers lend to each other at as low a rate as 4 per cent and sometimes even less. Such loans are often made without mortgage security. These conditions obtain only in sections where farmers are well to do, where the population is homogeneous with respect to nationahty, and where there are very few renters. More commonly farmers lend to each other at 5 or 5.5 per cent and require mortgage security. It is evident that there is no pressing need for cheaper money in such communities. Purposes of loans. — The commonest reason why farmers make long-time loans is for the purpose of buying land, either as part payment for the farm already occupied or for the extension of acreage. Loans made for farm improvements are more apt to be short-time than long-time loans. Little is borrowed for the purchase of land in other localities. MINNESOTA. 35 LetigOi of time that loans run. — The usual custom in Minnesota is for mortgage loans to run five years. In the northern part of the State many mortgage loans are made for terms of only three or four years. In the southern half of the State the time is seldom less than five years, and there is an increasing nimaber of 10-year loans. The tendency toward 10-year loans is very marked in some sections, although there seems to be no very great demand on the part of farmers for longer loans. In this connection your committee is advised to compare the results obtained by an investigation made by President F. L. McVey, of the University of North Dakota. This report is available, being pubhshed in bulletin form. Of course, many of the 5-year loans are renewed, probably at least half of them. The average length of time that long-time loans actually run, includ- ing renewal periods, is probably' at least seven or eight years, although we have no definite data on that point. Most long-time loans do not give the privilege of payment in installments. The contracts for some loans do specify that a certain amount may be paid off at any interest day, and the number of loans containing such privileges is increasing. Experience does not show, however, that farmers are taking advantage of this privilege to any great extent. Short-time loans run usually from three to nine months. The commonest period is six months, and some banks make a uniform practice of dating their short- time notes six months ahead irrespective of the period for which the farmer is apt to need the money. In the northwestern part of the State it is common for notes to fall due in the fall, often November 1, as representing the time when farmers are apt to be able to pay off loans after harvest time. In such cases the length of time depends on the time of year that the loan is made, usually in the spring or during the summer. Security for loans to farmers. — In the case of mortgage security, money is loaned up to 35 or 50 per cent of the value of the farm. A fair average would probably be about 40 per cent. In the case of short- time loans the practice with regard to security varies in different parts of the State. In some sections money is loaned on plain notes; in others, two-named paper prevails; in still others, it is common to require additional indorsers. In the northern part of the State chattel mortgages are often required, especially in the case of tenant farmers and new settlers. The rate of interest on such chattel loans is usually the maximum of that section. CONCLUSIONS ON RURAL CREDIT. 1. Although there is no such dire need of cheaper credit facilities in Minnesota as there was in European countries before cooperative credit organizations developed, yet lower rates of interest would undoubtedly be an advantage to the farmers in many parts of the State. In some sections, where fanners are lending to each other at as low as 4 per cent, there is no great need. In many sections the rates run up to 10 or 12 per cent, and although these rates wUl come down as the communities develop, their very existence indicates the need of lower rates and suggests the advisability of devising methods for their reduction. 2. Conditions are so diverse, even within Minnesota, that it is not at all certain that any general scheme to cover the whole State, much less the United States, would serve the purpose. At least any general scheme of organization for cheaper credit must be adaptable to local conditions. In this connection, our study shows the value and necessity of such investigations as we have partially made in Minnesota and the necessity of making such investigations for the whole country before any definite program is formulated. 3. The problem of better financing of a community involves not only the country but also the town, and implies a close friendly relationship between the farmer, the business man, and the banker. Hence the success of a rural credit program depends largely upon the avoidance of antagonisms between these interests. 4. In the discussion of this subject we beHeve that the tenant farmer has not received sufficient attention. The inefficient renter," who shifts from one locality to another, perhaps deserves to be left out of account. We believe however that under the present conditions of high land values, it is difficult for the industrious and efficient tenant to acquire ownership of land, and that a system of long-time loans with an amortization feature would be a distinct benefit to such renters. 5. On the whole we urge extreme caution in the development of a program for the betterment of agri- cultural credit conditions. Conditions here are not the same as in Europe, and they vary very widely within the United States. No form of organization should be definitely recommended until it has been worked out to the minutest detail, and no scheme would be at all safe or feasible unless it be surrounded by the most stringent safeguards. To attempt to get farmers started in the organization of credit associations without such caution and safeguards would be suicidal. II. Marketing and Cooperation. The principal products of Miimesota with which marketing problems are concerned are as follows: Cereals, live stock, dairy products, potatoes and other vegetables, eggs, poultry, and fruit. The prmcipal facts with regard to the marketing of each of these products will be reviewed in order, together with a statement of the development of cooperative effort in each case. 86 AGRIOTJLTUKAL COOPERATION IN ETJEOPB. Oermls. — ^The principal cereal crop marketed is wheat. In the early days line elevators secured control of the buying and storing of wheat at country points. Owing to the rapacity of these companies and the intoler- able conditions surrounding the whole system, the farmers began building their own elevators about 1889. Since that time farmers' elevators have multiplied until at present there are over 300 in Minnesota. Not all of these are strictly farmers' elevators or cooperative companies; many of them are owned by bankers and busiaess men of country towns. There is no information available as to the number owned strictly by farmers. In the handling of grain at country points, the farmers' elevator buys from the farmers, and ships grain on consignment to commission men operating in the MinneapoUs Chamber of Commerce or in the Duluth Board of Trade. A feeUng of discontent with regard to the methods of the Minneapolis Chamber of Commerce has been gradually developing among farmers, who do not beUeve in dealings in futures, nor in the restriction of membership, and who feel that the chamber is a monopoly. This is evidently stronger in North Dakota than in Mianesota, and the Equity Cooperative Exchange, an outgrowth of the Equity Society of North Dakota, has set up an independent marketing agency, entirely outside of the chamber of commerce, and is marketing grain from farmers' elevators, which it handles on consignment. The principal weaknesses of the farmers' elevator movement have been poor management and poor account- ing methods, to say nothing of the destructive competition offered by line and independent elevators at local points. A careful study should be made of the methods employed by farmers' elevator companies, and of the best systems of accounting. Live stock. — The usual method of marketing hve stock has been for farmers to sell to independent buyers who drive about from farm to farm, and who ship their stock in carload lots to the commission men of South St. Paul and Chicago. This method of marketing is a costly one, inasmuch as the expenses of assembhng and shipping from country points can be done more cheaply than through the independent buyer. Live- stock shipping associations have developed since 1908, until there are now about 100 in the State. These not only save the profits of the independent buyer to the farmers, but cut down the actual expense of assembling shipments through the use of the telephone instead of driving about the country with horse and carriage. These cooperative shipping associations are easy to form and easy to manage. They are increasing in number rapidly and will soon be the usual method of marketing stock. The promotion of the work has been done principally by the University of Minnesota and by the Society of Equity. Dairy 'products. — The principal dairy product of Minnesota is butter; httle cheese is made. In spite of the existence of 864 creameries in Minnesota, a large amount of butter is still made by the farmers and traded at the country store. The greater part, however, is made in the creameries. Of the 864 creameries, 621, or 72 per cent, are cooperative. A great many of these are not cooperative to the extent that they provide for patronage dividends, but they are practically aU run on a no-profit basis and may be considered cooperative. On the whole, the butter industry is well organized; creameries exist in all parts of the State where cows are raised to any extent. There is constant competition between the centralizing plants of the large cities, which attempt to draw shipments of cream away from cooperative companies, but in most places this com- petition is not severe. Each cooperative creamery markets its product independently, shipping to wholesalers and commission merchants of Chicago and New York. A seUing association comprisiug a part or all of the cooperative creameries, with a distributing point in New York and perhaps other eastern cities, would undoubt- edly result in more efficient marketing. Potatoes. — The production of potatoes has increased immensely in Minnesota. The principal market for Minnesota potatoes, many of which are used for seed purposes, is in the South. Potatoes are bought direct from the farmers by the wholesalers of Minneapolis and St. Paul, who have warehouses at country points. Some companies have as many as 30 or 40 warehouses in the State, analogous to the line elevators in the grain trade. The farmers suffer a disadvantage in selling to these line houses. Accordingly, they have started cooperative potato warehouses, of which there are probably 15 or 20 in the State. There are about as many more which handle other vegetables in addition to potatoes. These farmers' companies ship on consignment to commission men in Minneapolis and St. Paul. Some are shipping to a cooperative selling agency called the Minnesota Fruit Association, which has not as yet made much headway. Eggs and 'poultry. — It has always been the custom for farmers to trade their eggs at the country store, and this custom persists to an amazing extent to-day. Under this system there is no incentive to the farmer to improve his breeds, or to gather his eggs frequently, and he does not receive cash for his eggs. A change has started in within the last few years. There are now about 20 communities in the State that market their eggs through their creameries, whQe two or three others have organized formal egg-shipping associations. As yet the problem of marketing eggs through egg-shipping associations has not been thoroughly worked out, and the movement has not progressed very far. There is much room for educational work in this field. MINNESOTA. 37 In general, poultry is not sold on a large enough scale by Minnesota farmers to have led to any important development in marketing. A large part is traded to the country store just as eggs are. The country store- keeper then ships the poultry to conunission merchants, both as hve poultry and dressed. Where farmers ship their own poultry it is often poorly prepared and unattractively packed, and it does not bring the best price at terminal markets. There is great opportunity for educational work in this field also. Fruit. — There are few districts in Minnesota where farmers may be said to specialize heavily in the raising of fruit. There are many farmers scattered over the southern half of the State who raise considerable quantities, but they are relatively scattered, making efficient cooperative marketing impossible. The reason that so many farmers have had to feed their good apples to the hogs has been the impossibility of marketing them effectively. Some large growers have as individuals perfected growing, picking, packing and marketing effectively. There are also four or five cooperative fruit-shipping associations which are doing good work, and there are imdoubtedly other locaUties where speciahzation has gone far enough to permit of cooperative marketing. Other cooperative organizations. — Besides the cooperative organizations mentioned above, there are other types which are developing among Minnesota farmers. For instance, there are 12 cow- testing associatiouB; there are any number of cooperative breeding associations which exist for the purpose of the purchase and coop- erative use of pure-bred sires; there are also about 12 conununity breeding associations which promote specializa- tion in the raising of some particular breed; there are also three or four cooperative lumber yards, a cooperative laundry, and many informal types of buying associations. There are also about a hxmdred cooperative stores in Minnesota, many of which have been organized by the Right Relationship League of MinneapoUs, which is a private, and not a cooperative concern. CONCLUSIONS ON MARKETING AND COOPERATION. 1. The pohcy with regard to forming new organizations should be extremely conservative. It would be suicidal to attempt a rapid development of organizations. Some organizations, like creameries, hve-stock shipping associations, and cow-testing associations are perfectly safe, but local conditions must be very care- fully studied even before these forms are permitted to come into existence. 2. The primary need is to place existing organizations on a firm basis. The best possible accounting sys- tem should be devised for each type of organization. The University of Minnesota is planning to develop special "short courses" for the managers and secretaries of cooperative organizations, to teach them the priii- ciples of marketing and the best accoimting methods. 3. For the present, the principal work should be investigational and educational, rather than propagandist. Minnesota has recently passed a law empowering the university to obtain annual reports from all cooperative organizations.^ This is the first step in the statistical study of the whole field that the university is about to make. Each form of organization and the marketing problems connected with it are being studied separately. 4. Educational work for effective cooperation should include more than practical uistruction for those who are managers of existing organizations. It should aim to prepare both the students of agricultural colleges and the students in the public schools for future efficiency in cooperation. Education along cooperative lines has developed in foreign countries; it should be developed in this country, so as to prepare the growing generations for the development of cooperation that is bound to come. 5. Inasmuch as the University of Minnesota has already started to develop this work through the division of research in agricultural economics, and inasmuch as it has trained men who are familiar with conditions throughout the State, it would seem desirable to leave this educational and investigational work to the univer- sity, rather than to attempt to create a separate organization to perform these fimctions. What propagandist work is necessary can be done through the university extension department and through the publication of bulletins. Respectfully submitted, December 9, 1913, by— J. C. Caldwell, Member of the American Commission from Minnesota. Hugh J. Hughes. James A. Valentine. L. D. H. Weld. 38 ageicultueal coopbbation in eueope. mississippi. Mississippi, Executive Department, Jackson, October 25, 1913. My Deae Sie: Your letter of the 23d instant is received, and the reason I have not appointed a committee from Mississippi to give a statement of the needs of our State is that I have found it very difficult to secure three men who will give the necessary time and attention to this work. I have concluded to appoint Prof. J. T. Brooks, of the agricultural college, who also went to Europe last spring and summer; H. E. Blakeslee, commissioner of agriculture and commerce of this place, and Dr. E. N. Lowe, also of this place. But I very much fear they will be unable to give the time necessary to making an accurate and full report. I will say that the needs of Mississippi are very much the same as Alabama, Arkansas, and Tennessee. Yours, very truly, Eael Beeweb. To his excellency Hon. Eael Beewee, Oovernor of Mississippi: We, your committee appointed to report on the agricultural needs of Mississippi, beg leave to submit the following report for transmission to the American Commission on Agricultural Finance, Production, Distribu- tion, and Rural Life : One thousand letters were sent out to the various counties of the State to the leading farmers, asking what they considered the greatest need of agriculture in their several communities. Their answers covered the subjects of production, distribution, and finance, and the business and social side of rural life. It was prac- tically the unanimous report that improvements were needed in all these departments of rural activity. PEODUOTION. That improved, methods of agriculture are needed goes without saying. This will come from better agri- cultviral education through the agricultural colleges, the agricultural press, and through the field workers of the State and National Government. We wish to make an observation just here on the overlapping of the dual agencies representing the State and Federal Governments, working for the advancement of agricultm-al knowledge among the farmers of the State. It is impossible to secure perfect cooperation between the repre- sentatives of entirely different sources of authority. A species of rivalry rather than cooperation springs up, and jealousies lead to friction and antagonism. This has been remarked upon by the Secretary of Agriculture, and applied in State institutions, in the following language : Some institutions, like some individuals, get to thinking so much about themselves that they forget the people whom they serve and who make them possible. I could point to State after State where the State department of agriculture is jealous of the State college of agriculture, and is busier watching the advance of the State college than it is with its job of helping the people. I could point to State after State where the State college of agriculture and the State university, created by the same people and maintained for the service of the people, neither is content to find out the job it can do best and do it. It is trying to prevent the other from doing a job it might do. This observation should be extended to apply into Federal and State efforts for the benefit of the farmers. Through its numerous agents, the Federal Government is interested in purely local activities and is now engaged in organizing a national system for placiag an agent in every county for the giving of advice to individual farmers. The over-lapping of the National Government agents in their work with the State Government agents in theirs is an uneconomic method of accomplishing the most good, and leads to disagreeable results — the waste of money, energy, and time — leading to confusion among those for whom the money is expended. The new draft of the Lewis bill does not provide for a change of policy. It is our opinion that aU agricultural help from governmental sources should be directed by the State agricultural college. The fund suppHed by the National Government should go to such purposes as the Federal Government may direct, but its management and operation should be under the direction of the agricultural college. There should be no Government agent occupying a position that renders him subject to political domination or makes him the agent for strengthening congressional fences by methods less obvious but more effective than the free distribution of seeds. The State of Mississippi has not less than 10,000,000 acres not yielding their share of production. This is due to lack of proper cultivation and farm management and these in turn are in the main the results of two causes — lack of means, and lack of ownership by the one who cultivates the soil. Only 37 per cent of those who do actual farming in this State own their own land. We doubt seriously that this condition can be more than remedied to a Umited degree by all the efforts of agriculturists in increasing the yield und«r present con- ditions. Some agencies that wiU bring the net result for the labor bestowed and a greater interest in the soil MISSISSIPPI. 39 itself must stimulate the moving, renting, and hiring class to become permanently located and in their own homes. This brings us to the busiaess side of farming, which we believe has been neglected more than any other side of agricultural hfe. Any eflPort to increase production and the results of production, must be cared for, and this involves distribution and finances. DISTRIBUTION. We believe that a fuller development of the division of markets by the Federal Government, and the utiliz- ing of a greater portion of its field workers ia giving practical aid in marketing farm products will accomplish more good to producers and consumers than the same amount expended in any other line. We beheve with the conference called by Gov. Glynn of New York, on the same subject on which we are reporting, that "marketing farm products should be taught in all the agricultural schools of the State." This was their recommendation to the legislature. Last year, the report on a commission appointed by the Legis- lature of New York on the expense of distributing the year's supply for the city of New York stated that $60,000,- 000 a year could be saved by a better method of distributiag the food products alone to the city of New York. It has been estimated by competent authority that enough money is lost each year through distribution from producer to consumer equal to double the entire expenses of the National Government. To wilfully allow this waste to continue is an economic crime. Why should we devote our energies to producing and neglect the consideration of the things produced ? This problem is not limited to any State or nation. It is a world wide problem. It is tasking the statesmanship and business acumen of the leading statesmen of every nation. Under modern methods of production and transportation it is a travesty that it costs the consumer so much to get the products from the producer as it does to pay for the product from the producer. There should be a division of the saving between the producer and consumer, each profiting to the amount of many milUons each year. We beheve that the exchanges should be required to furnish statements of the sales and purchases, and that the same be published; that they be required to state the original price for which each article sold and the final price secured therefor. By this means the exact points of expense can be obtained and the itemization of the cost of Mving be made possible. This is necessary for a complete understanding of the problem involved in solving the high cost of hving. FINANCE. The Department of Agriculture has estimated that the average profit on farming amounts to 5 per cent. If this be true, the average farmer who pays more for his capital than 5 per cent is doomed to bankruptcy sooner or later as a mathematical certainty. When has it ever been that agriculture could be financed for 5 per cent or less in the United States ? This, in part, accounts for the increase in tenantry and the decrease in home ownership. Those who are overaverage farmers may pay more for the capital invested and stiU make a profit. Those who do not borrow capital at all, but are able to go on a cash basis, escape the danger involved in paying high rates of interest. We beheve that farmers should have a system of finances and credits adapted to agricultural needs. First, we beheve that the farmer needs a time exchange, extending for a year or so, so as to help him perform the carrying function in the marketing of his crop. Second, he needs a system of long-time loans and the payment of same by amortization. He also needs long-time loans to enable him to go into the hve-stock business without having to pay all the profits for the use of capital. Third, he should have provision made for the sale of debentures based on land investments that wiU furnish investments for those who are now absentee landlords and allow the purchase of their land by the tenants. Fourth, he should have the short-time loan, based on the principle of the open account, whereby the individual farmer may have a rating the same as commercial men, the loan to be provided for productive purposes. This wiU enable him to buy for cash and ehminate the credit system — one of the greatest taxes upon the resources of the farmers of the State. Ninety-five per cent of the business of the country is done without the use of money. This is a system of checking against accounts and credits that enables the business world to carry on its enormous affairs day by day. The farmer has not had a commercial rating and the open-account privilege, and farming as a business exemplifies the result. If the farmers were allowed to organize credit unions, and these credit unions receive sufiicient deposits to answer their needs they would follow somewhat after Eaiffesen models. If the deposits provided for only a portion of their needs, they would probably follow after the Hungarian model. If the deposits were insig- nificant compared to the needs they would probably follow after the French method. Whatever system might be provided the various sections should be allowed to conform to the interests of the community. We see no reason why most European nations may successfully use individual character 40 AGRICULTURAL COOPERATION IN EUROPE, as a basis of restricted loans for productive purposes, and this country refuse to permit or encourage a system of rural credit which brings out this latent power of applied industry. These credit unions have proved to be safer and more adjustable to local needs than the commercial bank. A signed statement from Dun's Commer- cial Agency in Austria states that they have not had a single failure of the Raiffesen type of cooperative banks. In Germany, where there are more cooperative unions than in any other country, there are 57 failures of com- mercial banks to one failure of credit unions. In conclusion, we feel that agriculture in Mississippi needs applied science in production, appHed economics in distribution, and applied economics in finance. We believe that an agricultural State, such as we have, is capable of the highest degree of prosperity and the best tj^e of citizenship under the proper conditions, and we feel that it is a task of the statesmanship of to-day to put into operation the different agencies that may conserve the resources of the State and bring out all the productive activities of the people. We do not feel that this is being done. Should such agencies be appHed as we have merely suggested, and not taken time to discuss, we believe that millions of wealth would result that at present is not coming to the producing citi- zenship of the State, and we do not feel that it would be a burden on the National and State Governments to apply each of these instrumentalities necessary to reach the results desired. T. J. Brooks, Ohairman. MONTANA. Executive Office, Helena, Mont, October 27, 1913. Dear Sir: Complying with your request of the 21st instant, I have to-day appointed the following com- mittee to represent Montana in pursuance of the purpose of the Permanent American Commission: Alfred Atkinson, Bozeman; A. H. Bowman, Hardin; Joseph L. Asbridge, Roundup. Yours, truly, S. V. Stewart, Governor of Montana. Dear Sir: Below you wiU find a statement of what the Montana committee considers tlie most pressing agricultural needs of the State : 1. Better roads. — The condition of the roads governs, in a large measure, the social life of the country. With large farms, neighborhoods are not thickly settled, so this is especially important here. 2. Improved farm loan facilities. — Farmers should be able to get money for longer periods and at lower interest rates. 3. Adjusted transportation charges. — Present rates tend to discourage manufacturing development in the State. The farm products are hauled to manufacturing centers and the fiaished products returned for con- sumption. Shipping out hay and shipping in dairy products is obviously poor management for the producer and consumer. 4. Better Federal seed laws. — Producers of high-grade seeds in one State ought to be protected from the misrepresentation of their products in other States. Also the sort of stuff that may be shipped from one State to another, to be sold as seed, ought to be regulated. At present, noxious weeds may travel over the continent in seed packages. Respectfully submitted. Alfred Atkinson, CTmirman. NEVADA. State of Nevada, Executive Chamber, Carson City, October 28, 191S. My Dear Sir: I beg to acknowledge receipt of your favor of the 21st instant relative to appointing a com- mittee to prepare a report as to the agricultural needs of the State of Nevada, and in reply beg to advise you that I have this day appointed Hon. Charles A. Norcross, commissioner of the bureau of industry, agriculture, and irrigation; Hon. W. M. Kearney, State engineer; and Hon. C. L. Deady, surveyor general and register of Carey Act lands, members of the committee for the State of Nevada. AU of the members of this committee reside in Carson City, Nev. Trusting your commission will be most successful in its efforts, I am, very truly, yours, Tasker L. Oddib, Oovemor. Note. — Report has not been submitted. AGBICULTUBAL COOPEEATION IN EUROPE. 4l NEW JERSEY. State of New Jersey, Executive Department, August 27, 1913. Mt Dear Sir: Following the request contained in your letter of the 18th instant, I have appointed Hon. Joseph S. Frelinghuysen, Raritan, N. J.; Dr. Jacob G. Lipman, New Brunswick, N. J.; and A. J. Eider, Hammonton, N. J., as a committee to prepare a statement of the agricultural needs of New Jersey to present to the American Commission on Agricultural Finance, Production, Distribution, and Rural Life. Very truly, yours, James F. Fielder. NEW JERSEY REPORT. The overshadowing importance of our State industries has, in a large measure, been the cause of the neglect of our farms and farm lands. There was a time when crop and animal production was the chief asset of our State. Throughout the eighteenth and up to the middle of the nineteenth century the forest areas of New Jersey were gradually reduced. Much land was made arable and prosperous farming communities were estab- lished throughout north and middle Jersey, as well as throughout the western portion of south Jersey. From decade to decade the first half of the nineteenth century showed an increase in the arable area and an increase in the value of farm products and an increase in the number of live stock kept on the farm. The economic disturbances brought about by the Civil War and the opening of the western lands to settle- ment inflicted a serious blow to agricultural New Jersey, a blow from which it might have recovered had it not been for the rapid growth, in the last quarter of the nineteenth century, of the manufacturing industries along the Atlantic seaboard. The thoughts of the young men in the State were directed toward the cities rather than toward the country. There was for many years an unceasing drain of the best blood of the country districts and a constant migration of the ambitious and enterprising young men into the urban districts. This weeding out of the competent and the intrusting of the fortunes of New Jersey agriculture to those not always best fitted to insure its progress have led to decreased fertility of the once productive soils, to the neglect of important farm interests, and to the decay of the farm enterprises that had been in a flourishing stage for many years. A careful study of rural New Jersey shows that profitable crop production can be more readily carried on to-day than it could have been carried on twenty-five or fifty years ago in spite of the changed conditions. It is recognized by all who have given some thought to this subject that the farm lands of New Jersey, like those of neighboring States, are at present below par. It is safe to predict, further, that a growing realization of the opportunities that exist in eastern agriculture and of the extremely low cost of farm lands in the East will bring to us a rush of farmers from the Middle and Far West. Land values wiU rise and soil improvements will be undertaken in a more systematic and more extensive manner. In order to provide for the needs already existing and for the expansion in our agricultural industries that is bound to come, we must devise ways and means for hastening the more rapid development of our agricul- tural resources. In considering i^e&e ways and means we can not fail to agree that our problem concerns both the production of farm crops as well as the transportation and distribution of farm products. It is recognized by all thoughtful men that crop production is but one phase of the farm enterprise. Indeed many farmers fail, not because of their inability to produce average or even large crops, but because of their inability to dis- pose of these crops to the advantage of themselves and of the consumer for whom these crops are grown. The feeling has been growing among us, and has been voiced in the agricultural and general press of the country, that we have done much for better and larger production, but that we have neglected to help the farmer with his problems of transportation and distribution. But after all is said and done it still remains true that we have much to learn as to methods of producing crops economically. "We do not, in most cases, secure the returns from the land which the intelligent and indus- trious farmer should secure. But too often we plant seed that fails to germinate; but too often we neglect to prepare the seed bed and to fit it for the proper germination of seed; but too often we allow our soils to become acid and unfit for the growing of soil-restoring crops. We fail to conserve the moisture that falls upon the land. We fail to supply the lacking plant food. We fail to adapt varieties of crops to our particular needs. We fail to deal effectively with fungous and insect enemies. In a word, we still have much to learn concerning methods of profitable farming. There is stUl a vast field before us to improve so that larger returns may be obtained from the land. How, then, are the agricultural needs of New Jersey to be met so that the problem of crop production may be best solved ? 42 AGRICULTUKAL COOPEEATIOUT IN EUKOPE. THE NEED OF AGRICULTURAL EDUCATION. In order to make the farmer more eflficient as a producer we must place at his disposal the knowledge and the training that would permit him to answer clearly the almost innumerable questions which confront him. We must direct our efforts toward educating the sons and daughters of the farmer in the ways of agricultural production. We must begin with the children in the rural schools. These must be taught to see their own interests as a part of the interests of the community and of the Nation. We must instill into them something of the true spirit of farm life and of that great industry of which they are a part. In other words, we must create ideals, or at least awaken ideals that seem to be slumbering. Apart from the inspiration which wise teaching must bring to the children of the rural schools, provision should be made for vocational training so that the boys and girls of the farm may be better prepared to carry on their work on the farm. The need of rural New Jersey is much like the need of the rural sections of other States. There is before us an opportunity for pro- viding agricultural education to the farmers to be. But aside from training of children in the rural schools, aside from establishing agricultural high schools, aside from establishing or improving the agricultural courses at the State college, there is need for more edu- cation and of a wider outlook to the fathers and mothers of these children. Since the establishment of agri- cultural colleges and experiment stations, the efforts of these institutions have been directed toward leavening the whole mass of farmers. The great service rendered by the agricultural colleges and experiment stations to agricultural progress in the United States is well recognized by the friends of agriculture. Much has been done by these institutions toward raising the level of production, toward introducing improved varieties of plants and improved breeds of animals, toward making production more efficient and economical, toward finding methods to overcome soil defects or to combat plant and animal diseases. But, after all, the magni- tude of the task was such that but little opportunity was offered to these colleges and experiment stations to deal with each farm as an individual problem. However, as the resources of these institutions have increased it was found possible for them to undertake more specific and more detailed work. Following the example of some of the European countries, a number of these State institutions, either alone or in cooperation with the United States Department of Agriculture, have been giving an increasing amount of attention to the individual farm enterprise. The conviction has been growing stronger that by dealing with the individual farm as a problem in itself, by learning of the defects in its organization and by correcting these defects, the level of production might be raised much more rapidly than by means of the older method of dealing with farmers of any section en masse. This method of education, attempted largely through our extension departments and the farm bureaus, is one of great promise. It is a method which has long passed the experimental stage. It can safely be applied to the conditions in our own State. To sum it up, therefore, we must attempt to make the individual farmer a more efficient producer, and as the first step in this direction we must give him and his children better education and a broader outlook on life. By estabhshing agricultural courses in our public schools, by establishing agricultural high schools, by providing better trained teachers for our public schools, by reorganizing social activities in the rural districts, by providing books of reference materials, and by establishing farm bureaus in the individual counties — or even townships, if need be — we shall lay the foundation for systems of education dealing directly with the individual and directly with problems that need solution. But little difference of opinion can exist on this point. We must have better educational opportunities if we are to have more efficient farmers. PROBLEMS OF TRANSPORTATION. New Jersey is famed for its good roads, yet even New Jersey has much to accomplish for the transportation of agricultural products. Miles and miles of our country roads are stUl in a deplorable condition and the ba.nling of farm produce over these roads is a costly undertaking. The needs of New Jersey in this direction, while not as pronounced as the needs of other States, are present and should be given intelligent study. The friends of agriculture in New Jersey have been advocating the carrying of farm produce over our trolley roads. Notwith- standing attempts at legislation in this direction, notwithstanding some measures already enacted, the producer and consumer still faU to receive the benefits which could be theirs if our trolley roads could be used at certain times of the day for transporting agricultural products to our towns and cities. It is true, also, that the splendid beginning made in our parcel-post service calls for further extension. This subject can not be passed in silence in any discussion of the agricultural needs of New Jersey, yet but little needs to be said about it at this time. It is certain to receive consideration from the standpoint of all of the States rather than from the standpoint of any one State. The farmers themselves are much to blame for the defects at present existing in the transportation of farm products. Having been made an- individualist by antecedents and environment, the American farmer has not NEW JEBSEY. 43 learned as thoroughly as the European farmer that the neglect of community interests is certaia to react unfa- vorably on the indiTidual producer. In many instances the farmers of New Jersey fail to avail themselves of the advantages of the lower freight rates on carload lots. They do not study their markets as they should, and, not knowing the markets, they do not adjust their cropping inethods to the true needs of these markets. They are just as apt to ship at the wrong time as at the right time. The importance of distribution problems should bring the producer and the public carrier together. It is to be hoped that at certain centers in districts where specialized farming is being carried on storage houses wiU be built to provide room for large quantities of farm produce. At these central points farm produce can be collected and sent to the markets where they would be most likely to find ready buyers. The problem is surely a large one and its solution will be best accomplished only when the producers, the public carriers, and the jobbers and commission merchants at the points of con- sumption, wUl come together for the consideration of their common interests. THE DISTKIBUTION OF FARM PRODUCE. It is not always possible nor profitable for the producer to dispose of his wares directly to the consumer. With that much admitted, it remains true, nevertheless, that the crops raised on the farm pass through too many hands before they reach the consumer. Every one of the cities of New Jersey, like those of other eastern States, should have public markets. In the next place, the consumer in the city should recognize more sti-ongly the value of cooperation or combination in the purchase of food products. Much has already been done in Europe in the organization of consumers' leagues, who secure their conunodities from the individual producer or from societies of producers. The possibilities in this direction are well illustrated by an organization of factory employees in the city of Passaic, N. J. This organization has been buying cooperatively for a number of years directly from producers, among them the Monmouth County Farmers' Exchange, whose oflice is located at Free- hold. There is entirely too much loss in our present method of distribution, and it is evident that at every agricultural college or State board of agriculture there shovdd be some agency that would provide farmers, as well as consumers of farm produce, with information concerning markets, prevailing prices, and transportation. New Jersey shares with other States this need for more adequate, economical, and efiicient distribution of farm produce. It is to be hoped that this need wiU receive the careful study of which it is deserviag. LAND-TENURE LAWS. The depletion of the soils of our State has been hastened by lack of wise legislation on land tenure. Under present conditions the tenant is not in any way encouraged to improve his holdings. He knows that he ia renting the farm for one or two years, or at most for a few years only, and aims to derive as large an income as possible with the least investment on permanent improvements. He has no incentive for adopting methods or rotations that would enhance the crop -producing power of the land. He is very economical in the use of manures and fertilizers. He withholds the application of hme as far as possible. He refrains from using cover crops for adding to the content of vegetable matter and nitrogen in the soil. He neglects the buildings and fences, and, in a word, becomes the true exploiter rather than a builder. European countries have long recognized the wisdom of encouraging the tenant to maintain the land at the high level of production. It is time that New Jersey, among other States, gave earnest consideration to legislation on land tenure. THE SPECIFIC NEEDS OF RURAL NEW JERSEY. Apart from the needs which our State shares with other States, there are problems and needs more or less peculiar to our own State. Of the more than four and a half million of acres of land surface, there are about 2 000 000 of acres which are yet to be made arable. Vast areas of scrub oak and pine land exist in southern New Jersey and still await development. While it is true that the soils of this pine belt are poor in plant food and very open in texture, they are capable of improvement and large production, as has been demonstrated time and again by farmers in this territory. But the improvement of these light soils calls for the highest type of farming skill for an intimate knowledge of plant-food problems and for well digested information on insects and fungus diseases likely to reduce the profits from crops raised on these soils. It is evident that these prob- lems peculiar to south Jersey can not be studied at long range from the experiment station at New Brunswick. There is urgent need for the establishment of a branch experiment station in the pine belt of south Jersey. This branch experiment station should devote itself to the study of local problems and should show the way to the profitable farming of the sandy soils. Methods of tillage, of irrigation, of drainage, of fertiUzation, of cropping, of transportation and distribution— aU pecuUar to this territory— should be given thorough consideration and study. 44 AGBIOTJLTUEAL COOPERATION IN EUROPE. Judging by what has been accomplished in certain sections of Europe, where soils fully as poor once existed, we may look forward with a great deal of confidence toward the coming prosperity of the pine belt. The im- provement of the light sandy soils in this belt wiU be accompanied also by the improvement of the low-lying areas now designated as "swamps" and the improvement Ukewise of the great stretches of salt marshes, now the breeding places of the salt-marsh mosquitos. It is hardly necessary to emphasize in this place that the development of this region will be hastened by the establishment of a branch experiment station that can deal with the problems already enumerated at close range. These, in brief, are the general and more local problems that we must consider in New Jersey for the up- building of our great agricultural industries. It is hoped that a discussion of these needs will serve to crystallize public sentiment in the right direction and will lead to united effort toward the wise and effective solution of the problems before us. Joseph S. Feelinghutsen. A. J. KlDEK. Jacob E. Lipman. NEW MEXICO. State of New Mexico, Executive Office, Santa Fe, September 6, 1913. Dear Sm: I beg to acknowledge receipt of yours of August 16 in regard to the appointment of a commit- tee for the State of New Mexico to consider the agricultural needs of om- State and to cooperate with the Ameri- can Commission appointed for the investigation of agricidtural finance, etc., in European countries. I am heartily in favor of the purposes for which this commission was appointed. The committee appointed by me is as follows : James G. Fitch, Socorro, N. Mex. ; Ralph C. Ely, Deming, N. Mex.; George H. Slaughter, Roswell, N. Mex. With best wishes, I am, yours, very truly, W. C. McDonald, Governor. October 15, 1913. American Commission on Agricultural Cooperation, Washington, D. C. Gentlemen : Possibly no State in the Union presents more of complexity in its rural credits, its farm pro- duction, distribution, and rural social conditions than does New Mexico. It is at once the oldest of our settled communities and the youngest of our States. At least 60 per cent of its people are native, or Mexican people, finding their origin at once in the aborigines and the conquistadores, while the other half of our people are drawn from every State in the Union and every cotmtry in Europe. The native people are stable, immobile, and in a large measure attached to the communities in which they live by hundreds of years of tradition, habit, and precedent. The balance of our population is largely newly grafted on the soil, unattached, shifting, and transitory. While a great proportion of these people are coming to look upon New Mexico as a permanent place of abode, the number of those who have actually been here so long they think of no other place as home — no other place where they could live to their own satisfaction— is comparatively small. For a great many years the largest rural industry of the then territory has been the raising of cattle, horses, sheep, and goats. Vast herds of these animals were at large upon the public domain. The methods of their care under those conditions were, and still are, more nearly analogous to the methods of Abraham, Isaac, and Jacob than to those of the farmer and stockman of the eastern and northern portions of the United States and the European countries. There are two general classes of farmers — the so-called dry farmers, in the northeastern portion of the State, who endeavor by skillful and scientific methods to conserve the rainfall, ranging from 16 to 22 inches annually, and thereby to make it adequate for the production of general farm products; and the irrigator, who applies his water artificially. The irrigators in turn are sharply divided into two classes — those who divert water from flowing streams, or reservoirs when the same has been impounded, and conduct it upon the land under so-called gravity systems, and those who pump the water from an imderflow. The dry farmers and the irrigators by pumping are, as a rule, Americans — that is to say, of European origin — while the gravity irrigators are very largely natives, particularly where the oldest water rights are found and the diversion of the water was most easily accomplished. The native farmers often love their work. They are, as a rule, better acquainted with the seasons than the more recently transplanted Americans. They usually have smaller holdings of land, and are very fre- quently lacking in thrift. Their stock, as a rule, is inbred and inferior in quality. Their farming methods are NEW MEXICO. 45 crude and wasteful, but their crops are better than what might otherwise be expected because their lands were the first selected for cultivation and have an abundant water supply and the soil is very fertile. When New Mexico became a part of the United States some 65 years ago, nothing was done by the American Government for the education or the development of these people. They had been living for nearly 300 years in isolated communities without any communication with the outside world and with very meager knowledge of its aflFairs. Our Government established no schools for them, sent in no teachers as it did to the Philippine Islands and Porto Rico, introduced no new methods of agriculture, and made no very adequate provision for the estab- lishment of a stable and respectable government. New Mexico, as a state, is now struggUng with problems which should have been met and solved by the Federal Government during the 60 years of our territorial existence; and the social and economic conditions must be improved among this class of people, in my opinion, before any considerable improvement in the line of rural credits can be developed among them, however great its need may be. The American gravity irrigator, as a rule, receives his water through extensive systems, which have been developed either by private enterprise or through the activity of the Reclamation Service of the Federal Gov- ernment. The title to his water right usually is more formal in character than that of the native irrigator, having been provided for by legislative and congressional acts, while the title of the native irrigator to his water right is more frequently prescriptive in character. Nevertheless, there is very little litigation and these water rights are generally considered to be good. The American irrigator usually handles his tract of land with more skill in his methods, and after a few years of acquaintance with the climatic condition, produces more to the acre than his Mexican neighbor. His farm or orchard is kept up in better shape, and when he sells he gets a better price for his land. The irrigator who gets his water from wells by means of pumping plants is a more recent acquisition. The necessity of possessing some knowledge of mechanics in order to operate a pumping plant or engine, coupled with the fact that weUs and casing, and pumps and engines require an immediate cash outlay, have the effect of settling districts of this character with a class of farmers who are a httle more forehanded than are usually found in other locahties. They come from all sections of the country, and are frequently above the average in skill and capacity. As a rule, they greatly underestimate the expense of necessary development work, and with hardly an exception they become borrowers very quickly after they enter the country. It probably takes more working capital and a larger immediate cash investment, per acre, for farming of this class than it does' for general farming under any other conditions, but the water supply (when properly developed) is more abundant, more flexible, and more reliable, and the returns are more certain than under gravity systems, to say nothing of the dry farming. There are probably no sections of the whole country where the profits to be derived from farming are so absolutely sure as in irrigated sections, and there is no form of irrigation so rehable as that of pumping. The so-caUed dry farmers are entirely dependent upon the conservation of an uncertain rainfall in an uncertain country. Their methods of tillage are comparatively inexpensive. They cultivate large areas and are gradually developing crops which withstand drought amazingly. When they make a crop, the profit in its production will easily carry them over a lean year and a total loss is unnecessary and inexcusable, being usually due to the slackness or the want of skill in the farmer. I think I have sufficiently outlined the general conditions so far as the farmer himself is concerned. When he becomes a borrower, conditions harder than those imposed by nature surround him. It is perfectly safe to say that the average rate of interest paid by the farmer on short-time loans exceeds 12 per cent, and he has great difficulty in getting money sufficient for his needs. This is a borrowing State. Our banks are smaU and their resources are limited. Their biggest depositors to-day may to-morrow become their biggest borrowers. It is necessary to carry more than the legal reserve in order to meet extraordinary demands. As a rule, very considerable deposits are carried in Chicago and New York banks, out of aU proportion to their deposits. Real estate loans to farmers sometimes extend over a period of three years, but are, as a rule, made for a shorter term. There are a few five-year loans. These loans usually command 10 per cent. The Union Central Life Insurance Co., of Cincinnati, and the Pacffic Mutual Life Insurance Co., of Los Angeles, have within the last few years been lending money in the State. They have usually made their loans at 7 per cent for from three to five year terms, and have, as a rule, required the borrower to take out life insurance with them, the premium on which approximately equals the interest paid on the loan. Disregarding the value of the insurance to the borrower his total cost, including the expense of the loan, as well as the interest and the cost of the insurance, runs from 10 to 15 per cent. In some instances the insurance is assigned as additional collateral. I have heard of some money loaned in the State at 7 per cent for from three to five years, while the paper is discounted at the rate of 3 per cent per annum for the full term of the loan. On a five-year loan, the discount would be 15 cents on the dollar, and the actual interest paid would be over 11 per cent. These conditions usually are found 46 AGEICULTUEAL COOPEEATION IN EUEOPE. in the development of new farms and the security offered is frequently corn or milo maize lands, which have net earning power of from $20 to $50 per acre, or alfalfa land, which will earn from $30 to $60 per acre. The character of the security is first class. Its earning power per acre is in excess of the earning power of farm lands in eastern and central States, but the scarcity of money in this section of the country, the lack of a knowl- edge of the resources of New Mexico on the part of those in the East who have money to loan, make it very difficult to procure money on some very valuable farms. I do not know of any other section of the country where farmers can prosper and pay from 10 to 14 per cent on the money they borrow. No other section more sorely needs the development of some system for the presentation of farm loans in the money market, accom- panied by dependable information as to the character of security, than does this section. The markets of the Southwest, including New Mexico, are exceedingly good. The stockman, the miner, the railroader, as well as the urban population, produce nothing to eat. The cattle from our ranges are, as a rule, sold as stockers and feeders on the eastern market, a few are killed for home consumption during possibly five months of the year. We import into our State dairy products, including butter, milk, cheese, eggs, and poultry, equaling in value the total products of our sheep. Our people are fed very largely from tin cans on the products of Colorado, Kansas, and California and on the milk of Wisconsin, Illinois, and Iowa. But no other section of the country is better adapted for dairying, as far as natural conditions are concerned, than New Mexico. Our markets are supplied from States to the east and west of us. In a large measure the freight rates, which are high, operate as a protective tariff and are of very great benefit to the producer within our State. Marketing conditions, however, are difficult. It is easy for the local merchant, wherever he may be, to find a uniform and reliable supply of his wares in the better organized States, and he looks to them naturally for his goods. The individual producer in New Mexico, wherever he may be situated, rarely if ever finds near him a merchant who wiU buy his products for cash and market the same for him. He is almost compelled to peddle his apples, his hay, his dairy products, his beans from door to door in the settled communities to get cash for same. The merchant has grown up under the old stock-raising conditions. In the past he has not been bothered with the necessity of marketing local products and has found his chief care in supplying the needs of his patrons from abroad. It follows very naturally that orgahized marketing, if not cooperative marketing, must be developed in this portion of the Union, and it follows from the facts which I have heretofore set forth, regarding the com- posite character of our people, that any scheme of cooperative endeavor will be more or less difficult to initiate and possibly more difficult to execute. Many of the brightest and most capable of our people, deep in their hearts, consider themselves as temporary sojourners in New Mexico, hoping to make a stake and get back to the States from which they came to pass their remaining days. These people are naturally looking for quick profits from their individual effort, while those of our American farmers permanently attached to our State are frequently only slightly acquainted with one another and not easily welded together in any scheme for com- munity upbuilding. Possibly I am not wrong in reciting this catalogue of difficulties growing out of the complexity of our con- ditions before discussing some of the more cheerful features of New Mexico rural fife. At a cost of from $5 to $8 per acre the dry farmer should always produce enough to pay for his seed and labor and should, three years out of five, produce, under present market conditions, wheat, milo maize, Kafir corn, having a value of from $15 to $20 per acre. The irrigator who produces alfalfa should harvest from 4 to 7i tons of hay per acre year in and year out. Of course we have varying conditions from year to year affecting the crop, and in the higher altitudes the seasons are shorter, lessening the yield of this staple. Our hay is worth from $10 to $15 per ton, baled, at the time of harvest, and the feeding value of alfalfa is unequaled, ahke for the fattening steer or for the milch cow. Silos are being constructed in many sections of the State, and their more general use will materially increase the profit that the farmer derives from his crop. It is not at all unusual for the irrigator to get 40 bushels of wheat, 60 bushels of corn, and 80 bushels of oats per acre. The more reliable his water supply and the greater intelligence with which he conducts his work, the more sure and the more generous are his returns. While the farmer in the Northern and Eastern States feeds his teams for 12 months in the year in order to have them available for work for possibly 6 months in the year, the farmer in New Mexico can work with his team in the field practically 300 days out of the year. He requires correspond- ingly less work stock, has a decreased expense of maintenance and an increased earning power for himself. Our stock requires less shelter, takes less feed for bodily heat, and with reasonable care we sustain few losses from exposure. I believe it is perfectly safe to say our cows will produce more pounds of milk for these reasons on the same feed here than they can possibly produce where climatic conditions are more rigorous. The average market price for butter throughout the year in our towns and cities is 40 cents a pound. Eggs bring about the same price per dozen. If we can produce more pounds of butter for every ton of feed and more tons of feed per acre cultivated and cultivate the land with fewer animals and less hired help, we can face the diffi- culties of our marketing conditions and the temporary embarrassment of high interest rates with some degree NEW MEXICO. 47 of equanimity, for the marketing conditions are not impossible to adjust, and outside money is now beginning to flow into our State for investment. It would not come if the security were not satisfactory, no matter what the interest rate might be, although it is perfectly natural that the money loaners should exact as high rate as they can procure through the necessities of the borrowers. Our railroads for more than a generation have considered this a vast expanse of territory which they must necessarily traverse in going from east to west or west to east. They are beginning to see in our valleys fields for the activities of their farm demonstrators and are becoming increasingly liberal in their appropriations to aid in the development of the country which they traverse, so that it may become productive of freight and passenger traffic. Our bankers who have here- tofore failed to accede to the farmers' demand for money are beginning to realize that the farmer is really a factor in our economic development, and they are considering the means of procuring money for them. Our merchants who have been annoyed by the complaints of the farmers because of our marketing conditions are beginning to study this new phase of commerce which they must take up if they continue in trade, and New Mexico in another 10 years will have worked out many of the problems which are now puzzling its people. Whatever its difficulties may be, however complex our conditions may appear, the basic facts are that our land has an unusual power of production, our climatic conditions are extraordinarily favorable, both for the health of our people and for the growth and the production of our crops, and our resources are of such a character that whether our development is slow or rapid, we will always consume more products than we can possibly raise, so that our markets will be equal to the best markets of the East and our prices will be measured by the prices obtained in the nearest competitive productive States, plus the cost of transportation here. I have left to the last the discussion of New Mexico's social conditions. The day of the bad man has long since past. Whatever the census may show, as to the percentage of the illiteracy in this State, it may be ascribed justly to the Federal Government's failure to see its duty to New Mexico 60 years ago as clearly as it has seen its duty to our colonial possessions dm-ing the past decade; but the fact to-day is that we have our university, our school of mines, our agricultm-al college, our military institute for the training of boys, three normal schools, and a number of private or sectarian institutions, all of which are doing work of an excel- lent character that would compare favorably with the higher educational work in many of the Eastern States. Throughout New Mexico the little primary and secondary schools are dotted for the training of the boys and the girls of the present generation. Our native people are recognizing the necessity of the proper education of their httle ones, even more clearly than one would expect them to do. Some of the clearest minds and most courageous hearts in the State have been developed among these people. Our churches are well sus- tained and well distributed. Lecture courses are common in our larger towns and a chautauqua has been main- tained at Moxmtainair for the past five years. Moral conditions throughout om- State are ordinarily clean, and the foundation of our communities' future development, laid in the lives of our young people, calls for no apology. I know of a number of farming communities where the people are closely in touch with the progress of the investigations of your commissions in Europe, as reported from time to time in oiu" papers and magazines, and they are already organizing themselves socially and are eagerly awaiting the report of this com- mission on economic questions. These people are building their silos first. They will follow with good barns and later will build homes, but in the meantime they are working for their schoolhouses, their Sunday schools, and their churches, and when this commission reports the plans, and Congress or the legislature of our State prescribes the machinery, the people of New Mexico, particularly the American-born farmers, wiU be prepared to quickly follow out the plans for the development of their community. We need men and money. There is plenty of room for the immigrant, either from other States or from abroad, but after he gets here he will, like those who have preceded him, require an introduction in the cheaper money markets, and a suggested plan of organization for the distribution of his products, in order to realize the fullest measure of the possibilities of his own life. Conununity borrowing, as it is practiced in European countries and particularly in those sections where the individuals assume unlimited Hability for the entire amount of the loan, is quite impossible to initiate in a coimtry so complex as ours. Our native people are not sufficiently famiUar with business transactions of any character to engage in such an undertaking, and our American farmers are too newly settled, too shghtly ac- quainted with one another, to enjoy that mutual confidence which must be essential to such an undertaking. It would seem, however, that where the security is good, the need for money great, the earning power of the land high, the markets assured, and the cost of money excessive, some scheme of community borrowmg ought to be possible of development. Out of the practice of the two insurance companies, which I have mentioned, and of the loan company which exacts a discount of 3 per cent per annum, m addition to the regular interest charged, it would seem that a workable plan might be developed. On a five-year loan the 15 per cent discount paid by the borrower is gone forever. The person making the loan, whether he rediscounts the paper or carries it himself, must find in that 15 per cent practically an msurance feature against loss, and some measure of addi- 48 AGEICTJLTUBAL COOPEEATION IN EUBOPE. tional profit. Otherwise, he would loan his money at 7 per cent in some other market. If that 15 per cent discount is more than a reasonable insurance against loss, due to the supposed imcertain security, then it may be reasonably assumed that it is an excessive discount. I would suggest the following scheme for the organization of rural or agricultural cooperative borrowing societies: First. That loans be procured in series of say $100,000, borrowing the plan of the old-fashioned buUding and loan association. Second. That mortgages be made by individual farmers to a trust company as trustee to seciure, first for the holders of the notes or other evidences of indebtedness, and second the proposed cooperative borrowing society, as guarantor. Third. That the total par value of the notes, or other evidences of indebtedness, be equal to the total amoimt of the money borrowed in each series, say $100,000. Fourth. That the loan be discounted by the association to the farmer, say 3 per cent per annum, for the term of the loan, or 15 per cent on a five-year loan. That on such a loan, the borrowing farmer be given 85 per cent of the par value of his notes, or other evidences of indebtedness, for the prosecution of certain specific work, to be defined by contract between himseK and the association and to be supervised by the association. Fifth. That the discoimt exacted by the association be evidenced by stock issued by it to the borrower and the money held as a sinking f tmd for the following purposes : (a) Of paying the expense of negotiating the loans and conducting the affairs of the association. (b) Of guaranteeing the payment of the interest and principal on all notes, or other evidences of indebted- ness, issued through the association. (c) For repayment to the borrowing members of the association at the time of the maturity of their loans, by means of distribution of the said sinking fund and its proportionate earnings among the members of the association at the time of the maturing of the loans represented in each series. Sixth. That shares of stock in the association should be issued to the members thereof in amounts propor- tionate to their several contributions to the aforesaid sinking fund. Seventh. That the business of the association be conducted by a limited number of directors, selected by the members or stockholders. Eighth. That the sinking fund be put out in short-time loans at the going bank rates of interest, that the earnings of the sinking fund be equally and equitably distributed among the members or shareholders, in pro- portion to the number of shares held by each. The concern being mutual in character, preference, of course, should be given to its members in making the short-time loans. But in all instances adequate security should be exacted and precautions at least equal to those observed by conservative banks should be taken. Ninth. Real estate loans for a longer period than five years would be exceedingly desirable in this country, and it is possible that graduated discounts, up to 25 per cent of the par value of the loan, might be advanta- geously worked out, particularly in view of the fact that the sinking fund, which would be loaned on personal .security, would inure to the benefit of the members or shareholders; and its earnings, together with its princi- pal sum, would operate to the final discharge of their indebtedness. Tenth. Provision should be made for the payment of certain portions of the principal at any interest- paying period, at least to the association, if not to the holder or holders of the notes, or other evidences of indebtedness, so that the borrowers could reduce their interest burdens whenever their abUity to do so would permit. Eleventh. That the long time loans, secured by real estate security, should not be made in excess of 50 per cent of a conservative valuation of the property, with the proposed improvements; and with the additional security, which the association would hold on the loans of its sinking fund, woxild make it practically a 40 per cent basis, which ought to provide against all possible fiuctuations of value in a new country. It is quite impossible to forecast the cost of placing a loan of this character, if indeed it could be placed. But if some such scheme were worked out in detail and should prove satisfactory in operation, the expense of negotiation, after the first series had been placed, would be materially decreased. The cost of handling the sinking fund would be very nominal, because of the cooperative character of the institution. For the same reason the scrutiny which would be given to the business would be rigid and the risks reduced to a minimum. The very conditions which would make the assumption of an unlimited habihty by the members of such an association difiicult would cause the members to deal with great caution, both in associating themselves together for the purpose of making the long time loans, secured by their real property, and in authorizing the short time loans on personal security. Using 7 per cent as a basis for the loans in the beginning, with a discount feature to a sinking fund, would enable the members, if they were able to place a paper on a 6 per cent basis in the eastern money markets, to NORTH CAEOLINA. 49 proportionately increase the amount of the discount, and by swelling the sinking fund, and therefore its earn- ing power, to distribute among themselves fairly the dividends resulting from improved rural credit conditions, if such a result should follow. The foregoing suggestion is offered because of the complex conditions in New Mexico and the very great difficulties which would be encountered in endeavoring to transplant upon our soils the institutions and prac- tices which have been outlined from time to time in the public press of your findings in several of the European countries which you have investigated. We shall gladly welcome any method of procedure, which will place the remote communities of the newly awakening Southwest in closer touch with the money centers of our country. All of which is respectfully submitted. NEW YORK, State of New York, Executive Chamber, Albany, August SO, WIS. Mt Dear Mr. Owens: In accordance with yoUr request of the 11th instant, Gov. Sulzer has appointed as members of the committee of three to work in conjunction with the delegates of the American Commission on Agricultural Cooperation from New York in preparing a brief statement in regard to the agricultural needs of the State, the following named: Hon. Calvin J. Huson, commissioner of agriculture, Albany, N. Y.; Hon, William Church Osborn, of Garrison, N. Y.; Hon. W. A. Stocking, jr., acting dean of the College of Agriculture, Ithaca, N. Y. Very truly, yours, Chester C. Platt, Secretary to the Governor. Note. — Report has not been submitted. NORTH CAROLINA. State of North Carolina, Executive Department, Raleigh, August 2S, WIS. Dear Sir: Gov. Craig is to-day issuing commissions to Mr. Clarence Poe, of Raleigh; Mr. W. A. Erwin, of Durham; and Mr. R. G. Vaughn, of Greensboro, as delegates to participate with the representatives from North Carolina in preparing a report to be submitted to the Congress by the American Commission which recently went abroad to look into agricultural, financial, and other conditions. Very truly, yours, Jno. P. Kerr, Private Secretary. REPORT OF COMMITTEE APPOINTED BY THE GOVERNOR OF NORTH CAROLINA ON NEEDS OF NORTH CAROLINA FARMERS WITH REGARD TO CREDITS, MARKETING, AND COOPERATION. To his excellency Hon. Locke Craig, Governor of North Carolina: We the undersigned committee appointed by your excellency to report on conditions affecting agricultural credit, marketing, and cooperation in North Carolina, beg leave to submit the following report for transmission to the American Commission on Agricultural Finance, Production, Distribution, and Rural Life: It is clear that there is something radically wrong with the facilities for borrowing money on farm lands in North Carolina. From general inquiry in many parts of the State the fact is revealed that few banks in North Carolina lend on farm lands and that the average farmer desiring to borrow money on his land is com- pelled to deal with the land-loan shark, and is compelled to pay from 6 to 20 per cent on money borrowed. As a general rule he is subjected to many kinds of extortion, usury, and exploitation, and, naturally, the average farmer of North Carolina is very much dissatisfied with the present land-loan-shark business and avoids borrow- ing money whenever possible, Frequently the land -loan shark preys upon the necessities of the distressed farmer and, regardless of law against usury, without conscience and without heart, gets all for the money loaned that his victim wiU pay. Another curious fact about this business in North Carolina is that the more remote the farmer lives from the larger money centers the greater the usury, the higher the commission and renewal fees, and the more exacting the oppression and the extortion. Hardly any greater blessing could befall the farmers of North Carolina than the institution of a system of land-mortgage credit that will bring money to the farmers and lando\Yners at a low rate of interest, and by the process of amortization or annual instalhnents extend to them the privilege of repaying this money over 42998°— S. Doc. 214, 63-1, pt. 3 4 50 AGRICULTURAL COOPERATION IN EUROPE, a long period of years. Our farmers are willing to pay what money is worth in the markets of the world, but they are not wilhng to be robbed by land-loan sharks and "blood suckers." Eather than subject themselves to oppression they prefer to allow about 14,000,000 acres of land to remain in a state of waste that is a menace to the health and happiness of the entire population of our State. COLLECTIVE CREDIT OF CITIES UTILIZED; WHY NOT COLLECTIVE CREDIT OF FARMERS? Collective credit for public purposes and at from 4 to 5 per cent has already been extended by investors to nearly aU the counties of North Carolina and to many townships upon satisfactory amortizatioil basis, but collective credit has been denied the citizen in his individual capacity. The result has been that the coimties and cities in North Carolina ia their corporate capacities have made such marvelous progress as to attract the attention of the rest of the country, yet the farmer in North Carolina is making little progress in developing his lands. The average Tar Heel farmer is only making a bare living. He enjoys none of the profits derived from the. business handling of his products. It is a fairly established fact that there is a great deal of money in North Carolina that would be invested in land-mortgage bonds bearing 5 per cent interest payable to bearer and secured by aggregated mortgages on farm lands, but in order that money for such investment may be attracted we should first make some reforms in our present system of taxation; second, we must institute the necessary financial machinery for handling land-mortgage bonds; and, third, we must remove from the minds of the bankers their im just prejudice against lending money on real estate. The actual experience of a few banks in diflFerent parts of our State shows that this prejudice is unjust, and that loans on real estate, especially small loans on real estate, when handled with iatelligence, are just as liquid and active as loans on other security and are safer and better loans than the average loan found in commercial banks But in view of the fact that the great commercial bank is highly organized for the purpose of supplying credit to the manufacturers, merchants, and business men. it would be difficult for such a bank to extend its business to the handUng of land mortgages. There is pressing need in North Carolina of a great State land- mortgage institution (or some institution rendering similar service) with proper capital and with proper equip- ment for mobihzing individual land mortgages placed on property located in the various counties, and issuing bonds against these aggregated individual land mortgages, controlled by the farmers. The form of organization of this great land-mortgage institution should be largely* determined by the security behind the collateral trust bonds and the ability of the institution to find a satisfactory market for its issues of bonds, whether at home or abroad. While the greatest need of the farmer is probably for long-time credit, yet there is also a great and pressing need of short-term credit for North Carolina farmers. At the present time the manufacturers, the merchants, and business men in the cities of North Carolina have a practical monopoly of short-time credit. The average farmer either has no credit at all or is compelled to use such forms of high-priced credit as he can obtain from the merchant. We have a great many banks in North Carolina, but we have scarcely any banks willing to do the banking business of the poor man. The farmer who has little or no property which can be taken by law for debt — the man who has no stored-up capital in North Carolina — has practically no standing at its banks. This great body of borrowers does not receive consideration at the banks because the average bank is not organized to handle this class of business. It is estimated that there are at least 200,000 persons engaged in agriculture in North Carolina that have not sufficient stored-up property to give them standing either at land-mortgage banks or at the present commer- cial banks, but these people greatly need money at reasonable rates of interest for purchasing supplies, fer- tilizers, seed, and for paying for labor. A cheap, safe, and elastic form of credit which could be reached by this tremendous class of small farmers would work wonders in upbuilding agriculture and bring much new business to our commercial banks. PRESENT BANKING FACILITIES UNSUITED TO FARMER'S NEEDS. The small Tar Heel farmer has no use for a 90-day loan that the commercial bank handles, and upon which it charges interest in advance and requires 26 per cent of the money borrowed to be left in the bank without interest. The farmer wants money for six, nine, and twelve months with the privilege of renewing the loan uptil he has marketed his crop and, in the event of crop failure, until he can raise another crop. Eather than pay from 8 to 20 per cent for his money and have himseM subjected to the uncertainty of call by the bank, he will either join (or be forced to join) the great host of farmers who have moved to the cities, or become a crop-lien farmer, closing entirely the door of hope for landownership and home building. It is respectfully submitted that the collective paper of neighborhood groups of North Carolina farmers is as good security as the collective paper of neighborhood groups of farmers in any other country in the world. NORTH CAROLINA. 51 There is a great and pressing need for steps to be taken as rapidly as practicable to organize neigTiborhood cooperative credit unions among our farmers in order that they may secure short-term, cheap, safe, and elastic credit to which they are so justly entitled. THE NEEDED FORM OF CREDIT UNION OR FARMERS' BANKS. The particular form of this credit union can be determined by the particular locality in which it is to be organized. The credit union of each neighborhood should be thoroughly adapted to its necessities. Generally speaking, the constitution and by-laws of the credit union must conform to the means of securing funds. If the organizers believe that sufficient deposits can be secured from the community to take care of the loans of the farmers, then the cooperatiye credit union would take the form of a savings and loan association and naturally would follow somewhat after the Raiffeissen model. If the organizers believe that the deposits secured from the neighborhood would only be sufficient to take care of a part of the loans required by the farmers and the balance of the money needed is to come from redis- counting the paper of the union, the form of organization would probably foUow somewhat^fter the Hungarian model. If the organizers did not take into consideration at all the deposits from the neighborhood and expected to rely entirely upon rediscounting the paper of the credit union in order to raise funds to meet the demands for loans by the farmers, then the form would probably follow somewhat after the French model. No matter what cooperative form the local credit union adopted, the foundation principle would be the same; that is, that any man of good character and industrious habits may secure financial assistance if needed for productive purposes, and that this necessary credit shall be advanced to him at as low a rate as the rate charged by banks to any other citizen of the State. Many of these unions may find it advisable to incorporate some specific features of our town building and loan associations. RELATIONS TO EXISTING BANKS. As any cooperative system of local credit unions would substitute industry and honesty for stored-up prop- erty as security, it is respectfully submitted that they should be organized separate and apart from our highly organized commercial banks. It is not only possible but highly desirable that this new agency shall be connected with the existing banks and not projected against them: Provided, That the banking institutions of our State be willing to rediscount the paper of the neighborhood credit unions on a satisfactory basis and thus share in the great volume of new business that the organization of these cooperative credit unions will be sure to create. But if our existing banks, through neglect, stupidity, or selfishness, fail to meet this great movement kindly and assist in its organization and development, then it will be up to the farmers of North Carolina to go it alone and organize a big central cooperative bank to act as a monetary adjustment institution, a clearing house for all the local credit unions in the State. SAFETY OF COOPERATIVE BANKS ASSURED. Under the provisions of the pending national currency bill, such a State central cooperative bank would have little difficulty in rediscounting the bulk of the paper of the local credit union with the nearest regional bank of issue of the United States. The power to rediscount agricultural paper by order of the Federal Gov- ernment at a fixed rate of interest granted by this currency bill ought to be sufficient argument to induce our existing banks to make a thorough study of this great problem and do all in their power to give us the very great blessing of cheap, safe, elastic credit for our North Carolina farmers. There need be nothing startling about the proposition to the banks to rediscount for our local cooperative credit unions a reasonable amount of the paper which is secured by the earning capacity of our best farmers, instead of by land, buildings, stocks, and bonds. Experience shows that the earning capacity of farmers, organized in cooperative credit unions, is about the best banking security in all the world. A signed statement from Dun's Agency in Austria states that this agency did not have any record of a single failure of the .Raiffeisen (cooperative) banks, and that the system was founded on such a strong, conservative basis that failure was practically impossible. In Germany, where there are many thousand cooperative credit unions, there are 57 failures of commercial banks to 1 failure of the cooperative credit unions. In Hungary, during a recent financial crisis, all of its 2,412 cooperative bankmg mstitutions stood the strain without failure, whUe 52 banks of the ordinary joint-stock kind which we have in North Carolina, or 10 ner cent of the entire number of such banks in the country, were compelled to close their doors. 52 AGRICULTURAL COOPERATION IN EUROPE. INEFFECTUAL MARKETING STSTEM HINDERS PRODUCTION. Reports from the Agricultural Department show that last year North Carolina imported $5,000,000 worth of corn for feed purposes, $4,000,000 worth of vegetables, $15,000,000 worth of hay, 12,000,000 pounds of but- ter ; and despite the fact that probably no country in the world, in proportion to its acreage, offers better facili- ties for raising hogs and cattle, we imported last year 52,000,000 pounds of meat in order that our people might be fed. All in all, the value of food products imported into North Carolina during the past year reached the enormous sum of $50,000,000. It is clear from the above facts that our farmers either have not learned the great lesson of diversified farming, or they have not learned how to produce food products as cheaply as farmers of other parts of the country. It is clear that, step by step, the farmers of other States are capturing our markets for foodstuffs, and our farmers are driven more and more to the one-crop system of production. It is necessary to place farming in North Carolina on a business basis. Step by step the great manufacturing centers in North Carolina are cap- turing the markets of the world. Why can not our farmers do likewise ? Perhaps our farmers might profitably learn from our captains of industry the secret of thoroughly industrializing the business of farming. In order to accomplish this great result there is need of organized community effort; the farmers in North Carolina need to follow the example of farmers of other parts of the world and turn to cooperation as the great working sys- tem that will give them a fair share of the profits of their labors by bringing them in closer relationship with the consumers. Standardization of farni products must be the rule in North Carolina if our farmers expect to meet outside competition. In all probability one of the greatest reasons for the failure of our farmers to present a better showing in the production of foodstuffs for our people is their persistent refusal to standardize the products they sell. The strawberry farmer who fills the bottom of his baskets with small, knotty strawberries and crowns the top with dehcious, large, red berries is only cutting off his nose to spite his face. When his crate of berries reaches the market the consumer overturns the baskets and penalizes the farmer by refusing to buy his crate of berries at all or by paying the price of knotty berries for the whole crate, one-half of which would bring first-class prices. The good, honest housewife who, in her ignorance, sends to town a couple of dozen eggs which, by mistake, includes six of uncertain age is sure to get a low price for her eggs; and, furthermore, she brings about hard feelings between the merchant and the consumer. The apple grower who "faces" his barrel of apples and fills the center of the barrel with off-color, off-shape, undersize, and wormy apples is bringing discredit upon his State and low prices for himself and his neighbors. Upon reaching the market the barrels have to be opened, every apple standardized and repacked, and all this Work must be paid for at high prices, plus many extras. The producer is thereby penalized and the consumer is made to pay for the extra work of repacking the apples. A properly labeled, standardized barrel will obAdate the necessity for repacking, bring better prices for the farmers, and by cutting out waste lower the price to the consumer, bring smiles to the faces of American wives, and encourage them to use more apples. If the farmers of North Carohna will only standardize their products and label them "North Carolina," they win quickly build up a world-wide market for all their products and secure at least 25 per cent better prices. Irish farmers captured the London markets by standardizing; why can not North Carohna farmers capture the market of New York by standardization ? Sharp dealing in the marketing of farm products brings low prices, overproduction, and tremendous waste, while square dealing and standardizing in marketing farm products bring greatly increased prices and world-wide markets. Distribution of farm products in North Carolina is characterized by tremendous waste, complicated methods, outworn ideas, and general dissatisfaction. Lack of proper system of marketing and distribution of our farm products is costing North Carolina farmers an annual tribute of millions of dollars. One illustration, the marketing of eggs, wiU be sufficient to show the waste and duplication of service, the loss to the farmer, and the loss to the consumer. Eggs that are served on the breakfast table of the leading men in the leading cities of North Carolina have frequently passed through a wonderful around-the-country trip. They have been collected by the farm wives at odd times and kept until the number was sufficient to carry them to the nearest store. From the country merchant they pass to the collector, who makes it a busi- ness to go through the country gathering eggs from the storekeepers. The collector ships the eggs in large quantities to cities like Richmond and Baltimore, where they are received by wholesale dealers, known as com- mission men. The commission men then sell the eggs in large quantities to jobbers who in turn sell the eggs to the retailer, the small corner groceryman. Then our city housekeeper orders the eggs over the telephone and the groceryman dehvers the eggs, which are of ancient age, to the home of the consumer; and finally the family NORTH CAEOLINA. 53 cook stops the merry-go-round of the eggs from the hands of the farm wife, the storekeeper, the collector, the commission man, the jobber, the corner groceryman, to the city consumer. At each transfer there is loss in handling, expense for trucking, storage, and margin of profit. The same amount of unnecessary waste in more or less degree is found in handling the poultry, vegetables, fruit, peanuts, and other articles of farm produce other than such staple crops as cotton and tobacco. There is something radically wrong with the present method of marketing when the farmer of Halifax County gets $2 a bag for peanuts, which, after taking the merry-go-round journey of the commission merchant and the jobber, finally lands in Guilford County at $7 per bag. It is poor encouragement to the farmer of Craven County when he can get only $1.50 a barrel for white potatoes which finally reach the consumer in Durham County at a price of $4.80 per barrel. The Buncombe County farmer is going slow in mortgaging his land for cheap money, repayable in small installments over a long period of years, in order that he may acquire sufficient capital to plant his waste farm land in apple orchards, when he is compelled to sell his apples at $1 per barrel that have to take a roundabout journey through several States and several cities and finally reach the consumer of Wake County at $6 per barrel. We need to establish a great system of community marketing whereby the best brains and the best energies of the State are employed in bringing the producer and the consumer closer together. Individual marketing by the farmer, as well as individual marketing by the consumer of the city, has proven a failure in North Caro- lina, as elsewhere in the world. We need a system of cooperation, or association marketing, whereby the products of the farmer are offered to the consumer in uniform quantities, thoroughly standardized and guaran- teed in quahty, and thoroughly suited to the requirements of the consumer. The Tar Heel farmer wiU then receive a fair market price for all the marketable produce that he can grow upon his farm. Proper organization of the farmers of North Carolina is greatly needed to devise the ways and means for establishing institutions that will provide long-term and short-term credit desired by the farmers, and that will institute proper systems of cooperative production and cooperative distribution. The last census shows that about four-tenths per cent of the population of North Carolina, or one person out of every 250, was foreign born; hence it is apparent that the two and a half millions of white people in our State are about the most homogeneous body of white people on the face of the globe. There would seem to be no serious obstacles, therefore, in the way of finally organizing our white farmers along cooperative lines after they have had sufiicient opportunity to learn what cooperation really means and after they have had time to acquire the true cooperative spirit. Let us proceed on the principle that cooperation means "organized self-help;" all these needed reforms must be brought about mainly by the farmers themselves. What the farmers can do for themselves along these lines is immensely more valuable than what well-meaning friends in the cities and subsidies from the State can do for them; but there is great need of encouraging the voluntary efforts of the farmers in these organiza- tions by the judicious aid of the State itself, mainly along educational fines. There is urgent need that all insti- tutions controlled by the State, capable of rendering such services, should lend a helping hand in the launching of this great movement for the upbuilding of the State. There is need in North Carofina for a great agricultural forward movement in order that our Federal Department of Agriculture and our State department of agriculture and our rural pubfic schools and our educational institutions offering courses in agricultural economy, forestry, and domestic science, can come in closer contact with and widen their usefulness to the farmers themselves. Now that the farmers are greatly interested in the subject of cooperation, there is immediate need for a great central bureau of in formation with the hearty cooperation of State and National Governments where per- sons interested in the formation of cooperative enterprises can promptly secure all the proper legal forms and the proper system of bookkeeping for the organization of such enterprises in North Caroliaa and to provide ample information on marketing subjects. There is also great need, even at this early stage of this movementj for the services of experts in cooperative credit, cooperative production, and cooperative distribution, in order that the farmers may start their organizations on the right basis and with the best expert information that the State can afford. SUMMARY. 1. We find that credit costs the average North Carolina farmer 8 to 20 per cent normally. 2. We beUeve that some form of rural credit society not dependent upon our present system of commercial banks must be evolved, based on the European models but adapted to American conditions, with the addition perhaps of certain other features of our buildmg and loan associations. There is great need both for short-time credit and for providing money on long time and low rate to enable worthy citizens to build houses, buy land, drain it and stock it, provide home conveniences, etc. 54 AGRICULTURAL COOPERATION IN EUROPE. 3. North Carolina has just adopted the Torrens system of registering land titles, a system which will greatly cheapen and facilitate agricultural credit, and which we would commend to other States. 4. At the same time our system of taxation should be reformed so as to discourage speculation in lands, stimulate home ownership, and stop taxing the farmer on the full value of a farm he has just contracted for when perhaps he has only paid for one-fourth of it. 5. Largely because of our undeveloped marketing system we find that North Carolina is importing $50,000,000 of food or feed products which should be produced in the State. 6. One of the chief needs in providing markets for these potential products and in economical marketii^ of what we already produce is the proper standardization of these products. 7. We behave that the main dependence of our farmers must be self-help, but that it is the duty of the State through its agricultural agencies to educate, stimulate, and guide their eflForts in these respects. 8. Our farmers need to develop a complete system of cooperation ia (1) getting credit; (2) in buyiag supplies; (3) in buying and using machiaery; (4) ia converting raw products into more finished forms, as ia ginning cotton, grinding grain, converting cotton seed iato meal and oil, milk into cream, butter, and cheese, etc.; and (5) in marketing the finished product directly to the consumer. Kespectfully submitted. E. L. Daughtridge, H. Q. Alexander, Clarence Poe, John Sprunt Hill, Subcommittee on Report, (Full committee : E. L. Daughtridge, chairman; Clarence Poe, secretary; A. E. Tate; J. H. Evans, S. H. Hobbs, R. G. Vaughn, H. Q. Alexander, John Sprunt HUl.) NORTH DAKOTA. State of North Dakota, Office of the Governor, Bismarck, August 28, 191S. My Dear Sir: I have your letter of the 16th iastant, asking me to name three men to prepare a brief statement as to the agricultural needs of the State. I beheve that this matter is a most important one and one well worthy of serious consideration, and I have taken pleasure in naming the following: Hon. W. P. Tuttle, Dawson, N. Dak.; Hon. W. A. Scott, Fargo, N. Dak.; and Hon. J. E. Phelan, Bowman, N. Dak. Sincerely, L. B. Hanna. Bismarck, N. Dak., September 25, 191S. We, the undersigned commissioners appointed by Gov. Hanna, of North Dakota, to report on the agricul- tural needs of North Dakota, respectfully submit the following : Statistics show that in 1911 farmers received $6,000,000,000 for their products. Consuraers paid thirteen biUions for the same products. The cost of transportation for the products was only four hundred and ninety- five millions. The farmers for such products, including the cost of transportation, received less than one-half of the total amount paid by the consumers. The agricultural needs of North Dakota at the present time can be best served by all the well-disposed people who are advising the farmers how to travel the road to success making good in that line themselves; that is, if we know how to farm and how farmers ought to farm, let us demonstrate the methods by practical experiences. In other words, maintain successful farms where weeds are cut out, profitable crops raised, moisture conserved, and success perpetuated. Then demonstrate that all this can be done at a profit and coilvince the farmer that he is not being made a part of an industrial system that is aiming to force production without due measure of profit. When the country home is given the same conveniences that the city home enjoys the city must pay for its food supplies off the farm suflBicient to hire the help necessary to take care of the time and cost of such improved living. Competition, mentally, advantageously, and economically, has been so keen in the city that the quality and price of help ia the country has not kept pace with the price the city wishes to pay for farm products. The result is the changing of ownership from the farmer who lives on his farm to the city ownership. OKLAHOMA. 55 Farmirg to be a success must be a profitable and enjoyable industry. The farmers are getting tired of being preached at, but never grow tired of seeing things grow or being made to grow bountifully. Present methods in National Government tend to put the farmers in competition with aU the world, to set an example in the competitive system, making it necessary to produce the greatest amount for the least compensation. Over against this condition stands the powerful organizations that tend to hold production to a safe and profit- able balance with the demand in nearly all industrial fields, including skilled labor. So far as North Dakota is concerned, no State in the Union is better equipped to supply the necessary credit to farmers for their needs. The university, agricultural college, experiment stations, farmers' institutes, country schools are all adequate and progressive and practically in the hands of the farmer, representative government to shape according to their own best interests and the interests of the State. In this direction we recommend further effort and extension of agricultural and manual training in all the schools, expansion of demonstration farms throughout the country; also better farming associations. We recommend untiring effort in maintaining a cordial fellowship between the farmers and their brethren of the banks, the railroads, and commercial centers. The uplift is on in North Dakota and the intell^ence of the farmers is equal to their task, and to-day we believe that the farmers are operating on a narrower margin of profit, considering the property and labor involved, than any other industry in this Nation. Under present conditions, dollar wheat on the farm, and other products in proportion, can aid the "back to the farm" movement. Many are deploring lack of pro- duction on the farm and the cities crying for lower cost of living, but no one wants so-called cheap living, except- ing those who are seeking something for nothing. Proper compensation to the farmer for his labor and his products will insure bountiful and ample production. W. P. Ttjttle. Wm. a. Scott. J. E. Phelan. OKLAHOMA. State of Oklahoma, Oklahoma City, October 24., WIS. Dear Sm: I am in receipt of yoiu* letter of October 21, in reference to the appointment of delegates to represent the State of Oklahoma in reference to preparation of a report based on the American Commission, but regret to state that on accotmt of no appropriation having been made by the legislature, I do not see my way clear to make these appointments and to expect this work from such committeemen. If you could get them to act voluntarily, I believe Mrs. C. E. Lahman, of Vinita, who made the Em-opean trip with the com- mission, Mr. J. F. Darby, of Muskogee, who is greatly interested in agricultural matters and a member of the State board of agriculture, and Capt. S. T. Bisbee, managing editor, Daily Oklahoman, Oklahoma City, who is also interested in agricultural matters, would be good persons to serve on such committee. Yours, truly, Lee Ceuce, Governor. By F. S. E. Amos, Secretary. Report of J. p. Dakbt. No adequate understanding of the agricultural situation in eastern Oklahoma can be gained without some knowledge of the history of this section. A brief recital of this history wiU in a large degree explain the present conditions. To apply remedies it is necessary that the conditions sought to be remedied must be fully understood. The land of eastern Oklahoma (formerly Indian Territory) was for many years held in common by the Indian tribes. Through acts of Congress this territory, comparable in area to the State of Indiana, was allotted in severalty to approximately 100,000 Indians — men, women, and children. After this process was well advanced, in 1904 the restrictions on the sale of lands so allotted were removed from a certain class of enrolled citizens. Subsequently more restrictions have been removed and more or less land rendered ahenable and open to farmers to purchase. At the present time there is still considerable land which the allottee himseK can not sell, mainly the holdmgs of full-blood Indians, and other portions which may be sold through the approval of the deed by the Secretary of the Interior. Because of these conditions, due to Indian holdings of land, eastern Oklahoma is largely imdeveloped. On all sides of us we find the territory in an advanced state of agricultural development. What OTir agricultural resources are in kind and quahty and what population this territory can support few realize. The conditions existing here are unhke those existing in other sections of the United States of equal area. This expanse of country is new to modern agriculture, since only within the last few years could our 56 AGRICULTUEAL COOPERATION IN EUROPE. land be bopght and sold, and only since November, 1907, have we enjoyed the rights of self-government under State organization. We found ourselves at statehood in a backward condition. Only a smaU amount of land had been purchased by actual farmers and a great portion of the lands were not cultivated. A large portion of our farmers were tenants renting from year to year, many of whom moved about in covered wagons. Most all farm improvements were exceedingly poor and hardly fit for habitation for man or beast. Only a few section- hne roads had been opened and no funds had been made available for road improvement or construction of bridges. No rural schools existed except a few Indian schools. From this condition in 1907, the time of statehood, we have progressed steadily, yet many of our foremost problems are the same now as they were then. We need immigration of more farmers and better farmers. Not more than one-half of our lands are utilized at all and a much smaller amount is in cultivation. We must have more farmers, and it is equally imperative that we have farmers who will succeed. Our present farmers come from north, south, east, and west of us, from locahties where the chmatic and soil conditions are very different. To such farmers we must lend every assistance in our power to educate them as to cultivation of the soil and selection and rotation of crops. To induce desirable farmers to come they must be satisfied by observation and demonstration that they can make farming remunerative on the basis of the price they have to pay for the land. If they come as tenants we must give them better improvements and better living con- ditions. Landlords must do their share in this work and should understand that it is the successful farmers who cause the advance in the value of land. Farmers who have prospered elsewhere will only come when Improvements on the farms, the roads, schools, and social conditions appeal to them as being satisfactory. The situation is such as to demand prompt, intelhgent, united action on the part of aU agencies operating to develop agriculture in this region. Out holdings of land are in many cases allotted in small tracts which permit no large colonization or immi- grant schemes. Our accessions to rural population have come and wiU continue to come through gradual process of infiltration. When the conditions around the farmer are made more desirable this movement of farmers to eastern Oklahoma will be thereby accelerated. The present period may be called one of adaptation. Our farmers who gather in here from all sides, where dissimilar conditions as to plant life and soil conditions prevail, are endeavoring to adapt their methods in farming and stock raising to conditions which are new to them. We need more inteUigent comprehension of our soil conditions, including conservation and improvement of the soil and a better understanding of cUmatic conditions, together with practical advancement along the lines of preparation of seed beds and selection of crops and seed, methods of cultivation, and intelligence in marketing. Our conditions are favorable for general stock and poultry raising, yet our farmers do not understand that they are not even going to approximate their full capacity in agricultural production until each farmer raises cattle, hogs, poultry, and dairy products Eastern Oklahoma, year in and year out, can raise an abundance of green feed for stock in wonderful variety. At the present time there are several agencies at work in eastern Oklahoma which deserve mention. The United States Department of Agriculture, through its farmers' cooperative demonstration work, has some 40 coimty agents engaged in demonstrating to farmers on their own farms methods by which they can secm-e greater crop yields. This carries instruction direct to the farmer. About 30 of these demonstration agents are engaged by eastern Oklahoma counties. To assist the Department of Agriculture in this work and make the work more effective the Eastern Okla- homa Agricultmal Association was organized at Muskogee in February, 1913. Its primary fimction is to cooperate with the Department of Agriculture in its work, and to this end 35 counties in eastern Oklahoma have now been organized. In this organization there are not only farmers but business and professional men interested in better farming. These organizations interest themselves in all agricultural matters and assist the farm demonstration agent in his work. Everyone in eastern Oklahoma is talking agriculture, which is a decided step toward improvement. The last legislature, through the efforts of the Eastern Oklahoma Agricultm-al Association, passed a law authorizing county commissioners to appropriate $500 per annum to be paid on the salary of farm demonstration agents in connection with the United States Department of Agriculture. Before this law was passed and before the organization of the Eastern Oklahoma Agricultural Association, the Depart- ment of Agriculture was forced to pay the entire salary of these agents, whereas now it pays only one-half or less • thus this movement has resulted in placing in eastern Oklahoma almost twice as many farm demonstra- tion agents as heretofore with no increased appropriation by Congress. This work is not only carried on among the farmers, but boys' and girls' clubs are organized and are doing very effective work. As the result of the coalition between the Eastern Oklahoma Agricultural Association with its component county organizations and the United States Department of Agriculture a novel method of distributing prac- tical information to the farmers has been put into practice. Farmers' bulletins are issued each month con- taining advice for the farmer in concise, simple paragraphs on subjects which should have consideration during OKLAHOMA. 57 the month. These are printed on single sheets of cardboard with a calendar at the top and perforated so as to hang on the wall. The material printed in these bulletins is prepared under the direction of the State agent of the farmers' cooperative demonstration work and franked out under Government frank. The cost of the printing and mailing is borne by the Eastern Oklahoma Agricultural Association. The buUetms are also placed each month in every railway station in eastern Oklahoma. These bulletins are doing an infinite amount of good to the farmers, as they will read them when they will not read farm papers. They are usually kept hang- ing on the wall and not destroyed. This is the most effective and cheapest process of printed means of educa- tion for the farmers of which I have any knowledge, and deserves adoption in other States. Besides these agencies we have in Oklahoma an Agricultural and Mechanical College of almost 1,000 students and 6 district agricultural schools. There are published in this State at least four farm papers. Agriculture studies are fast being put into the public-school curricula. The Department of the Interior of the United States Government maintaias, under the direction of the Indian superintendent, 14 expert farmers, who work among the fuU-blood Indians. There are also two large fairs,- one held at Oklahoma City and one at Muskogee, and in addition many county fairs. Practically aU of these agencies of agricultural development were started only recently, but their effects have aheady been felt. To summarize, I will say that we need an immigration of a desirable class of farmers. One of the duties of each county organization is to give the incoming farmers information relative to the soil and climate and conditions with a view to making them successful farmers. We need a general education of our farmers along all agricultural lines. Fundamental in such education should be information relative to soil and climatic conditions, as practically all our farmers come from States where conditions are different and will not realize the full degree of success from their efforts until they have an understanding of the local conditions and wherein they are different from the conditions to which they have been accustomed. We need better roads. At the present time there is considerable agitation for better roads, and some work is being done each year. The Government might help out in this matter in connection with rural mail routes and interstate roads and also in sending lecturers over this country to instruct our people on methods of road making and upon the benefits to be derived from weU-constructed and well-maintained highways. There could be much done, also, to promote the live-stock business. Eastern Oklahoma is weU adapted to the growth of live stock, and this feature of farming is so necessary for the maintenance of soil fertility and to the realization of the maximum profit from the farms that it should be encouraged in every possible way. The State and Federal authorities have live-stock agents engaged chiefly in the work of tick eradication, which work is progressing in a satisfactory manner. Much is said about credit systems and about high rates of interest charged farmers. In my opinion this matter will adjust itself when our farmers farm in such a manner as to accumulate a surplus sufficient to improve and stock their farms. Interest rates are subject to an economic law of supply and demand and when the security which the farmer gives the banker is improved rates of interest wiU fall. I do not beheve this matter merits any special attention. In prosperous farm communities in the older States farmers loan to each other at a low rate of interest and many of them have time deposits in the bank bearing low rates of interest. The Government might do more work than it is doing in educating our farmers in the management of their business. Much lack of success in this State is due to a failure of our farmers to use business ability in managing their farms and marketing their crops after they produce them. We need better schools for the farmers. The aim should be to give the farmer boy and girl an education equivalent to that given to the boy and girl in the village and town. If this condition prevailed not so many farmers would move to town to send their children to school. The crying need of this country is for better elementary education. A higher degree of iateUigence is needed everywhere among our farmers and the school is the proper place to start such improvement. To those famiUar with conditions in eastern Oklahoma it is needless to say that one of the most important factors in the development of this country Hes in the removal of restrictions on ahenation upon the greatest possible acreage. This restricted land means the tenant system, for as a rule the restricted land farms are so poorly improved that good farmers will not five on them. The proportion of tenant farmers in the counties in eastern Oklahoma runs from 50 to 85 per cent of the total. This condition in itself is the source of many of our agricultural problems. Inasmuch as we are endeavoring to raise field crops and use methods adapted to the conditions imposed by nature it might be well if the Government would estabhsh one agricultural experiment station in eastern Oklahoma and one in western Oklahoma. All experiments and bufietins of the United States Department of Agriculture should be made more easHy avaUable to the farmers, and I beheve it would be wise if each county agent would prepare a fist of the farmers to whom buUetms should be sent or be required to order direct for them such bulletins as would be of greatest benefit to them. 58 AGBICULTURAL COOPEEATION IN EUROPE. Report of Mari6n S. Lahman. A categorical list of the agricultural needs of Oklahoma or any other place is of little value without some explanation of the causes that create such conditions, particularly if the enumeration is made for the purpose of suggesting remedies. For instance, the first most pressing need of this, the eastern section of the State, is better farmers; farmers who are trained in the science of agriculture, who are intelligent enough to vary their methods to suit the varying climatic conditions, and who are energetic enough to do as well as they know how. This statement might apply to almost any poor farming district, but in order to plan improvements the causes of such a need must be considered, since those causes vary with the localities. With us lack of land titles, ignorance of the nature of the soil, and extremely variable climate have kept out the better class of farmers. Until a short time ago the restrictions on Indian lands made it difficult for a white man to get clear title to a farm. Even now so many complications have arisen over transfers of titles that it is often an expensive matter to prove a clear title. On the other hand, renting was not satisfactory, because farms had so few im- provements that only a very inefficient class of people would consent to hve in such a primitive manner. So much money had to be spent lq order to make the farms habitable and productive that good farmers could not afford to so take hold of another man's land. Again, the soU in many places requires particular handling; sometimes the addition of an applied agent to counteract some excess of varying chemical constituents. The average farmer does not know how to analyze soil, and it usually takes many failures to teach him the successful way of handling his fields. Then the climate of eastern Oklahoma is exceedingly variable and fuU of extremes. One year spring planting will be delayed by excessive rains ; another year at the same season there wiU be no rain at all. Many a corn crop has been blasted by scorching winds that burned corn in the tassel; or days of drought will shrivel crops during seed formation. Repeated crop failures discourage farmers and they lose ambition. Agricultural conditions have improved somewhat in the last five years. Since title to land could be bought, a better class of farmers has appeared. Rural schoolhouses have been built; bridges and some road improvement put in. Still our rural conditions are bad. Roads are so poor that after a heavy rain it is very difficult for farm- ers to get to town. Town residents are made to feel this by a sudden scarcity of eggs and the like. Rural mail delivery and rural telephones have greatly improved the social condition of our agricultural population, but there is still a great lack along this line. Farmers' clubs, cooperative associations, and the like are practically unknown. Rural credit can be obtained only at high rates. I have left this point untU the last, partly because I do not consider it of first importance, as many do ; and partly because it seems the most difficult of solution of all ' farm problems. Easy and cheap credit seems to be the panacea generally recommended for aU agricultural troubles. It is true that the condition of the peasants in a number of European countries has been improved by the personal credit system, but their whole foundation of agricultural conditions differs so absolutely from what we have here in Oklahoma that the adoption of such a system by us is, so far, out of the question. Their rural popula- tion is station'ary; ours is migratory. Their people are accustomed to supervision by the Government and by overlords ; our people would resent interference with personal affairs. In our older settled districts where many farmers have bank accounts and are able to finance themselves, where the same "family from one to three gener- ations has occupied the same land, you will fuid personal credit given more or less as financial security. In the majority of cases here, the farmer's personal integrity is not well enough known to permit his using it as financial security. Ignorant as many of our farmers now are of both the first principles of farming and of business methods, it would not be any real advantage to them to be able to get into debt. So we come back to the first proposition; first improve the farmer, then he will improve his surroundings. It is a tedious matter to educate adults. Our only hope is to educate the rising generation. Better rural schools is a great cry and a good one. How we are to get them is another matter. With the present area of farm land as compared with rural population, the distances are too great to allow more than a small number of fai-mers' children to use any one schooUiouse. In towns, one schoolhouse, one equipment, one set of teachers, serve for a large number of children. In the country the cost of such advantages is in inverse ratio to the school attendance; the fewer the children, the more per head is the cost. The same thing applies to road making and other rural improvements. More intensive farming would seem to be one factor in the solution of this problem. Education, both general and agricultural, is imdoubtedly our first need. The farmer left to himself must grope his way hesitat- ingly. He could be helped, given a start, so to speak, by those who are already educated. This would not PENNSYLVANIA, 59 be altogether a labor of charity, for town and city will profit by increased prosperity of surrounding agricultural districts. This is a very fragmentary statement of the situation. Its only value Ues in its attempt to draw atten- tion to this most vital subject of the state of our agricultural lands and population. OREGON. State of Oregon, Executive Department, Salem, August 21, 1913. Dear Sir: Replying to yours of the 11th instant, this is to advise you that I have named as a committee to cooperate with the Oregon delegates on the American Commission in the matter of preparing a statement concerning the agricultural needs of this State the following men: A. P. Davis, La Grande, Oreg.; A. T. Buxton, Forest Grove, Oreg. ; Geo. F. Rodgers, Salem, Oreg. Very truly, yours, Oswald West. Portland, September 22, 1913. A committee appointed by Gov. West met in the Imperial Hotel, Portland, to discuss and report on the agricultural needs of Oregon. The members present were H. G. Starkweather, Milwaukee; Geo. F. Rodgers, Salem; A. P. Davis, La Grande; and H. Macpherson, Corvallis. In addition, Messrs. H. F. Cutting, of Port- land, and Wm. Grissenthwaite, representing the Farmers' Society of Equity, were present as consulting members. After considerable discussion the committee settled upon the following as the paramount agricultural needs of the State of Oregon: Cheaper credit. — Interest rates are too high, and, in general, terms of repayment are not adapted to farm conditions. The State and National Governments should take a hand in securing a system which will pro- vide loans for the farmer upon mortgages and other collateral at rates and upon terms which insure the pro- motion of the great fundamental industry. State guaranty of land titles. — Steps should be taken to secure compulsory uniformity of land registration and State guaranty of titles. Some system upon the Torrens plan of land registration is necessary to cheapen the transfer of property and secure simplicity and safety in pledging land as a security for credit. Cooperative laws. — The present cooperative law of Oregon is quite unsatisfactory. Careful preparation should be made to frame suitable laws to be presented at the next meeting of the legislature. The federation of farmers' organisations. — Various plans were discussed for the federation of the farmers' organizations of the State, especially with a view to securing a more efficient and economical system of market- ing farm products. The members of various organizations present resolved to bend their efforts toward bring- ing about such a federation. Better country roads. — One of the worst handicaps to Oregon agriculture is the bad condition of our country roads. Plans should be worked out, if possible, to secure both Federal and State aid in building up a system of highways. H. G. Starkweather, Chairman. PENNSYLVAlNflA. Commonwealth of Pennsylvania, Executive Chamber, Harrisiurg, August 26, 1913. Dear Sir: The governor directs me to acknowledge the receipt of your letter of the 11th instant and to advise you that in accordance with the request therein contained he has appointed N. B. Critchfield, secre- tary of agriculture, Harrisburg; A. L. Martm, deputy secretary of agriculture, Harrisburg; and George G, Hutchison, Warriors Mark, Pa., as a committee of three to work in conjunction with the delegates from Penn- sylvania on the Permanent American Commission. RespectfuUy, yours, W. H. Gaither, Private Secretary. Note. — Report has not been submitted. 60 AGKICULTUBAL COOPEEATION IN EUROPE. RHODE ISLAND. State of Rhode Island and Peovidence Plantations, Executive Department, Providence, October 28, 1913. Sir: I have the honor to inform you that, pursuant to the request of the Permanent American Commission on Agricultural Finance, Production, Distribution, and Eural Life, I have appointed the followiiig-named persons as a committee to report upon agricultural conditions and needs in Rhode Island, and to confer with the delegates of the American Commission at meetings to be called with a view to furthering the welfare of New England agricultural and rural life: Dr. Howard Edwards, president Rhode Island State College, Kings- ton, R. I.; Mr. Horace W. Tinkham, Warren, R. I.; Mr. Frank E. Merchant, Kingston, R. I. A copy of this letter has been sent to each of the above-named persons, to Mr. Clarence J. Owens, director general of the Permanent American Commission, Southern Building, Washington, D. C, and to Dr. Alexander E. Cance, chairman New England committee, Massachusetts Agricultural College, Amherst, Mass. Very truly, yours. A. J. Pothier, Governor. STATEMENT CONCERNING RHODE ISLAND'S NEEDS FROM AN AGRICULTURAL STANDPOINT. The State of Rhode Island is possibly unique from the agricultural standpoint in that(l) its native population, having had their attention turned almost exclusively toward commerce and manufactures and having found, as a rule, so much larger returns and more compact and pleasant community life through these pursuits, have come to regard agriculture in the State as outside of or indeed beneath the scope of worthy endeavor on their part; and (2) as a consequence, while it is by for the most densely populated of the States, it has also relatively the largest amount of unused farming land. We would therefore place as first and most difficult in advancing the status of agriculture among us the creation of a mental attitude as to its possibilities and its consequent dignity. To create this new mental attitude, three things are necessary: (1) Financial success in farming in Rhode Island; (2) the minimizing of hand labor on the farm and in the home; (3) the enlargement of social life and opportunity through better transportation facilities. Financial prosperity is, then, the key to the whole situation. Energy and intelhgence are everywhere looking for outlets to success, and they will enter upon farming as readily as upon any other line so soon as they are made to see a reasonable prospect of adequate financial return for effort put forth. It behooves us, first of all, therefore, to examine into the conditions for financial success. The evidence goes to show (1) that intensive cultivation and speciahzed farming are financially suc- cessful in Rhode Island, taking the form of market gardening, fruit, and poultry products; (2) that, imder favorable conditions,' dairying can be made to pay; (3) that, in the opinion of some and with suitable mar- keting facihties, beef raising might now be profitably carried on; (4) that rougher outlying lands can be made to bring in a revenue by sheep raising and forestry; (5) that general farming as practiced on a large scale in the West is not profitable in Rhode Island, as is evidenced by the decrease of improved farm land by 4.8 per cent in the last 10 years. Now, the conditions necessary for success in these specialized lines of farming are three: (1) Thorough knowledge of the applications of science in these pm-suits combined with individual initiative and energy; (2) credit facilities of the same kind and extent as are available for the manufacturer and the merchant; and (3) organization for cooperative marketing. To obtain these conditions, there are needed, in our opinion: (1) Wider, more practical, better organized instruction in agriculture in our pubUc schools; the elimi- nation from aU our schools of that atmosphere of veiled contempt or, at best, of passive indifference toward farming which so surely influences the minds of our strongest and most ambitious boys and girls away from country life and its pursuits. We believe that the attitude of our teachers in this matter has more to do with the present low estate of farming than any other one factor entering into the problem. All the proc- esses of the school work tend to exalt the office of the financier, the manufacturer, the railroad magnate, the lawyer, the physician, or the writer; but the farmer in picture, and story, and song lacks every element of grace, dignity, or romance, and his occupation, instead of figuring as the greatest and most important of the productive industries is either taken for granted or ignored. These things, while trivial in themselves, have an enormous effect in determining the ambitions and ideals of youth, and, indeed, almost in spite of oneself, color all the thought of later years. Under such school conditions it is no wonder that young blood is steadily drained away from the farm and that the land cries out for intelligent and adequate tillage. Let us have SOUTH CAROLINA. 61 schools in which, not only are a few instructed ia the principles and methods of agriculture, but the many are also duly impressed with the dignity and importance of farming, with the wonderful opportunities it now offers for ambition, energy, science, and skUl, with pride in its achievements and respect for its processes in the' same way as they are now informed of the standing and function of the merchant or the manufacturer. Until then we shall have as now, the general complaint of dearth of energy and initiative on our farms. We need (2) one or more agricultural vocational schools (not colleges) to which the boy from the common school may go and receive intensive instruction and practice in the scientific processes and methods of those forms of farm production adapted to our resources and needs. These schools may form a department in some existing high school or may be organized separately, but in all cases they should have a minimum of academic training combined with a maximum of vocational and social work that would enable the student to pass directly from the school to effective participation in farm enterprises and undertakings. We need (3) better financial support for the work of the State board of agriculture and the extension de- partment of the State college in carrying to the men and women now on the farms detailed information and advice concerning existing problems, situations, and opportunities. This work should be done, not only by farmers' institutes, by pamphlets and bulletins, by correspondence, and by the fostering of boys' and girls' corn clubs, potato clubs, canning clubs, and the like — all of which methods are good and are now being prosecuted as earnestly and vigorously as strength and funds will permit — but also by house-to-house visitation, by actual demonstrations on the farms themselves, by continued consultation, tactful advice, and suggestion, man to man, as occasion and need arises, on the part of an expert living in the community year in and year out. In other words, we need the operation of just such a measure as the Smith-Lever extension bill, providing for State and county agricultm-al leaders, whose whole business shaE lie in the prosecution of just this sort of work. It is by some such process as this that more obviously needed improvements wiU be brought about. Farm- ers need organization and cooperation both in selling their products and in buying their fertilizers, feed stuffs, and supplies. They need improved marketing conditions. They need capital for making farm improvements and for financing the year's enterprises. They need to learn the significance and value of intensive farming under our market conditions. They need information about changing demands of the consumer, the develop- ment of new markets and opportunities, more attractive farms for marketing products, standardization of products for the market, new and better methods of seed selection, crop production, and crop defense, better and more intimate farm bookkeeping to show what undertakings and what individuals are profitable and what are not, cow-testing associations to raise the productive grade of their herds — a thousand things that mean success or failure in farm undertakings under increasingly exacting conditions. But all these needs can come and will come only by and through the farmer himself. He and he alone in all these matters must work out his own salvation. The manufacturer or the merchant calls in the expert to tell him how, but he himself must, and he alone can, carry out the methods which the expert invents or discovers. So with the farmer — give him the expert counsel of the State and county advisers provided for in the Lever bill, and he will himself evolve provision for all these other needs. To sum up, then, financial success, the one thing necessary to vivify farming in Rhode Island can be ob- tained only through either the possession of specialized knowledge or access to advice and direction from a special- ist. One essential result of this farm-specialist's work will be the demonstration of the need for cooperation and the development of the cooperative spirit. Once this spirit is thoroughly awakened, credit facilities will be naturally and inevitably evolved, just as they have come in other countries, not as a beneficence from the outside, but as a natural development of enterprise and initiative in the farmer himself. Finally, with the establishment of a financially prosperous and aggressive farming class in the State, inven- tion and ingenuity will surely apply itself to the lightening of the tasks of the intensive farmer in a series of im- plements comparable with those already evolved for the extensive farmer of the West. Indeed, we may surely say even now that the devices for minimizing hand labor on the farm and in the home are in large measure already existent and can be obtained with comparatively small expenditures. In the same way the estabhsh- ment of better transportation facilities is dependent only on further organization and cooperation. SOUTH CAROLINA. State of South Caeolina, Executive Chamber, Columbia, August I4, 1913. Dear Sir: Gov. Blease is in receipt of your letter of August 12, requesting that he appoint a committee of three "to work m conjunction with the delegates on the commission from South CaroUna, Messrs. R. I. and E. F, Woodside, both of Greenville, in preparmg a brief statement as to the agricultural needs" of South Caro- 62 AGEICULTITEAL COOPEEATION IN EUKOPE. Una, "in order that the American Commission may consider the needs of our States and provinces as they endeavor to reach the solution of our economic problems through the use of the findings of the commission in European countries." I have the honor to inform you that Gov. Blease has named the following three gentlemen: Mr. B. O. Harris, Pendleton, S. C. ; Mr. Welch Wilbur, Newberry, S. C. ; Mr. J. P. Kirven, Darlington, S. C. It is presumed that you will send the proper notification to these gentlemen, with such information as you may deem necessary. Respectfully, Jno. K. Aull, Private Secretary. Note. — Report has not been submitted. SOUTH DAKOTA. Fairfax, S. Dak., October 10, 1913. Dear Sir: Gov. Frank Byrne, of Pierre, S. Dak., appointed a committee on rural credits and agricultural cooperation for the State of South Dakota, consisting .of J. F. Goodsell, of Flandreau, S. Dak.; G. R. Malone, of Draper, S. Dak.; and Charles A. Johnson, of Fairfax, S. Dak. On September 23 this committee met at Mitchell, S. Dak., and perfected an organization by electing G. R. Malone president and Charles A. Johnson secretary. They passed a resolution, which was unanimous, indorsing the proposition of rural credits and coop- eration, pledging themselves to do all that they can in securing such information as is- available of the present condition of our farming community, and in cooperating with your organization. I find that in looking into the matter of the credits of farmers in this part of the country that the farmers are able to borrow money on land for five years at 6 per cent, and that every five years they have to pay a commission of from 1 to 2 per cent for the whole length of time on the loan, which makes the loan cost them anywhere from 7 to 8 per cent, and in many cases it costs them as high as 10 per cent on five-year loans in the western part of our State. The State of South Dakota has quite a volume of school money, which is loaned to the farmer on five years' time without any commission, but this is only a drop in the bucket and is taken up very rapidly. I have been La the farm-loan business for the past 25 years and have charged commissions rang- ing from 1 to 2 per cent. We do this because we have to pay a commission in selling these loans where we sell them through brokers, but I think that the system is all wrong, as a five-year loan carries with it an uncertainty to the farmer, wondering whether he can renew his loan at its due date and at what rate. I believe that if rural credits could be secured for the farmer, enabling him to borrow his money for longer time and without a commission, that it would do more for the farming industry than has been done for it in the last 50 years, and that it would enable a lot of men who are now renters to own farms, which would materially increase the pro- duction. As it is now, with high rates of .interest, the renter says that he can better afford to rent land than to pay the high rate of interest that he would have to in owning a farm. I believe that the system of rural credits, such as some of the countries of Europe have, would easily double the number of farm owners living on the farm than we have at the present time, as the renter who has a few thousand dollars now finds it more profitable to rent than to pay the high rate of interest that it is necessary to pay under the present system. Assuring you that this commission for South Dakota will be very glad to cooperate with you in any way possible and we would be very glad to have aily suggestions for our future work in this State, and assuring you that we are at your command, I remain. Respectfully, yours, Charles A. Johnson, Secretary of Rural Credits Commission for South Dakota. TENNESSEE. State of Tennessee, Executive Chamber, Nashville, August IS, 1913. Dear Sir: I am directed by Gov. Hooper to acknowledge receipt of your letter of the 8th instant, and to advise that he has appointed the following men on a committee to work in conjunction with the delegates on the American commission from Tennessee : Hon. T. F. Peck, Nashville, Tenn. Mr. Robert Gallagher, Shelbyville, Tenn. Mr. R. T. De Berry, Humboldt, Tenn. Very truly, yours, Robert S. Henry, Secretary. TENNESSEE. 63 AGRICULTURAL CONDITIONS AND NEEDS OF TENNESSEE. This is a big question, and one with many angles, and it will not be possible for it to be covered with justice to its importance in the time given for the preparation of this report. More recent years in Tennessee have given signs of much progress among the rural population of the State, and it is a significant fact that every section of the State is evidencing the ever-widening wave of interest in things agricultural — and more especially in the spread of knowledge of better methods of farming. This interest is manifesting itself not only among the farmers themselves, but among the bankers, the manufacturers, and the great pubUc-service corporations — especially the railroads of the State, the directors of which keenly appreciate the importance of the development of agriculture and allied industries along their lines as furnishing their chief source of revenue. The most important phase of the work of the present administration of the department of agriculture of Tennessee has been and is its efforts to redirect thought and action into agricultural channels that the great resources of the State may be developed to the extent that it will produce everything necessary to the support of its people and, as it is capable of doing, furnishing a surplus for export. The wonderful results of the past several years in the study and research for the improvement of agriculture have been taken to the farmers of Tennessee through the institute work of the department of agriculture. Ex- perienced men, fitted and trained for this work, have visited the various counties of the State and have dis- cussed with assemblies of interested farmers the needs of that particular section — soil conservation, the enemies and diseases to which crops are subjected and the best methods for their subjection and eradication; the proper preparation of farm products for the market and the adoption of the most approved methods for this purpose; the placing of the products in the hands of the consumer in the best possible condition and at the least expense, in order that the producer may obtain his rightful share of the consumer's dollar. In order to bring the producer and the consumer closer together, for the profit of both, the State depart- ment of agriculture has inaugurated a free market bureau, at the service of both, and this movement is meeting with the hearty cooperation of the farmers of the State, and bids fair to be successful and to contribute in no small degree to the progress of agriculture in the State. During the past year the State department of agriculture, in cooperation with the Federal Government, has completed the work of eradicating the Texas fever tick, placing the entire State out of quarantine, and thus giving the live-stock raisers of the State an unrestricted world market for their cattle. What this accom- plishment means to the live-stock industry of the State can hardly be measured in dollars. With this incubus removed, Tennessee should and will be one of the leading beef-producing States of the Union; for its mild win- ters and long grazing season, and its abundance of native grasses make it the ideal live-stock section. Besides the eradication of the Texas fever tick, all other contagious animal diseases have been brought under control in the State, and there is now nothing standing in the way of a great development of this industry in Tennessee. The farmers in every section of the State are evidencing a desire to adopt better methods of farming. There are many really progressive and up-to-date farmers in the State — men who have taken up and put into practical working the results of the research work of the experiment stations; and these men are serving as examples to their neighbors. The institutes held in the various counties of the State are well attended, and the interest in this work is increasing. The State needs more assistance along this fine from the Federal Govern- ment. It needs trained lecturers and demonstrators. The appropriation made by the State is inadequate to do the work that is badly needed along this line, and it is hoped that the needed assistance will be forth- coming in the near future. If some method can be devised and put into operation by which the farmers of the State can obtain money on longer time and at a lower rate of interest than they are now having to pay, enabUng them to buy improved labor-saving machinery, to employ labor at the time it is most needed, and to harvest their crops when mature, agriculture in this State will receive an impetus that will result in increased acreage and production under the better methods which would be adopted, and the State would take its place as one of the best agricultural sections of the entire country. Tennessee has the same conditions to meet as other sections of the South. About 45 per cent of the farmers of Tennessee, according to the Federal census of 1910, are tenant farmers. How to decrease this number by increasing the number of farm owners is a problem worthy of as much study as that of making it easier for the landowner to borrow money with which to operate his farm. Of course, in the last analysis, this, as weU as many other questions . affecting the rural population, is one to be worked out by the individual. At the same time, it may well be assumed that if changing condi- tions easier money, better farming methods, community cooperation, etc., improve the status of the land- owner, the condition of the tenant wiU also be improved, enabling him to produce more, save more, and take advantage of opportunities to invest in a small farm for himself, ^ ^ p^^^ Commissioner of Agriculture. R. Q. De Berry. RoBT. Gallagher. 64 AGKIOXJLTUKAL OOOPEKATION IN EUROPE. TEXAS. Governor's Office, Austin, Tex., August 19, 19tS. Dear Sir: Replying to your letter of August 11, beg to advise that the governor has appointed Hon. Gus Shaw, of Texarkana; Hon. Howard Bland, of Taylor; and Hon. Peter Radford, president of the Farmers' Union of Texas, of Fort Worth, as an advisory committee to work in conjunction with the permanent memberd of the American Commission in preparing statement of the agricultural needs of this State. Yours, truly, J. T. Bowman, Private Secretary. Sir: The following members of the American Commission for the study of European systems of agricul- tural credit and cooperation, Clarence Ousley, J. S. Williams, S. A. Lindsay, and Charles B. Austin (F. W. Wozencraft being absent), and Peter Radford and N. A. Shaw (Howard Bland being absent), the three latter gentlemen appointed by His Excellency Gov. Colquitt, to cooperate with the members of the American Com- mission, wish to submit to the permanent American Commission the following brief statement concerning the agricultural needs of the State of Texas at the present time : Before these needs can be satisfied, the rural population must have instruction in rural organization and the business side of farming. It is our belief that this can be secured by the cooperation of the national bureaus and State institutions concerned with agricultural betterment, and by the present farmers' organization carry- iQg on an educational propaganda. The State needs improvement in the credit and financial facilities now at the command of the farmer. There should be iaaugurated a system whereby the tenant may secure long-time credit at a low rate of interest for the purpose of purchasing a homestead and making permanent improvements thereon. In addition to securing a system providing for putting homes within the reach of the present tenant, there should be estabhshed a system for financing the production and marketing of farm crops, the loans secured under this provision being for a short time in contrast to the long-time credit mentioned above. The State of Texas needs improvements in methods and facilities for marketing both perishable and staple products. The chief product of the State is cotton. It is our opinion that a State bonded warehouse system should be established for the improvement of present marketing methods. A special need of this State and of all cotton-growing States is a bureau of information for the purpose of ascertaining and publishing from month to month accurate facts concerning cotton consumption and the con- dition of the cotton trade in order that the demand as well as the supply may be known. We recommend that the cotton States and the Federal Government cooperate to this end. Clarence Oxjsley, Chairman, Fort Worth, Tex. Charles B. Austin, Secretary, Austin, Tex. Fort Worth, Tex., October 7, 1913. UTAH. State of Utah, Executive Office, Salt Lake City, Octoher 28, 1913. Dear Sir: This letter is to acknowledge receipt of your communication of the 21st instant, requesting me to appoint a committee of three to advise the Permanent American Commission as to the agricultural needs of the State of Utah. Complying with your invitation I have this day appointed Mr. Robert J. Glendinning, Mr. Glen Miller, and Mr. R. T. Badger to serve as such a committee. Very truly, yours, William Spry, Governor of Utah. AGRICULTURAL NEEDS OF UTAH. 1. More expeditious and economical land-transfer system. 2. A quicker and cheaper supply of money for farm loans. 3. Feed Unes from our present transportation systems to reach the vast areas of good agricultural land now too distant from railroads. 4. Legislation to encourage electric-trolley transportation of produce. WASHINGTON. 65 5. Improvement of parcels post whereby perishable farm produce can be cared for in transit, and if necessary refrigerated. 6. Free public markets in larger cities. 7. Training of children and adults in sorting, preserving, and general handling of farm products. 8. Agricultural survey of the State, that accurate and scientific data may always be available as to soils, cHmate, water supply, and adaptability of every section of the State. 9. Reclamation of large tracts of alkali soil through drainage and fertilization. This could not be done by individuals except through large cooperative societies with power to issue reclamation bonds, secured by long-time mortgages with easy amortization. 10. The conservation of the State's water supply, so as to prevent needless evaporation, overconsumption, and other waste. 11. Scientific education in dry farming and application of water to sparsely supphed districts. 12. Good roads. 13. State immigration department amply supphed with funds to properly advertise the lands of the State and working hand in hand with the agricultural and experiment stations. More damage is done the State by misdirected private zeal in land promotion than by none at all. 14. Local warehouses to care for farm products on a reasonable basis of profit, so that the farmer would not have to sell on glutted markets and be at the mercy of middlemen. VIRGESflA. Commonwealth of Virginia, Governor's Office, Richmond, October 22, 1913. Dear Sir: I have yours of October 21, but have not before received any communication asking for the appointment of a committee to report on the agricultural needs of the State. Eesponding to your request, I have appointed Dr. J. D. Eggleston, president of the Virginia Polytechnic Institute, Blacksburg, Va. ; T. O. Sandy, State agent, farmers' cooperative demonstration work, BurkeviUe, Va.; and Hon. B. D. Adams, member of State board of agriculture. Red Oak, Charlotte County, Va. Very truly, yours, Wm. Hodges Mann, Governor. Note. — Report has not been submitted. WASHINGTON. State of Washington, Office of Governor, Olympia, October 25, 1913. My Dear Sir: Gov. Lister directs me to acknowledge the receipt of your favor of the 21st instant and to call your attention to the fact that he has appointed a committee from this State, comprising Senator Ralph Metcalf, of Tacoma, Wash., and Hon. Clark G. Black, of Pomeroy, Wash., to act in preparation of the recom- mendations referred to in your letter. This committee is now formulatiug its recommendations preliminary to a meeting that I beheve is to be held in Washington, D. C, during the month of November. Yours, very truly, Irvin W. Ziegaus, Secretary to the Governor. November 26, 1913. To the Governor of Washington, Olympia, Wash.: Pursuant to yoiu- request for a report upon the agricultural needs of the State for transmission to the Permanent American Commission on Agricultural Finance, Production, Distribution, Rural Life: The soil and climate of Washington are unsurpassed for agriculture. It is the one State capable of pro- ducing practically everything needed. Its progress and the happiness and prosperity of its people would continue if it were separated from the rest of the world by an impassable wall. In Washington, as elsewhere, the farmers are undercapitalized. A system of very long time farm loans is needed on the amortization plan. This can best be secured on the Landschaften system of collective security. This State has extended this system from cities and counties and school districts to port districts, dildng districts, drainage districts, irrigation districts, and agricultural development districts. It should be extended to provide 42998°— S. Doc. 214, 63-1, pt. 3 5 66 AGEICULTUEAL COOPEEATION IN EXJEOPE. collective security for loans for 30 years or longer to farmers, payable by amortization. Short-time personal loans are also needed at a very greatly reduced rate of interest and much more easily to be obtained. This necessitates a guaranty that the security; individual or collective, land or personal, shall not deteriorate in value ; that it shall be worth as much intrinsically at any time during the loan and when the mortgage is due as it is the day of the loan. A loan is not justified on a farm which the borrower robs of its productive value, to leave it stripped of fertility and productivity, as we have done in America for several generations. Farming must be so managed, crops so planned, fertilizer so used, that its value is not stolen, but maintained, its vital element restored as it is withdrawn in crops. Every farmer in Europe knows this. His first thought is study and analysis of the soU, crop rotation, and fertilizer, and before he buys his seed he buys his chemical. Main- taining the productivity of the soil is a contract feature in his loan. Some European Governments by law prescribe a crop rotation that shall accomplish this, for without it ruin and starvation would be inevitable. To this end dairying and raising beef cattle is essential in the grain belt of eastern Washington and is probably the best first step in the development of the logged-off lands of western Washington. This will not only preserve fertility, but will double the value of the land and produce greatly increased returns. This State is shipping a large amount of lumber east for silos in the grain States. It would profit a thousand times more if these silos were constructed and utilized here in every agricultural section of Washington. It has been demonstrated that corn can be grown for silage anywhere in the State. It should be grown. The carbohy- drates are essential. Alfalfa and clover are a matter of course. When our farmers add a dairy herd and a silo, they have taken a long step toward providing the protective security that will be needed when a farm credit system goes into eflPect. The most important law for the farmer passed by the last legislature, chapter 18, providing for a bureau of farm development and the establishment of an agricultural expert in each county, has been neglected by most counties. In every agricultural county farmers should demand that they be given the advantage of this law. A manufacturer and a merchant employs an efl&ciency engineer. One of the largest eastern manu- facturers called such a man from a distant city, handed him a check book, and told him he had deposited a check for $50,000 to his order. He wanted a certain small reduction in his cost of manufacture of each machine he was turning out, whether by devising labor-saving machinery or other means he cared not; and he said if the .$50,000 was not enough there was plenty more available. He was turning out many thousand machines a year, and a dollar- or two reduction on cost of each meant an increase of five or six figures in his profits. The farmer has not been able to do this; he can do it under this law with no expense; he needs it more than the manufacturer. There is plenty of very valuable information in books and Government bulletins, but the only plan that will work is to carry right to the farmer the answer to his personal problem. This law provides the way. Agricultural education in schools and high schools should be made practical and emphasized. It should be available to the farmer as well as to the schoolboy. School laboratories should be available for soil analyses, which are neglected by our educational authorities. If practicable there should be a demonstration farm in connection with high-school instruction, where farmers may be shown the enormous difference right farming makes, while the boys are being taught to farm right; where the effect of planting the right seed, using the right rotation, preserving fertility by the right fertilizer will stand out in nature's book, forcing attention, and not be smothered in books and bulletins molding on forgotten shelves. Such a demonstration farm would be of infinite value to the county agricultural expert. Standardizing crops and stock is greatly needed and will necessarily come with cooperative marketing. Cooperation eliminates most of the middlemen and of the superfluous duplication of process of distribution which causes a fearful economic waste for the producer. Our apple growers must realize that there have been hundreds of thousands of apple trees planted all over the country and hundreds of abandoned orchards in the East revitalized. Whatever the superiority of Washington fruit, salvation depends upon a gemiine cooperative organization, a strenuous campaign for increased and ever-widening markets and marketing upon a scientific basis. And the same principle applies to all of our products in every part of the State. There arc men who say that cooperation wiU not work in this country and point to failures as a proof. Wo are just beginning to learn the kindergarten principles of cooperation, and failures are due to this lack of laiowl- odge of what true cooperation is. Cooperation does this. We are not hazarding a to-be-proven hypothesis; we are stating a fact, emphatically and without equivocation. Practically every country in Europe has dem- onstrated it beyond argument or denial. Cooperation cheapens and vastly betters supplies, increases returns and insures a certain market, strengthens human power and ability for productive labor. Milk, eggs, meat, fruit, and grain bring better prices; fertilizer, feed, implements, seed, all agricultural necessities, cost less. And, fvu-ther, indirect effects are diffusion of practical knowledge, remarkable educational capacity, stimulation of thought, teaching men to cultivate better, select the most profitable crop, to conserve the fertility of the WEST VIRGINIA. 67 soil, to improve grade, to turn produce to better account, and to promote general well-bemg and community spirit. It means making farming profitable and easier, the creation of a bigh, prosperous, contented rural civilization, the vital need of our time. Cooperative credit, collective security are the basic principles of coop- eration. Cooperative production, supply, and distribution naturally and logically and necessarily follow. This is our first essential. We are going to have cooperative farm credit in this country, and we are going to have Federal and State legislation to make it easy and to safeguard it. And when this movement starts, it must be in the hands of the farmers themselves. We emphatically repeat the one recommendation of our August report to your excellency: Whatever rural credit or cooperative organizations may be provided by legislation, the farmers must take the initiative in their creation, must take their management — so that their success and the benefit for the entire State, since what benefits the farmers of necessity benefits the State, may be due to and belong to only the farmers themselves. This is the Irish idea, and no country ever in the world's history- made so much progress in agriculture, in the betterment of the life and condition of the farmer, in a like period as has Ireland, the result of the preaching and teaching and organization of cooperation by Sir Horace Plunkett. It is no longer suffering Ireland; it is happy, prosperous Erin in the agricultm-al districts. On the Continent Government aid indubitably has retarded progress. It must be self-help. Respectfully submitted. Ralph Metcalf. Clark Black. WEST VIRGINIA. State op West Virginia, Executive Department, CJiarleston, August 27, 191S. My Dear Sir: In comphance with your recent reqi.est, Gov. Hatfield has announced the appointment of the following committee to act in conjunction with Mr. J. F. Marsh, of Charleston, the delegate on the com- mission representing West Virginia: E. W. Oglebay, of Wheeling; H. E. Williams, of Charleston; J. B. Garvin, of Barboursville. Yours, very truly, Walter S. Hallanan, Secretary to the Governor. SUMMARY OF AGRICULTURAL ORGANIZATIONS IN WEST VIRGINIA. The following summary of the agricultural organizations in this State will show that we have a large number and a large variety of organizations having for their purpose the benefits coming from unified action among our farmers. On the other hand, these paragraphs will show that these organizations are by no means occupjong the fields that need so much organized attention in our State. Below we mention our principal agricultural organizations: (a) The grange. — There are in West Virginia about 64 grange organizations with a total membership of 11,813. In years past, the grange was quite active in organizing cooperative buying and selling stores. At the present time, only a few, if any, of these stores are in operation. The grange is now giving its chief attention to farmers' mutual insurance and, in this way, is doing the farmer a good service in a business sense. In addition to its business activities, the grange serves a good social purpose in the communities where it is active. Prof. T. C. Atkeson of Morgantown, W. Va., is the State master and recognized leader of this organization Ln West Virginia. (&) Farmers' mutual cooperative insurance. — The best proof that cooperative farmers' organizations will succeed in West Virginia is found in the records of the farmers' cooperative insurance companies. This State protects these companies by a strong law and encourages them by friendly supervision. At the present time we have about 20 such companies in this State, -with insurance in force amounting to $18,703,801. According to the official report of the State auditor, this insurance is absolutely safe and costs only about one-half as much as the old line insurance. (c) Horticultural societies. — ^We have nine horticultural societies foxmd mostly in the northeastern part of the State. These societies carry on an educational propaganda and do much for the encouragement of fruit culture. When we remember that Switzerland, a country two-thirds the size of West Virginia and even more mountainous, has 118 such societies with a total membership of more than 6,000, we realize the need for more activity in this branch of agricultural organization. The Virginias' Fruit Exchange is doing some practical work in marketing the fruit grown in the eastern panhandle of West Virginia, and is demonstrating what are the possibilities for better marketing through cooperative effort. 68 AGEIOTJLTUKAL COOPBEATION IN EUROPE. (d) lAve-stock associations. — The different live-stock societies in this State have recently federated under one organization. The leaders of these societies feel keenly the need of cooperative organizations for pure animal breeding and marketing. The most recent definite piece of work done by these associations is the publication of a partial directory of all of the breeders of pure bred Uve stock in the State. (e) West Virginia branch of the American Poultry Association. — There are 11 local branches with a mem- bership of several hundred in this State, 60 of these being life members. Hon. Horace Atwood, of Morgan- town, in commenting on this organization, says, "We have great need for more economical and efficient methods of marketing poultry products in this State. For example, in the interior counties eggs practically sell for not more than one-half what the high-grade eggs are selling for wholesale in New York City, and yet the express rate in most instances is less than 3 cents a dozen." This statement clearly shows the need of organ- izations that will connect our farmers with the best poultry markets. Special attention is called to the "Report of the Proceedings of the Fifth Annual Meeting of the West Virginia Branch of the American Poultry Asso- ciation," which can be secured from Hon. H. E. Williams, Charleston, W. Va. if) Creamery associations. — In spite of the fact that West Virginia is a natural dairy State, we have less than half a dozen cooperative creamery associations in the State. We take pride in calling our State the Switzer- land of America,. yet we find in Switzerland 2,785 mUk and cheese societies with a membership of 77,227. From these figures it is evident that there is great opportunity for good work in organizing of farmers for the purpose of increasing the number and efficiency of the cows of the State and in getting the daily products to the market with the best economic results. It is the hope of this committee that the foregoing pages will call to the attention of our governor and the American Commission the need and opportunity for cooperative action among farmers in West Virginia; the proof that such organizations succeed when properly managed; and that this branch of the business of the State is exceedingly small when compared with what might be done if the State should enter with earnestness upon a campaign for better farming, better farm business, and better country life. Respectfully submitted. J. F. Marsh, Chairman, Charleston, W. Va. E. W. Oglebay, Wheeling, W. Va. H. E. Williams, Charleston, W. Va. J. B. Garvin, Huntington, W. Va. AGRICCLTUKAL NEEDS OF WEST VIRGINIA, WITH SPECIAL REFERENCE TO COOPERATIVE ORGANIZATION. Letter of transmittal.] Sir: We, the members of the committee appointed by Gov. H. D. Hatfield at the suggestion of the American Commission to prepare a statement of the agricultural needs of West Virginia, with special reference to agri- cultural organizations, respectfully submit the following report. J. F. Marsh, Chairman, Charleston. E. W. Oglebay, Wheeling. ' J. B. Garvin, Huntington. H. E. Williams, Charleston. [Letter or transmittal.] Hon. Henry D. Hatfield, Governor of West Virginia. Sir: We, the members of the committee appointed by your excellency, at the request of the Permanent American Commission, to prepare a statement on the agricultural needs of West Virginia, with special reference to agricultural organizations, respectfully submit the following report for your consideration. J. F. Marsh, Chairman. E. W. Oglebay. J. B. Garvin. H. E. Williams. WEST VIEGINIA. 69 INTRODUCTORY. After inquiry as to the wishes of the American Agricultural Commission which inspired the appointment of this committee, and considerable thought as to how this report might add to the great mass of agricultural literature appearing in the State and Nation from time to time, we have decided upon the course indicated by the contents of the report. It appears that the national authorities are in need of a brief, accurate survey of the agricultural organiza- tions — especially cooperative organizations — in each State to use as a basis for framing national law and in carrying on a nation-wide campaign for organizing the agricultural forces throughout the country. In view of this need we have endeavored to make this report answer as a creditable chapter on "Farm organization in West Virginia," in case these State reports are combined in a national report on this subject. We feel that this compilation of facts, with the brief comments by the committee, contains some valuable information and suggestions for West Virginia officials and lawmakers. In our opinion the most convincing thing to be found in this report as a whole is the lack of organizations among our farmers and the great need and opportunities for further cooperative action among the farmers, our greatest producing class. This committee urges the governor to request the State commissioner of agriculture, the College of Agri- culture of the State University, the officers of agricultural societies, and the head of the State legislative refer- ence bureau to cooperate in preparing bUls bearing upon the agricultural needs of the State for the considera- tion of the next session of the legislature. If it is the pleasure of the governor, this committee will hold itself in readiness to render every possible service in behalf of better organization among the farmers of West Virginia. NEEDED MORE ORGANIZED EFFORT AMONG FARMERS OF WEST VIRGINIA. As has been stated in the introduction to this report, no attempt wiU be made in this treatise to discuss the great variety of agricultural needs in this State. In this connection a few facts should be given to show the urgent need of constructive organization and effort among the farmers and those who depend upon the farmers in West Virginia. The urgency of the situation is indicated by the brief survey of conditions found in the following paragraphs: 1. The people of West Virginia are leaving the farms, as the table below shows: 1890, rural population of West Virginia, 82 per cent of total population. 1900, rural population of West Virginia, 78 per cent of total population. 1910, rural population of West Virginia, 70 per cent of total population. 2. The people of West Virginia are not feeding themselves. Without discussion the figures given below tell their own story. For example, let us use the figures regard- ing the production of corn in this State. This product can be raised with profit in our great river valleys and can be consumed with good returns on our f arnis and in our numerous markets, yet the per capita production is decreasing as follows: Bushels. 1880, per capita com production of West Virginia 22. 4 1890, per capita corn production of West Virginia 18 1900, per capita com production of West Virginia 17. 3 1910, per capita com production of West Virginia 14 Other products are not keeping pace with the increase in population. Indeed, many of the important products of the farm are decreasing, and thus are putting longer and longer distances between the demand and the supply. The following table shows this situation: Per cent. Increase in population from 1900 to 1910 27 Decrease in number of sheep, 1900 to 1910 3 Decrease in number of cattle, 1900 to 1910 6 Decrease in number of swine, 1900 to 1910 26 Decrease in wheat raised, 1900 to 1910 40 It has been shown by a careful study of the facts that at the present acreage of hay, corn, oats, beans, and potatoes, if cultivated according to scientific methods and with reasonable care, would produce an increase of about $7,000,000, although the total present production on this acreage is only $22,500,000. At the present time West Vu-ginia pays annually for imported farm products about $50,000,000. At the lowest estimate it seems quite possible for our State to supply this great demand which is now sending so much of our wealth beyond the borders of our State. Our annual coal production of $60,000,000 can not add much 70 AGBICULTUKAL COOPEEATION IN EUBOPB. to the permanent wealth and happiness of our State so long as most of the money thus received must bo sent out of the State to bring in products to feed our people. West Virginia should he a "land of plenty." — The reader should not get the impression from what is said above that West Virginia does not have great possibilities as a general farming State. The rich valleys of such rivers as the Ohio, the Kanawhas, the Potomac, and numerous smaller ones are capable of producing heavy crops on a large scale; the hiU and mountain ranges of "chert" limestone, and heavy clays, and rocky lands, with ideal natural frost protection and sun exposure, are waiting to blossom with beauty and wealth in peach and apple orchards; the great rolling areas of limestone produce blue grass that will put cattle in condition for export without any grain feeding; the great variety of soil, contour, and climate make unusual possibilities in trucking, small fruit, poultry, etc. Some of these fine farming resources are being well used, others are in the process of development; but much of our State is awaiting the vigorous touch of organized, expert effort from our farmers. Therefore we conclude that — 3. The fanners of West Virginia should organize. — ^The reports found in the pages which follow will show that this State has a large enough variety of organizations. They wiU also show that most of these organiza- tions, up to the present, have been "discussing" organizations. This work of education and culture is highly essential, but the time has come when we should turn talk into action. Our organizations need much larger numbers of active members and many more definite activities to perform. It isn't much trouble to induce farmers to quit work to attend a sale if there is a prospect of getting a good bargain there, or of getting him to go to town if he has some produce to sell and the market is especially good. The same instinct for business will cause him to give active interest to a society that has businesslike appeals to him. The reports of the different societies will suggest their specific purposes and needs. In this general statement we desire to point out in the following paragraphs at least two important means of service to be rendered by active farmers' organizations. (a) Such organization will give each member the ienefit of the hest aggregate thought of aU. — "It is not good for man to be alone" well applies to farmers. If a farmer is using poor methods, he should mingle with those, who use better methods. This contact will make him "catch" the better practices. If he is using superior methods, the laws of good citizenship require him to pass along his ideas. An organization that brings together the farmers of a neighborhood wiU accomplish both of these ends. We talk much about conservation. One of the greatest wastes in West Virginia is found in the good farm ideas which are going to waste for want of wide use. Most farmers are expert at something, small or great. If all of these experts were brought together, the whole community could profit by the ingenuity and experience of all. The motto of many of the European cooperative societies is, "AU for each, and each for all." (6) Such organizations will act as agencies for national and State workers. — ^Farm organizations should be run by farmers' for farmers. When such organizations are actively at work, they will naturally begin to look around for help. With a real motive, the farmers will then call upon the United States Department of Agriculture and other national organizations, the State commissioner of agriculture, the State colleges of agri- culture and experiment stations, the county demonstrators, the rural high schools, and the numerous other sources of direct help and inspiration. Under our present system there are large supplies of enthusiasm and inspiration at national and State headquarters, but these good things for the farmer have no well-connected medium through which to reach the individual farmer, where they are much needed. On account of the lack of local org^anized activity among farmers, the State is failing to get proper returns for what it is spending for agricultural experimentation, teaching, and supervision. NEEDED — BETTER CREDIT FOR FARMERS. Inasmuch as the National Congress at the urgent request of the President of the United States is now con- sidering the passage of national laws on this important question, and, as the United States Department of Agri- culture and several national organizations are preparing model State laws to create, protect, and supervise sys- tems of rural credit in the several States, it is not deemed advisable for this committee to report at length on this question. We offer, in brief form, the following propositions: 1. West Virginia has plenty of capital and hanks. — Owing to our great national resources, our State has sufficient aggregate capital to finance aU classes of business including that of our farmers. Under our present system there is a natural tendency for this capital to concentrate in great industrial centers in and out of the State. Although our farmers are wihing to pay a reasonable interest and to offer good security, they can not, as a rule, secure without difficulty loans suited to their particular needs. A few months ago, a prosperous farmer in one of our interior counties told a member of the committee that he and his farmer neighbors had been accus- WEST VIRGINIA, 71 tomed to pay 8 per cent on money with which to buy stock and improve their farms. One day he learned that the banks in a near-by raikoad town were loaning to merchants at 6 per cent, so he had a business friend to negotiate his next loan which was secured at the lower commercial rate. Such conditions are common in West Virginia. Farmers are favorite depositors, and are often treated as undesirable borrowers. Progressive farm- ing is a business demanding considerable working capital in varying quantities. For this reason the farmer should have facihties for securing easily fair loans for productive and constructive purposes. 2. Oood credit for the farmers requires an improved land-title system. — In countries that have been most successful in establishing helpful rural credit systems, much attention has been given to land titles. The best title systems have the following characteristics: (1) Simplicity: A good title system's rules and forms should be simple enough to be understood by the average man. (2) Provision for inexpensive transfer: At present, a lawyer is often needed to determine the worth of a title, and to assist in making a transfer of real estate. With a proper title system, the transfer of deeds should be no more difl&cult than the transfer of a negotiable note. (3) A title should carry a guarantee: Before an ideal system of rural credits can be worked out, all titles to land must be made clear. In countries where titles are guaranteed, a small fee is charged which goes to a fund that takes care of any loss the State may meet in guaranteeing titles. In this State it might be necessary to classify titles, as it will take much time to determine the legal owner of much of our land. Much valuable information on this subject is available. It is time for West Virginia to study these systems and begin to adopt and adapt one to our needs. 3. Our farmers need improved facilities for short-time credit. — As a rule the customs of our banks, even those in rural towns, are determined by the demands of the merchant and industrial classes. Loans are made for 30, 60, 90 days, or 6 months without much reference to the time the farmer expects to get his cash returns from his farm. Our State can secure valuable suggestions to meet this trouble from the agricultural banks of Europe and our own Philippine Islands. In these places, a farmer who wishes to undertake an agricultural project^^to raise a crop, buy stock or implements — makes an application stating the purpose of the undertaking, the esti- mated cost, and probable returns, and the time when the returns will make it possible for him to pay the loan. This application is passed upon by a committee or special official, and, if the projects are based upon sound, econo- mic principles, the loan is made. Such a system fits a farmer's immediate needs, and encourages careful think- ing about his plans. 4. Our farmers need special facilities for long-time credit. — This form of credit is needed by purchasers of farms and builders of homes who are not able to make the payments in the time generally stipulated under the present business system. By what is called the amortization plan, a poor young man could buy a farm and borrow the money to pay for it on 25-year or even 50-year time. He would be charged for the entire time a rate that would amount to an annual payment sufiicient to pay the interest, a small amount for bank adminis- tration, and for amortization (payment on principal). In Europe many such loans are made for 54 years at an annual rate of about 4^ per cent. Rural banking is a big subject and no attempt has been made to discuss it in detail in this report. This committee believes that the improvement in rural credit where needed should be made if possible through such banks, trust companies, building and loan associations, and such other estabhshed financial organizations as will meet these demands. REPOKTS OF ORGANIZATIONS AND COMMENTS BY THE COMMITTEE. THE GBANGB. 1. Merits of the grange. — In a card issued by the National Grange the merits and record of that organization are summed up as follows : WHY JOIN THE GRANGE? It is the farmer's only organization national in character. It has stood the test for 32 years, and has never been found wanting in any respect. It has exerted greater influence in securing State and National legislation in the interest of agriculture than any agency in the country. It is officered by those engaged in agriculture, who know from experience the needs of farmers, and are sincere in their desire to aid them in every possible way. It is the duty of farmers to cooperate with one another, if they would successfully meet the influence of organization in every direction, and secure for wife and home a fair share of what the harvest yields. It has secured national legislation in the oleomargarine law, the establishment of the Interstate Commerce Commission, the establish- ment of Kural Free Mail Delivery, and State legislation in every State in the interest of the farming population. It has exerted the greatest influence known in breaHng up the isolation of farm life and in making farm life attractive to the boya and girla, bringing sunshine and happiness into the farm home to such an extent as has never before existed. 72 AGRICULTURAL COOPERATION IN EUROPE. 2. Extent oftJie grange in West Virginia. — The latest report at hand gives location and membership of the granges of West Virginia as follows: (ffl) Pomona granges: No. 2. Monongalia and Preston Counties. No. 3. Lewis and Upshur Counties. No. 5. Marion County. (&) Subordinate granges: Location. Membership. Location. Membership. Tuscarora, Berkeley County 14 17 21 31 34 42 47 54 67 73 76 78 87 89 90 92 93 95 102 104 110 111 113 129 134 140 251 164 165 167 169 172 Valley, Lewis County. .. 178 Fairview, Ohio County Little Guyan, Mason County 181 Woodlawn, Jefferson County. . . 184 Pleasant Valley, Upshur County Tygarts Valley, Wood County 196 Pleasant View, Lewis County Evening Star, Preston County 206 Marion, Marion County Evergreen, Mason County 214 Orion, Lewis County Union, Lewis County 218 Kose, Putnam County Friendship, Monongalia County 236 "PaUing Spripgflj Greenbrier County Excelsior, Tucker County 237 Clover Valley, Taylor County Clover Dale, Gilmer County 249 Richlands, Greenbrier County Perseverance, Gilmer County 253 PhoeTiiif, MoTirnfi OmiTity , , TTnioTi ViTieyard, T.ewi« County , . ... 285 Grass Lick, Jackson County Rocky Point, Putnam County 290 Mount Zion, Lewis County 293 Union, Jackson County Poca, Putnam County 312 Grassland, Marion County Enterprise, Webster County 320 Valley, Gilmer County Lone Star, Raleigh County 322 Buenavista, Cabell County Cassville, Monongalia County 335 River Side, Putnam County Centermifllj "Ranflwha. Crmnty 336 Enterprise, Harrison County Victoria, Ritchie County 337 Teays Valley, Putnam County Smithvillfi, "R.itphie Cniinty 338 Banner, Marion County Ladv. Tvler Countv 339 Star, Marion County Independent, Ritchie County 356 Eagle, Marion County 358 Independent, Randolph County Salem, Nicholas County 368 Hazel Dell, Monongalia County University, Monongalia County 372 Harmon, Mason County Rockforge, Monongalia County 380 Flora, Upshur County 383 Evergreen, Upshur County Kfl.Tia.whn., GilTner CmiTity 397 Oak Grove, Marion County Glenndale, Ohio County 105 Frontier, Tucker County 106 Locust Grove, Wood County 3. The history and worTc of the grange in West Virginia. — The following letter from Hon. T. C. Atkeson, who has been the recognized leader of the grange in West Virginia for many years and who stands high in National Grange circles, gives a valuable account of the history, the work, and the possibilities of the grange in West Virginia. Prof. Atkeson's letter follows: Mr. J. F. Marsh, Chairman, Charleston, W. Va. Dear Sir: Your favor of September 30 just at hand. Inclosed I am sending you the 1910-11 grange directory which is the latest I happen to have. If you will write Secretary M. V. Brown, Buffalo, Putnam County, W. Va., he wiU send you a later directory. A number of new granges have been organized in the last year or two. The grange was organized in this State in October, 1872, and has met regularly every year since. The membership is between four and five thousand — membership in the United States about 1,000,000. The grange has done more cooperative buying and selling during its 41 years of life in this State than all the other individuals and organizations combined and, being a perfectly organized concrete fra- ternity of farmers with well-trained conservative leaders, possesses all the necessary machinery for successful cooperation. In its early years the grange established himdreds of cooperative stores in West Virginia, built woolen mills, wool warehouses, and engaged in other enterprises of a similar character. Then a period of reaction came and most of these enterprises were closed out, and some of them suffered disastrous losses. For the last 20 years the cooperative efforts of the grange have been given to fire insurance, buy- ing fertilizers, nursery stock, machinery, and general farmers' supplies and to selling live stock and general farm products. The grange began the agitation for the election of United States Senators by the people, the introduction of agriculture into the pub- lic schools, the establishment of agricultural experiment stations, the improvement of our agricultural colleges, rural mail delivery, par. eels post, postal savings banks, and many other State and National reforms. The grange has been a pioneer in practically every reform movement in this State for 40 years — including movements for better schools, better roads, tax reform and many others. It is impossible to do justice to the cooperative and reform work of the grange without writing a complete history of the order. The grange held the first farmers' institutes and agricultural extension schools ever held in the United States. It held the first farmers' institute in this State and probably the first in the United States in October, 1872, and the first agricultural-extension school ever held in the country March, 1897. WEST VIRGINIA. 73 The grange is the only farmers' organization that has lived long enough to become a permanent institution. Many others have sprung up like Jonah's gourd and perished in a night, while the grange continues to grow. Away back in 1874 the grange said in its declaration of piurpose: "We shall advance the cause of education among oiu-selves and for our children by all just means within our power. We especially advocate for our agricultural and industrial colleges that practical agriculture, domestic science, and all the aits which adorn the home be taught in their courses." And as far back as 1872 it publicly advocated the teaching of agriculture in the public schools. Again quoting the declaration of purposes, "We propose meeting together, talking together, working together, buying together, sell- ing together, and in general acting together for our mutual protection and advancement, as occasion requires." That is pretty good cooperation doctrine to be 40 years old. Once more, "For our business interests, we desire to bring producers and consumers, farmers and manufacturers, into the most direct and friendly relations. Hence, we must dispense with a surplus of middlemen, not that we are unfriendly to them, but we do not need them. Their surplus and their exactions diminish our profits." That is what is the chief cause of the high cost of living to-day. As a rural-betterment organization the grange has no equal. Its "specific objects" are: "To develop a better and higher manhood and womanhood among ourselves; to enhance the comforts and attractions of our homes and strengthen our attachments to oui piursuits; to foster mutual understanding and cooperation; to maintain inviolate our laws and to emulate each other in labor; to hasten the good time coming; to reduce our expenses, both individual aitd corporate; to buy less and produce more, in order to make our farms self- Bustaining; to diversify our crops, and crop no more than we can cultivate; to condense the weight of our exports, selling less in the bushel and more on hoof and in fleece; less in lint and more in warp and woof; to systematize our work and calculate intelligently on probabilities; to discountenance the credit system, the mortgage system, the fashion system, and every other system tending to prodi- gality and bankruptcy." But I must close. There never has bc<-n any better farmers' organization than the grange and probably never will be. With very best wishes, 1 remain, very truly, yours, T. C. Atkbson, Member of ike National Grange Legislative Committee. 4. Comments hy the committee. — -Your committee fully realizes that the grange has great fundamental, abiding quaUties that give it permanent possibilities. As stated in Prof. Atkeson's letter, its opportunity for best service at present in this State is found in the field of farmers' mutual fire insurance and cooperative buy- ing. Your committee beUeves the grange should be encouraged and urged to expand this phase of its work, so as to secure for its members the cheapest sound insurance for five stock and better methods of marketing farm products, such as eggs, butter, vegetables, and fruits. Probably the grange's emphasis on thrift and savings would make it an unnatural medium for carrying on a propaganda for farm credits. We believe, however, that the grange wiU lend its iafluence to any proper effort to insure fair borrowing facilities for farmers who need short-time or long-time loans. We suggest that the governor, the State commissioner of agriculture, the college of agriculture, and organ- izations for promoting the interests of rural life encourage and use the grange in every way possible, and, on the other hand, we call the attention of the members of the grange to their opportunity and duty respecting the need for better business methods among the farmers of the State. The present State officers of the grange are: State officers: Master, T. C. Atkeson, Morgan town. Overseer, C. E. Lewis, Maxweltpn. Lecturer, E. W. Sheets, Lost Creek. Steward, W. T. McDonald, Charles Town. Assistant, G. E. Skinner, Pliny. Chaplain, G. V. Forinash, Homer. Treasurer, J. B. Wilson, Mannington. Secretary, M. V. Brown, Buffalo. Gatekeeper, W. E. Evans, Cottageville. Ceres, Mrs. Anna M. Wells, Bens Run. Pomona, Misa Bly Darnell, French Creek. Flora, Miss Fay Allman, Weston. Lady assistant steward, Mrs. R. C. Taylor, Homer. Executive committee: H. C. Skinner, chairman, Pliny, 1914. J. R. Wells, Bens Run, 1912. R. E. Thrasher, Duo, 1913. farmers' mutual cooperative insurance companies in west. VIRGINIA. The best example of the possibilities of cooperative action among farmers and of the benefits to be derived from such action is found in farmers' mutual cooperative insurance companies. As reported by Mr. Atkeson, the grange has done much to promote this movement. 74 AGBIOULTURAL COOPEEATION IN EUROPE. West Virginia lias a sound law covering this form of insurance, and thus makes this form of business legal and safe in every respect. Extracts from the law regarding farmers' mutual cooperative insurance follow: Section 11. A farmers' mutual cooperative fire insurance company is hereby defined to mean a company incorporated under the laws of West Virginia for the purpose of insuring property against damage by fire, lightning, tornadoes, without capital stock, and which operates on the assessment plan and is limited to one or more counties in the transaction of its business, as hereinafter provided. Sec. 12. No such company shall commence the transaction of business until it receives from the insurance commissioner a certificate of authority, which certificate shall state that such company has complied with the provisions of this chapter. Before such certificate may be issued such company shall file with the insurance commissioner a certified copy of its charter, together with a sworn statement of three Qf the incorporators, that bona fide applications have been made by not less than 25 citizens for not less than $25,000 of insurance, of which amount no one or more risks subject to one fire shall exceed $1,000, said risks to be located in the State of West Virginia. Sec. 13. Every such company may then be authorized to issue policies of insurance, signed by its president and secretary, agreeing in the name of the company to pay all damages caused by fire, lightning, or tornado to the property insured during the life of the pohcy. There shall be a clause plainly printed on the policy that the holder thereof (the insured) is Uable for such assessments as may be neces- sary to pay in full his pro rata share of all losses and expenses incurred by the company. Sec. 14. The secretary of any such company shall notify every member of the corporation by written or printed notice signed by him stating the amount due the company from the members and the time and place and to whom it shall be paid. Such payment shall be made by the members within 60 days from the delivery of tha notice, which notice may be delivered personally, or by mail, and if by mail, it shall be addressed to each member at the last post-office address given, as shown by the company's book of record. The company shall have a lien upon the property insured to secure the payment of all such assessments and calls as may be legally made under the contract of insurance or by-laws of the company, and it may maintain an action against any member thereof to recover all assessments which he may neglect or refuse to pay when due, made upon him under the provisions of this chapter or the by-laws of the company. Sec 15. Such companies are authorized to accumulate a surplus or emergency fund in such amount as may be deemed advisable by its board of directors. 2. Extent ofbusiness. — ^The following table taken from the report of the insurance department (auditor's oflBlce) for 1913, shows the extent of this business in West Virginia: Name of company. Risks written. In force at end of year. Cash income during year. Fire losses paid during year. Farmers & Mechanics Mutual Fire, Martinsburg, W. Va. Farmers Mutual Fire Association, Fairmont, W. Va Grange Mutual Fire, Philippi, W. Va Harrison County Farmers MTutual, Shinnston, W. Va Mimicipal Mutual, Wellsburg, W. Va Mutual Protective Association, Romney, W. Va Pan Handle Farmers Mutual, Clinton, W. Va Patrons Mutual Fire, Buffalo, W. Va Safe, Harrisville, W. Va Siure, Huntington, W. Va Wetzel Farmers Mutual, Vernon, W. Va Farmers Home Fire Insurance Co., Lewisburg, W. Va... $9, 855. 00 1, 185, 612. 00 47, 900. 00 281, 255. 00 91, 250. 00 142, 928.. 00 292, 250. 00 35, 208. 00 2, 029, 508. 00 435, 321. 00 196, 850. 00 $518, 376. 00 7, 850, 348. 00 684, 934. 00 1, 159, 298. 00 202, 600. 00 240, 928. 00 3, 313, 250. 00 359, 898. 00 1, 868, 733. 00 425, 821. 00 525, 615. 00 155, 400. 00 $2, 378. 53 26, 021. 38 1, 065. 95 3, 789. 38 518. 98 427. 92 19, 581. 82 1, 050. 80 10, 045. 02 2, 021. 95 1, 700. 38 $1, 032. 10 14, 380. 10 835.00 1,047.00 5.26 33.26 9, 023. 81 595. 15 8, 775. 91 682. 70 Total. 4, 747, 967. 00 18, 703, 801. 00 68, 602. 12 36, 410. 29 3. Comments iy the committee. — ^As this kind of insurance is absolutely safe and costs only about one-half as much as the ordinary old-line insurance, its benefits should be given wide pubhcity through the proper agency. Farmers should be encouraged to expand this form of insurance so as to include hve stock and principal crops against Hghtning, disease, flood, and storms. Such insurance has been practiced with good results for many years in many European countries and in several of our States. Such insurance has many benefits: First. It gives the farmer certain rehable assets that make his financial standing stable. With such insur- ance, he can borrow or buy on what is insured. It gives him a feehng of safety that makes for peace and optimism in business. Second. It brings sharply to his attention .the need of preventive measures and the advantages of good, well-kept buildings and hardy stock and crops. TMrd. It brings about a feehng of mutual interest, and cooperative action that make for a better neighbor- hood feeling among farmers. Such organizations have a tendency to cause the stockholders to become inter- ested inspectors of each other's property, for loss by one means loss by all. One farmer who had just lost a large barn by hghtning and had received its value from the farmers' mutual cooperative insurance company, well expressed the value and spirit of such an organization when he said to a member of your committee, " The difiference between the old way and the new is this: In olden times my neighbors would have assembled to assist me in building a new barn; by this new way my neighbors had paid for a new barn before my old one was destroyed." WEST VIRGINIA. 75 HORTIOtTLTURAL SOCIETIES IN WEST VIRGINIA. At the request of this committee, the secretary of the horticultural societies of the State made the follow- ing report: 1. Horticultural societies of West Virginia and their officers. — West Virginia State Horticultural Society, officers: H. L. Smith, Martinsburg, president; A. D. Page, French Creek, vice president; L. F. Sutton, Mor- gantown, secretary; and H. H. Hoffman, Keyser, treasurer. The Upper Potomac Fruit Exchange, officers: E. A. Leatherman, Keyser, president; Senator Q. A. Hood, Keyser, secretary. Harrison County Horticul- tural Society, officers: Roland Barnes, Shinnston, president; George Mixon, Gypsy, vice president; F. W. Sturm, Shinnston, secretary- treasurer. Jefferson County Horticultural Society, officer: Logan B. Shutt, Charlestown, president. Mineral County Horticultural Society, officers: WiUiam Payton, Einehurst, president; A. V. Parks, Keyser, vice president; T. T. Huffman, Keyser, secretary; and H. H. Hoffman, Keyser, treasurer. Pleasants County Horticultural Society, officers: T. J. Taylor, St. Marys, president; J. E. Cochran, Salama, vice president; W. R. Carson, St. Marys, secretary; and C. F. Ingram, Bellmont, treasurer. Randolph County Horticultural Society, officers: W. H. Kime, EUdns, president; B. F. WhetseU, Elkins, vice president; J. G. Vanscoy, Kerens, secretary; and R. Darden, treasurer. Upshur County Horticultural Society, officers: Judge J. C. McWhorter, Buckhannon, president; Fred Brooks, French Creek, secretary- treasurer. Monon- galia County Horticultural Society, officers: H. S. Vandervort, president, and J. R. Hough, secretary. The Greenbrier Valley Horticultnial Society, officer: W. W. Stevens, secretary- treasurer. 2. The worTc of horticultural societies. — The work of these societies has consisted for the most part in meetings for the general discussion of horticulture. These societies have been the means of distributing much valuable information regarding fruit raising in West Virginia. As a result the members have increased their orchards in both size and efficiency and have learned much about the proper methods of marketing fruit. Several of these societies, especially those in the Eastern Panhandle, hold fruit shows and carnivals. By this means desirable comparison and competition are brought about. The State Fruit Show held each year in connection with the annual meeting of the West Virginia Federation of Agricultural Societies, is one of the most interesting and instructive features of that annual event. 3. Comment hy the committee. — West Virginia's possibilities in horticulture are well known. We have many advantages as a fruit State : (1) Fruit land can be purchased at low cost. (2) Our conditions — soU, elevation, rainfall, and general climate — make it unnecessary to spray as often as is required in many fruit belts in the West. (3) Our proximity to the great eastern markets gives us a great advantage over the western growers. This industry is expanding very rapidly. It is estimated that nearly three-quarters of a million young trees are being set out annually, and that our crop often reaches 300,000 barrels in one season. The results of recent experiments and of large private orchards show that most parts of the State are suited to successful fruit culture. As the list above shows, organized interest and effort among fruit growers in this State are confined to a small section of it. The lack of effective organization for the marketing of our horticultural products causes great loss to our State. During the season of 1912 many thousand bushels of fine fruit rotted in the orchards of this State because the farmers did not know the standards of packing and were not in touch with the needs of the markets. As a matter of comparison, it is interesting to note that Switzerland, a country two-thirds the size of West Virginia, and much more mountainous, has 68 arboriculture and fruit companies, vsdth a membership of 3,648, and 50 vineyard culture societies, with a membership of 2,744. We recommend that the public organizations for the promotion of agricultural interests use and entourage the present horticultural societies and seek to extend them as rapidly as possible, and that the proper official invite the leaders of these societies to frame needed laws bearing on horticulture in West Virginia. THE VIRGINIAS FRUIT EXCHANGE. 1. Report of secretary and manager. — ^Mr. Campbell's report, which follows, and two sample letters from members of the exchange show how the farmers may benefit from careful organization: Gentlemen- I beg to own receipt of your favor and to comply Tvith your request for information, as follows: The officers of the Virginias Fruit Excliange are Prescott Huidekoper, president, Romney, W. Va.; William Campbell, secretary and manager, Charles Town, W. Va. ; Gerard D. Moore, treasurer, Charles Town, W. Va. Its purposes are as outUned in the inclosed copy of charter and by-laws. 76 AGKICULTUEAL COOPERATION IN EXJKOPE. I regret that our supply of statements for last season's business has been exhausted, but inclose another for youi information. In the volume issued by the United States Department of Agriculture early this year on cooperative marketing, a full account of the system and operation of our exchange is given. Under the head of your interrogatory No. 2, I would say that, in my judgment and experience, unless West Virginia fruit growers cooperate more thoroughly, and in their own interest subject themselves to proper discipline in the matter of grading and packing, as do the fruit growers of the Northwest, when the young orchards now planted come into bearing their product will be unmarketable at remunera- tive figures. We can produce fruit of as good size and color and of better flavor than the growers of the Pacific slope. We have an enormous advan- tage in freight rates and quick transportation to the great consuming centers of the East and Middle West. But unless and until we grade our fruit as honestly and attractively as do our competitors, these advantages are lost. If assistance is to be extended by Federal or State agencies, it, to be worth while, must be practicable rather than theoretical. I could offer many suggestions as to how efficient aid could be given from these sources, such as the publication of bulletins showing the movement of fruit during the shipping seasons, the quantities held in cold storage at each point, etc., but I take it that a general dis- sertation on the broad subject of marketing is not called for at this time. Faithfully, yours, Wm. Campbell, Charles Tovm, W. Va. 2. Letters. — The following letters from members show how well the exchange works: Kabletown, W. Va., January 1, 1911. WiLLiAu Campbell, Manager The Virginias Fruit Exchange, Charles Tovm, W. Va. Deab Sir: My experience with the Virginias Fruit Exchange has been entirely satisfactory, and both made and saved me money by getting better prices for my crop than I was offered by outsiders, and enabling me to buy spraying material and a spraying outfit on better terms than I could have had I not been an exchange member. You have my hearty wishes for the continued success of the exchange and an enlargement of its business this year. Yours, respectfully, Logan B. Shctt. Linden, Va., November SS, 1910. William Campbell, Manager, The Virginias Fruit Exchange, Charles Town, W. Va. Gentlemen: I shipped over 15 carloaas of apples through the exchange this season, and the results were better than I had hoped for. I knoTt that I got more than my neighbors who were selling to spot buyers. The \vide distribution and exact knowledge of market condi- tions doubteless brought about these results. You can count on my business next season, and I think a good many others in this section have seen the light and will be only too glad to entrust their crops to the exchange for sale next year. Yours, truly, C. W. Walter. 3. Oncers.— Prescott Huidekoper, president, Romney, W. Va.; Archibald R. Arnette, vice president, Berryville, Va. ; Gerard D. Moore, treasurer, Charles Town, W. Va. ; Wm. Campbell, secretary and manager, Charles Town, W. Va. LIVE-STOCK ASSOCIATIONS IN WEST VIEGINIA. 1. Report of secretary. — Gentlemen: Your letter of Septembsr 26 received. In reply to your question 1 beg to say: 1. Farm organizations in this State are as follows: West Virginia Live Stock Association. Officers: President, C. C. Hardman, Spencer, W. Va.; secretary, C. A. Lueder, Morgantown, W. Va.; vice president of dairy divisions of the association, Wm. Hill, Bethany, W. Va.; vice president of Deef association, R. E. Thasher, Dewey, W. Va.; vice president wool growers, H. B. Huyitte, Charleston, W. Va. Understand, up to last year these three associations were entered separately, but now they have been brought under one association, and if the executive committee does their work a bill will be drafted and the live-stock association will be incorporated. (a) The Tri-btate Sheep Breeders: Officers— President, S. E. Gist, Ellsbuig, W. Va.; secrjtary, Earl Sheets, Urbana, 111. There are two associations in the State. The State Live Stock Association holds their meetings in Charleston everj other year. When the meetings are not held in Charleston they are held in some city chosen by an executive committee. The roeetings of the Tri-State Sheep Breeders' Association held their last meetings in Wheeling, W. Va. (c) The purpose of the State Live Stock Association is to protect and promote all lines of live-stock interests in West Virginia and to collect and disseminate information relative thereto. The results obtained are not verv gratifying because the members of the association do not take the interest they should. This year is the first that the association has been on a sound footing. A partial directory of all the breeders of pure breed Uve stock in the State has been compiled and is in press at present. This directory will be distributed among the breeders as soon as it is out of press. 2. Agricultural needs in West Virginia. We need more cooperative organizations, especially pure animal breeding associations. Very truly, yours, Chas. A. Lueder. 2. Comment ly the committee. — The prevalence of steep land and of a high quality of blue grass, and our nearness to good live-stock markets are some of the reasons why West Virginia should become famous as a WEST VIEGINIA. 77 State where special attention is given to standard breeds of fine stock. Yet our showing is very poor. During the period from 1899 to 1909 our population increased 27 per cent; the live stock produced in the State decreased — horses, 3 per cent; sheep, 3 per cent; cattle, 6 per cent; and hogs, 26 per cent. As is indicated by Dr. Lueder's report, this important branch of farming has not been given very much attention by the organizations which represent it. The membership of the societies is small, and the attendance at the State meetings is not at all encouraging. In spite of this, the society is doing the State a good service in compiling a directory of breeders. West Virginia is cursed with "scrub" animals. The farmers should have some way of knowing who's who and what's what in breeding. The committee is pleased to note the plan to unite all of the live-stock societies under one head. This reorganized body should present to the next legislature model "pure bred" and "pure feed" laws and, at the same time, be prepared to bring to bear enough argument and public sentiment to cause the legislators to act. CKEAMEKY ASSOCIATIONS IN WEST VIRGINIA. 1. Refort. — In response to the request of this committee, Mr. Bennetch made the following report: Gentlemen: Replying to your recent letter, asking for information on creamery associations in this State, I will say that there are at present the following creameries in operation in this State: Elkins Provision & Storage Co., Elkins, W. Va., Mr. S. B. Haffan, man- ager; Ravenswood Creamery Co., Ravenswood, W. Va.; Monroe-Wetzel Dairy Co., New Martinsville, W. Va., Mr G. P. Umstead, presi- dent; Sinksgrove Creamery Co., Sinksgrove, W. Va.; and a creamery located at Buffalo, W. Va. I am unable to give you the officials for each of these. With one or two exceptions all of these creameries were originally or have been on a cooperative basis. I understand that the cream- ery located at Buffalo is the only survivor of promoted creameries. Several of these promotive creameries were started several years ago and most of them were short lived. There is considerable territory where sufficient number of cows are available for more cooperative creameries to be organized upon a sound basis. Hoping this answers your questions, I am, yours, very truly, Paul B. Bennetch. 2. Comments hy the committee. — A glance at the report above would give the impression that West Vir- ginia is not, in any sense, a milk and butter State. The scant organization of creameries does not give a fair measiire of this branch of our farming, for the State does a big aggregate of business in dairy products through individual farmers. Yet we are far behind our possibiUties in this matter. In spite of our fine grazing and unusual markets, the official figures show that we have, comparatively speaking, a very small number of cows, and the average of these will not pay her keep. A few comparisons will be interesting: Switzerland, a country much smaller than West Virginia, has 1 054 000 cows against our 310,000, or more than three times as many. Contrasted with our half dozen dairy associations are Switzerland's 2,785 milk and cheese societies, with a membership of 77,227. In "little Old Ireland" we find more than 45,000 farmers active members of the 400 cooperative creameries. A report from one of our cooperative creameries in a blue-grass region shows that its products bring more than the standard price in the Philadelphia market. We express the hope that West Virginia wiU soon have an expert in the field who can give his entire time to instructing the farmers regarding the cow and her product and to the organization of cooperative creamery societies wherever the conditions wiU guarantee the success of such an organization properly managed. The consumers need more pure milk, cream, cheese, and butter, and our farmers should profit by meeting this ever-increasing need. WEST VIEGINIA BKANCH OF THE AMERICAN POULTRY ASSOCIATION. Prof. Horace Atwood, president of the West Virginia branch and a national authority on poultry, makes a brief but comprehensive report, as follows : Gentlemen: In reply to your letter of September 26 with reference to farm organizations, I would say: 1 The West Virginia branch of the American Poultry Association includes those members of the American Poultry Association who reside in West Virginia. . ^ ,, tt ■ j ^ j The parent organization contains over 5,000 members throughout the various States of the Umon and Canada. We have in West Virginia about 60 life members and there are 11 local associations affiliated with the branch, thus making the actual membership of our branch several hundred. ,,.-.,■ .^t, i,- ^ t v. v, * -j ■ *i, v. -u- c ^i. With respect to the purpose of the organization, would say that it is the object of our branch to aid m the upbuilding of the poultry ^ 'Te^are doTng ttohf various ways-by promoting the holding of poultry exhibitions, by lectures and educational exhibits in con- nection with poultry showtf, and by the publication of annual reports. We have prepared four or five annual reports which had been pub- ished by the West Virginia State Board of Agriculture in fairly large editions for distribution among the farmers of the State. 78 AGKICULTUKAL COOPBEATION IN EUEOPE. 2. Officers oj West Virginia. — The names of the officers of the branch are as follows: President, Horace Atwooa, Morgantown, W. Va.; vice president, J. L. Jamison, Morgantown, "W. Va.; secretary and treasurer, Thomas S. Meek, Wheeling, W. Va.; executive committee, C. L. Beynolds, Flemington, W. Va., W. R. Carson, St. Marys, W. Va., George B. Bowes, Parkersburg, W. Va., W. D. Corder, Philippi, W. Va. 3. Regarding the agricultural needs of West Virginia, would say we have great need for more economical and efficient methods of marketing poultry products in the State. For example, in the interior counties eggs frequently sell for not more than one-half what high-grade eggs are selling for wholesale in New York City, and yet the express rate in most instances is less than 3 cents a dozen. However, the average producer does not have enough eggs to make ca.se shipments, so he is barred from shipping to the big markets even though he could get twice as much for his eggs as he can secure at home. It seems to me that methods of marketing is one of the fundamental matters that attention must be given to in the near future. Very truly, yours, Horace Atwood. 4. Comments hy the committee. — Many of the States of tlie Union and many European countries are showing the possibilities of greatly increasing the poultry product in quantity and quality through proper organization. Special attention is called to the "Report of the Proceedings of the Fifth Annual Meeting of the West Virginia Branch of the American Poultry Association." This valuable report was published by the State Board of Agriculture and can be secured from H. E. Williams, State commissioner of agriculture, Charleston, W. Va. It gives a fuU account of the opportunities in poultry cultiure in this State, outlines the methods and possi- bilities of cooperative poultry associations, and discusses many subjects of vital interest to the farmers of West Virginia. It contains a map showing by dots the relative egg production in the different States. Below is the way we look with our neighbors : Dots. Ohio 18 Pennsylvania 11 Kentucky 9 Virginia 5 West Virginia 4 We need more dots — that is, more eggs — in West Virginia, and we believe proper organization will bring them. COUNTY FAIRS AS AGKICULTUKAL ORGANIZATIONS. 1. General discussion. — ^We beg to call attention to the possibilities of county fairs as agents for agricultural advancement. Through their variety of unusual attractions they bring very large numbers of the rural popu- lation together. Getting together generally has good results, for it affords measures and standards and sug- gestions which seldom come to isolated people in the coimtry. For many years there was a tendency in the West Virginia fairs to degenerate into gatherings with horse racing and cheap and sometimes questionable amusements as the chief attractions. Happily there seems to be a perceptible effort to reemphasize the agricultural features. Now those who attend these great annual occasions may see great halls filled with the best results of the labors of the farmer and the farmer's wife, and the school boys and girls, and long lines of stalls filled with the finest specimens of stock. During the season just closed, the College of Agriculture added a very valuable attraction to several fairs by furnishing a tented agricultural exhibit and furnishing lecturers to talk to the visitors and to distribute farm literature. These fairs should be held in all of our agricultural counties, and more and more attention should be given to agricultural and educational displays. Besides offering opportunity for social intercourse they sharpen the thought of farmers by competition, and set standards much above those of isolated small communities. 2. List of fairs. — The fairs held during 1913 — place, date, and secretary follow: Wheeling, September 8-12; Geo. Hook, secretary. Wheeling, W. Va. Fairmont, September 16-19, John S. Scott, secretary, Fairmont, W. Va. Clarksburg, September 1-4; Jas. N. Hess, secretary, Clarksburg, W. Va. Pennsboro, August 26-29; Will A. Strickler, secretary, Pennsboro, W. Va. Parkersburg, September 23-26, William Dudley, secretary, Parkersburg, W. Va. Buckhannon, September 8-11; G. F. Stockert, secretary, Buckhannon, W. Va. Elkins, W. Va., September 30-October 2; G. H. Coleman, secretary, Elkins, W. Va. Oak Hill, October 7-10; S. M.. Archer, secretary. Oak Hill. MISCELLANEOUS FARM ORGANIZATIONS. 1. Farmers' reading circles. — Director C. R. Titlow, of the extension division, reports under this heading as follows: The following are the number of farmers' reading circle clubs that we could report as live and active: Lewis County, Horner, R. T. Taylor, leader; Marion County, Hoult, J. D. Bowman, leader; Pleasants County, St. Marys, W. B. Carsons, leader; Marion County, Watson, W M. Lanham, leader; Harrison County, Viropa, Felix L. Sturm, leader. WISCONSIN. 79 2. Agricultural clubs and associations. — ^Mr. Titlow continues his report by saying — In addition to these it may be reported that there is an organized association for the promotion of the boys' and girls' club work in 40 counties. Monroe County has a county agricultural association, Baxter L. Neel, Gap Mills, president. Preston County has a similar association, J. W. Dorsey, Kingwood, president. These associations are used to promote agricultural interests by arranging for extension schools, securing the place of same, etc. Mr. B. B. Ezell, of Kanawha County, Hugh Vandervort, of Wood County, and H. D. Groves, of Tyler County, have organized a farmers' bureau to help advance the demonstration work. A list of these may be secured from each agent if so desired. It seems as though through the institutes, granges, and other organized meetings much has been done to advance the productions of the farm, but little has been attempted toward better marketing of farm products, purchasing of farm supplies, or the art of home keeping. We are planning for an organization of farm women' clubs to arrange for meetings to be given to the study of the advancement of home interests. West Virginia is greatly in need of organizations for agricultural purposes and also to promote the social interest of the community. 3. County demonstrators. — At tlie present time West Virginia by cooperating with the National Government has expert farm demonstrators in six counties as indicated below: Kanawha County, B. B, Ezell, Charleston, W. Va.; Wood County, H. S. Vandervort, Parkersburg, W. Va.; Ohio, Brooke, and a part of Marshall, W. D. Zinn, Bethany, W. Va., and W. H. Sill, Bethany, W Va.; and Tyler County, E. E. Groves, Middleboume, W. Va.i Inasmuch as the work of these demonstrators is fuUy explained in other State publications no comment is needed here. This committee believes that county courts, under proper restrictions, should be allowed to pay a part of the salary and expenses of these county farm demonstrators. These men could become eflfective agents for advancing the work of farmers' organizations. 4. District leaders. — Through the help (franking privilege and salary for a month or two) of the United States Department of Agriculture this State has one district leader of agricultural club work, A. L. Thomas, district school superintendent of Mannington District, Marion County. The Government proposes to extend this experiment to include four more district school superintendents. When such a system spreads over the State the education of the rural children will go on the year round. WISCONSIN. April 21, 1914. HoNOEABLE Dear Sie: In compliance with the request of the Permanent American Commission on Agri- cultiu-al Finance, Production, Distribution, and Country Life, the inclosed report concerning agriculture in Wisconsin is respectfully submitted by the commission appointed by Gov. Francis E. McGovera, whose names are thereto appended. Very truly, yours, PoRTEE L. A. Ferguson, Chairman of Commission. GiLMAN, Wis., April 21, 1914. Gov. Feancis E. McGovern, Madison, Wis. Your Excellency: The following statements concerning agricultural conditions in Wisconsin are respectfully submitted by the commissioners whose names are signed to this report: In the early history of Wisconsin, mining, lumbering, and agriculture occupied the attention of its pioneer settlers. Here the cross currents of widely separated nations met and mingled. To-day, 40 per cent of its population is foreign born, of which considerably more than one-half are of German and Scandinavian birth. The rich prairie lands of the southern part of the State lured the virile youth from New England and the Middle States, while throughout many portions the influx of the best blood from the north of Europe gave it a yeomanry that has done much to lay the foundation for its future progressive development. Its early agricultural history was marked, like all other farming sections, by an era of exploitation, and with the single-crop system of wheat raising, the originally fertile soil was robbed to the point where crop returns were pitiably small. It was then that the attention of the farmers was turned into more scientific channels. The lessons of diversified farming came to be better understood and the importance of dairying and live stock raising recognized. For these types of farming the physical conditions of the State are especially favorable. Flanked as it is on two sides by the Great Lakes, whi ch act as huge refrigerators, tempering the summer heat and > Mr. Groves teaches agriculture in the Tyler County High School and gives about two days each week and vacation time to farm demonstration work. 80 AGEIOULTUKAL COOPEEATIO]Sr IN EUROPE. the winter cold, as well as materially iacreasing the humidity of the air, Wisconsin is preeminently a State in which dairying naturally flourishes. The abundant supplies of cold, dear water, the luxuriant growth of forage grains are the indispensable adjuncts to successful dairying. Such physical conditions as soil and climate profoundly influence the history and development of any commonwealth, and the present and future status of the State owes much to its location and physiographic features. This physical basis, coupled with a population which has learned the lessons of good farming in Europe and America, made possible an early start in dairying which has now reached such proportions that Wisconsin ranks supreme in this branch of agriculture. Now one-eighth of the dairy cattle of the United States are to be found within its border, more than in any other State in the Union. Wisconsin makes one-half of the entire cheese supply of the Nation in her 2,000 factories, and one-sixth of all the butter of the United States — more than any other single State — in her 1,000 creameries. The milk supply now annually used for the manufacture of a single dairy product — condensed milk — would float four of the largest battleships yet built by any nation. These dairy products now aggregate over $85,000,000 annually. This exceeds the entire output of gold mined in the entire United States, including Alaska, which supply when once taken from the ground can never be replaced, while the stream of dairy gold is constantly increasing in volume year by year. The development of live-stock husbandry and dairying has increased the fertility of our soils so that, prac- tically speaking, the use of commercial fertilizers, except for special purposes, is almost unknown. The entire reported sales of licensed commercial fertilizers for 1912 aggregated only 4,000 tons, worth $100,000, while over $81,000,000 was spent for chemical fertilizers in five of the seaboard States. The soil is our greatest natural resource, and one that under this mode of husbandry is worth more to-day than ever before. At one time vast forests covered the entire nortjj half of the State, but with the rush for the more easily tilled prairie lands, these forested areas attracted only the attention of the lumberman and the manufacturer. The State has been gridironed with railroads which have carried away much of our forests, but the numerous cities that have developed in proximity to water-power sites and other locations of strategic commercial importance have made a home market that is first to supply. Within 12 hoiu-s' ride from its borders live 25,000,000 people, the hub of the great Mississippi Valley, that must be fed, clothed, and housed. These northern lands, protected by the mantle of forest that has for centuries covered this total area, are now coming into use in a virgin condition. About 60 per cent of the land area is now in farms, but there is an empire of undeveloped agricultural wealth (over 10,000,000 acres) lying in the very center of the American con- tinent, in the heart of civilization, that is fraught with much promise for the future of the Commonwealth. It is potentially the greatest dairy region of the State. By reason of the abundant and well-distributed rainfall forage crops grow in greatest profusion. It is the natural clover-land country and all along the "tote roads" of the lumberman, where the sunlight filters in through the second-growth forest, the seed from the hay hauled in by the logger has seeded itself naturally. The potato grows exceptionally well on the light loams of the central and northern part of the State. To such an extent has the cultivation of this tuber increased in later years, that Wisconsin now exceeds in yield even Maine. Hundreds of thousands of acres of these virgin lands are pre- eminently adapted to the cultivation of this crop. The soils of the State are mostly of glaciated origin and by virtue of the grinding action of the huge ice sheets that ploughed and furrowed the underlying rocks, the soils are more diverse and richer in mineral elements than soils formed by simple disintegration of underlying rock. The rapid increase of the wealth of the developed portions of the State is attested by the character of the improvements of the open country. Here and there will yet be found on the farm the small house (sometimes constructed of logs) that marked the early home of the pioneer settler (perhaps now serving as a farm outbuilding), but well-constructed homes and large red barns, with the inevitable silo, that guarantee of dairy prosperity, betoken a state of development that is an index of the rapidly enhancing value of improved lands. The result is that money for development purposes is cheaper in the older rural districts of Wisconsin than it is in the cities. The farmer on his mortgage loans for land purchase is often able to secure long-term paper at 5 per cent and in some cases for 4 or 4^ per cent, while 6 per cent is the prevailing city rate for security of equal character. The needs of the State naturally range from the problems of the pioneer in the newer sections of the north to those of a long-established agriculture in older settled portions of the State. Tenancy is very low compared with most States. Eighty-six per cent of Wisconsin farmers, a higher per cent than that of any other State in the Mississippi Valley, own the farms they operate, and many of those who are classified in the census as tenants are young farmers working a farm on shares, the owner being a retired farmer who has moved to the village to pass his declining days. The new north awaits both labor and capital. In practically all portions of this section development has begun and gone on sufficiently so that the intending settler can see for himseK what the agricultural possibilities WISCONSIN. 81 of any region are. The State maintains several agricultural experiment and demonstration stations operated by the university on the representative soil types of the State, and from these locations the new settler can secure information that will enable him quickly to adjust himself to his new environment. A soil survey is in progress and the larger portion of the State has now been mapped so that accurate data as to soil conditions are available for incoming settlers (address State Soil Survey, A. R. Whitson, Madison). Numerous agricul- tural organizations of the State are available to help the farmer to adapt his work to the special requirements of his land. Information can be secured as follows: Field crops: Wisconsin Experiment Association, R. A. Moore, secretary, Madison. Fruits: Wisconsin Horticultural Society, F. Cranefield, secretary, Madison. Potatoes: Wisconsin Potato Growers' Association, J. G. Milward, secretary, Madison. Dairying: J. Q. Emery, Dairy and Food Commission, Madison College of Agriculture, Madison. Live stock: Wisconsin Live Stock Breeders' Association, A. W. Hopkins, secretary, Madison. General information: B. G. Packer, Commissioner of Immigration, Madison, regarding land and agricul- tural opportunities. Naturally the northern portion of the State is most in need of additional capital, yet for a new country money rates are much lower than in many of the newly opened sections of the West. The main reason for this is that the lumber industry (which is now on the wane) has made possible the accumulation of much wealth that is locally available. Another factor is that stability of crop returns (due to absence of prolonged droughts) make the risk of loaning money less hazardous than in many newly opening sections. The very progressive character of its people has made possible the development of a keen body politic. Legislation in the State is in an advanced condition and the beneficent results have attracted the attention of many other Commonwealths. The last legislature provided for the establishment of land-mortgage associations to meet the demands for long-time agricultural loans payable on the installment or amortization plan. The purpose of this act is to help those desiring to purchase farms or to improve those already owned. The long-term loan feature is provided for by a bond issue which enables the borrower to pay off a small per- centage of the principal each year. Under the plan outlined in this act fifteen or more persons, adult residents freeholders of Wisconsin, may incorporate with a capital stock of not less than $10,000, for the purpose of making loans secured by first mortgages on Wisconsin real estate. The mortgages thus obtained may be deposited with the State treasurer and the association may then issue bonds up to the amount of the mortgage so depos- ited. The bonds issued are the direct obligation of the association and shall at no time exceed the amount of securities on deposit with the State treasurer. The granting of loans is safeguarded, first, by a provision imposing a double liability upon the stockholders and the obUgation of the association which issued the bonds; second, by a requirement that the assessor of incomes shall certify that the value placed upon any property for the purpose of a loan shall not exceed its market value; third, by a provision that no loan shall be made unless the committee on loans shall first be satisfied that a loan for the purpose specified by the applicant promises to benefit him, and by other provisions for soil conservation, the payment of taxes, insurance, special assess- ments, etc. In numerous instances the local bankers and business organizations have instituted cooperative arrange- ments to enable farm loans to be secured for the purchase of five stock and other direct agricultural improve- ments at very reasonable rates of interest. To enable settlers to begin work along dairy lines, these local business associations guarantee the notes of farmers who repay their obUgation by turning over one-half of their cream or mUk check as partial hquidation of such obHgations. In this way the town and the country are brought together in the closest possible cooperation with a view of improving the agricultural status of the community. Wisconsin is preeminently noted for the large number of successful cooperative institutions that have been inaugurated. It is rapidly becoming one of the important fruit regions of the middle section and a large pro- portion of its creameries are organized under the cooperative law. The result of this has been to develop a quality of citizenship among the farmers of the State which renders them most progressive in matters of rural betterment and augurs well for the agricultural future of the State. Respectfully submitted. H. L. Russell. F. J. Matchette, B. F. Faast. Porter L. A. Ferguson. 42998°— S. Doc. 214, 63-1, pt 3 6 82 AGEICTJLTXJEAL COOPBBATION IN EUROPE. NEW BRUNSWICK. Feedeeicton, New BEtrNSWiCK, October 4, 191S. Deae Sie: Inclosed please find order in council appointing committee, as requested in your correspond- ence to Premier Fleniming, under date of August 12. I regret that this matter has been delayed so long, but on account of the absence from the Province of some of our officials for the summer months it has not been attended to as promptly as it otherwise would have been. We would be pleased to receive any instructions you may desire to send us. Yours, very truly, J. B. Daggett, Secretary for Agriculture. [Inclosure.l The honorable the minister of agriculture reports for the information of the committee of the executive council — That he has received a communication from the Permanent American Commission in which it is set forth that the said commission has completed its investigation of agricultural finance, production, distribution, and rural life in European countries and that the said commission has collected a large quantity of material bearing upon the said subject. That in order that the benefits accruing from the work of the said commission may be distributed as widely as possible among the farmers of this continent, the said commission has invited this Province to appoint a committee of three to prepare a brief statement as to the agi'icultural needs of the Province. The minister of agriculture, upon the consideration of the said communication and an outline of the nature of the work done by the said commission, is of the opinion that it would be in the interests of the farmers of this Province to appoint such committee and he therefore recommends that the Hon. D. V. Landry, M. D., minister of agriculture for the Province; Mr. J. B. Daggett, secretary for agriculture; and Mr. W. W. Hubbard, manager of the Dominion Experimental Farm near Fredericton, the address of each being Fredericton, New Brunswick, be such committee and that the names and addresses be furnished to the said commission. And the committee of council concurring in the said recommendation, it is accordingly so ordered. Certified: Passed Septembers, 1913. Jos. Howe Dickson, Cleric of the Executive Council of New Brunswick. REPORT OF COMMITTEE. Feedeeicton, New Beunswick, November S, 1913. Messrs. The Permanent Ameeican Commission Ageicultueal Finance, Peoduction, Disteibution, Rueal Life, Southern Building, Washington, D. G. Gentlemen: The committee appointed by order in council of the government of New Brunswick, in response to a request from your director general, to prepare a brief statement as to the agricultural needs of the Province of New Brunswick, beg to report that, after giving the matter such consideration as was possible in the limited time at their disposal, they would briefly sum up the most urgent needs of this Province from an agricultural standpoint under the following heads: 1. A system of education which will enable our farmers to best utilize their opportunities and which will give their children that knowledge which wiU be most useful to them for the development of the districts in which they live. 2. Improved means of communication, which wiU include good highways, sufficient railway accommoda- tion, an adequate rural postal service, parcel postal facilities, cheaper express service, and rural telephones in every district. 3. Effective cooperation among farmers for economical production and to enable them to meet fairly the organized interests with which they are forced to deal. 4. A better system of credit for agricultural development and the carrying out of farming operations. 5. More farmers to occupy the large amount of excellent land now undeveloped in this Province, more agricultural labor, and more domestic help. While these five heads do not completely cover the ground, they touch the most important points, each of which can be expanded as to details to an almost unlimited extent. The limited amount of money available for the work of the provincial department of agriculture has prevented that progress in the efforts to provide such assistance to meet the needs above outlined which is desirable. A brief summary of the work that the department of agriculture is carrying on, might be of interest to you. SASKATCHEWAN. 83 The farmers of the Province are at present organized into agricultural societies, or farmers' institutes, numbering 135. Sixteen thousand dollars was divided among these societies last year for the purpose of assist- ing in the importation of pure-bred stock, better seed, and any other use which would tend to the development of the agricultural interests. There has recently been established a horticultural branch, under the direction of an expert horticulturist. This branch is doing excellent work, especially in the encouragement of fruit growing, apples being the main fruit raised, and these are of excellent quaUty. The Province has two dairy superintendents, who give their entire time to the encouragement of our dairy- men. They visit the creameries and cheese factories, giving instruction and help wherever possible. An excellent dairy school is also maintained at Sussex, in connection with a creamery, where practical instruction is given in dairy work. In agricultural education, a director of elementary agricultural education was appointed this year, whose duties are to encourage elementary education in agriculture in our rural schools. A school for agricultural education has been built at Woodstock during the past summer and will be opened early in 1914. This school has not the standing of a college, but short courses in agriculture will be given in the several branches of agri- culture for about six months in the year. If this school proves a success, a number of such schools vrill be estab- lished throughout the Province. Students taking the regular courses at any of the agricultural colleges outside of the Province are given transportation to and from the college by the department of agriculture. A staff of traveling instructors is maintained. These instructors hold pubHc meetings in the agricultural districts and visit the farraers at their work. Exhibitions — provincial, county, and parish — are encouraged by substantial grants from the government. The poultry interests are having special attention. A poultry superintendent has recently been appointed and is doing excellent work in the encouraging of poultry raisers and development of the market. The women's institutes have obtained a large place in the work of the department during the past year. A supervisor has been appointed who gives all of her time to the encouragement of this branch. Yours, very truly, D. V. Landrt, J. B. Daggett, W. W. Hubbaud, Committee. nova SCOTIA. Halifax, Nova Scotia, November 15, 191S. Dear Sm: I have received your letter of October 23, and note therein that other States and Provinces have appointed their commissions of cooperation. I regret to state that your letter to the premier, dated August 12, in which you request that the appoint- ment of a commission for this Province be made, was in some manner overlooked. I am now directed by the honorable premier to request you to add the following as a commission representing this Province: Arthur S. Barnstead, Halifax; Melville Gumming, Truro; A. Hector Cutten, Lower Truro. These with the Hon. Premier G. H. Murray will form the commission for Nova Scotia. Yours, truly, Arthtir S. Barnstead, Secretary. Note. — Keport has not been submitted. ONTARIO. Toronto, August 15, 191S. Dear Sir: Sir James Whitney has instructed me to acknowledge receipt of your letter of recent date, addressed to Tiim and to inform you that it has been handed to the department of agriculture, to be dealt with by that department. Yours very truly, Horace Wallis, Secretary. Note. — Keport has not been submitted. SASKATCHEWAN. Executive Council, Saskatchewan, Regina, August 19, 191S. My Dear Sir: In further reply to your letter of August 12 I beg to state that the Saskatchewan government is appointing Hon. George Langley, Mr. Charies A. Dunning, and Mr. A. F. Mantle as the committee of three, as proposed in your letter, to work in conjunction with Mr. Haslam and Dr. OHver. These three gentlemen are the colleagues of Mr. Haslam and Dr. Oliver on the Saskatchewan commission. BeUeve me, very sincerely, yours, Walter Scott. Note. — Keport has not been submitted. RURAL CREDIT UNIONS. PROVISIONS FOR THE FORMATION AND INCORPORATION OF SAME. CHAPTER 87— GENERAL LAWS OF TEXAS. [S. B. No. 458.] AN ACT Providing for the formation and incorporation of rural credit uniona or cooperative associations for the purpose of promoting thrift among their members, and to enable the members thereof, when in need, to obtain for productive purposes moderate loans of money for short periods and at reasonable rates of interest, and declaring an emergency. Be it enacted by the legislature of the State of Texas: Section 1. In this act the words "rural credit union'' shall mean a cooperative association formed for the purpose of promoting thrift among its members and to enable them, when, in need, to obtain for productive purposes moderate loans of money for short periods and at reasonable rates of interest. The capital stock of rural credit unions organized under the provisions of this act shall be divided into shares of $25. Entrance fees of rural credit unions may be fixed by the board of directors at such an amount as may be prescribed by the by-laws. Sec. 2. A rural credit union may receive the savings of its members in payment for shares; may lend to its members at reasonable rates of interest not to exceed six per cent per annum, or invest, as hereinafter provided, the funds so accumulated, ind may undertake such other activities relating to the purposes of the association as its by-laws may authorize. Sec. 3. Ten or more citizens of this State may associate themselves together, by articles of agreement, and form a rural credit union, and, upon the approval of the State banking board, may become a corporation upon complying with such provisions of the act regulating State banks as may be applicable to the transaction of the business herein authorized to be done. The State banking board may permit the formation of such corporation when it is satisfied that the proposed field of operation is favorable to the success of a rural credit union, and that the standing of the proposed members is such as to give assurance that its affairs will be administered in accordance with the spirit of this act, and it shall be the duty of the commissioner of banking to issue a charter to said rural credit union to do business in conformity with the provisions of this act. The State bank commissioner, or his deputy, shall have authority to examine the accounts, books, and papers of rural credit unions herein authorized to be organized. Any rural credit union violating the provisions of this act shall be subject to the forfeiture of its charter, and any oflOicer or member misapplying or embezzling funds belonging to such rural credit union shall be subject to prosecution and punishment as already provided for violating the provisions of the State banking laws. Sec. 4. No person, partnership, association, or corporation, except corporation formed under the provisions of this act, shall here- after transact business under any name or title which contains the three words "rural credit union," except those expressly authorized herein to be formed. Sec. 5. The State bank commission shall require such rural credit unions to keep such books as he may deem necessary tor the proper conduct of their business; may make examination and report of the transaction of such rural credit unions' business and institute neces- sary proceedings for the prosecution of any officer or director misapplying the rural credit unions' funds. The rural credit unions shall be subject to the general supervision of the State bank commissioner. Sec 6. The by-laws of the rural credit unions shall prescribe — (a) The name of the corporation. (b) The purpose for which it is formed. (c) The conditions of residence or occupation which qualify persons for membership. (d) The par value of the shares of capital stock. (e) The conditions on which shares may be paid in, transferred, and withdrawn. (f) The conditions on which deposits may be received and withdrawn. (g) The method of receipting for money paid on account of shares or deposited, (h) The number of directors and number of members of the credit committee, (i) The duties of the several officers. (j) The fines, if any, which may be charged for failure to meet obligations of the association punctually. (k) The date of the annual meeting of members. (1) The manner in which members shall be notified of meetings. (m) The number of members which will constitute a quorum at meetings. (n) Such other regulations as may seem necessary. Sec. 7. No such credit union shall receive deposits or payments on account of shares, or make any loans until its by-laws have been approved in writing by the State bank commissioner, nor shall any amendments to its by-laws become operative until they have been 80 approved. Sec. 8. The fiscal year of every such association shall end at the close of business on the 31st day of December. The annual meeting of the association shall be held at such time and place as the by-laws prescribe. Special meetings may be held by order of the directors or of the supervisory committee, and the clerk shall give notice of such special meetings upon request, in writing, of ten members. Notice of all meetings of the association shall be given in the manner prescribed by the by-laws. No person shall be entitled to vote who has not been a member for more than three months, but this restriction shall not apply during the first twelve months of the existence of the association, nor shall any member vote by proxy or have more than one vote. At the annual meeting the members shall upon recom- 84 BUBAL CEBDIT UNIONS. 85 mendation of the board of directors declare dividends and fix the amount ot the entrance fee. At any meeting the members may decide upon any question of interest to the association, and upon appeal of two members may reverse decisions of the credit committee or board of directors, and by a three-fourths vote of those present, provided the notice of the meeting shall have specified the question to be con- sidered, may amend the by-laws. Sec. 9. At the annual meeting the members shall elect a board of directors of not less than five members from which a credit committee of not less than three members may be selected. A supervisory committee of three members shall also be elected. ^ No member of the board of directors shall be a member of the supervisory committee, nor shall one person be a member of more than one of said committees, and all members thereof, as well as all officers whom they may elect, shall be sworn, and shall hold their several offices until others are elected and qualified in their stead; and a record of every such qualification shall be filed and preserved with the records of the association. Sec. 10. At their first meeting the board of directors shall elect from their number a president, a vice president, a clerk, and a treasurer who shall be the executive officers of the association. The board of directors shall have the general management of the affairs, funds, and records of the association, and shall meet as often as may be necessary. It shall be their special duty — (a) To act upon all applications for membership. (b) To act upon the expulsion of members. (c) To fix the amount of surety bond which shall be required of each officer having cutsody of the funds. (d) To determine the rate of interest on loans. (e) To fill vacancies in the board of directors or in the credit committee of the association until the election and qualification of officers to fill said vacancies. (f) To make recommendations to meetings of the members relative to the amount of entrance fee; the maximum number of shares which may be held by and the maximum amount which may be lent to any one member; the dividend to be declared; amendments to the by-laws and; any other matters which, in their opinion, the members should decide. Sec. 11. The credit committee shall approve every loan or advance made by the association. Every application for a loan shall be made in writing and shall state the purpose for which the loan is desired, and the security offered. No loan shall be made unless the credit committee js satisfied that it promises to benefit the borrower, nor unless it has received the unanimous approval of those members of said committee who were present when it was considered, nor if any member of said committee shall disapprove thereof, but applicant for a loan may appeal from the decisions of the credit committee to the board of directors. Sec. 12. The supervisory committee shall inspect the securities, cash, and accounts of the association and supervise the acts of its board of directors, credit committee, and officers. At any time the supervisory committee, by a unanimous vote, may suspend the credit committee or any officer elected by the board of directors, and by a majority vote may call a meeting of the shareholders to consider any violation of this act or of the by-laws, or any practice of the association which, in the opinion of said committee, is unsafe or unauthorized. Within seven days after the suspension of the credit committee the supervisory committee shall cause notice to be given of a special meeting of the members to take such action relative to such suspension as may seem necessary. The supervisory committee shall fill vacancies in their own number until the next annual meeting. Sec 13. The capital of the association shall be unlimited in amount. Shares of capital stock may be subscribed for and paid in in such manner as the by-laws shall prescribe. Sec. ^4. Shares may be issued and deposits received in the name of a minor[,] and such shares and deposits may, in the discretion of the directors, be withdrawn by such minor or by his parent or guardian, and in either case payments made on such withdrawals shall be valid. If shares are held or deposits made in trust, the name and residence of the beneficiary shall be disclosed and the account shall be kept in the name of such holder as trustee for such person. If no other notice of the existence and terms of such trust has been given in writing to the association, such shares or deposits may, upon the death of the trustee, be withdrawn by the person for whom the amount of such shares was paid in or for whom such deposit was made, or by his legal representative. Sec. 15. The capital, deposits, and surplus funds of the association shall be either lent to the members for such purposes and upon such security and terms as the credit committee shall approve, or deposited to the credit of the association in savings banks or trust com- panies incorporated under the laws of this State, as in national or State banks located therein, such depositories to be approved by the commissioner of banking. Sec. 16. A borrower may repay the whole or any part of his loan on any day on which the office of the association is open for the trans- action of business[;] for failure to pay the interest or any installment required by the terms of the loan, the borrower may be fined if the by-laws so prescribe. Sec 17. No member of the board of directors or of the credit or supervisory committee shall receive any compensation for his serv- ices as a member of said board or committees, nor shall any member of the credit or supervisory committee, either directly or indirectly, borrow from or become surety for any loan or advance made by the association, except upon the approval of two-thirds of the members of the association. No loan shall be granted except for productive purposes or urgent needs, nor for a longer period than eight months; nor shall any loan be renewed for a sum as large as the original amount. Loans to any one member shall not exceed $200. Sec 18. The board of directors may expel from the association any member who has not carried out his engagements with the asso- ciation or has been convicted of a criminal offense, or neglects or refuses to comply with the provisions of this act or of the by-laws of the association, or who habitually neglects to pay his debts, or shall become insolvent or bankrupt, or shall have deceived the association with regard to the use of borrowed money; but no member shall be expelled until he has been informed in writing of the charges against him and an opportunity has been given to him, after reasonable notice, to be heard thereon. Sec 19 The amounts paid in on shares or deposited by members who have withdrawn or have been expelled shall be paid to them, but in the order of withdrawal or expulsion, and only as funds therefor become available and after deducting any amounts dew [due] by said members to tiie association; but such expulsion shall not operate to relieve a member from any remaining liability to the association. Sec 20 Immediately before a meeting of the directors caUed to recommend the declaration of a dividend, the supervisory com- mittee shall make a thorough audit of the receipts, disbursements, income, assets, and liabilities of the association for the fiscal year, and shall make a full report thereon to the directors; said report shall be read at the annual meeting, and shall be filed and preserved with the records of the association. 86 AGEICULTUEAL COOPEEATION IN EUEOPE. Sec. 21. At the annual meeting a dividend may be declared from income which has been actually collected during the fiscal year next preceding, or during the months which have elapsed since the association began business, and which remains after the deduction of all expenses, losses, and the amount required to be set apart as a guaranty fund. Such dividend shall be paid on all fully paid ahajes outstanding at the close of the fiscal year, but shares which become fully paid during the year shall be entitled only to a proportional part of said dividend, calculated from the first day of the month following such payment in full Dividends due to a member shall be paid to him in cash or credited to the account of partly-paid shares for which he has subscribed. Sbo. 22. Immediately before the payment of each dividend there shall be set apart as a guaranty fund twenty per centum of the net income which has accumulated during the fiscal year. Said fund and the investments thereof belong to the association and shall be held to meet contingencies or losses in its business. All entrance fees shall be added at once to the guaranty fund. But upon recom- mendation of the board of directors the members at an annual meeting may increase, and, whenever said fund equals or exceeds the amount of capital stock actually paid in, may decrease the proportion of profits which is required by this section to be set apart as a guaranty fund. Sec. 23. At any meeting specially called to consider the subject the members upon the unanimous recommendation of the board of directors may vote to dissolve the association, provided at least two-thirds of the members are present at such meeting, and provided not more than ten members, either in person or by written notice, object thereto. A committee of three shall thereupon be elected to liquidate the assets of the association, and each share of the capital stock, accord- ing to the amount paid in thereon, shall be entitled to its proportion of the proceeds after all debts of the association have been paid. Sec. 24. Within twenty days after the last business day of December in each year, ever [every] such association shall make to the bank commissioner a report in such form as he may prescribe, signed by the president, treasurer, and a majority of the supervisory com- mittee, who shall certify and make oath that the report is correct according to their best knowledge and belief. Any such association which neglects to make the said report within the time herein prescribed shall forfeit to the State $5 for each day during which such neglect continues. Seo. 25. The near approach of the close of the present session of the legislature, and the further fact that Texas is an agricultural State and among our farmers are a large per cent of tenants for whose benefit this law is intended, to the end that they may be able to reduce the cost of living, creates an emergency and an imperative public necessity, demanding that the constitutional rule requiring bills to be read on three several days be suspended, and said rule is hereby suspended, and that this act take effect and be in force from and after its passage, and it is so enacted. (Note. — S. B. No. 458 passed the senate by a two-thirds vote— yeas 27, nays 0; and passed the house of representatives March 31, 1913, but no vote given.) Approved March 31, 1913. (Takes effect 90 days after adjournment.) CHAPTER 733.— WISCONSIN LAWS OF 1913. [Approved August 1, 1913.] AN ACT To create section 1786e-20 of the statutes, relating to cooperative credit associations, providing for their incorporation and pre- 1 scribing regulations. ! The people of the State of Wisconsin, represented in Senate and Assembly, do enact as follows: Section 1. There is added to the statutes a new section to read: Section 1786e-20. 1. The words "cooperative credit association" shall mean a cooperative association formed for the purpose of promoting thrift among its members. 2. A cooperative credit association may receive the savings of its members in payment for shares, or a deposit; may lend to its mem- bers at reasonable rates or invest as hereinafter provided, the funds so accumulated; and may conduct also such other activities relating to the purpose of the association as its by-laws may authorize. 3. Seven or more citizens of this State who have associated themselves by an agreement in writing for the purpose of forming a coopera- tive credit association may become a corporation under the provisions of section 1786e-l to 1786e-17, inclusive, of the statutes, Provided, That section 1786e-8 shall not apply to such associations: Provided further. That no such association shall transact any business under this section until it has been regularly authorized by the commissioner of banking to commence such business. Such authorization shall be subject to and shall be given in the manner prescribed by section 2024-12 of the statutes. 4. No person, partnership, association, or corporation, except corporations formed under the provisions of this section, shall hereafter transact business under any name or title which contains the two words "credit" and ''association." Any person, partnership, associa- tion, or corporation violating the provisions of this subsection may be enjoined from doing business under such name at the instance of any stockholder of any association legally organized under this section. 5. The provisions of section 2018 to 2024r-l, inclusive, of the statutes, shall apply to such association and its directors, committees and ofB^cers, and they shall be subject to the supervision of the commissioner of banking in the manner and to the extent set forth in said sactions. 6 The by-laws shall prescribe — (a) The name of the corporation; (b) The purposes for which it is formed; (c) The conditions of residence or occupation which qualify persons for membership; (d) The par value of the shares of capital stock; (e) The conditions on which shares may be paid in, transferred, and withdrawn; (f) The conditions on which deposits may be received and withdrawn; (g) The method of receipting for money paid on account of shares or deposits, (h) The number of directors and number of members of the credit committee, (i) The duties of the several officers. (j) The fines, if any, which shall be charged for failure to meet obligations to the corporation punctually. (k) The date of the annual meeting of members. (1) The manner in which members shall be notified of meetings. (m) The number of members which shall constitute a quorum at meetings. (n) Such other regulations as may seem necessary. EUEAL CREDIT UNIONS. 87 7. No such corporation shall receive deposits or payments on account of shares, or make any loans, until its by-laws have been approved in writing by the commissioner of banking, nor shall any amendments to its by-laws become operative until they have been so approved. 8. The fiscal year of every such corporation shall end at the close of business on the thirty-first day of October. The annual meeting of the corporation shall be held at such time and place as the by-laws prescribe. Special meetings may be held by order of the directors or the supervisory committee, and the clerk shall give notice of special meetings upon request in writing by ten members. Notice of all meetings of the corporation shall be given in the manner prescribed by the by-laws. No person shall be entitled to vote who has not been a member for more than three months, but this restriction shall not apply during the first twelve months of the existence of the corpora- tion, nor shall any member vote by proxy or have more than one vote. At the annual meeting the members shall, upon recommendation of the board of directors, declare dividends and fix the amount of the entrance fee. At any meeting the members may decide upon any question of interest to the corporation; and upon appeal of two members, may reverse decisions of the credit committee or board of direc- tors; and, by a three-fourths vote of those present, provided the notice of the meeting shall have specified the questions to be considered, may amend the by-laws. 9. At the annual meeting the members shall elect a board of directors of not less than five members, a credit committee of not less than three members, and a supervisory committee of three members. No member of said board shall be a member of either one of said committees, nor shall one person be a member of more than one of said committees, and all members thereof, as well as all ofiicers whom they may elect, shall be sworn and shall hold their several offices until others are elected and qualified in their stead, and a record of every such qualification shall be filed and preserved with the records of the corporation. 10. At their first meeting the board of directors shall elect from their number a president, a vice president, a clerk, and a treasurer, who shall be the executive officers of the corporation. The board of directors shall have the general management of the affairs, funds, and records of the corporation, and shall meet as often as may be necessary. It shall be their special duty — (a) To act upon all applications for membership. (b) To act upon the expulsion of members. (c) To fix the amount of surety bond which sliall be required of each officer having custody of funds. (d) To determine the rate of interest which shall be allowed on deposits. (e) To fill vacancies in the board of directors or in the credit committee of the corporation until the election and qualification of offi- cers to fill said vacancies. (f) To make recommendations to meetings of the members relative to the amount of entrance fee; the maximum number of shares which may be held by, and the maximum amount which shall be lent to, any one member; the dividend to be declared; amendments to the by-laws; and any other matters which, in their opinion, the members should decide. 11. The credit committee shall approve every loan or advance made by the corporation. Every application for a loan shall be made in writing and shall state the purpose for which the loan is desired and the security offered. No loan shall be made unless the credit com- mittee is satisfied that it promises to benefit the borrower, nor unless it has received the unanimous approval of those members of said committee who were present when it was considered, nor if any member of said committee shall disapprove thereof; but the applicant for a loan may appeal from the decision of the credit committee to the board of directors. 12. The supervisory committee shall inspect the securities, cash, and accounts of the corporation and supervise the acts of its board of directors, credit committee, and officers. At any time the supervisory committee by a unanimous vote may suspend the credit com- mittee, or any officer elected by the board of directors, and by a majority vote may call a meeting of the shareholders to consider any violation of this section or of the by-laws or any practice of the corporation which, in the opinion of the said committee, is unsafe or unauthorized. Within seven days after the suspension of the credit committee the supervisory committee shall cause notice to be given of a special meeting of the members to take such action relative to such suspension as may seem necessary. The supervisory committee shall fill vacancies in their own number until the next annual meeting. 13. The capital of the corporation shall be unlimited in amount. Shares of capital stock may be subscribed for and paid in such manner as the by-laws shall prescribe. 14. Shares may be issued and deposits received in the name of a minor, and such shares and deposits may, in the discretion of the directors be withdrawn by such minor or by his parent or guardian, and in either case payments made on such withdrawals shall be valid. If shares are held or deposits made in trust the name and residence of the beneficiary shall be disclosed and the account shall be kept in the name of such holder as trustee for such person. If no other notice of the existence and terms of such trust has been given in writing to the corporation, such shares or deposits may, upon the death of the trustee, be withdrawn by the person for whom the amount of such shares was paid in or for whom such deposit was made, or by his legal representative. 15 The capital deposits, and surplus funds of the corporation shall be either lent to the members for such purposes and upon such security and terms as the credit committee shall approve, or deposited to the credit of the corporation in savings banks or trust companies incorporated under the laws of this State, or in national banks located therein. 16. A borrower may repay the whole or any part of his loan on any day on which the office of the corporation is open for the trans- action of business. For failure to pay the interest or any instalment required by the terms of the loan, the bbrrower may be fined if the by-laws so prescribe. 17 No member of the board of directors or of the credit or supervisory committee shall receive any compensation for his services as a member of said board or committees, nor shall any member of the credit or supervisory committee, either directly or indirectly, borrow from or become surety for, any loan or advance made by the corporation. But the officers elected by the board of directors may receive such compensation as said board shall authorize. 18 The board of directors may expel from the corporation any member who has not carried out his engagements with the corporation, or has been convicted of a criminal offense, or neglects or refuses to comply with the provisions of this section or of the by-laws, or whose private life is a source of scandal, or who habitually neglects to pay his debts, or shall become insolvent or bankrupt, or shaU have de- ceived the corporation with regard to the use of the borrowed money; but no member shall be so expelled until he has been informed in writing of the charges against him, and an opportunity has been given to him, after reasonable notice, to be heard thereon. 19 The amounts paid in on shares or deposited by members who have withdrawn or have been expelled shall be paid to them, but in the order of withdrawal or expulsion and only as funds therefor become available and after deducting any amounts due by said mem- ber to the corporation; but such expulsion shall not operate to reUeve the member from any remaining Uability to the corporation. 88 AGKICULTUBAL COOPBBATION IN EXJKOPE. 20. Immediately before a meeting of the directors called to recommend the declaration of a dividend the supervisory committee shall make a thorough audit of the receipts, disbursements, income, assets, and liabiKties of the corporation for the fiscal year, and shall make a full report thereon to the directors. Said report shall be read at the annual meeting and shall be filed and preserved with the records of the corporation. 21. At the annual meeting a dividend may be declared from income which has been actually collected during the fiscal year next preceding, or during the months which have elapsed since the corporation began business, and which remains after the deduction of all expenses, losses, interest on deposits, and the amount required to be set apart as a guaranty fund. Such dividend shall be paid on all fully paid shares outstanding at the close of the fiscal year, but shares which become fully paid during the year shall be entitled only to a proportional part of said dividend, calculated from the first day of the month following such payment in full. Dividends due to a mem- ber shall be paid to him in cash or credited to the account of the partly paid shares for which he has subscribed. 22. Immediately before the payment of each dividend there shall be set apart as a guaranty fund twenty per cent of the net income which has accumulated during the fiscal year. Said fund and the investments thereof shall belong to the corporation and shall be held to meet contingencies or losses in its business. All entrance fees shall be added at once to the guaranty fund. But upon recommenda- tion of the board of directors the members at an annual meeting may increase, and whenever said fund equals or exceeds the amount of capital stock actually paid in, may decrease, the proportion of profits which is required by this subsection to be set apart as a guaranty fund. 23. At any meeting specially called to consider the subject, the members, upon the unanimous recommendation of the board of direc- tors, may vote to dissolve the corporation, provided at least two-thirds of the members are present at such meeting, and provided not more than ten members, either in person or by written notice, object thereto. A committee of three shall thereupon be elected to liquidate the assets of the corporation, and each shalre of the capital stock, according to the amount paid in thereon, shall be entitled to its propor- tion of the proceeds after all deposits and debts of the corporation have been paid. 24. Section 2024r-78m of the statutes shall not apply to cooperative credit associations. 25. The capital stock of cooperative credit associations shall be exempt from taxation. Section 2. This act shall take effect and be in force from and after its passage and publication. PROPOSED P.EVISION.— CHAPTER 582, LAWS OF NEW YORK. Article II. Credit Unions. Sec. 330. Incorporation and by-laws. 331. Amendment to by-laws. 332. Restriction of term "credit union." 333. Powers. 334. Membership; prohibition against payments for members. 335. Reports; examination; supervision. 336. Fiscal year and meetings; regulations as to voting. 337. Elections. 338. Directors and officers; compensation. 339. Credit committee. 340. Supervisory committee; audit and report. 341. Capital; entrance fee; transfer fee. 342. Shares and deposits of minors and in trust. Sec. 343. Fines and penalties. 344. Deposits. 345. Power to borrow. 346. Investment of funds. 347. Loans, 348. Interest rate. 349. Reserve fund. 350. Dividends. 351. Expulsion and withdrawal; payments to expelled and with- drawing members. 352. Voluntary dissoltition. 353. Change of place of business. 354. Exemption from execution; from taxation; from usury. 330. Incorporation and by-laws. Seven or more persons, employed or residing in the State of New York, three of whom must be citizens of the United States of America, and at least one of whom must be a citizen of the State of New York, may become a credit union by making, signing, and acknowledging a certificate which shall contain: First. The name of the proposed credit union, which shall include the words "credit union." Second. A statement that incorporation is desired under this article. Third. The conditions, whether of residence, of occupation, or otherwise, which shall qualify persons for membership. Fourth. The par value of the shares, which shall not exceed ?25. Fifth. The city, village, or town in which its principal business oflace is to be located. If it is to be located in an incorporated city, the street address of the city shall be given. If the condition of its membership is employment by a certain individual, copartnership or corporation, a statement that its office shall be with the said named individual, copartnership, or corporation may be substituted for said street address. Sixth. The number of its directors, not less than five, all of whom must be members of and shareholders in said corporation. Seventh. The names and post-office addresses of directors for the first year. Eighth. The names and post-office addresses of the subscribers to the certificate, and a statement of the number of shares of stock which each agrees to take in the corporation. At the time of the making of said certificate the incorporators shall adopt by-laws which shall provide: First. The name of the corporation. Second. The purposes for which it is formed. Third. Qualifications for membership. Fourth. The date of the annual meeting; the manner in which members shall be notified of meetings; the manner of conducting said meetings; the number of members which shall constitute a quorum at said meetings, and regulations as to voting. Fifth. The number of members of the board of directors; powers and duties; the compensation and duties of officers elected by the board of directors. Sixth. The number of members of the credit committee; powers and duties. Seventh. The number of members of the supervisory committee; powers and duties. KUKAL CEEDIT UNIONS. 89 Eighth. The par value of the shares of capital stock. Ninth. The conditions upon which shares may be issued, paid in, transferred, and withdrawn. Tenth. The fines, if any, which shall be charged for failure to meet obligations to the corporation punctually. Eleventh. The conditions upon which deposits may be received and withdrawn. Whether the proposed corporation shall, in addition, have power to borrow funds. Twelfth. The manner in which the funds of the corporation shall be invested. Thirteenth. The conditions upon which loans may be made and repaid. Fourteenth. The maximum rate of interest that may be charged upon loans. Fifteenth. The method of receipting for money paid on account of shares, deposits, or loans. Sixteenth. The manner in which the reserve fund shall be accumulated. Seventeenth. The manner in which dividends shall be determined and paid to members. Eighteenth. The manner in which a voluntary dissolution of the corporation shall be effected, and the order of preference of the liabilities of the corporation. Said by-laws acknowledged to have been adopted by all of the said incorporators, together with the certificate of incorporation, shall be filed in the office of the superintendent of banks, who shall approve said certificate of incorporation if he is satisfied that it is in con- formity with this article and shall approve said by-laws if he is satisfied as to the character of the incorporators and that said by-laws are reasonable and will tend to give assurance that the affairs of said prospective credit union will be administered in accordance with this article. Thereupon, the superintendent of banks shall issue to the said corporation a certificate of approval, annexed to a duplicate of said certificate of incorporation and of said by-laws, which certificate of approval, together with said attached duplicate certificate of incorporation and duplicate by-laws, acknowledged by all of the incorporators to have been adopted by them, shall be filed in the office of the county clerk of the county in which the office of such credit union is situated, and upon such filing the said incorporators shall become and be a monied corporation, but not a stock corporation. The county clerk shall charge the same filing fee per folio for filing said certificate of approval, certificate of incorporation and by-laws, as he is now allowed to charge per folio for filing a certificate of incorpora- tion of a corporation organized under the business corporations law of the State of New York. 331. Amendment to by-laws. The by-laws adopted by the incorporators and approved by the superintendent of banks shall be the by-laws of the corporation, and no amendment to said by-laws shall become operative until such amendment shall have been approved by said superintendent of banks, and a copy thereof certified by the superintendent of banks, with a certificate of his approval, shall be be filed in the office of the county clerk, where the office of the said credit union is located. Such approval may be given or withheld by the superintendent of banks at his discretion. The county clerk shall receive the same fee per folio for filing as provided in section three hundred and thirty hereof. 332. Restriction of teem "credit union." The use by any person, copartnership, association, or corporation, except corporations formed under the provisions of this article, of any name or title which contains the two words "credit" and "union," shall be a misdemeanor. 333. Powers. A credit union may receive the savings of its members in payment for shares or on deposit; may loan to its members at reasonable rates not exceeding one per centum a month inclusive of all charges whatsoever, or may invest as hereinafter provided the funds so accumulated, and may imdertake such other activities relating to the purposes of the corporation as its by-laws may authorize. 334. Membership; prohibition against payments for members. The membership of the corporation shall consist of those persons who have been duly elected to membership and who have subscribed for one or more shares and have paid for the same in whole or in part, together with the entrance fee as provided in the by-laws, and have complied with such other requirements as the by-laws may contain. No credit union shall ever pay any commission or offer compensation for the securing of members or on the sale of shares. 335. Reports; examinations; supervision. — Corporations organized under the provisions of this article shall be subject to the supervision of the superintendent of banks and to sections twenty-five, twenty-six, and twenty-seven of the banking law. Every corporation organized under this act shall, in January of each year, make a report for the previous calendar year to the super- intendent of banks, giving such information as he shall require, which report shall be verified by the oath of the president, treasurer, and secretary, as well as by the oath of a majority of the members of the supervisory committee, and it shall make such other and further reports under the like oath as the said superintendent shall demand at any time. Any such corporation which neglects to make an annual report within the month of January or any of the other reports required by the superintendent of banks at the time fixed by the superintendent shall forfeit to the State five dollars for each day which such neglect continues. The superintendent of banks shall cause every such corporation to be examined whenever he deems it necessary; and the examiners appointed by him shall be given free access to all books, papers, securities, and other sources of information in respect to said corpora- tion and for the purpose of such examination the superintendent of banks shall have power and authority to subpoena and to examine peiaonally or by one of his deputies or examiners, witnesses on oath and documents, whether such witnesses are members of the corpo- ration or not and whether said documents are documents of the corporation or not; and for such examination a reasonable charge shall be imposed by the superintendent and paid by the said corporation so examined within sixty days after the notice of the charge shall have been mailed to the corporation at the last address given by it. Expenses incurred and services performed on account of any of such corporations shall be charged to and paid by the corporation for whom they were incurred or performed. All moneys received by the superintendent in payment of such charges shall be deposited and paid by him into the treasury of the State. All debts of such corporation due to the superintendent of banks or to the State of New York shall be a preferred claim against the assets of any such corporation. In the event that any such corporation shall neglect to make its annual report as hereinabove provided for more than fifteen days or in the event that any such corporation shall fail to pay such charges as herein required, including the charges for examination and fines for delay in filin" reports, the superintendent of banks shall give notice to such corporation of his intention to revoke the certificate of approval of said corporation for said neglect or failure, and if such neglect or failure continues for fifteen days after such notice, then the superintendent of banks shall at his discretion revoke said certificate and he or through one of his deputies shall take possession of the property and business of such coi^oration and retain such possession until such time as he may permit it to resume business or its affairs be finally liquidated as provided in section nineteen of the banking law. 90 AGEICULTUEAL COOPERATION IN EUEOPE. In the event it shall appeaj to the superintendent of banks by any examination or report that any such corporation is insolveol. or that it has violated any of the provisions of this article or any other law of the State, he may, by an order made over his hand and official seal after a hearing or an opportunity for a hearing given the said accused corporation, direct any such corporation to discontinue the illegal methods or practices mentioned in said order or to make good any deficit. A deficit, in the discretion of the superintendent of banks, may be made good by an assessment on the members in proportion to the shares held by each member. If any such corporation shall not comply with such order within sixty days after the same shall have been mailed to the last address filed by such corporation in the banking department, the superintendent shall thereupon take possession of the property and business of such corporation and retain such possession until such time as he may permit it to resume business or its affairs be finally liquidated, as provided in section nineteen of the banking law. 336. Fiscal yeah and meetings; hbgulations as to votinq. The fiscal year of every such corporation shall end at the close of business on the thirty-first day of December. The annual meeting of the corporation shall be held at such time and place as the by-laws prescribe. Special meetings may be held by order of the directors or of the supervisory committee, and shall be held upon request in writing of ten members. Notice of all meetings of the corporation shall be given in the manner prescribed in the by-laws. At all meet- ings of members or shareholders a member shall have one vote, and but one vote, irrespective of the number of shares that may be held by him, and no shareholder may vote by proxy. At any meeting the members may decide upon any question of interest to the corpora- tion, and overrule the board of directors, and by a three-fourths vote of those present, provided the notice of the meeting shall have speci- fied the question to be considered, may vote to amend the by-laws. 337. Elections. At the annual meeting the members shall elect a board of directors of not less than five members, a credit committee and a supervisory committee of not less than three members each. However, in credit unions whose business office is located in places other than incorporated cities, the board of directors as such may also be the credit committee. Except as hereinafter specified, no member of said board shall be a member of either one of said committees, nor shall one person be a member of more than one of said committees, and all members of committees and all directors, as well as all officers whom they may elect, shall be sworn, and shall hold their several offices for such term as may be determined by the by-laws. The oath required in this section of each director, officer, and member of committee shall be the oath of the individual taking the same that he will, so far as the duty devolves on him, diligently and honestly administer the affairs of such corporation and will not knowingly violate or willingly permit to be violated any of the provisions of law applicable to such corporation, and that he is the owner in good faith and in his own right on the books of the said corporation of at least one share therein. Such oath shall be subscribed by the individual making it and certified by the officer before whom it is taken and shall immediately be transmitted to the superintendent of banks and filed and preserved in his office. 338. Directors and officers; compensation. At their first meeting and at each first meeting in the fiscal year, the board of direc- tors shall elect from their number a president, vice president, a secretary, and a treasurer who shall be the executive officers of the cor- poration. The offices of secretary and treasurer may, if the by-laws so provide, he held by one person. The board of directors shall have the general management of the affairs, funds: and records of the corporation, and shall meet as often as may be necessary. Unless the by-laws shall specifically reserve all or any of these duties to the members it shall be the special duty of the directors: (a) To act upon all applications for membership and the expulsion of members. (b) To fix the amount of the surety bond which shall be required of each officer having the custody of funds. (c) To determine from time to time the rate of interest which shall be allowed on deposits and charged on loans. (d) To fix the maximum number of shares which may be held by and the maximum amount which may be lent to any one member; to declare dividends; and to recommend amendments to the by-laws. (e) To fill vacancies in the board of directors or in the credit committees until the election and qualification of successors. (f) To have charge of the investment of the funds of the corporation, except loans to members, and to perform such other duties as the members may from time to time authorize. No member of the board of directors or of the credit or supervisory committees shall receive any compensation for his services as a member of said board or committees. But the officers elected by the board of directors may receive such compensation as the members may authorize. 339. Credit committee. The credit committee shall approve every loan or advance made by the corporation to members. Every application for a loan shall be made in writing and shall state the purpose for which the loan is desired and the security offered. No loan shall be made unless it has received the unanimous approval of those members of said committee who were present when it was consid- ered, who shall constitute at least a majority of said committee, nor if any member of said committee shall disapprove thereof; but the applicant for a loan may appeal from the decision of the credit committee to the board of directors. The credit committee shall meet as often as may be required after due notice has been given to each member. 340. Supervisory committee; audit and report. The supervisory committee shall inspect the securities, cash, and accounts of the corporation and supervise the acts of its board of directors, credit committee, and officers. At any time the supervisory committee, by a unanimous vote, may suspend the credit committee or any member of the board of directors or any officer elected by the board, and by a majority vote may call a meeting of the shareholders to consider any violation of this act or of the by-laws, or any practice of the corpora- tion which, in the opinion of said committee, is unsafe and unauthorized. Within seven days after the suspension of the credit committee the supervisory committee shall cause notice to be given of a special meeting of the members to take such action relative to such suspen- sion as may seem necessary. The supervisory committee shall fill vacancies in their own number until the next regular meeting of the members. At the close of each fiscal year the supervisory committee shall make a thorough audit of the receipts, disbursements, income, assets, and liabilities of the corporation for the said fiscal year, and shall make a full report thereon to the directors. Said report shall be read at the annual meeting of the members and shall be filed and preserved with the records of the corporation. 341. Capital; Entrance Fee; Transfer Fee. The capital of a credit union shall consist of the payments that have been made to it by the several members thereof on the shares. Shares may be subscribed for and paid in such manner as the by-laws shall prescribe. The credit union shall have a lien on the shares of any member and upon any dividends payable thereon for and to the extent of any loan made to him and of any dues or fines payable by him. The credit union may, upon the resignation or expulsion of a member, cancel the shares of such member and apply the withdrawal value of such shares toward the liquidation of the said member's indebtedness. A credit union may, if the by-laws so provide, charge an entrance fee for each share subscribed, to be paid by the shareholder upon his election to membership. BUBAL CEEDIT UNIONS. 91 Fully paid shares of a credit union may be transferred to any person eligible for membership, upon such terms as the by-laws may provide, and the payment of a transfer fee shall not exceed 25 cents per share. 342. Shares and Deposits op Minors and in Trust. Shares may be issued and deposits received in the name of a mLuor, and such shares and deposits may, in the discretion of the directors, be withdrawn by such minor or his parent or guardian, and in either case payments made on such withdrawals shall be valid. If shares are held or deposits made in trust, the name and residence of the beneficiary shall be disclosed and the account shall be kept in the name of such holder as trustee for such person. Such shares or deposits may, upon the death of the trustee, be withdrawn by the person for whom the shares were held or for whom such deposits were made, or by his legal representatives. 343. Fines and Penalties. For failure by any member of a credit union to meet his payments on shares when due, such fines and other penalties may be imposed upon the dehnquent member as the by-laws provide. Such fines shall not exceed two per centum per month or a fraction thereof on amounts due, except that a minimum fine of 6 cents may be imposed. 344. Deposits. A credit union may receive on deposit the savings of its members in such amounts and upon such terms as the board of directors may determine and the by-laws shall provide. 345. Power to Borrow. If the by-laws so provide, a credit union shall have power to borrow money from any source in addition to receiving deposits from its own members, but the aggregate amount of such indebtedness at any one time shall not exceed forty per centum of the capital of a credit union: Provided, however, That a credit union having a capital of $5,000 or less may borrow to the extent of $2,000. 346. Investment op pcnds. The capital, deposits, undivided profits and reserve fund of the corporation may be invested in one of the following ways, and in such ways only: (a) They may be lent to the members of the corporation in accordance with section three hundred and forty-seven of this act. (b) They may be deposited to the credit of the corporation in savings banks, State banks, or trust companies, incorporated under the laws of the State of New York, or in national banks located therein. Funds of credit unions deposited in any savings bank. State bank, or trust company which may become insolvent, shall be preferred in the same way that funds of a "savings and loan association" so deposited are preferred under section two hundred and thirty-one of the banking law. (c) After a credit union shall have been in existence for three full fiscal years, so much of the reserve fund thereof as shall equal twenty per centum of the total liabilities of the credit union shall be deposited in savings banks incorporated under the laws of the State of New York, and shall not be invested in any other way. 347. Loans. A credit union may loan to its members for such purposes and upon such secxirity and terms as the by-laws shall pro- vide and the credit committee shall approve; but security must be taken for any loan in excess of $50. An endorsed note shall be deemed to be security within the meaning of this section. No member of the board of directors or of the credit committee or the supervisory committee shall either directly or indirectly borrow from or become surety for ary loan or advance made by the corporation, unless said loans shall have been approved at a regularly called meeting of the members of the corporation by a majority vote of those present at said meeting and the consideration of said loans was mentioned in the call for the meetii^. All officers and members of any committees in any way knowingly permitting or participating in making a loan of funds of a credit union to a nonmember thereof sha,ll be guilty of a misdemeanor. The credit union shall have the right to recover the amount of such illegal loan from the borrower or from any officers or members of committees who knowingly permitted or participated in the making thereof, or from all of them jointly. A borrower may repay the whole or any part of his loan on any day on which the office of the corporation is open for the transaction of business. 348. Interest rate. No corporation organized pursuant to this act shall directly or indirectly charge or receive any interest, dis- count or consideration, other than the entrance fee, greater than one per centum per month upon any loan made by it. Any corporation, any person, the several officers of any corporation, and the members of committees, who shall violate the foregoing prohibition shaU be guilty of a misdemeanor. The corporation shall also be subject to procedure by the superintendent of banks as pre- scribed in section three hundred and thirty-five hereof. 349. Reserve ptjnd. — ^AU entrance fees, transfer fees, and fines shall, after the payment of organization expenses, be known as reserve income, and shall be added to the reserve fund of the corporation. At the close of each fiscal year there shall be set apart to the reserve fund twenty-five per centum of the net income of the corporation which has accumulated during the year. But upon the recommendation of the Board of Directors the members at an annual meeting may increase and whenever said fund equals the amount of the capital may decrease, the proportion of profits which is required by this section to be set apart to the reserve fund. Nor shall the reserve fund in any case exceed the capital of the corporation plus fifty per centum of its other liabilities. The reserve fund shall belong to the corporation and shall be held to meet contingencies, and shall not be distributed to the members except upon the dissolution of the corporation. 350. Dividends. ^At the close of the fiscal year a credit union may declare a dividend from the income during said year and which remains after the deduction of expenses, losses, interest on deposits, and the amount required to be set apart to the reserve fund. Dividends shall be paid on all fully paid shares outstanding at the close of the fiscal year, but shares which become fully paid during the year shall be entitled to a proportional part of said dividend calculated from the first day of the month following such payment in full. 351 Expulsion and withdhawal; payments to expelled and withdrawing members. — ^The board of directors may expel from the corporation any member who has not carried out his engagement with the corporation, or has been convicted of a criminal offense, or neglects or refuses to comply with the provisions of this act or of the by-laws, or who habitually neglects to pay his debts, or shall become insolvent or bankrupt. The members at a regulariy called meeting may expel from the corporation any member whose private life is a source of scandal; no member shall be expelled until he has been informed in writing of the charges against him and an opportunity has been given him, after reasonable notice, to be heard thereon. A member may withdraw from a credit union by filing a written notice of his intention to withdraw. The amounts paid in on shares or deposits by an expelled or withdrawing member, with any dividends credited to his shares and any interest accrued on his deposits to the date of expulsion or withdrawal, shall be paid to such member, but in the order of expulsion or withdrawal and only as funds therefor become available, after deducting any amounts due to the corporation by said member. Said mem- 92 AGEICULTUEAL COOPERATION IN EUROPE. ber shall have no other or further right in said credit union or to any of its benefits, but such expulsion or withdrawal shall not operate to relieve said member from any remaining liability to the corporation. 352. VoLtTNTARY DISSOLUTION. At any meeting specially called to consider the subject, four-fifths of the entire membership of the corporation may vote to dissolve the corporation and upon such vote shall signify their consent to such dissolution in writing. Such corporation shall then file in the office of the superintendent of banis such consent, attested by its secretary or treasurer and its presi- dent or vice president, with a statement of the names and residences of the existing board of directors of said corporation and the names and residences of its officers duly verified. The superintendent of banks, upon receipt of satisfactory proof of the solvency of the corpo- ration, shall issue to such corporation, in duplicate, a certificate to the effect that such consent and statement have been filed and that it appears therefrom that such corporation has complied with this section. Such duplicate certificate shall be filed by such corporation in the office of the clerk of the county in which said corporation has its place of business, and thereupon such corporation shall be dissolved and shall cease to carry on business except for the purpose of adjusting and winding up its affairs. The said corporation, by its board of directors, shall then proceed to adjust and wind up its business and affairs, with power to carry out its contracts, collect its accounts receivable, and to liquidate its assets and apply the same in discharge of debts and obligations of such corporation, and after paying and adequately providing for the payment of such debts and obligations, each share according to the amount paid in thereon shall be enti- tled to its proportion of the balance of the assets. Said corporation shall continue in existence for the purpose of paying, satisfying, and discharging any existing debts or obligations, collecting and distributing its assets, and doing all other acts required in order to adjust and wind up its business and affairs, and may sue and be sued for the purpose of enforcing such debts and obligations until its business and affairs are fully adjusted and wound up. 353. Change of place op business. A credit union may change its place of businss on the written approval of the superintendent of banks, which written approval shall be filed in the office of said superintendent of banks and a duplicate of said approval in the office of the clerk of the county where its office was located and a second duplicate in the office of the county clerk of the county in which the new office is to be located. Such approval of the superintendent of banks may be given or withheld at his discretion. 354. Exemption pkom execution; from taxation; prom usurt. Shares held by members and all the accumulations thereon shall be exempt from sale on execution and proceedings supplementary thereto to the amount of $600; and the shareholders of any such cor- poration, unless the by-laws so provide, shall not be individually liable for the payment of its debts. The corporation shall be deemed an institution for savings, and together with all accumulations therein shall not be taxable under any law which shall exempt savings banks or institutions for savings from taxation; nor shall any law passed hereafter taxing corporations in any form, or the shares thereof, or the accumulations therein, be deemed to include corporations doing business in pursuance of the provisions of this article, unless they are specifically named in such law. The shares of credit unions being hereby regarded as a system for saving, shall not be subject to the stock-transfer tax either when issued by the corporation or transferred from one member to another. No payments of any charges authorized by the by-laws in accordance with this article shall be deemed usurious. THE STATUTE RELATING TO CREDIT UNIONS— MASSACHUSETTS. [Chapter 409 of the Acts of 1909.] AN ACT To authorize the incorporation of credit unions. Section 1. In this act the words "credit union" shall mean a cooperative association formed for the purpose of promoting thrift among its members. Sec. 2. A credit union may receive the savings of its members in payment for shares or on deposit; may lend to its members at rea- sonable rates or invest as hereinafter provided, the funds so accumulated; and may undertake such other activities relating to the pm^jose of the association, as its by-laws may authorize. Sec. 3. Seven or more citizens of this Commonwealth who have associated themselves by an agreement in writing for the purpose of forming a credit union may, with the consent of the board of bank incorporation, become a corporation upon complying with all the pro- ■\dsions of section three of chapter one hundred and fourteen of the Revised Laws, except those which relate to the limit of capital to be accumulated. The board of bank incorporation is hereby authorized to grant such consent when it is satisfied that the proposed field of operation is favorable to the success of such credit union, and that the standing of the proposed members is such as to give assurance that its affairs will be administered in accordance with the spirit of this act. Sec. 4. No person, partnership, association, or corporation, except corporations formed under the provisions of this act, shall hereafter transact business under any name or title which contains the two words "credit" and "union. " The provisions of section seventeen of chapter five hundred and ninety of the acts of the year nineteen hundred and eight shall apply to, and as prescribed therein proceedings shall be brought against any person, partnership, association, or corporation which violates the provisions of this section. Sec. 5. The provisions of sections one to sixteen, both inclusive, of said chapter five hundred and ninety shall apply to such corpora- tion and its directors, committees, and officers, and they shall be subject to the supervision of the bank commissioner in the manner and to the extent set forth in said sections. Sec. 6. The by-laws shall prescribe — (a) The name of the corporation. (b) The purposes for which it is formed. (c) The conditions of residence or occupation which quaUfy persons for membership. (d) The par value of the shares of capital stock. (e) The conditions on which shares may be paid in, transferred, and withdrawn. (f) The conditions on which deposits may be received and withdrawn. (g) The method of receipting for money paid on account of shares or deposited, (h) The number of directors and number of members of the credit committee, (i) The duties of the several officers. (j) The fines, if any, which shall be charged for failure to meet obligations to the corporation punctually. (k) The date of the annual meeting of members. (1) The manner in which members shall be notified of meetings. (m) The number of members which shall constitute a quorum at meetings. (n) Such other regulations as may seem necessary. RUEAL CREDIT UNIONS. 93 Sec. 7. No such corporation shall receive deposits or payments on account of shares, or make any loans, until its by-laws have beau approved in writing by the bank commissioner, nor shall any amendments to its by-laws become operative until they have so been approved. Sec. 8. The fiscal year of every such corporation shall end at the close of business on the thirty-first day of October. The annual meeting of the corporation shall be held at such time and place as the by-laws prescribe. Special meetings may be held by order of the directors or the supervisory committee, and the clerk shall give notice of special meetings upon request in writing of ten members. Notice of all meetings of the corporation shall be given in the manner prescribed by the by-laws. No person shall be entitled to vote who has not been a member for more than three months, but this restriction shall not apply during the first twelve months of the existence of the cor- poration, nor shall any member vote by proxy, or have more than one vote. At the annual meeting the members shall, upon recommen- dation of the board of directors, declare dividends and fix the amount of the entrance fee. At any meeting the members may decide upon any question of interest to the corporation; and upon appeal of two members may reverse decisions of the credit committee or board of directors; and, by a three-fourths vote of those present, provided the notice of the meeting shall have specified the question to be con- sidered, may amend the by-laws. Sec. 9. At the annual meeting the members shall elect a board of directors of not less than five members, a credit committee of not less than three members, and a supervisory committee of three members. No member of said board shall be a member of either one of said committees nor shall one person be a member of more than one of said committees, and all members thereof, as well as all officers whom they may elect, shall be sworn and shall hold their several offices until others are elected and qualified in their stead; and a record of every such qualification shall be filed and preserved with the records of the corporation. Sec. 10. At their first meeting.the board of directors shall elect from their number a president, a vice president, a clerk, and a treasurer, who shall be the executive officers of the corporation. The board of directors shall have the general management of the affairs, funds, and records of the corporation and shall meet as often as may be necessary. IJ; shall be their special duty — (a) To act upon all applications for membership. (b) To act upon the expulsion of members. (c) To 6x the amount of surety bond which shall be required of each officer having custody of the funds. (d) To determine the rate of interest which shall be allowed on deposits. (e) To fill vacancies in the board of directors or in the credit committee of the corporation until the election and qualification of officers to fill said vacancies. (f) To make recommendations to meetings of the meinbers relative to the amount of entrance fee; the maximum number of shares which may be held by and the maximum amount which may be lent to any one member; the dividend to be declared; amendments to the by-laws, and any other matters which in their opinon the members should decide. Sec. 11. The credit committee shall approve every loan or advance made by the corporation. Every application for a loan shall be made in writing and shall state the purpose for which the loan is desired and the security offered. No loan shall be made unless the credit committee is satisfied that it promises to benefit the borrower, nor unless it has received the unanimous approval of those members of said committee who were present when it was considered, nor if any member of said committee shall disapprove thereof; but the applicant for a loan may appeal from the decision of the credit committee to the board of directors. Sec. 12. The supervisory committee shall inspect the securities, cash, and accounts of the corporation and supervise the acts of its board of directors, credit committee, and officers. At any time the supervisory committee, by a unanimous vote, may suspend the credit committee or any officer elected by the board of directors, and by a majority vote may call a meeting of the shareholders to consider any violatiou'of this act or of the by-laws, or any practice of the corporation which, in the opinion of said committee, is unsafe or unauthorized. Within seven days after the suspension of the credit committee the supervisory committee shall cause notice to be given of a special meeting of the members to take such action relative to such suspension as may seem necessary. The supervisory committee shall fill vacancies in their own number until the next annual meeting. Sec. 13. The capital of the corporation shall be unlimited in amount. Shares of capital stock may be subscribed for and paid in in such manner as the by-laws shall prescribe. Sec. 14. Shares may be issued and deposits received in the name of a minor, and such shares and deposits may, in the discretion of the directors be withdrawn by such minor or by his parent or guardian, and in either case payments made on such withdrawals shall be valid. If shares are held or deposits made in trust the name and residence of the beneficiary shall be disclosed and the account shall be kept in the name of such holder as trustee for such person. If no other notice of the existence and terms of such trust has been given in writing to the corporation, such shares or deposits may, upon the death of the trustee, be withdrawn by the person for whom the amoimt of such shares was paid in or for whom such deposit was made, or by his legal representative. Sec. 15. The capital, deposits, and surplus funds of the corporation shall be either lent to the members for such purposes and upon such security and terms as the credit committee shall approve, or deposited to the credit of the corporation in savings banks or trust com- panies incorporated under the laws of this Commonwealth or in national banks located therein. Sec. 16. A borrower may repay the whole or any part of his loan on any day on which the office of the corporation is open for the transaction of business. For failure to pay the interest or any installment required by the terms of the loan, the borrower may be fined if the by-laws so prescribe. Sec 17. No member of the board of directors or of the credit or supervisory committee shall receive any compensation for his services as a member of said board or committees, nor shall any member of the credit or supervisory committee, either directly or indirectly borrow from or become surety for any loan or advance made by the corporation. But the officers elected by the board of directors may receive such compensation as said board shall authorize. Sec 18. The board of directors may expel from the corporation any member who has not carried out his engagements with the cor- poration, or has been convicted of a criminal offense, or neglects or refuses to comply with the provisions of this act or of the by-laws, or whose private life is a source of scandal, or who habitually neglects to pays his debts, or shall become insolvent or bankrupt, or shall have deceived the corporation with regard to the use of borrowed money; but no member shall so be expelled until he has been informed in writing of the charges against him, and an opportunity has been given to him, after reasonable notice, to be heard thereon. Sec 19. The amounts paid in on shares or deposited by members who have withdrawn or have been expelled shall be paid to them, but in the order of withdrawal or expulsion and only as funds therefor become available after deducting any amounts due by said mem- bers to the corporation; but such expulsion shall not operate to relieve a member from any remaining liability to the corporation. 94 AGEIOULTUEAL OOOPEEATION IN EUEOPE. Sec. 20. Im m ediately before a meeting of the directors called to recommend the declaration of a dividend, the supervisory committee shall make a thorough audit of the receipts, disbursements, income, assets, and liabilities of the corporation for the fiscal year, and shall make a full report thereon to the directors. Said report shall be read at the annual meeting and shall be filed and preserved with the records of the corporation. Sec. 21. At the annual meeting a dividend may be declared from income which has been actually collected during the fiscal year next preceding, or during the months which have elapsed since the corporation began business, and which remains after the deduction of all expenses, losses, interest on deposits, and the amount required to be set apart as a guaranty fund. Such dividend shall be paid on all fully paid shares outstanding at the close of the fiscal year, but shares which become fully paid during the year shall be entitled only to a proportional part of said dividend, calculated from the first day of the month following such payment in full. Dividends due to a member shall be paid to him in cash or credited to the account of partly paid shares for which he has subscribed. Sec. 22. Immediately before the payment of each dividend there shall be set apart as a guaranty fund twenty per cent of the net income which has accumulated during the fiscal year. Said fund and the investments thereof shall belong to the corporation and shall be held to meet contingencies or losses in ita business. All entrance fees shall be added at once to the guaranty fund. But upon recom- mendation of the board of directors the members at an annual meeting may increase, and whenever said fund equals or exceeds the amount of capital stock actually paid in, may decrease, the proportion of profits which is required by this section to be set apart as a guaranty fund. Sec, 23. At any meeting specially called to consider the subject, the members, upon the unanimous recommendation of the board of directors, may vote to dissolve the corporation, provided at least two-thirds of the members are present at such meeting, and provided not more than ten members, either in person or by written notice, object thereto. A committee of three shall thereupon be elected to liquidate the assets of the corporation; and each share of the capital stock, according to the amount paid in thereon, shall be entitled to its proportion of the proceeds after all deposits and debts of the corporation have been paid. Sec. 24. Within twenty days after the last business day of October in each year, every such corporation shall make to the bank com- missioner a report in such form as he may prescribe, signed by the president, treasurer, and a majority of the supervisory committee, who shall certify and make oath that the report is correct according to their best knowledge and belief. Any such corporation which neglects to make the said report within the time herein prescribed shall forfeit to the Commonwealth $5 for each day during which such neglect continues. Sec. 25. The provisions of section twenty-three of chapter fourteen of the Revised Laws and the provisions of chapter six hundred and five of the acts of the year nineteen hundred and eight shall apply, aiid the provisions of section one of chapter one hundred and fourteen of the Revised Laws shall not apply to credit unions incorporated under the provisions of this act. THIRD ANNUAL REPORT OF THE JEWISH FARMERS' COOPERATIVE CREDIT UNIONS. (Organized by the Jewish Agricultural and Industrial Aid Society, 174 Second Avenue, New York City.) The Jewish farmers' cooperative credit unions — the first and so far the only cooperative agricultural credit banks on American soil — were created by the Jewish Agricultural and Industrial Aid Society. LAND CBEDir. This society is an offshoot of the Baron de Hirsch Foundation, which came into existence in 1890. From its very inception the Baron de Hirsch fund, among its other activities, made loans to Jewish farmers. Ten years later the Jewish Agricultural and Industrial Aid Society was incorporated, specially to look after the agricultural end of the Baron de Hirsch fund work. All agricultural matters were then turned over to the newly organized society. It can therefore be said that the Jewish Agriciiltural and Industrial Aid Society, together with the loans made by its parent organization, has been engaged in the land credit business close to 24 years. The land credit system of that society is, accordingly, the oldest extant in the United States. With the exception of the manner of raising its funds the land credit system of the Jewish Agricultural Society is not unlike that of the Credit Foncier and other corporate land credit institutions of the type prevailing on the European Continent. Loans are secured by real estate mortgage and are repayable by amortization in moderate annual installments. The interest rate is 4 per cent. Although the funds of the Agricultural Aid Society are limited to a stated annual income and its operations are confined to a special class, its work shows the possibilities of land credit and its adaptability to American conditions. In the 14 years the society has been in existence it has granted 2,800 loans, aggregating about $1,800,000. These loans were made to 2,500 Jewish farmres in 31 States and in Canada. The operations of that society thus embrace a much larger territory than those of all the land credit banks in Continental Emrope taken together. COOPERATIVE CREDIT. The cooperative credit system of that society is a direct outgrowth of its land credit system. The need of short-time personal credit by the American farmer was long recognized by those at the head of the society. But with a clientele scattered over practically the entire country direct extension of personal credit was not deemed practicable. Accordingly, as early as 1907 serious consideration was given to the question of relieving the situation by the adoption of one of the European cooperative systems. But progress was not very rapid. The wealth of literature, which is now at everybody's command, was wanting then and it was necessary to go to original sources for infor- mation. Legislation on the subject, too, was nonexistent, and it was a question whether such associations could be legally organized. In 1909 the society was prepared to attack the problem definitely and it was then and there decided to organize these credit unions as unin- corporated or voluntary associations. Meanwhile the spirit of cooperation was growing among the Jewish farmers and the groundwork was being laid for these credit unions through the organization of many local Jewish farmers' associations and their federation into the Federation of Jewish Farmers of America. PIONEER credit UNIONS. The first credit union commenced business in May, 1911, 3 were organized that year, 5 in 1912, and 9 in 1913, making a total of 17 in operation. Eight of these are located in New York, 5 in New Jersey, and 4 in Connecticut. Each of them raised $500 or more from the sale of shares to members and the aid society loaned them each $1,000 with which to begin operations. The form of organization of these EyBAL CEEDIT UNIONS. 95 credit unions is similar to that of the KaifiEeisen banks— after which most cooperative credit institutions the world over are patterned— in 80 far as that system could be adapted to American conditions and to the peculiar needs of the situation. The following table contains a report of the operations and financial statement of these credit unions for September 30, 1913. As will be observed, they have an aggregate membership of 517 and a capital of $9,165. They have been in operation for periods averaging a little over 13 months, during which time they loaned out $73,624.66, about eight times their capital. Their net profits amount to $1,317.93, that is, at the rate of 13} per cent per annum on their capital. Table showing the operations oj the Jewish Farmers' Cooperative Credit Unions since their organization. [Compiled by the Jewisli Agricultural and Industrial Aid Society.] Name. Com- menced business. Num- ber of mem- bers. Num- ber of shares out- stand- ing. Num- ber of loans granted. Amount of loans granted. Num- ber of loans repaid. Amount of prin- cipal collected. Amount of loans outstand- ing. Interest collected. Ex- Total Total liabilities. Assets over liar bilities. Fairfield, Conn Ellington, Conn Bensselaer, N. Y Briggs St., N. Y Lebanon, Conn Colchester, Conn FaUsburg-N. Y Hurleyvffle, N. Y Hightstown. N. J Parksvllle, N. Y Woodbine, N. J , Cannel, N. J Flemington, N. J Perrinevllle, N. J Ellenville, N. Y Maplewood, N. Y BtevensTille and Femdale, N. Y. Total May, 1911 May, 1911 May, 1911 Mar., 1912 Mar., 1912 Apr., 1912 Apr., 1912 May, 1912 Jan., 1913 Jan., 1913 Feb., 1913 Feb., 1913 Mar., 1913 Apr., 1913 Apr., 1913 Apr., 1913 Apr., 1913 108 112 84 117 117 101 113 119 100 120 100 144 100 97 100 102 108 92 109 63 78 129 34 31 42 60 67 27 42 21 28 16,930.00 7,656.00 6,613.00 6,036.00 5,624.00 4,070.00 6,384.00 8,034.82 2,130.00 2,750.00 2,930.00 3,630.00 4,097.94 1,836.00 2,475.00 1,925.00 1,905.00 87 72 86 67 64 38 61 102 9 17 23 33 43 13 20 S5, 630. 00 5,905.00 6,017.00 4,653.50 4,021.86 2,636.00 4,204.00 6,326.79 830.00 1,600.00 ,1,690.00 2,080.00 2,782.97 1,040.00 1,210.00 676.00 716.00 $1,300.00 1,650.00 1,496.00 1,481.50 1,603.05 1,635.00 1,180.00 1,708.03 1,300.00 1,160.00 1,240.00 1,460.00 1,314.97 795.00 1,266.00 1,250.00 1,190.00 1189. 64 231.64 208.32 160.63 191. 13 140.48 140.10 162.46 63.45 70.00 63.12 65.35 62.43 37.70 49.83 49.75 44.43 $138. 37 91.20 106. 12 41.30 57.93 36.88 69.99 33.93 15.41 34.69 10.92 16.38 23.03 24.47 24.47 6.97 6.97 $1,601.77 1,709.98 1,544.35 1,704.33 1,756.78 1,613.40 1,687.67 1,723.42 1,638.04 1,634.91 1,642.20 1,773.22 1,544.51 1,498.23 1,525.86 1,652.78 1,636.21 $1,540.00 1,560.00 1,420.00 1,685.00 1,585.67 1,606.00 1,566.96 1,697.00 1,600.00 1,600.00 1,500.00 1,720.00 1,600.00 1,485.00 1,600.00 1,610.00 1,496.00 $61.77 149.98 124.35 119.33 171. 11 107.40 121.61 126.42 38.04 34.91 42.20 53.22 44.51 13.23 26.86 42.78 41.21 617 1,833 1,103 73, 624. 66 60,816.11 22,808.65 1,900.35 726 27,487.56 26, 169. 63 1,317.93 o 63d Congress "1 ci^w 4 tt? i I*oo- No. 261 2dSe8»ion { SENATE j ^^^-^ AGRICULTURAL COOPERATION AND RURAL CREDIT IN EUROPE REPORT OF THE AMERICAN COMMISSION, CONSISTING OF DELEGATES FROM DIFFERENT STATES IN THE UNITED STATES AND DIFFERENT PROVINCES OF CANADA, ASSEMBLED FOR THE PURPOSE OF IN- VESTIGATING IN EUROPEAN COUNTRIES COOPERATIVE AGRICUL- TURAL FINANCE, PRODUCTION, DISTRIBUTION, AND RURAL LIFE PART I OBSERVATIONS WASHINGTON GOVERNMENT PRINTING OFOCE 1914 SUBMITTED BY MR. FLETCHER. In the Senate of the United States, December 6, WIS. Ordered, That the manuscript of the report of the American Commission on Agricultural Cooperation in Europe be printed as a Senate Document. Attest: James M. Bakek, Secretary. 2 ORGANIZATION OF THE COMMISSIONS. THE UNITED STATES COMMISSION. Duncan U. Fletcher, Florida, Chairman. John Lee Coulter, Minnesota, Secretary. Thomas P. Gohe, Oklatoma. Kenton L. Butterfield, Massachusetts. Ralph W. Moss, Indiana. Clarence J. Owens, Maryland. IIarvib Jordan, Georgia. THE AMERICAN COMMISSION. EXECUTIVE OFFICERS. Duncan U. Fletcher, Florida, Chairman. Kenyob L. Butterfield, Massachusetts, Vice Chairman. Thomas S. Southgate, Virginia, Vice Chairman. Harris Weinstock, California, Vice Chairman. S. A. Lindsey, Texas, Vice Chairman. Caltfornia : Harris Weinstock. E. J. Wickson. Connecticut: Edward Chapman. Colorado : Gordon Jones. Florida . Duncan U. Fletcher. John G. Ruge. F. J. H. von Engelken. Georgia: C. W. ffillhouse. Harvie Jordan. Illinois: George W. Woodruff. Indiana: Ralph W. Moss. Massachusetts : Kenyon L. Butterfield. J. Lewis Ellsworth. Charlotte Barrell Ware. Maryland: Clarence J. Owens. Michigan: William B. Hatch. Minnesota: James C. Caldwell. John Lee Coulter. Mississippi: Thomas J. Brooks. Alberta: Alwyn Bramley-Moore. Henry Marshall Tory. Clarence J. Owens, Maryland, Director General. Harvie Jordan, Georgia, Secretary Treasurer. members by states. Missouri: Garland B. Miller. Nevada: J. E. Stubbs. New York: Frederick H. Allen. Albert E. Roberts. R. B. Van Cor1;landt. C. C. Mitchell. North Carolina: E. L. Daughtridge. John Sprunt Hill. A. E. Tate. Ohio: William M. Brown. John Cunningham. Marshall E. Thrailkill. Oklahoma: Thomas P. Gore. Oregon: Hector MacPherson. H. G. Starkweather. Pennsylvania : Robert L. Munce. James G. McSparran. South Carolina: T. B. Thackston. E: F. Woodside. R. I. Woodside. Tennessee: Lilian W. Johnson. H. A. Morgan. Ernestine Noa. James Allen Smith. Mary Temple. Texas: Charles B. Austin. W. W. Dexter. S. A. Lindsey. Clarence Ousley. J. S. Williams. Francis W. Wozoncraft. Utah: Robt. J. Glendinning. Vermont: Charles Otis Gill. Virginia: R. W. Dickenson. JjcRoy Hodges. Thomas S. Southgate. Washington: Clark G. Black. Ralph Metcalt. Sarah S. McMillan. West Virginia: Joseph F. Marsh. Wisconsin : Porter L. A. Ferguson. District of Columbia: Milton V. Richards. members by canadian provinces. Ontario: Charles F. Bailey. Lionel Smith-Gordon. Nova Scotla: Arthur S. Bamstead. Saskatchewan : John H. Haslam. Edmund Henry Oliver. REPORT OF THE AMERICAN COMMISSION ON AGRICULTURAL COOPERATION AND RURAL CREDIT IN EUROPE. PART I. ■ OBSERVATIONS. INTRODUCTION. Its organization. The tonr Commission. of the Its plan of nork. Its reports. Several years' foreign experience of Hon. David Lubia, United States delegate to the ican'&Mssiom'"*" International Institute of Agriculture at Eome, convinced tMs student of affairs that the European systems of agricultural credit and cooperation had much to teach the American farmer. As a result of Mr. Lubin's address before one of the annual meetings of the Southern Commercial Congress, that body undertook the assembling of delegates from various States in the Union and Provinces of Canada for the purpose of malring a tour of Europe to study these cooperative systems on the ground. This group of delegates was organized as the "American Commission on Agricultural Credit and Cooperation," with a list of official delegates aggregating about 70, from 29 States and 4 Provinces of Canada. The Commission divided into four sections — (1) Finance, or Agricultural Credit; (2) Cooperative Production; (3) Cooperative Distribution; (4) The Organization of Agriculture and Rural Life. The Commission left New York April 26 and returned July 25, having in the meantime , visited, as a body or through subcommittees, Italy, Egypt, Hungary, Austria, Russia, Ger- many, Switzerland, Belgium, Holland, Denmark, Norway, France, Spain, England, Wales, Scotland, Ireland. In gathering material the miain reliance of the Commission was the holding of hearings at which government officials, heads of agricultural organizations, and other experts presented statements and answered questions. Many conferences were held with individuals or with small groups, and many visits were paid to small banks and other cooperative institutions, and to farms. * The American Commission joined with the United States Commission in the publication of a joint report pertaining to agricultural cooperation and rural credit in Europe. This report is known as the "Information and Evidence," and has been printed by the United States Gov- ernment as Senate Document No. 214. In addition, the United States Commission made a separate report to Congress, which has been printed as Senate Document No. 380. The Ameri- can Commission now makes its separate report, of which this is Part I. This report will be printed in several parts. This, the first part, is a summary or digest of Senate Document No. 214 referred to above, and is the report of the majority. Part II will be the report of the minority. Part III will be a bibliography of all literature collected by the two commissions as a basis for their reports. Other parts are in the course of preparation. It is doubtful whether so much valuable first-hand material on the subjects of Agricultural Credit and of Agricultural Cooperation in general has ever before been brought together, in any language, as in the volume of "evidence" just referred to. Possibly the greatest result of the trip, however, was in the personal contact of interested Americans, from all parts of the Union and from Canada, with the actual workings of the splendidly developed agricultural cooperative systems of more than a dozen European countries. Moreover, the assembling and the journey of the Commission were so thoroughly advertised over this country that the already developing interest of the American people in rural cooperation in its various forms was greatly intensified. To the members of the Commission the tour was an illuminating experience; its value to the American farmers, only the future will reveal. While the American Commission was being assembled Congress passed a law authorizing commisSra?* ^*°''*' the President to appoint a Commission of seven to cooperate with the American Commission, more especially in the study of rural-credit institutions in Europe. The letter and spirit of the law were carried out, and for all practical purposes of the study in Europe the two Commis- sions were merged into o'ne. The United States Commission, however, was charged with the duty of reporting its findings and recommendations to the Congress of the United States. The American Commission makes a general report to the American people. 7 Results of the tour. O AGBICTJLTUEAL COOPEKATION IN BUBOPE. THE PURPOSE OF THIS CHAPTER ON "OBSERVATIONS." fac^s an.d™pMions. "' '^^® puppose of this part is to present a statement of those "observations" made by the Commission in Europe that seem to show most truly the important lessons that were learned, and their applicability to American conditions so far as we know them. The maia object of the Commission was to gather facts and to let these facts speak for themselves. But this mass of facts occupies as "evidence" something like 900 large pages in a printed book; hence the necessity of presenting a briefer statement, to serve for general distribution as well as a sort of interpretation of the facts. eraM'onfn^Amlfrica?''' ^^ ^ perhaps Unfortunate that the American Commission as an organization has not had an opportunity to make the same sort of study of agriculture conditions and cooperation in Ajnerica as it made in Europe. This is probably one of the criticismls that may be made of the work of the Commission. But the Commission hac no desire to present to the American people a finely written paper scheme of reform la agricultural matters. For one thing, the members of the Commission are quite aware that conditions and needs differ radically in different parts of the United States, and that no one detailed plan wUl answer for all regions. has'^kept^cSanUy '^^^ Commission, howcver, was made up of representatives from many States and from conditions *™*'""'" aU the important regions of the United States and Canada, and hence it s^ems fair to assume that their observations might safely include comments on what is believed to represent the needs of America and the applicability of the European experience to these needs. Canada's part In There Were feeven Canadian delegates on the Commission, who rendered efficient service and did their full share of the work. The report of the Commission is not exclusively for American citizens; it belongs also to Canadians. Nevertheless, Canadian conditions differ iu some resjpects from those in the United States, and remedies may differ. Certainly, legisla- tion in each country must proceed along lines germane to national political institutions. GENERiCL AGRICULTURAL CONDITIONS IN EUROPE. operation ""o" "ifuro- ^^ ^^® lesson was more fully learned by the Commission in Europe than that a subject gencraf.^"*^*"" '" ^^^^ pural credit can not be divorced from other phases of the farm question. All the interests of the farmer are tied together and, indeed, his interests and the interests of all other classes and of the nation as a whole are inseparably linked. Hence the importance of making a few observations on general agricultural conditions as a background for the development of cooperation. The Commission made no attempt to study the practical side of farming, but as it passed through the country districts, visited the country banks, talked with the farmers, and asked questions of the experts certain general impressions were made that can profitably be repeated here. eTMywiere*"^™'"^ '^^^ traveler in Europe is constantly impressed by the fact that the European farmers are thrifty farmers. They use all the land; farm the roadsides; develop waste places; plant fruit trees along the roads; terrace the hillsides. Then, too, they get a large average yield per acre. They seem to have a pride in this good farming and there is almost no exception to the rule. Nearly every farm is a weU-tiUed farm. food*s™pSy c?n e:^u? "^^^ result of this good farming has been that the European countries, although their city be grown at home, population has growu rapidly, import comparatively little food. If this can be done in Europe, why not iti the United States for an iade&iite period ? It has been estimated that if the people of the United States were wiUiag to live as frugally as are the people of Germany we could supply food for haH a billion people without buying from abroad, even if we produced only half as much per acre as Germany does now. mart'ed ° Interest "in Everybody whom the Commission met ia Europe seemed to be interested ia agriculture — agriculture. government officials, bankers, business men, as well as farmers. In other words, agriculture is looked upon as a great national business, of so much importance that all thoughtful men must be interested in it; not necessarily as landowners, but at least as students and helpers. "The^ peasant The great majority of European farmers are what in America would be called "small farmers." In some sections of Germany farmers own and tiU 200 or 300 acres apiece, but in most parts of Europe the average farm is very small indeed. Over two- thirds of the farms in Germany are less than 13 acres each, and over one-third less than 2^ acres. In Belgium the proportion of tiny farms is even greater; in some countries, notably in Great Britain, the pro- portion of small farms is less. Of course, on most of these very small farms machinery can not be used; in fact, horses can not be used to advantage, and so there is an immense amount of hand labor. This hand labor is efficient but, from an American point of view, costly. Pos- sibly it would not be feasible to carry on this particular kind of agriculture if it were not for AGEICULTUEAL COOPERATION IN EUROPE. y the field labor of farm women, which seemed so strange to American eyes and yet is so common in Europe that it is accepted without question. The person who goes among European farmers for the first time wiU be impressed with Cooperation, the fact that cooperation is the most important thing about European agriculture. It is, of course, not true that all the farmers band themselves together, and yet that is a very common way of doing farm business. Farmers buy together, sell together, borrow and lend together, insure together, own machinery together, and in some cases actually carry on a farm together. There are 25,000 cooperative societies of various kinds in Germany alone. It is really astonish- ing to see the extent to which the farmers, particularly the small farmers, have accomplished results which would have been impossible if each farmer had depended upon himself. It is generally admitted in Europe that while cooperation has been, perhaps, the greatest uou^"^""'*"''''' '"''""'■ single means of making the farmers prosperous, education has also played a vital part. The European farmers soon learned, in spite of their prejudice, that the scientific men could help them, and, through traveling teachers, they have learned how to apply the teachings of the scientists. The extent to which the European farmers own the land they work is really astonishing; ^'■^^ ownership, in some countries it amounts to more than four-fifths of the farmers. This fact holds true particularly of the Continent of Europe, but even in Ireland the great estates are being broken up by law and are passing uito the hands of small owners who formerly were renters. One of the best lessons of the whole journey came through the observation that in every Leadership, country in Europe fine, strong men have given their lives to the service of agriculture and country life. Some of these men are farmers, some government officials, some teachers, some men of leisure. But that they are sincere is evidenced by their large following, and that they are efficient is shown by the success ot the enterprises which they have developed. AU this is just as true in small communities as in the country at large. The Commission found many villages where the pastor or priest, and the teacher were very influential on behalf of aU good movements for agricultural upbuilding. Oftentimes these men were the treasurers of the credit banks, or the purchasing agents of the cooperative societies. Farmers and "other It is interesting to see how there has developed in Europe the feeling that there are mutual p^pfj^ interests between farmers and laborers — the "small men" generally. This, of course, is not true everywhere. But take, for example, the popular banks of Germany: About one-third of the patrons of these banks are farmers and about one- third are artisans. In England the great cooperative wholesale societies, representing largely the laboring men, are beginning to purchase their supphes from cooperative agricultural societies. This is a practical way of bringing producer and consumer together. Hard-headed business farmers in the United States may be inclined to think that agri- ..^J^j?,""'*'^''*'''* culture can be developed only on the principles of bargain and of profit. Of course cooperation is first of all designed to get advantages for the cooperators. It would be hypocrisy to claim differently. But we were told everywhere in Europe that the key to the success of the coopera- tive method of doing farm business is to develop the cooperative "spirit;" that is, the willing- ness ard desire to sink individual opinions and interests to such an extent that a group of men can work together for common interests. When this spirit is developed to a high degree it means a sort of loyalty and patriotism that leads men even to sacrifices if necessary. Clearly there is in Europe such a thing as the cooperative "spirit." Cooperation can not long exist without it. We can not borrow European cooperative methods indiscriminately. Nor should we ^ay'^k ta^nrop" refuse them indiscriminately. It would be just as unwise to recommend that the European Jj^'^,'* '">"'' ^»'^"' methods of doing farm business be adopted universally in the United States as to recommend to America the general use of oxen or of wooden shoes. But it would also be foolish to say that, no matter how successful cooperation has been in Europe, Americans are so different that it can not be made to work here. The only wise method is to take what seems best from Europe, adapt it to our conditions, and "try it out." Above everythmg else, let us not assume that Europe has on its farms an "ignorant peasantry," and that the farmers of America, under "free institutions," are so much superior that they can learn nothing from Europe. THE REVIVAL OF EUROPEAN AGRICULTURE. American farmers in general, and especially any who are opposed to the thorough trial of a bit of history, agricultural cooperation, must remember that 30 years ago European agriculture was in a bad way. They used to grow a great deal of grain and stock all over western Europe,, but when the 20506°— S. Doc. 261, 63-2 2 10 AGEIOULTUEAL COOPEKATION IN EUROPE. Great Plains of the United States were developed and the immense areas of South America became productive the pressure of competition upon the European farmer was simply tremen- dous, and for a decade there was a serious situation. The development of city industries, calling in laborers, and the changes in farming due to the new agricultural science, also had a depressing eflfect. Now, to-day it is fair to say that from the European point of view its agri- culture is prosperous. Undoubtedly the great mtiltitude of European farmers do not Uve as well or dress as weU as the more prosperous American farmers, and it is possibly true that the masses of our American farmers may never be ready to live as simply as the great majority of European farmers live. Nevertheless it is the truth to say that European agriculture is highly prosperous. This prosperity has been achieved in a generation, and almost entirely, the Euro- pean farmers assert, by means of education and cooperation. ^Necessity was the Qne of the most important lessons that the Commission learned in Europe was that it was only when the European farmers were hard pressed, when the Governments saw that they were ' going to lose their farmers because they could not make a living; and when the farmers saw that they must do something to preserve themselves, that they took up the matter earnestly. Old prejudices against scientific farming had to be broken down, and old prejudices favoring each man "paddling his own canoe" had to give way. A great reform was accomplished, but it never would have been accomplished except for the spur of necessity. ^^seif-heip the watch- European Governments have done a great deal for agriculture because they wanted many people on the land and wanted to raise their own food. European Governments to-day assist agricultm-e in many ways. Yet it remains true that ia most of the European countries to a considerable degree, and in some of them to a very great degree, the idea prevails that the Government shall simply help farmers to help themselves. In fact, in coimtries like Denmark, Holland, Switzerland, and even in Germany, the great thought is that the people shall organize to do for themselves what nobody else wiU do for them and what they, working as individuals, could not achieve. the meVod '**'"" The last Sentence is the key to much of the success of the European farmer. He found that alone he could do nothing; together with his fellows he could do a great deal. He proved that one and one are more than two; at least that two people who work together can accomplish a great deal more than two people who work separately. Hence was formed a habit of doing collectively what farmers had been doing singly and alone, and it was found that as the farmers became accustomed to doing business in this way it proved to be the better way. So, gradually at first, the method spread. It is important to know that there has been a greater development of cooperation in practically all the European countries in the last 10 years than in. any previous period in the history of the movement. Education the The Eutopcan fanner has been willing to learn. He was prejudiced at first, but he has found that science can teach him much and that it pays to take the experts' explanation of the laws of nature rather than his own. And, above all, he has found that it pays to work with nature and not against her. This has meant a tremendous education for the less intelligent of the European peoples, and, indeed, for many of the more intelligent. Agricultural perma. It would not be corrcct to Say that cooperation can not be successful where the tenant Mfchoi! ^ ' system prevails. In Belgium, for example, perhaps haH the farmers are tenants, and yet cooperation has been developed to a good degree. But it is correct to say that cooperation, or, indeed, any phase of good agriculture, can not be developed when the agricultural popu- lation is frequently and constantly shifting. Unless the population is lairly permanent, unless they stay long enough in a place to be known to their neighbors and to the business men, and unless they have an intererest in the land and in the community, the best results never come. A finer rural civUi- Listen to Mr. George W. RusseU, editor of the Irish Homestead : This ideal, the Commis- e goa . ^^^^ found, was, whether expressed or not, one of the great motives and purposes in the work of improving agriculture in the different European countries: "I look myself to the social and human results of this complete oi^anization of rural life and industry as the best result. We should aim at creating a social order where the struggle for existence will give way to a brotherhood of workers ; where men, dependent on the success of their united endeavors for their own prosperity, wUl instinctively think first of the com- munity and secondly of themselves. I would say, indeed, all other movements, however necessary, are external and hollow compared with any movement which deals with life itseM and tries to create conditions in which a higher humanity will be possible, and sets that before it as its aim." AGEICULTURAL COOPERATION IN EUROPE. 11 RURAL CREDIT. THE NEED OF AGRICULTURAL CREDIT. THS FARMER NEEDS MORE CAPITAL. While our country was being settled, the chief capital of the farmer was free or cheap •"•«*? •*'"' ?•"'*• land plus his own intelligence and strength. Comparatively little money capital was needed. As settled conditions developed more capital was needed to make permanent improvements, to buy machinery, etc. Now we have come to a time when free and cheap land is practically gone. Combined with this fact is a growing need for larger capital on which to do business. Although the average values of farm lands in the United States do not approach those of *■»"" i»»* '••s''. Europe, the increase in price in the past decade has been very marked, and in the more prosperous parts of the country good land is exceedingly high. In other words, if a man who does not own land wants to buy a farm of his own, he finds at once that it takes a great deal more money than it used to take simply to get possession of the land. Since the rapidly increased use of agricultural machinery and the increase in cost of ^^J'^^'^/^jJ^lji"'?™"'' building materials for farm buildings, fvirther capital is needed by the farmer in order to purchase the proper equipment for his farm. This equipment is relatively much more expensive than it ever was before. It pays to have adequate equipment, but the initial cost is high. Gradually but surely our American farmers are passing from extensive to a relatively intensive farming, intensive kiad of farming. Now, ia general, the more iatensive the farming the greater the cost of equipment and maintenance per acre — as a rule, more implements; frequently, a greater expenditure for fertilizers; sonaetimes a greater investment ia hve stock, buildings or other fixtures. In order to make more intensive methods feasible a pretty substantial use of capital is necessary. CREDIT NECESSARY IN ORDER TO OBTAIN CAPITAL. The credit form of capital is absolutely necessary in order to get adequate capital. This Credit mnst snppie- i 1 . 1-1 •! iiTT 11 I'l/. ■ 1 • i"*"* cash. In modem IS true m the busmess and industrial world. Very rarely does anyone thmk ot startmg a busi- business, ness on cash-capital alone. If he did there would not be cash enough to go round. There are always risks in making investments, even of cash, and there is an added risk ia borrowing. But the world has found that on the whole the only way to get launched on a busuiess career is to borrow; that is, to have credit-capital. This credit is usually based partly on property, partly on expected success, and partly on the efficiency of the borrower as well as his personal char- acter. Now, these same needs are felt by the farmers, and are just as legitimate as in any other fhe farmer must be business. When land was cheap and capital dear, the farmer could afford to use land lavishly and capital sparingly. Now that conditions are reversed the farmer has become a business man and he finds it advantageous to use the same business methods; one of these methods is the use of credit-capital. It is possible, of course, that farmers may want to speculate, and consequently to borrow ™« "?» j'"* »•"•!« , 1 • ■■ 1 • 1 1 1 •!! • 11 • • 1 rm ■ t Of capital: Farmcred- money on land with the expectation that the land will rapidly rise m value. That is, they " must be "produc- J ..,,.. iijj-i. 11 '*'''* "^^ provident." may borrow not prmcipaUy m order to procure land tor larming, but m order to procure land for selling. This is an abuse of credit in agrictdture, and should be discouraged in every pos- sible way; not because it is wrong to buy land to sell, but because a better use of capital is to make the land productive. What the country wants of its farm land is not increase of price, but increase of productivity. Farm credit, therefore, as a distinguished writer has said, should be "productive and provident." That is, money should be borrowed only in order to make a farm more efficient as a producing machine; not merely to get a farmer out of trouble or to enable him to hold his land for an unearned rise in value. There have been so many losses on account of mortgaged farms that a great many farmers best ^'onrm'^ *** ""^ dislike to borrow. But it may be just as unwise to refrain from borrowing when capital is needed to make the farm as productive as possible, as it is wrong and foolish to borrow in order to cover up mistakes or speculate in futures. In other words, to refrain from borrowing may be almost as uneconomical as to borrow for the wrong thing. In business a certain amount of credit is considered not only legitimate but necessary to good business. Gradually our farmers must learn the same rule for themselves, but it must be used with caution. 12 AGKICXJLTUEAL OOOPEBATION IN EUROPE, theXtfmilt"'^' ""* -^ rural banker has said that "the most optimistic man ia the world is the prospective farmer borrower; the most pessimistic, the same man when the first payment on the loan comes due." This is the other side of the picture. Some farmers are altogether too wiUing to go into debt. ap"Sw*'ob8Ude''to During the past 15 years the increase in land values in better farming regions has been *""•"• prodigious. The same thing was observed in Europe, where it was not at all uncommon to find farm land valued at $400 to $600 per acre. In some regions of the United States it is a serious question whether this increase of value is based on the actual value of the land for farming purposes or whether it arises because land is getting scarcer and people know that it must get more and more valuable. Wherever farm land is held at a value beyond that which makes it a good present investment for farming, the application of a sound system of rural credit is made difficult, because a sound system of rural credit must be based on actual not on speculative values. to^hSp"'' prodicttoi! ^^ *^® othcr hand, there is possible danger in an easy form of farm credits, especially at "a"nd. ^P"""'"'*'™ ^ unusually low rates of interest, because under present conditions, with land getting scarcer and risiQg constantly in value, investors may seek to buy land on easy terms, knowing that they can rent it on fair terms and that it will go up in value rapidly. Hence any adequate system of farm credit must make it difficult to borrow on farm land except at its true value and chiefly for productive uses. One advantage of a working system of farm-mortgage credit is that it tends to make good farming attractive. It almost compels the borrower to farm well. The lender's interest is to have his security maintained. tioM''toie'c'ilfe'??"diT ^^ ^^ ^ pretty generally accepted principle that, so far as practicable in any country, it is wise to use existing agencies rather than to multiply new ones, no matter what the object to be gained may be. This is true of rural credit. If we can use tried financial institutions, or modi- fications of them, at the outset it is far better than to experiment with a new kind of institution. fafmere*"^^ "*" ''"''^ "^^^ European bankers are friendly to agriculture. Of course it pays them to be so. They see that agricultural prosperity means national prosperity. So they do all they can for the farming interests. It would be unwise for our own farmers to throw aside the practical assistance and coimsel of the bankers, at least until the farmers find that they are being exploited and that they can run their own banking business better than they can utilize the bankers' bank. In Europe agricultural credit needs are met both by private joint-stock banks and by cooperar tive banks. RURAL CREDIT HAS NEEDS OF ITS OWN. Rural and urtan But rural credit is not the same as urban credit. The rural people have habits of their own. The farm business is not, in all respects, like other businesses. Hence the question of rural credit caUs for special attention and for some special institutions. Seasonal needs. The Ordinary merchant or business man does not need to borrow money for more than 30 or 60 days, or at the most 90 days, because if he is doing any business at all his money will como back to him withia those periods. But not so the farmer. To produce and market even the most rapidly growing crop requires 60 days, and usually nearly 6 months. In the live-stock industry, for example in growing beef, it may take 2 or 3 years for the farmer to get his money back for his investment. The farmer needs money for productive purposes for from 90 days to one year or longer, while the merchant needs it for 90 days or less. Inability to pay f re. The same is true of payments on mortgage indebtedness. The average merchant may have poor sales in the spring, but good sales in the fall. The farmer is entirely dependent on his year's work. Often he is dependent on things entirely outside of his control, like drouth or frost; not only may he be unable to make his payments, but he may lose his labor and his investment in the crop. So the farmer needs different terms, both for short term and for long term credit. Bankers do not Almost invariably the city banker lends only to men whom he knows or who have a recog- farmers. nizcd rating or business standing. Now, the average banker finds it harder to know what the farmer is doing, what his farm is worth, and how good a farmer he is, than to find the same facts about the merchant. AGBICULTUEAL COOPEBATION IN EUEOPE. 13 From the standpoint of the financial world the individual farmer is a very small business "snSS'^'a*n."''"^'"*"' man. His investment is not large, and the amount of the business he does through the bank is relatively small. Of course, agriculture, as a whole, is a tremendously big business — in fact, the biggest business that the American people have. It becomes clear, then, that if enough farmers can work together they ought to be able to get better terms than if they work separately. The "small man" alone makes no impression on the business or financial world; but a million "small men" make a formidable army, especially if well organized. If agriculture has special needs and habits, then it would seem clear that- there is a call farm^b^^sf *"""'*' for institutions to interpret these needs to the financial interests and to each other. This seems to be good argument for a local or community bank that serves the farmer, that understands him better than anybody else, and that makes a link between his need for credit and the people who have money to lend. This may be simply the existing bank adapting itself to the farmers' need ; or it may be a separate institution managed by the farmers themselves. SPECIAL OBSERVATIONS ON EUROPEAN CREDIT. (1) Agricultural credit ia the greater part of Europe ranks as high as, or even higher than, cnitaf Si crediun^lnl commercial credit. The prevailing rate of interest paid by farmers for short-term loans is ™p«- from 4 to 5 per cent. Local personal-credit societies generally are organized on the basis of unlimited liabihty. In many cases loans are made upon open accoimt. (2) Land-mortgage credit ranks as high as or higher than industrial credit. Land of demonstrated and dependable value is accepted upon a loan basis of 50 to 66 per cent as the safest possible security. Savings and trust funds are freely invested in land mortgages. Land loans for the most part are paid upon the amortization plan, so that the obligation will be discharged in from 30 to 60 years. The law makes Httle or no provision for the exemption of homesteads, household goods, or farm equipment from execution on judgment debt. (3) Rural credit societies and land-mortgage associations are often fostered by government <5oTemment aid. grants, loans, or special privileges. (4) Commercial banks and land mortgage banks of private capital are not in antagonism P^vate banks, with these government-fostered , institutions, which are recognized as occupying a separate sphere and are needful in the development and conservation of agricultural resources. In many instances private banks purchase the securities of land-mortgage associations. SHALL THE GOVERNMENT HELP IN RURAL CREDIT? Nearly all European Governments do assist farmers in obtaining credit, and in some coun- ^^^^^ practice m En- tries, like France, the amount of money loaned directly by the Government for farming pur- poses is very great, indeed. Some countries have gone further than others, but nearly all the European countries give financial assistance in some form. It has been shown that Government aid in democratic Australia is a common practice, osiH^n."™""'^* ^"'^' and there are strong advocates of Government assistance in the United States. Why should not the Government help ? Here is a great business, fundamental to the nation's prosperity, in which combination is difl&cult, a business that has special needs. Now, why should not the Government step in and contribute HberaUy or lend its credit ? Nevertheless, it is the opinion of the Commission that our American problem of rural credit cia?au™ot™Le^"iI should be worked out without Government aid. It is perhaps true that the world is short of capital. But it is beheved that capital awaits bef/de'pendtnc*e!' ''' investment in farm lands as freely as in other fields, provided the security is good and the means of investment are made easy. On the other hand, if there is not private capital in sufiicient quantities the only way the Government can get the needed capital is either by taxing aU the peo- ple in order to get capital for farming, or else by issuing bonds that sometime later must be paid by all the people. Of course there are conditions under which the Government can guarantee bonds that are issued with farm property as security. But this is no great advantage, because under a wise system of credit the land itself is the very best security for borrowed money, and the safest system is the one that stands on its own feet. One of the great lessons learned in Europe is that in the long run the farmers succeed best ^eaklnr"farmltt when they help themselves. Whenever they become dependent on the Government they keep ttemseives. looking to the Goverimaent for more aid. It is believed to be a correct general statement that rural credit is on the strongest basis in those countries where it has been developed most com- pletely without Government aid. Fall Interest. 14 AGBICULTTJRAL COOPERATION IN EUEOPE. tmsen'^mT ^ * " Eveii granting the great importance of agriculture, it is improper for all the people to be taxed in order to assist the prosperity of even a great class Hke the farming class. inighr™iidu"e und Anything in the way of special favors or opportunities for borrowing money on land would speculation. be ahnost certain to encourage speculation in land. This would lead to still higher prices of land and still greater difficulty in getting the land into the hands of owners who till it. It "is sometimes urged that the Government should loan money directly to farmers at a very low rate of interest. A low rate of interest is not so much the great need of farmers, as more capital, under better conditions, at fair interest. Everything should be done to give the farmers an equal opportunity with other business men in securing capital. Ifr is doubtful if it wiU help the farmers in the long run if they are given special privileges. In other words, the Government should help bring about a better system of rural credit by legislation, but not by subsidy, ofits'*' savings dc- It is predicted that the plan of postal savings banks is destined to grow to large proportions. If so, the funds thus accumulated would form a large source of capital for investment in farm credits. It is doubtful, however, if this use should be compulsory; it may be made a desirable use. Tenants and credit. Transient tenants — that is, those who stay on a farm only a year or two — wiU always find it ■ hard to get credit of any kind. European observation indicates that permanent tenants may secure credit, because permanent tenancy usually means that the tenant has a right in the improvemenjis which he creates. If a tenant stays on a farm for a lifetime, he is almost as much interested in the farm as is the owner. At the same time the European experience seems to support the view that the very best system of credit is built up only among landowners who manage their own farms. The rapid increase of transient tenantry in the United States is becoming an alarming condition. It makes for poor farm practice,' poor farm business, and a poor farm community. ation! "***"' **'"'"' ■'•* ^ clear that no new system of furnishing credit to the American farmers should be developed without due thought and discussion. It will not answer to import European sys- tems bodily without trial. On the other hand, it would be very unwise to assume that European methods may not work here. THE ESSENTIALS OF LONG-TERM RURAL CREDIT. tenS^Jdi" " '°"^" Long-term credit may be defined as credit to meet the capital requirements of the farmer. It is to be used as aid in paying the purchase price of the farm; in permanent improvements; for erecting modern farm homes and other buUdings; or properly to equip the farm, so as to* bring all operations to the highest state of efficiency. The money for these purposes must be expended in the form of a permanent investment; consequently the loans must extend over such a period of time that they can be not only reduced gradually, but paid off from the increased earnings derived from the borrowed money. Present terms for WhUe it is true that many farmers are able to carry a mortgage indefinitely, the actual factory. conditions under which the farmer borrows are such that he is handicapped in making satis- factory loans. There is no guaranty that the mortgage may be carried for a long term of years, nor is there any system by which the mortgage may be paid in installments. Every operation connected with the issuance of mortgage costs money. Furthermore the farmer borrows as an individual, and as such is entirely at the mercy of the money-lender. Some conclusions. Several features of an adequate system of long-term rural credit can fairly be gleaned from the European experience and considered appHcable to American conditions. A long period of Loaus On real estate should be for a term of years sufficiently long to enable the farmer to use the capital thus secured in a manner to obtain the largest net returns and, consequently, to gain the abiUty to pay both interest and principal easily and safely. Amortization an "Amortization" means the payment of a small proportion of the principal each year, for a absolute essen a . iQj^g term of years, so that the principal is gradually reduced without seriously encroaching on the income from the investment and that at the end of the period the borrower has discharged the mortgage. For example, if a mortgage^were to run for 54^ years, bearing 4 per cent inter- est, and the borrower paid one-half of 1 per cent each year on the principal, in addition to the interest and the expenses of management, at the end of 54| years the debt would be dis- charged, and the farmer would have hardly felt the payment. He would have had to pay 4 per cent interest any way, and the addition of one-half of 1 per cent, or a total of 4^ per cent a year, is hardly felt. At the same time he is steadily paying off the debt. The period of AGEICULTTJEAL COOPBEATION IN EUEOPE. 15 amortization in tliis country perhaps need not exceed one generation. The farmer should be allowed to pay his loan in full at any time. Under the present plan the farmer gives simply individual security. His particular farm coUecHve security, guards the mortgage. European farmers have found that if they pool their securities they can get much better terms from capital, as regards the rate of interest, the length of loan, and the terms of payment. But in order to make collective security workable, there must be some piece of paper which represents this collective security. This paper in Europe is the land-mortgage bond. It is based not on one man's farm, but j^^JJ" iand-mortg«ge on the farms of many. Consequently this bond is bought and sold in the market just Uke Government bonds or railroad bonds. It is considered an especially safe investment for trust funds, because it is believed that in a growing country agriculture forms the most reUable invest- ment known. However, to be thoroughly sound, these land-mortgage bonds must be based on land a restricted area, mortgages taken within a comparatively restricted area. In Europe this area is usually a * . State or Province. In the United States and in Canada it would have to be a State or Province. There is danger in spreading the security or mortgages too widely, because it wiU be difficult to make proper valuations and to keep track of the farmer and his methods, which, of course, have a good deal to do with the continued value of the land and consequently with the permanent yalue of the mortgage on the land. Satisfactory land-mortgage bonds should be issued chiefly against productive land carefuUy Loans chiefly on valued, and ought not to exceed a half of its value. Money so secured must never be loaned, if that can be avoided, for purely speculative purposes, but always either for acquiring the land or for utilizing it more eflPectively. Of course one of the objects of better rural credit is to assist in bringing unimproved land into production. In order that these bonds may have not merely a local sale but a standing in the general uniform laws, market, it is very desirable at least that all the States should enact uniform and proper laws concerning (1) the registering or guaranty of titles at minimum cost; (2) a simple and uniform method of foreclosure; (3) if possible, uniformity in exemptions from debt. If the farmers of America are ever to get long-term credit at a fair rate of interest, farm „ Abolition of taxa- => *= . ' tlon on mortgages. mortgages must be in every State exempted from taxation. The farmer always pays the tax in his interest. It is rarely, if ever, shifted. It has been estimated by competent authorities that about $2,000,000,000 are now invested gati^af""*'"'""'*" in farm mortgages in the United States, and the amount is constantly increasing. The first task before a new system of land-mortgage banks is to get this investment relet under better terms to the borrower and perhaps even fuller security to the lender. A system of land-mortgage banks would seem to be the best way for the farmers of America National charters or to gain greater facilities for long-term credit. Whether these should be State institutions or mortgage banks i should be chartered under a national law may be open to question. The Commission is incHned to coincide with the views of the United States Commission favoring a national law and charter and supervision, with operations of the land-mortgage banks in any State restricted to that State. THE ESSENTIALS OF SHORT-TERM RURAL CREDIT. Short-term credit is credit intended to meet the temporary or annually recurring needs of term^^diT "' ^''°^' the farmer; — as, for example, in preparing the land; planting, cultivating, and harvesting the crop; handling of the crop for market, etc. Short-term credit is personal credit, being based, not on mortgages on real property, but on promises to pay, signed by the borrower and usually indorsed by other persons. To the prosperous farmer who owns his farm, has money in the bank, and is knoAvn for his sonia'crJdit^faduSes'. substantial business capacity, existing facilities for borrowing for the seasonal needs are usually ample. But this class constitutes a minority of the men who are actually carrying on farm operations in America. The smaller farmers are the very ones who need credit most and who find it hardest to get. And yet their efficiency as producers would undoubtedly be increased if, within prudent limits, they had better opportunities to borrow. The chief security in short-term credit is personal character. The promise to pay is »•>•"*?■ backed by the man's reputation for ability and willingness to pay. This is usually supported by the indorsement of one or two other men of at least equal standing. 16 AGEICULTXJEAL COOPEBATION IN ETJEOPE. unumited iiabuity. jjj EuTope the Small farmers have found that they can borrow to best advantage when a group of them in a given commimity, thoroughly known to one another, organize a credit society, into which they can if they desire put their savings, or through which they can if they choose borrow from a larger institution. In most of these societies each member agrees to become Uable to the extent of all his property for the obUgations of the credit society as a whole, buity "applicable "ta There is a general opinion that it is not. A close student of rural credit in Europe has America g^^^j ^-j^Q^i there are a number of reasons why it can not be applied in America, among which are the following : 1. The general unwilliQgness of the American farmers to trust one another. 2. Their unwillingness to divulge their own business to their feUow farmers. 3. The fact that they live rather far apart and can not watch one another as in the villages of Europe. 4. That there is a traditional objection to becoming financially responsible for one's neighbors. Many, if not all, of these difficulties originally prevailed in some European countries, as in Ireland, for example, and yet have been largely overcome. story?"^ "** ^^"^ There are students of American conditions who believe that among small land- owners, especially among the foreign-born who are colonizing in many parts of the United States, unlimited habihty would not only be not objectionable but would be welcomed and used. At any rate these students urge that in the formation of credit unions hability to double the amount of one's holdings in the bank be required and unhmited liabihty permitted. credM mnlt'b^'iongM '^^^ merchant finds that 60 or 90 day credit answers his pmrposes, because he must either sho?t-term credit!'*' make Ms turnovcr within that period or go to the wall. But the farmer can not make his turnover, as a rule, within six months, and in the case of live stock it may take even two or three years. Hence any satisfactory system of rural personal credit must take this fact into account. sho^"bc*aboiishcd." There are no figures available to indicate the extent to which farmers are accommodated Costly and unfair, jj^ tJ^g purchase of suppHcs, such as f ertifizcrs, farm tools, and even household supphes, by the merchants and dealers. But the sum total must be prodigious. Nor are there any figures available which show truthfully the actual interest that is paid by the farmers for these accommodations. Sometimes it has been claimed that these rates may run as high as 20 per cent per year. It is almost impossible to figure out the results acciu-ately, but it is certain that inasmuch as the merchant takes all the risk, and oftentimes a pretty large risk, and inas- much as he can easily hide the interest rate in the price, and, furthermore, inasmuch as he has the "whip hand," it is safe to say that the farmers of America are put to an enormous annual interest charge through this system of mercantile credit. Probably mercantile credit will never be abohshed for the shiftless farmer, because no permanent system of safe personal credit is possible except when it deals with farmers of abihty and character. Indeed, in Europe one of the great arguments made for the httle credit societies is that they put a premium on sobriety and thrift, and have really had an enormous influence in these respects. Perhaps the biggest argument for a better system of rural personal credit is the irregularity, lack of system, uncertainty, arbitrariness, and excessive interest of the present system of mercantile credit to which great masses of our farmers are frequently slaves. Present banking Thcpc are some scctions of America where it is said that the farmers already own the small some regions?"* " " banks. In such favored regions farmers can probably get all of the personal credit they need. In many other regions, if the banks will adopt the practice of extending the period of short-term loans, it is possible that all legitimate needs of the farmers can be met. If, moreover, the rediscounting of agricultural "paper" — i. e., notes given to banks by farmers — is practiced, as is contemplated by the Federal reserve act, one of the most pressing needs in short-term agricultural credit will have been met. It is still a question whether even these changes meet the need in wide areas of the country and with a very large class of the smaller farmers. The People's coop- The European countries have solved this problem in two ways — either by what are crativeban . called People's banks, which are cooperative banks, usually located in the cities, small or large, and which loan to people of small means, no matter what their occupation. In Germany about one-fourth of the borrowers in these People's banks are farmers. The other method is through the Kaiffeisen banlcs, which are really little credit societies absolutely cooperative in AGBICtTLTTJEAL COOPERAnON IN EXJBOPB. 17 character, usually with unlimited liability, without paid officials, with no profits. They serre as savings banks for the farmers and frequently they also act as societies for the sale of products and purchase of supplies. Banks very much like these European Raiffeisen banks are already authorized in some of Am^iica"'^" ""'""'" the States in the United States. For example, Texas, Wisconsin, New York, and Massachusetts have laws permitting the establishment of credit unions. These are cooperative, non- profit makiag societies intended to gather up unused savings and to secure money from the larger banks on good terms, and to make aU these resources available to members in the form of comparatively small loans for short terms and for productive purposes. A prominent English student of the European credit system, whom the Commission met ^ English Tiew. in England, and in whom its members have the greatest confidence, has used the following words in a statement of his own opinion concernuig these rural credit societies: "It appears in the highest degree desirable that, from the commencement of the work for the establishment of rural credit societies, strict attention should be paid to the inculcation of the essential features of such organizations — e. g., the coUectiveness of the liability; localization or definite limi- tation of area of operations so that mutual personal knowledge is secured as among all the members; loans only to members; loans only for reproductive or provident purposes; restric- tion of interest in shares (e. g., not to exceed rate charged by society for loans); unpaid man- agement, except for secretarial work; the object of these societies being to be the thrift as well as the credit organizations in their localities, stress must be laid upon" taking aU suitable steps that the thrift side is energetically developed — in their own interest they should aim at securing the regular collection of every idle doUar in the possession of all residing within their area of operation." COOPERATIVE CREDIT. A tremendously important question faces the American people at the outset in endeavoring to secure a better system of rural credit, both real and personal; namely, shaU this credit be developed by profit-making banks or through the cooperation of the borrowers — that is, of the farmers themselves ? Banks are a legitimate and important enterprise. They can not exist, however, unless pr^a*"^ ™"^* "*"''* * they make a profit out of their business. Now this profit comes largely from the borrower and from the depositor, rather than from the owner of the capital stock. When the depositors and borrowers band themselves together for the purpose of in^^^|8''pa™on''8*the securing credit, if there is any profit it accrues to the borrowers because they are the bank. In p™***' the long run the answer to the question whether the United States shall or shall not have a cooper- ative rural credit system depends largely on whether the farmers believe that by cooperating they can save enough in what would otherwise become profits for the banks, to make it worth while for them to take the risk, because there are risks. This is the same thing as saying that if either existing banks, or especially organized banks for agricultural credit, can furnish this credit successfully and satisfactorily, on such low terms that the majority of farmers do not care to take the risks of cooperative banking, the cooperative system will not develop. The genius, and the great reason for the success, of the Eaiffeisen banks in Europe is that cient^rec*os52lchMl they cater to the small farmer, encourage his industry and thrift, take care of his httle savings, *"'"• loan him small amounts of money on good terms, make his neighbors responsible for him, recognize his character as security. Now, it is not entirely the fault of our present banking system that these things are not so well handled in the United States. It is difficult for one of our bank officials to know and recognize aU these elements in the case of many farmers. Of course, this can be done and is done in the case of city business men. But city business is organized and farm business is not organized. The rural cooperative credit society organizes 'the farmers' business in such a way that the bank can recognize it and keep track of it. It puts a premiiun on character and thrift. The great Itahan statesman, Luzzatti, in his notable address to the American Commission, a^^eSvMrmon, made a good deal of the fact that the cooperative societies almost create capital. They do this partly because they capitalize character and thrift, and partly because they pull out of nonuse multitudes of small savings which are thereafter put to the use of the members of the community. credit money. A word of cantlon. 18 AGRICULTURAL COOPERATION IN EUROPE. ntuSie?"ttJB^fliiSnci" There is little doubt but heretofore the American banking system as a whole, so far as it S«w3ty!^ "' * '""°' a-ffects the rural communities, has worked in many areas so that it not only does not bring to those communities the benefits of organized finance, but actually tends to deplete their financial resources, because it gathers up the small savings and invests them outside of the community. This is not the fault of the country bankers, but is a flaw in our general banking system which should be remedied. An advantage of the little credit societies is that they not only succeed in getting better terms on money borrowed outside of the district in which they operate, but they tend to keep the financial resources of the district for productive use within that region. stim*Satetottetforras T^® European experience in general and the almost imiversal European advice is that of cooperation. Cooperative credit both precedes and stimulates cooperation in other lines. It is not to be concluded that cooperative purchase and sale can not be successfully inaugurated in the United States unless we first develop a complete system of both long-time and short-time agricidtural credit. But it is significant that in Europe the most complete systems of cooperative purchase and sale actually are built upon a thoroughgoing system of credit, particularly of cooperative personal credit. cooi?e?ati??"credu "^^^ European experience seems to indicate that the cooperative form of furnishing credit taTmerica. P™^'**'* is likely to be the ultimate method in America, for the very simple reason that credit will be , furnished by private joint-stock financial institutions only for profit to the institution, whereas under cooperative credit the members get the profits. Moreover, it is difiicult for a great financial system to adapt itself to the needs of the men of small means; but it is they who are most numerous and, in the long run, most important. Hence there should be provided opportunity and encouragement for the development of cooperative institutions intended to sup- ply credit to the farmer — that is, institutions for members rather than for outsiders. This obser- vation applies both to the question of long-term credit and the question of short-term credit. It must be remembered that it took a half century for the present system of rural credit in Europe to become thoroughly established. There is no reason why we should need so long a period of development in this country, but it is highly important that we should not rush into any new plans simply because they have worked in Europe. They should, however, be given every trial, and that as soon as possible. COOPERATION IN PRODUCTION AND DISTRIBUTION. Cooperative credit is by no means the only method by which farmers work together for their own interests in Europe. Credit, however, was the first subject that the American Com- mission went to Europe to study, hence the attention given to it in this report. Moreover, as already stated, all the European leaders agree that cooperative agricultural credit is the foun- dation of a successful and permanent agricultural business. But it is not all of that business. Other forms of cooperation, therefore, merit our attention and were, so far as possible, studied in Europe by the Commission. Cooperation^ found The Commission visited a dozen countries, and in every one they found active agricultural cooperation. They were not able to visit some countries, as, for example, Bulgaria. But so far as could be learned, with the possible exception of Turkey, there is not a single country in Europe that has not developed a more or less complete system of agricultural cooperation. The extent of co. jt ig impossible, from any figures placed at the disposal of the Commission, to say defi- nitely how much of the agricultural business in Europe is done under the collective or coop- erative method. It varies in different countries. But taking all forms of cooperation — that is, credit, purchase of suppMes, sales of products, etc. — the guess might be ventured that from one-third to one-half of the farmers' business in the western countries of the Continent of Europe is done through cooperative agencies. methSd ta™m*buS -^^ ^^7 ^^^^> ^* ^ perfectly safe to say that while there are many farmers, even in well- "^^s- organized countries like Germany, who do not belong to any cooperative society whatever, the majority do belong. Some are members of half a dozen cooperative societies for different purposes. So thoroughly has cooperation developed that it is the characteristic way of doing the farm business in Western Europe. In Eastern Europe, as in Russia, it has made only a start. In Ireland it is developed to a very large degree; to a less extent in Great Britain. Cooperation helps Coopcratiou hclps the farmers who do not cooperate. At first thought this mav be con- the farmers who do ,'^,... ,, ,. ,, ., xit -ii. •, ■, not cooperate. sidered an objection by the nard-headed man who does not believe m helpmg anybody unless AGBICTJLTTJRAL COOPEEATION IN EUEOPE. 19 that person reciprocates. But cooperators get enough advantage so that they do not need to worry about those who refuse to cooperate. Nevertheless, the true cooperator is anxious to help aU his brother farmers; and, as a practical matter of fact, while a great many farmers in Europe do not belong to cooperative cocieties, nearly aU of them indirectly get the benefit. A great cooperative purchasing society puUs down the price of fertilizer to all farmers as well as to members of the societies. A cooperative creamery sets the price for all butter made under as good conditions. Cooperative credit societies have brought down the rate of interest to all farmers who borrow. THE DIFFERENT FORMS OF EUROPEAN AGRICULTURAL COOPERATION. The extent to which the collective method of doing business is utilized by the farmers of Europe is illustrated by the following brief outline of the different classes of cooperation which may be mentioned separately. This has already been discussed. It is the fundamental and the most widespread of the cooperative credit, forms of collective agricultural business in Europe. The purchase of fertilizers, feed-stuffs, seeds, machinery, to some extent household supplies, chMTofrappiies '"" and other requirements of the farm is probably a bigger cooperative business than any other except credit. It should be noted that in most European countries the farmers do not confuse the purchase of farm requirements with the purchase of household requirements. This may be no guide for our own country, but in Europe it has been found better not to mix these two kiads of business. The little local cooperative societies usually give their orders to a big central society which buys at wholesale and distributes to the small societies. The cooperative creamery is the most common plan by which agricultural communities facta??."*"^* ™*'"'" make raw material into the manufactured product. Their plan is much like that of the Amer- ican cooperative creamery except — and this is very important — that many of the " cooperative" creameries in America are not really cooperative. But this is not the only form of coopera- tive manufacture in Europe. There are societies for making wine, spirits, beet sugar, curing bacon, canning and preserving fruit, manufacturing fertilizers, olive oil, oU cake, flour, bread, etc. This is confessedly more difi&cult than cooperative buying, and has developed more slowly fooperatiTe selling, and less satisfactorily. However, there is a great deal of cooperative selling in Europe. Proba- bly the best examples — and this is very natural — are connected with cooperative manufacture. That is to say, it is comparatively easy for cooperative creameries and bacon factories to sell their products. The collection and sale of eggs has developed aU over Europe in a very large way and has proved very helpful. The sale of some speciaHzed crops, such as fruits, has a good start. There is a good deal of cooperative selling of grain and some of five stock. A curious noncooperative feature of hve-stock selling was found in Austria, where, ia order to break up a stock buyers' monopoly, the Government, a good many years ago, organized a co7)v- pulsory Uve-stock market. Perhaps the best example of cooperative marketing for ordinary products is in connection with the selling of fruits and vegetables in HoUand, where the sup- plies are brought in by the growers and disposed of at auction, the auctioning being performed in a very few moments through electrical devices. There are a few cooperative seed-growing establishments, many cow- testing associations, p,*'^3^f»° 'pi^J societies for the purchase of pure-bred sires to be used in the community, and other coopera- *"* ammais- tive means of improving stock. Probably there is no more mutual insurance of farm property in Europe than there is in »ncranT"rotecHoS.'" America, but there are perhaps more varieties of it. Not only farm property, but live stock is insured in cooperative societies. There is insurance against diseases of animals, and some cooperative life insurance. ti n in Occasionally there will be found cooperative employment of farm labor; more frequently dnctive processes, the cooperative manufacture and use of electrical power; and still more frequently the coopera- tive purchase and use of farm machinery. Of course these forms of cooperation are not numer- ous but they do exist and illustrate a faith which the European farmers have in the collective method of doing business. The Commission found several instances of cooperative farming. In some cases the coop- cooperation in land erative societies rented the land, then parceled it out to the members, each to work his parcel in his own way. In other cases they who purchased the land also operated it, having a manager who assigned to each member his work for the day or week, and really managed the whole estate 20 AGBICULTUEAL COOPEEATION IN EUROPE. as a unit. In some cases groups of farm laborers band, themselves together to purchase land which they can divide into little gardens; these they work nights and mornings for themselves. THE FUNDAMENTAL FACTORS IN AGRICULTURAL COOPERATION. Different authorities on cooperation would probably differ in their' answers to the question. What are the essential things in successful agricultural cooperation ? The following are men- tioned, not necessarily as a complete list, nor as a minimum list, nor necessarily in the order of importance. They are aU points, however, that were strongly emphasized in Europe. tic?.''""'"^''* *°'''*' Almost always, at the outset at least, cooperative societies in Europe are organized for very specific purposes; as, for example, to buy fertilizers, to sell eggs, to insure Hve stock against disease, to buy pure-bred bulls. There are many exceptions to this rule, especially as the societies grow stronger. Some of these stronger societies are chiefly rural credit societies which find themselves in a good position to purchase many suppHes for the farmer member. Another society may confine itself to purchasing, but will purchase nearly everything a farmer wants. Or a society may be primarily for selling, as, for example, fruit, but may find it advan- tageous to purchase spraying materials, fertilizers, and fruit packages. But in general, and especially in the beginning, the successful society has a single object and does not try to do too much. dus "ry"."^*""" "^ *"' ^^ course, in order to specialize, a society must have enough of one kind of product or business to make it advantageous to handle it cooperatively. If a society has to do business over too wide an area, it finds it extremely difficult to maintain its advantages. So cooperation thrives best where some special industry is concentrated, such as poultry raising, fruit growing, dairying. There are many exceptions to this rule also. The egg collecting societies, for example, when once thor- oughly organized with substations, can collect from a very wide area. So, too, a large creamery with skimming stations can cover a wide field. The same practice may be apphed to selling live stock cooperatively; that is, they may be gathered in small numbers from widely separated communities and a sale consummated at some central place. But the general principle holds good and ought not to be forgotten by cooperators, namely, that the more completely a com- munity devotes itseK to the one, two, or three lines to which it is adapted, the better terms the community is likely to make when it comes to cooperative production or marketing. compnisory faith- The Tock ou which American cooperation has so frequently foundered is the disloyalty of members of the society. When offered better terms than those obtained by the society, they sell to the highest bidder, purchase elsewhere, or do not dehver their raw materials, even though it may mean the disruption of the society and ultimately the control of the situation by the self-interested middleman. Now in Europe they guard against this both by laws requiring the member to agree to transact all designated business through the society, or by fines imposed in case he fails to fulfil his contract with the society. This is not a universal practice, but it is a very common one, especially in those matters where the farmers, in seeking to cooperate, at once antagonize powerful business interests. This is usually more important in connection with the selling or manufacturing society than in connection with the purchasing society, because in purchasing directly the competition is not between the farmers, but between the dealers, whereas in the case of sales of agricultural products buyers usually combine in the attempt to bring about competition among the sellers. Prodncers only are The European cooperative societies are very rigid in the matter of excluding aU who are not reaUy of them. They will not allow anybody to join with any interests except the inter- ests of the society. Only persons can cooperate who have something to cooperate for that is common to all in the society. mill" '" ""'' At the same time, the true cooperative society is open to all who have the qualifications. No one is to be excluded because he is a big farmer, or a Httle farmer, or a tenant farmer, or 'for any other reason. The membership must not be exclusive. It must be democratic. It can not take in a certain group and leave another group out, provided they all have the same needs to be met. standardizaHon, One of the sccrets of the efficiency of collective agricultural business, especially in selling, is the fact that it is possible for the societies to enforce standards of quality. Here is a field in which the American farmers are woefully deficient. The dealers can have no guaranty that products are properly graded or packed, or even are as represented, when they buy of individuals. One of the characteristic methods of European cooperation is the rigorous enforce- ment of those rules which tend to make this guaranty possible. A big grocer in London can comers. AGBICULTUEAL COOPERATION IN EXJBOPB. 21 send an order to any cooperative bacon establishment in Denmark and be absolutely sure that what he orders will be of a standard recognized grade. The butter from cooperative cream- eries, the eggs from cooperative poultry societies, the wiae from cooperative wine societies, the fruit from cooperative fruit-selling societies are just as thoroughly standardized and graded as in the case of any other known business. If cooperation did nothing else than accomplish standardization, it would prove itself the proper method of doing farm business. The organization of agricultural cooperation in Europe calls for two tjrpes of organization. ti^f'^ia,^gT'\idert One, the little neighborhood society which looks after the interests of the individual farmer; *'""^- the other, a ujiion or federation of these societies which stands to the locals as a jobbing house does to the storekeeper, except that it is a part of the cooperative scheme and is so managed. But this large union does the wholesaling. The little neighborhood cooperative society is essential, but in many lines of cooperation it can work to best advantage only when it is part of a much larger scheme of things and can take advantage of wholesale rates. From the American point of view the managers of cooperative societies in Europe getgej^*"''*'^ "*"''■ small salaries, but it must be remembered that wages and salaries are only about one-half as high in Europe as they are here for the same grade of work. On the whole, it is fair to say that the managers of the larger unions are well-paid men. Sometimes the managers of the small local societies do not get very large pay, though usually lodging and sometimes board form part of the compensation. The European farmer knows that he must have efficient man- agers, and he is willing to pay them well. A "cooperator" in Eiu-ope is not merely a member of a cooperative society. He is pos- ^ .^ ™p"JftOT™"'"'* sessed of the "cooperative spirit." The motto of the cooperators, "Each for all and all for each," means all it says. Nobody supposes for a moment that all European farmers are abso- lutely unselfish; but that this cooperative spirit is a great asset in European agricultural coop- eration is inculcated at every turn. There is little doubt but it is a very real influence. Now, the managers, above all men connected with the enterprise, must have this spirit. It is in some sense a missionary spirit. These men must be willing to sacrifice something for the "good of the cause." They must believe profoundly in the importance of their calling. They must find rewards in their service as well as in their pay. THE ESSENTIAL PHINCIPLES IN THE ORGANIZATION OF COOPEHATION. There are a few general principles pretty generally accepted that define or distinguish the method by which a cooperative society differs in its organization from other associated groups of men, as, for example — As it is sometimes stated, corporations are groups of capital units; cooperative societies one man— one are groups of individual units. That is another way of saying that corporations are designed to secxire the working together of capital; cooperative societies are designed to secure the working together of persons. This being so, one member of a cooperative society is as powerful as any other member when it comes to voting. There are exceptions to this even in Europe. There are societies so organized that each member may vote according to the number of shares he owns, but in practically all cases this is under such restrictions that the general principle is thoroughly guarded. For example, each member of a cooperative creamery must take out one share for each cow he owns. The true cooperative society makes no profit as such. It is expected to return the com- NCproats.'! mercial rate of interest on its shares of stock, but it is not supposed to engage in a business for the sake of making money for investors in its shares. AU good financing in agricultural cooperation decrees that after interest has been paid to Beserve fund, shareholders, if there remain any surplus at least a proportion of it shall go each year to a re- serve fund which shall serve as a bulwark against misfortunes or possible mismanagement. This is regarded as so essential that it is usually required by the statutes under which coopera- tive societies gain their charters. If there should remain a surplus after interest and reserve have been provided, the general p,„°^t'*i»'«™ »' ^"f- rule is that this shall be distributed, not to shareholders on the basis of the amount of shares, but to all members (and frequently in a smaller proportion to nonmembers) who have par- ticipated in the business in proportion to the business done. A cooperative store, for example, may sell goods to those who are not shareholders. These nonshareholders get no interest, but inasmuch as they help to create the business they do get a certain share of the surplus after 22 AGEICULTTJRAL COOPEEATION IN ETJKOPB. interest and reserTS have been cared for. Moreover, it is usual for aU employees to receive a share of the surplus based on the amount of their salaries, "cooperative'.''""'' "^^^ word "cooperative" has been grossly misused in America, and many failures of poorly managed private joint-stock enterprises have been charged against the cooperative method, to its discredit, of course. Every State should have a law prohibiting the use of the word "coop- erative" in the name of any legal corporation imlessthat corporation is organized in conformity ^th these characteristic essentials of the cooperative society. SPECIAL FEATURES OF EUROPEAN AGRICULTURAL COOPERATION. Cooperation as an With the great body of European cooperators, especially among the leadeirs, cooperation means something more than a device for enabling the farmer to save or to make money. Many of its most ardent apostles look upon it as a sort of social reform, indeed, in some cases, almost as a religion. They consider it not only an economic but a moral question. It is admitted every- where that cooperation has had splendid moral and social results. It has made dissipated men sober, careless men thrifty, dishonest men square. Of course the immediate reason for this is that it paid them to be sober, thrifty, and square, but it has also given them a pride in the achievement. Farmers found that in order to work together they must sink personal feuds, lay aside personal prejudice, sometimes even sacrifice personal gain in order to make the cooperative scheme "go." It is to be said, however, that cooperation should be entered upon at the outset because it promises to be a more profitable way of doing business than the old way of every man for himself. Cooperation is more than this, but to be successful it must be built on a business and not on a sentimental basis. The sentiment will come later and will help maintain the cooperative scheme. ate°*^'*"""^ cooper- -^g h.e&T it said in America that cooperation is feasible only among the small farmers. In a sense this is true. Unquestionably it is the small farmer rather than the large farmer who is most advantaged by combining with other farmers. Very naturally the large farmer can more easily take care of himself. The small farmer is undoubtedly the bulwark of agricultural cooperation in Europe. At the same time the larger farmers find it profitable to cooperate, and in northwestern Germany, where the prevailing type of farmer is the large landholder, cooperation of all kinds is well developed, ma^gers?"'"*"^ "' When a big agricultural country develops agricultural cooperation to a large extent, it means that there must be a constant supply of good managers. European cooperative societies find that it pays them to train these men, and so in some cases they have organized schools for training cooperative managers. As a rule, however, the managers are men who in some sub- ordinate capacity started as assistants in a cooperative society and have worked their way up. Organizers. jjj some of the countries where cooperation is comparatively new, and where a big compaign is being carried on to develop cooperation, it has been found essential to employ a group of trained men to go about the country organizing cooperative societies on sound and uniform principles. This is especially characteristic of Great Britain and Ireland. Under some auspices or another it may have to be developed in America if cooperation is to grow rapidly and soundly. Europe"o?'o?gani?ing ^^^ ^f the most interesting and significant observations to be made about European agri- cooperative societies, cultural cooperation is the fact that, although the fundamentals are recognized, the greatest possible variety of form and method exists. The ways in which the societies get started, com- bine into larger units, handle their accounts, and limit their lines of activity differ greatly. Each country, in fact, has developed in its own way, although in general there may be said to be two main types — the German, followed in Austria and the north European countries, and the French, followed in Belgium and Italy. Yet the German rural credit institutions are the foimdations for the Italian work. In Austria the Government is very paternal in its attitude toward rural cooperation, not only kindly assisting but even "compelling them to come in." In Holland it is a boast that the motto of agriculture is "a free farmer in a free State" — no aid from the Government. In Ireland and in Great Britain farmers have to be m-ged to cooperate, and a strong central organi- zation society takes the lead, publishes literatxu-e, and maintains a corps of expert organizers. In Denmark there seem to have been no outstanding leaders. There is no campaign on behalf of cooperation; they just cooperate. All this indicates that in America we must not be slaves to any special scheme or plan as regards details. The main essentials, however, must never be disregarded. AGBICULTURAL COOPEEATIOIT IN EUROPE. 23 THE APPLICATION OP THE FOREGOING TO THE UNITED STATES AND CANADA. A good deal of what passes for agricultural cooperation, in the United States at least, is not ^ "^^J^ca aSy."" true cooperation. But aUowiag for that fact, there is ia the United States as a whole con- siderable successful busiaess cooperation in agriculture. The fruit growers of the West through their selling societies, the graia growers of the Central West ia their cooperative eleva- tors, the dairymen of the Northwest in their cooperative creameries, the vegetable growers of the eastern coast in their selling societies, the many mutual insurance societies, and the great numbers of cooperative country stores are doing a successful busiaess and are increasiag rapidly. Nevertheless the cooperative method is not ia America the characteristic method of doiag the farm business. One trouble with the American is that once he makes up his mind to do a thiag, he wants ,, ^ ^J'J^j^^^J''^*!,"^; to do it right away. We must not go too fast in this matter of cooperation. We must remem- ber that 40 yeare ago the farmers began to cooperate ra busiaess, and that the path of agricul- tural cooperation in America is strewn with wrecks, big and little. We must make haste slowly. We must build on good foundations. We must not be too enthusiastic about cooperation; we must treat it ia a hard-headed business way; we must try it out. Above aU, we must build it on proper lines. Nevertheless the American farmer should gradually, even if slowly, give up the iadividual t,n^STo'^ow" **'" method of doing his business and take up the collective method. Otherwise he can not hold his own except in the comparatively few cases of the very large and well-to-do farmers. The great masses of farmers will soon be perfectly helpless in their busiaess relationships unless they can, by collective effort, place themselves on a par with other business men. American farmers compete with one another. In Europe more or less of the trade ia agri- auS'^'omMatioii """ cultural products is confined within a given country. Of course, there is exchange of food- stuffs between countries, but not nearly to the extent as between different States of the Union. Moreover, American railways favor the long-distance markets. Yery naturally they want the long haul. Now, cooperation will tend to develop the local markets, reduce the hauls of prod- ucts, and thus tend gradually to bring about a situation where each region produces, so far as possible, its own food ; at any rate, raises those food products which it can grow, best. Many of the States have no adequate laws under which true cooperative societies can be Legislation neces- formed. Wherever this state of affairs exists laws should be passed which will enable Httle groups of farmers to organize on proper hues for anything they want to do in common. In order to make cooperation thoroughly understood, a State committee on agricultural state committees 111" ■ 1- 1 o -11 mi ■ • 1 1 1 1 "■' cooperation. cooperation snould be organized in each, btate as soon as possible. Inis committee should be made up of people unquestionably iaterested in agriculture and thoroughly representative of the farmers; and, while it may be self-selected at first, as soon as possible it should officially represent the cooperative societies of the State. Such a committee will carry on an educational campaign, look after necessary legislation, help procure organizers and managers, assist in organ- iziag societies, and, ia general, take charge of the movement for puttiag agricultural coopera- tion on its feet. A similar committee representiag the whole country should be in existence for the same a National commit- purposes, except that its work should be more general. At first it also may be a self-appointed cooperation, committee, but as soon as cooperation is well established it should be a thoroughly represent- ative body, confined to those who are actually engaged in practical agricultural cooperation or otherwise closely identified with it. For the present, at least, we must look upon cooperation in the United States as a means cooperation not the to an end and not an end in itself. The immediate purpose of cooperation is a, more effective tnbution. and less expensive means of distributing the products which the farmer grows to the individ- uals who finally consume them. At present the farmer gets too little of what the consumer pays and probably the consumer pay more than he ought to. Cooperation between producers and cooperation between consumers ought to iacrease the price to producers and decrease the cost to consumers. But there may be other ways of doiag this; at least there may be other things that will help. In any event, the movement for cooperation need not and should not bHad us to the great importance of endeavoring to improve our system of distribution by any means within our power. This is a matter of vital concern to the people as a whole, as well as to farmers. 24 AGEICULTUEAL COOPEEATION IN BUBOPE. red^JS the°"cMt"o" Yes; a well-developed system of agricultural cooperation should reduce the cost of hving. "'^^^ But too mtlch should not be claimed by the farmers nor expected by the consumers. Coopera- tion is primarily a method of doing business for the benefit of the producers by reducing the costs of distribution. Without question the consumers will gain something from this process. Cooperation is not against the consumers. It does not attempt to rule the market. More- over, it has been shown that consiuners can cooperate and deal directly with cooperating producers. It must also be remembered that collective selling of farm products is probably the most difficult form of agricultural cooperation. meaS''ttc''"ToTitioS Nobody knows. A generation of agricultural cooperation in Europe has not abolished of the middleman"? iniddlemen — it has reduced them. The aim of sane cooperation is to aboHsh unnecessary middlemen. The great argument for cooperation is that it is economical, both for producer and consumer. Wherever the middleman is also economical he should stay in the field ; wher- ever he is a parasite he should be driven out. THE ORGANIZATION OF AGRICULTURE AND COUNTRY LIFE. COUNTRY LIFE. of^ttie'"com"iMssioS's '^^^ main purpose of the Commission was to study on the spot the methods by which the ""''^' European farmers do their agricultural business collectively. But there were many members of the Commission particularly interested in the community or country-life side of the agricul- tural question, and so one of the four sections organized within the Commission bore the title "The Organization of Agriculture and Rural Life." No special opportunities had been arranged for this phase of the investigation, but of course the Commission was constantly in touch with rural leaders and necessarily gained many impressions concerning the human or country-life side, bound together? *"' The farther the Commission went in its work of investigation and the more it studied agricultiu-al cooperation, the more its members became convinced that it is impossible to pick out any one question, like rm-al credit, or cooperative selling, or the nu'al school, from among all other questions concerning the welfare of rural people and work that out by itself. All rural matters are tied up together. It is idle to attempt to separate them in a comprehensive study of any phase of the farm question. Consequently, a report on agricultural cooperation is not complete unless there is some mention of country life. apbSudtag lf*the ra- After all, the great purpose in all these schemes for improving agricultiu-al conditions is not rai commnnity. aloue to secuTC better terms for credit or to make a little more money in buying or selling. They are aU part of a plan to secure greater prosperity for the farmer, and, in turn, to make it pos- sible for him to use his prosperity to better advantage in making the community in which he lives a more satisfactory dwelling place for himself and his family. What we really want is not merely better farmers but better farm commimities. There is no rural neighborhood so good that it can not be improved, and there is none so poor that it is beyond hope of improve- ment. But the European experience shows that if we are to achieve this end we must think in terms of the community even more than in terms of the individual farmer. The question is less what will help John Smith than what will help aU in the neighborhood, what is for the common good. The community interest means the common interest of all. Let us repeat again the motto of the European cooperators, "Each for all and aU for each." COMMENTS ON EUROPEAN COUNTRY LIFE. Permanence. This has aheady been referred to. In America a very large proportion of the farmers have not Hved on their land more than five years. In Europe the big majority have lived on then- land for more than five years and hosts of them for a lifetime. The whole countryside is given the air of permanence through good roads, stone and brick buUdings, etc. Of course, all this is natural in an old country and it has its disadvantages. It is probably not nearly so easy in Europe as in America for the country-born boy to find his way to leadership in professional and public life. But, after all, this permanence does make for the prosperity and stabUity of the agricultural classes as a whole. vuiage life. j^-q^ ^U the farmers in Europe by any means live in country villages, but a very large pro- portion of them do. This has also both advantages and disadvantages. Some careful students beheve that on the whole it would be better if all the farmers hved in separated farm homes, as is the prevailing method in America. The people themselves, however, apparently like the AGErOULTUBAL COOPERATION IN EUROPE. 25 Good roads. Knral beauty. village life. They meet together after the day's work is over and have become so accustomed to this little hamlet method of living that they would probably not be contented under any other conditions. It does give a chance for close acquaintance, sociability, and ease in coop- erating. On the other hand, it is beUeved that the people in the isolated farm homes have greater initiative and independence and lean less on other people. Undoubtedly, too, time is wasted by the villagers in going out to and back from their farms daily. Still, they put in such long hours anyway that this may not be an important item from the American point of view. An almost universal system of hard roads makes the entire countryside accessible to the automobile, makes marketing of farm products less costly, and gives the farmers in the open country and in the small villages transportation advantages equal to those of the more populous regions. As a rule the European farm homes in their exteriors at least show evidences of the love of beauty. The use of flowers, of pleasing architecture, of permanent building materials, all combine to give the farming regions an air of finish and artistic appreciation that is most pleasing. Of course there are many exceptions to this rule and there are to be found sanitary conditions which the average American farmer's wife would "clean up in a jiffy." The European peoples as a whole are much more given to leisure than are American people. The farmers during the season work exceedingly long hours, and yet festivals, holidays, etc., are a part of their Hfe. Music adds zest and joy to what would often be otherwise hard con- ditions. In the more progressive European countries the proportion of illiteracy is astonishingly low. In Germany, for example^ we were told that it has been reduced to about 4 per cent. A few other countries show the same educational efficiency; those Americans who have an overweening pride in our pubhc-school system and who hold the opinion that the average European farmer is an ignorant peasant should revise their views. Even in the country districts of America, at least in all parts except possibly the Southern States, there is a great variety of nationality. Now, ia Europe this variety does not exist to any great extent. In some regions the people and their direct ancestors have been hving for a hundred years, perhaps several hundred years. So they have learned to think alike and they find it easy to act together. Diversities of race and religion do not break into the cooper- ative spirit. It is difficult for an American to reconcile himself to the xarge amount of farm labor per- formed by women in Europe. It is hard, however, to combat the argument which is made on behalf of this practice. It is healthy work; seldom do they overwork; certainly, in general there are large families of healthy children. It is also obvious that in some countries, if the farm women did not work, both the farmers and the city people would be hard pressed for their food supply. The economist uses glibly the phrase "standard of living." It is hard to say just what it is. It is a truism, of course, that the luxuries of one age become the necessities of another. In America conditions differ so much in different regions that nobody can say just what the general standard of living of the American farmer is. The standard of living of the farmers in Europe must be compared with the standard of hving of the people in the cities before we can make up our minds as to the comparative standards between European and American farmers. Among the masses of the people, living in Europe is simpler than in America; wages are less, but expenditures are less also. As to food, there is probably not so large a variety nor as much of the more costly foods, Uke meat. It is probably safe to say that the better farmers in America have more of the comforts and luxuries of hfe than the same number of better European farmers. It must be said, however, on the other hand, that there seem to be very few places in Europe where any large numbers of farmers are poverty-stricken or suffer discomfort. The church plays a part in Europe that it does not take in America. In countries like imJSftant Italy and Belgium, for example, the Roman Church has deliberately developed great schemes of agricultural cooperation wholly for church members. This interest of the church has had a profound influence in the development of agriculture in those countries ; but in other coun- Mnslc and tlon. General education. Like-mindedness. The work of farm women. Standards of living. The chnrcb very 26 AGKIOULTtTRAL COOPEBATION IN EITEOPE. tries both Protestant and Catholic churches have, through their pastors and priests, assisted materially in the development of agriculture. There is no reason why in America the church may not render a great service in encouraging cooperation. Certainly in all things looking toward better farm life the church should play a dominant part. RURAL ORGANIZATION. Either consciously or unconsciously all the European countries have attempted to organize agriculture and country life on a more or less comprehensive basis. Some have held to this ideal more completely than others; some have carried it further than others. In some countries the idea of organization is an economic organization that will allow the farmers to do their business to the best advantage. In other countries the ideal is to bring about a higher state of rural life at all points through organized effort. These facts are worth attention from our American farmers, although the subject is one of great complexity and can hardly be treated in a few words. nJtl* '"" ''"'°'''*'" * We must reiterate the statement that it is impossible to divorce some one farm question from all the others and solve it by itself. All of the interests of the farm people are bound together, and taken together they form one big question. Practically, however, there are many phases of this question, and they can be worked out best if they are separated into related groups. Perhaps one of the best divisions that has ever been made is expressed by the Irish leaders, imder Sir Horace Phmkett, who say that what is needed is "better farming, better busi- ness, better living." These leaders believe that better business is a necessary preliminary to better farming and an important aid to better living, arm g. Everybody will agree that we can improve our farming. But how can individual farmers or how can farmers working together improve their soil or their crops or their live stock ? How improve methods of cultivation and harvesting? How protect against the ravages of insect pests and plant and animal diseases? All these questions are concerned with production. They are farm-improvement problems. For many years our farmers have tried to improve their farming by talking together about methods. So we have thousands of horticultm-al socie- ties, poultry societies, etc. Now, the question for America is. Can we develop still better means of cooperation by which the farmers may improve their methods and get "better farming" ? Oiu" farmers have contended for many years that the real farm question in America is not to produce more but to sell to better advantage what is produced. This means better business. That is, a better system of marketing and exchange; a better system of buying and selling. Farmers have been working at this problem, but usually each man for himself. In Europe they have helped to bring about better business almost whoUy by cooperating. Shall we not do the same here ? ' Better iiTing." g^^ there are also other questions that have to be settled if we are to have the right sort of country life. It has often been remarked that farming is not only a business but a mode of living. It is a fair question to ask whether all of those things that go to make human life worth living are as well developed in the farming regions as they ought to be; such matters as schools, local government, home life, the country church, recreation, sanitation, all of those matters that are part of the common life of the people ? Now, in all of these three groups of questions that must be worked out, great improvements have been made and are being made to-day. We have in America many cooperative efforts, organizations, and associations for just these purposes and they have performed a prodigious service. But in general the American farmer has gloried in his individual freedom and has not taken very kindly to working with his fellows. One great lesson that we learned in Europe was that the collective method of solving all of these three groups of problems is the best method in the long rim. We believe that in all of these departments there should be a great forward movement for better organization, a^cnitar™'*""" **' Heucc arises the idea that we can make greater progress if we can relate to one another — that is, correlate — the various activities for rural improvement. Can we not devise a plan by which all agencies may work together for the common end of rm-al community-building ? If we could do this in each local neighborhood or community, do it in each agricultural county, arrange for it in every State, finally apply the principle to national agriculture and country life, it would mean a tremendous gain for our American farmers. ' Better business.' The need of coUec- (Ire effort. AGEIOULTUBAL COOPERATION IN EUROPE. 27 It means, first of all, that each community will organize itself thoroughly. That is, the ^™** '"' ""*»""• farmers will work together for improving their farms; they will work together for improving their business; they will work together for improving the life of the community. Now^ different communities may do this in different ways, but in general farm people will organize not for the sake of organizing, but for some immediate object. That is, the poultry growers will get together to study how to improve poultry and egg production; the dairymen will do the same, the fruit growers the same, and so on. Either these organizations, or more often still others, will organize for securing credit, for buying, for selling, for insurance. StiU other groups will organize for recreation, the improvement of roads, the improvement of public health, and for religious purposes. But just as it is important for individuals to work together for their common ends, so it These organizations .,» . \ _ . n r -IIP iinnn mnst Work together. is unportant ror associations to work together. So far as possible, tor example, let all or the farm improvement societies in a community or district cooperate wherever they have inter- ests in common. Let all cooperative business societies federate wherever they can. Let all of the different associations for improvement of country life come together and talk over things they have in common. And finally, so far as practicable, bring together aU of these interests, whether they are chiefly concerned with better farming, better busiaess, or better living, and see if, after all, they are not working for precisely the same large end and have not many things in common. No one yet knows just the best method of accomplishing this, but a plan is being tried in ^^J^^j" ^'"' *'^. ■»• some parts of the country that is worth suggesting, at any rate. It is as follows: Organize a council in each rural neighborhood the boundaries of which are agreed upon. The community This council is made up of representatives of all of the associations and institutions in the neigh- borhood, such as credit unions, cooperative societies, granges, farmers' unions, school board, women's clubs, etc.; let every agency or institution interested primarily in community bet- terment have a place in the council. The work of the council is to hold community meetings, appoint committees, and in other ways to try to accomplish the following objects: 1. To create the "community idea"; that is, the idea of "each for all and all for each." 2. To make a study of the needs of the community in farm matters, in business matters, and in living matters, and out of this study to make a plan of community improvement which includes both those things that can be done at once and those improvements that will take a long time to accomplish. 3. To assist and encourage any new organization in the commimity that may be necessary or desirable in order that aU the problems of the community may be, if possible, worked out to a successful solution. The county organization is made up of delegates from all of the community councils in a ^^^^^ organiza- coimty. Its purposes are similar to those of the local council except that it views the county as a whole, and serves as a clearing house for all rural improvement matters in the county. It holds frequent conferences to discuss various phases of rural improvement. The State organization is composed of delegates from the county rural councils and also of state organizations, representatives of State-wide organizations of aU kinds interested in agriculture and country life. The National Council of Agriculture and Country Life may be made up of representatives National conncu of of State councils as well as representatives of natioiial associations and organizations having try Life, an interest in agriculture and country life in any of its phases. THE PLACE OF GOVERNMENT IN AGRICULTURAL COOPERATION AND RURAL ORGANIZATION. Government, whether local, State, or national, can render a great service to agriculture and country life. Government can do a great deal more than many people suppose, and it ought to do a great deal less than many people expect. The following principles are set forth as suggestive of fundamental conditions of Government service : 1. The Government, as representing all the people, should do all such a Government can do on behalf of better farm practice, better farm business, and better farm life — ^in so far as this betterment is to the advantage of all the people. 2. In general, however, Government should do nothing that can effectively be done by individual farmers, or by the farmers collectively through voluntary effort. It is highly 28 AGKIOITLTtrKAL COOPEEATION llS EXTEOPE. important to develop self-help. The "cooperative spirit" is vital to the success of coopera- tive effort, and this spirit is best engendered by the work of voluntary agencies of social service. 3. The Government, however, may take the lead temporarily in many movements, in order to stimulate interest and to show how progress may best be secured. 4. Where there is practically unanimous agreement on the part of the people that a cer- tain type of effort is essential for the good of the whole people, it is highly proper that the Government should be the agency to perform the service. wh^at Government The typcs of work which Government may do for agricultural cooperation, for example, under the principles just enunciated, are as follows : 1. The Government may investigate facts and principles underlying the development of agriculture and country life. 2. The Government may interpret those principles in the hght of the needs of the people. 3. The Goveminent may inform the people of the results of its investigations and interpre- tations. 4. The Government may advise individuals and groups how best to take advantage of these facts and principles; that is, how to apply them to farm improvement, marketing and exchange, and community life. 5. The Government may demonstrate the best methods of accomphshing this apphcation of facts and principles to actual needs and conditions. 6 "'ernment""™' "' ^ • '^^® Government may not participate in the farmers' business nor direct their com- munity life. Only as legislation may be necessary to restrain should Government interfere with the initiative and development of the individual. It should not try to run a man's farm for him, nor to manage the farmers' business transactions. 2. There are money hmitations to the work of Government. The riu-al problem is so large that the work of Government even within its field will have to be supplemented by voluntary aid and financial support. 3. There are some fields in which the people are not sufficiently agreed as to raethods and machinery so that Government can safely undertake to carry on the collective enterprises of the people. IN CONCLUSION. 1. The experience of 30 years, by a dozen European countries, has demonstrated beyond all question the decided advantages to the farmers and to consumers as well of the cooperative or collective method of doing the business incident to agriculture — whether in obtaining credit, in buying, in selhng, or in manufacture of food products such as butter and cheese — over the older but much less effective method of purely individual business activity. 2. For nearly the same period, in America, farmers have experimented with the cooper- ative method. There have been many failures. But to-day the conspicuous success of coop- eration in the selling of fruit and vegetables, in butter making, in estabhshing grain elevators, and in organizing supply stores, indicates that collective farm business is feasible in America as well as in Europe. 3. The great and rapid increase in the cost of hving, the continued failure of farmers to receive what they consider their just share of the final price of their products, the growing beUef in the defects of the individuahstic method of farm marketing and exchange, and in the need of substituting therefor the cooperative or collective method — these and other causes have contributed to a renewed interest among American farmers in the subject of agricultural cooperation and a reahzation that, while Europe can teach us many valued lessons in the agricultural field, the American farmers, as cooperators, must work out their own economic salvation, not with fear and trembUng, but with courage, faith, care, and diligence. 4. One of the most pressing economic needs of American agriculture is the opportunity to secure, on better terms than at present prevail, the necessary capital, and, consequently, the necessary credit demanded by modern conditions of farming. In order that there may be a uniform and nation-wide system of long-term credit, it would seem wise to secure the enactment of a federal law permitting the organization of farm-land banks, either on the joint-stock or the cooperative plan, authorized to issue long-time bonds secured by farm mortgages, required AGBIOULTUEAL COOPEKATION IN EUROPE. to do business on a narrow margin of profit, to allow payment of principal on the amortization plan, and carefully and fully supervised by the Federal government. There is no objection whatever to the enactment of proper legislation by the different states for this same purpose. 5. In case the existing system of banks — national, state, savings, and private — is not able or not disposed to grant farmers increased and more liberal facilities for procuring short-time oans, there should be enacted state laws permitting the organization of cooperative credit associations by means of which the farmers of a given community may be enabled to meet their own needs for short-term or personal credit. 6. Every encouragement should be given the movement for organizing other forms of cooperative endeavor among farmers. This movement should proceed cautiously but rapidly. The main reliance of the American farmers in meeting economic disadvantages and handicaps must be their own intelligence and their capacity for united action. 7. In order to forward the cooperative movement, it is wise to form a voluntary National Committee on Agricultural Cooperation, to serve as a propagandist and educating body — a clearing house, in fact, for the nation as a whole — ^with respect to all phases of agricultural cooperation. Eventually the various cooperative organizations will form their own national federation or union. 8. AH farmers and friends of farmers must not fail to look at all sides of the rural problem and to look at it as a whole. Improvement in farm practice, improvement in farm business, and improvement in farm hfe are all important. In some respects the last is the most important. 9. In any event, the underlying need in American agriculture is to organize in every farm- ing neighborhood ia the land a well-considered cooperative effort for making that community in aU respects — in its farming and in the life and character of the people — the best possible neighborhood. This is rural community-building. 10. In order to give national scope and direction to the campaign for rm-al community- building, there should be organized a National Committee on Rural Federation, whose task would be to hold national conferences on rural progress, to seek to unify or correlate the many important and useful agencies already at work for rural advancement, and to give direction to the ultimate welding together, in one great forward-looking movement, of all the forces designed to insure on American soil better farm practice, better farm business, and better farm life. 29 X 63d Congbebs 1 „„„ . „„ ( Doc. No. 261 tdSeuum f SENATE ^ p^^^ 2 AGRICULTURAL COOPERATION AND RURAL CREDIT IN EUROPE REPORT OF THE AMERICAN COMMISSION, CONSISTING OF DELEGATES FROM' DIFFERENT STATES IN THE UNITED STATES AND DIFFERENT PROVINCES OF CANADA, ASSEMBLED FOR THE PURPOSE OF IN- VESTIGATING.IN EUROPEAN COUNTRIES COOPERATIVE AGRICUL- TURAL nNANCE, PRODUCTION, DISTRIBUTION, AND RURAL UFE PART 2 MINORITY REPORT OBSERVATIONS AND RECOMMENDATIONS WASHINGTON GOVERNMENT PRINTING OFHCE 1914 63dCongbb88 1 wtjatw (Doc. No. 261 AGRICULTURAL COOPERATION AND RURAL CREDIT IN EUROPE REPORT OF THE AMERICAN COMMISSION, CONSISTING OF DELEGATES FROM DIFFERENT STATES IN THE UNITED STATES AND DIFFERENT PROVINCES OF CANADA, ASSEMBLED FOR THE PURPOSE OF IN- ' VESTIGATING IN EUROPEAN COUNTRIES COOPERATIVE AGRICUL- TURAL nNANCE, PRODUCTION. DISTRIBUTION, AND RURAL UFE PART 2 MINORITY REPORT OBSERVATIONS AND RECOMMENDATIONS WASHINGTON GOVERNMENT PRINTING OFHCE 1914 SUBMITTED BY MR. FLETCHER. In the Senate of the United States, December 5, WIS. Ordered, That the manuscript of the report of the American Commission on Agricultural Cooperation in Europe be printed as a Senate Document. Attest: James M. Bakek,' Secreton/. 2 ORGANIZATION OF THE COMMISSIONS. THE UNITED STATES COMMISSION. Duncan U. Fletcher, Florida, Chairman. John Lee Coulter, Minnesota, Secretary. Thomas P. Gore, Oklahoma. Kbnyon L. Butterfibld, Massachusetts. Ralph W. Moss, Indiana. Clarence J. Owens, Maryland. Hakvie Jordan, Georgia. THE AMERICAN COMMISSION. EXECUTIVE OFFICERS. Duncan U. Fletcher, Florida, Chairman. Kenyon L. Butterfield, Massachusetts, Vice Chairman. Thomas S. Southgate, Virginia, Vice Chairman. Harris Weinstock, California, Vice Chairman. S. A. Lindsay, Texas, Vice Chairman. Cahfohnla : Harris Weinstock. E. J. Wickson. Connecticut: Edward Chapman. Colorado: Gordon Jones. Florida: Duncan U. Fletcher. John G. Ruge. F. J. H. von Engelken. Georgia: C. W. Hillhouse. Harvie Jordan. Illinois: George W. Woodruff. Indiana: Ralph W. Moss. Massachusetts : Kenyon L. Butterfield. J. Lewis Ellsworth, Charlotte Barrell Ware. Maryland: Clarence J. Owens. Michigan: William B. Hatch. Minnesota: James C. Caldwell. John Lee Coulter. Mississippi: Thomas J. Brooks. Alberta: Alwyn Bramley-Moore. Henry Marshall Tory. Clarence J. Owens, Maryland, Director General. Harvie Jordan, Georgia, Secretary Treasurer. members by states. Missouri: Garland B. Miller. Nevada: J. E. Stubbs. New York: Frederick H. Allen. Albert E. Roberts. R. B. Van Cortlandt. C. C. Mitchell. North Carolina: E. L. Daughtridge. John Sprunt Hill. A. E. Tate. Ohio: William M. Brown. John Cunningham. Marshall E. Thrailkill. Oklahoma: Thomas P, Gore. Oregon: Hector MacPherson. H. G. Starkweather. Pennsylvania: Robert L. Munce. James G. McSparran. South Carolina: T. B. Thackston. E. F. Woodside. R. I. Woodside. members by canadian provinces. Ontario : Charles F. Bailey. Lionel Smith-Gordon. Nova Scotia : Arthur S. Barnstead. Tennessee: Lilian W. Johnson. H. A. Morgan. Ernestine Noa. James Allen Smith. Mary Temple. Texas: Charles B. Austin. W. W. Dexter. S. A. Lindsey. Clarence Ousley. J. S. Williams. Francis W. Wozencraft. Utah: Robt. J. Glendinning. Vermont: Charles Otis Gill. Virginia: R. W. Dickenson. LeRoy Hodges. Thomas S. Southgate. Washington: Clark G.. Black. Ralph Metcalf. Sarah S. McMillan. West Virginia: Joseph F. Marsh. Wisconsin: Porter L. A. Ferguson. District of Columbia: Milton V. Richards. Saskatchewan : John H. Haslam. Edmund Henry Oliver. REPORT OF THE AMERICAN COMMISSION ON AGRICULTURAL COOPERATION AND RURAL CREDIT IN EUROPE. PART 2. MINORITY REPORT. OBSERVATIONS AND RECOMMENDATIONS. MINORITY REPORT OF THE AMERICAN COMMISSION ON OBSERVATIONS AND RECOMMENDATIONS. At the meeting of the American Commission, held in the city of Washington, D. C, December 11 and 12, 1913, called for the purpose of issuing its official report of findings and observations upon its recent European investigations of cooperation, the report which was approved by a majority of those voting has thereby become a majority report of the Commission and appears as Part I of this report. The majority report seems to have embodied the ideas and opinions it was desired to offier to the American public so thoroughly that a free and full discussion of certain phases thereof was deemed unnecessary, although in the report itself the statement is made that: It is clear that no new system of furnishing credit to the American farmer should be developed without due thought and discussion. It is the belief that the questions with which the majority report, thus issued, deals are of such vital importance that arguments upon those features where there is disagreement are worthy of consideration and should be presented to those who, in the last analysis, must decide what action shall be taken to remedy defects in American agricultural conditions. This idea is also expressed in that report wherein it states: All farmers and friends of farmers must not fail to look at all sides of the rural problem and to look at it as a whole. For these reasons the subscribers hereto feel it their duty to issue this minority report explaining the points upon which there is sincere conviction and honest difference of opinion. Not only is it desired that divergent views may be available to the interested public, but those members of the Commission holding opposite views should not be put in the light of indorsing that with which they find it impossible to agree. SHORT-TERM CREDIT. It may be stated at the outset that there exists Httle difference of opinion with the contents of that report with the exception of such parts of it as might be construed as suggestion, advice, or reconamendation for the introduction into this country of systems of cooperation or mutual guaranty and liability by the farmers for the purpose of securing credit. It is desired also to make it a matter of record that there is no difference of opinion as to the great benefits that might be derived by the fanners of this country by the introduction of cooperative methods in the conduct of much of their business. But is it wise at the present time to encourage farmers, as is done in the majority report, to believe that they can find rehef from their financial difficulties by coopera- tive systems of credit which have admittedly succeeded in Europe only because of the peculiar conditions existing there ? Is there not danger that the farmers may be induced to "try out" systems which can not succeed under our conditions, and thus lead them into much more serious difficulties ? Cooperation and the abihty to cooperate must be a process of development, of evolution, and of growth. Is it not vital and essential that where farmers desire to cooperate they shoujd experiment first in matters that concern them alone and in which there is the smallest degree of risk, such as cooperative buying and selling, cooperative creameries, cow-testing associations, breeding circuits, etc.? It seems reasonable that only by this means can the farmers of this country acquire that degree of education in cooperative effort that would warrant the introduction of this system into the more intricate phases of their business; this step to be taken, if deemed necessary, only after a demonstrated success in the more rudimentary branches. It should be borne in mind that before cooperation becomes general with our farmers there wiU undoubtedly be many failiu-es. This must be clear to any student of the question and of conditions in this country. If there are to be failures, therefore, during the process of introducing cooperation throughout this country gener- ally, such failures should fall upon those who are direct parties to the experiments having for their object their own profits and betterment of conditions rather than upon those outside the scope of endeavor. To the greatest degree does this apply to banking, where a failure is so far-reaching and always brings financial ruin and dis- tress to many innocent sufferers. There can be no justification for a call upon outside funds for conducting a business unless and until there has been demonstrated an ability to handle such funds with wisdom and with safety. i.- j t. No analysis of cooperation in Europe can fail to recognize the fact that the success achieved on that Continent is largely, if not altogether, a result of conditions and environment, and has not been achieved in spite of them A comparison is here made, therefore, of some European and American conditions that have had m Europe and wiU have in America decided influence upon the success of the cooperative movement. 20506°— 14 ^ 8 AGEICULTTJEAL COOPERATION AKD ETJEAL CREDIT IN EUROPE. The most vital factors operating for the success of European cooperative institutions are, undoubtedly, the community life and the fact that members of such organizations are all of oQe race, with, naturally, a similarity of ideas, habits, desires, and methods of hving. How far reaching is the effect of this upon the people and how well recognized is the value of this condition by those in the best possible position to know is shown by the following excerpts from an address dehvered before the American Commission whUe in Europe by the managing director of one of their large federations of agricultural credit associations (rural banks) : The rapid extension and brilliant development of our credit associations is not the result of chance, but of the manner of their organi- zation. People who live close to one another in a village know one another's possessions, business circumstances, and character so accurately that error in estimating the capacity and trustworthiness of loan seekers are scarcely possible. Thus the risk to the bank is diminished, and the possibility of its helping people is increased. Likewise, a good superintendence of the way in which these loans are spent la possible, and also of the changes which can happen in the fortune and earning capacity of members, especially of debtors. In this coimtry such conditions do not exist. Not only do the people of a given section not live in villages, as in Europe, where they are in constant touch with each other, both in business and in social life, but the inhabi- tants of any given section may be themselves, or through their immediate forefathers, of many dififerent national- ities, each still subject in large measure to the customs, habits, and characteristics of his particular nationality. Even with a people living under conditions so favorable as they are in Europe, it has taken a generation or more for the present system of cooperative rural credit to become established. It is therefore impossible to agree with the statement made in the majority report that — There is no reason why we should need so long a period of development in this country, but it is highly important that we should not rush into any new plans simply because they have worked in Europe. Emphasis must be given to the fact that community life encourages cooperative effort by pointing out that such a mode of life, coupled with the fact that the European farmer rarely moves from one section to another, has resulted in much intermarriage and consequent inter-relationship in a given community — a condition which fosters a system for credit based upon indorsement of notes and mutual liability. With our farmers, conditions are radically different; their homes, instead of being in a village, are scattered over the country, on their farms. Any considerable relationship among the mhabitants of a given section is the exception, rather than the rule. Compared with the constant contact and the consequent personal interest which European conditions bring about, our farmers see some of their neighbors often, some now and again, and others rarely. Further, who, of our farmers, knows that his neighbor of to-d&y will be his neighbor to-morrow ? Another tie that binds a European farming community together is the tie of a common religion. It is hardly necessary to point out that no such general condition exists in this country. This condition is the most potent in Europe in that each farming village or community must always have its own local church and resident pastor or priest, who takes active interest in the welfare of bis community and lends personal assistance to movements for their material betterment. There is a marked distinction between the European and American farmer as an individual. The average farmer of Europe is a man of little education, in its broad sense; traveling rarely, he is a man of rather narrow vision and, consequently, narrow views; a plodder, whose aim in life is not so much the acquisition of wealth as it is to provide for himself and his family a livbig such as his father and his forefathers provided. His wife and children aid him in the actual work in the fields. He has little use for money in that his wage account is insignificant; frequently he has no such expense to face, all the work being done by the family. He has few wants above those which can be supplied by his land. His profits, such as they are, are therefore, in large measure, available for the repayment of any loans he may have made. This repayment of loans is made stiU more certain by the fact that there are practically no exemptions from debts and no homestead laws, property of all kinds being subject to levy and execution. It must be remembered also that Europe is a thickly settled country. Few farmers are out of reach of a large town or city, and almost all crops are disposed of in these near-by towns and cities for cash. Local demand is equal to local supply. This practically assures a certain income except in cases of outright crop failure. American farmers are, as a class, an intelligent body of men — men of a certain natural initiative and intelUgence, even where education is lacking. They are ambitious, individualistic, and desirous of acquiring means and property, eager to forge ahead of the position occupied by their fathers. As a rule the American farmer is a trader, one who expects to make a profit from his business transactions, who has a natural inclina- tion to conduct his affairs in his own way and to his own personal advantage. Above all he has an inherent disinclination to shoulder the financial burdens of another, as must be the case where a system requiring liberal indorsement of notes and a mutual neighborhood or community liability is in force. A cooperative credit institution is an organization requiring a large degree of permanency among its mem- bers. Such an institution depends for its very existence upon a considerable group of members of quite AGBICULTURAL COOPEBATIOK AND EUBAL CEEDIT IN EUROPE. V a permanent character. This condition obtains in Europe. In America there are few farmers who will not sell at a profit and move elsewhere. A cooperative organization may in time find itself in a community where the gradual change of inhabitants has introduced an element hostile to the idea of cooperation, and under such circumstances cooperation can not exist. As the majorito report says: It is correct to say that cooperation or, indeed, any phase of good agriculture can not be developed when the agricultural population is frequently and constantly shifting. It is not the purpose of the minority to enter into an intimate and detailed analysis of European and American conditions to sustain their contention, it being merely to bring out saUent points touching upon the more radical dififerences existing in the conditions of the two continents. If further analysis is desired reference can be had to United States Senate Document No. 201, entitled "The German Farmer and Cooper- ation," and Senate Document No. 212, entitled "Some Methods of Financing the Farmer," which treat with the subject more in detail. As stated before, no consideration of cooperation in Europe can fail to recognize the fact that the success achieved on that continent is largely, if not altogether, a result of conditions and environment. It is univer- sally recognized that their conditions and environment have been of a kind that tended in every way to encotu-age and promote the progress of the cooperative idea and that they aie in very large measm-a responsible for what has been accomplished. Cooperative credit societies on this most favorable soil have not had uninterrupted success, for during the year--June, 1910, to May, 1911 — about 60 in Germany dissolved, and according to the yearly book of the Association of Cooperative Societies in Germany: Their dissolution was principally owing to insufficient knowledge on the part of the founders of the requirements of economic and credit associations. Several societies became bankrupt more on account of ignorance of proper management than because of dishonesty. In Austria one of these large central societies is now in the hands of the Government and in process of liquidation. Its management had proven inefiicient and unsafe, and the inevitable crash was pending. Real- izing that this meant financial ruin throughout the Province, as the central had deposits from some eight hundred federated societies, which societies in turn held the deposits of the farmers, the Government advanced about one million dollars to pay the habilities and took over the assets itself. The disastrous failure of the Genossensohaftsbank, a central cooperative association at Darmstadt, Ger- many, has recently come to fight. It appears that not only has the entire capital of about $600,000 been -whoUy lost but that the deposits of the farmers are also largely lost. Following is a quotation from a report issued in Berlin, Germany: The moral effects of the breakdown are apparently very bad— out of all proportion, in fact, to the actual dimensions of the failure. A new central bank has been organized and is bestirring itself to find ways and means of relief. It has addressed a memorial to the ■Government of Hesse in which it gives the following description of the moral effect of the failure there: "The broad masses of the country population, which far too long have maintained an attitude of noncriticism and really of nonparticipation in the management of the <:ooperative central bank, are indignant, and feel that they have been deceived by their former authorities. There is danger that com- munity spirit, that good teamwork for the benefit of the agricultural population, which is really the life element of the cooperative movement, will give place to a disintegrating spirit of controversy, to a strife of all against all. Even in the Province of Rhine-Hesse where, in other cases, practical decisions and energetic action have been swiftly adopted, men are wasting their strength in futile quarrels. ' ' Again quoting from press dispatches: The Imperial Cooperative Bank of Germany, a central institution for the loan and savings banks affiUated with the union of cooper- ative agricultural societies, will be dissolved. There are more than 26,000 societies, with a membership of 2,500,000 farmers. Many of these societies will lose. This is a partial record of some glaring cases of actual failure. What is the existing condition of such societies which have not openly failed is impossible to ascertain, for the reason that fittle or no Government supervision is maintained over them and no Government mspection is provided to require them to charge off losses or to keep up to a certain standard. Since disastrous failures occur even where such conditions are most favorable, is it wisdom to recommend the introduction at this time of a similar system in a country which has few or none of these favorable con- ditions for cooperative credit institutions ? Such a system should be introduced only after it has been demon- strated most clearly that success in allied branches of cooperative endeavor is assured and certain, and that the lessons of cooperation and teamwork have been clearly learned and the underlying principles fuUy under- stood and approved. . Considering conditions in our own country there does not appear to exist at the present time any real reason for advocating to the American farmer the introduction of a financial system requiring the estabhshment of a new type of institution that would merely add to existing institutions which, with shght modifications, would serve the same purpose. Pertinent to this is a quotation from BuUetin No. 1 of the Wisconsin State 10 AGRICULTUEAL COOPERATION AND RURAL CREDIT IN EUROPE. Board of Agriculture, by Dr. John Lee Coulter, expert special agent in charge of agriculture. Bureau of the Census, Washington, D. C, also member of the United States Commission and of the American Commission: Turning now to Senate Document 1003 (62d Cong., 3d sess., p. 6, Jan. 13, 1913). I find in connection with the Money Trust inquirjr the following statement: "The figures for Germany were collected by equally competent authority, yet the most painstaking investigation reveals for 1907 only 490 banks with 1,730 branches, not including, of course, the municipal and state savings institutions and the cooper- ative credit societies which perform some of the functions of the banks." If these figures show the total number of banking institutions aside from municipal and state savings banks and cooperative credit societies, Germany has only about one institution for every 30,000 persons, compared to one institution in the United States for every 4,000 persons. Clearly most of the institutions in Germa.ny must be the small savings institutions and cooperative credit societies instead of state and private banks and small national banks. After adding^ the number of all cooperative credit societies, including those in country districts and cities, towns and villages, I find that there is aa average of one for approximately 4,000 persons or about the same as the average in the United States. It would seem, therefore, that we how have in the United States approximately as many institutions per capita as Germany has, even when we include among the German, institutions all of the rural credit societies which are now being so carefully investigated. The same general conclusions apply to France. I need not go further than this and only relate these few facts in order that I may- point out that we probably have at the present time enough institutions in this country and only need to change them to make them, supply the peculiar needs of the time. The introduction of cooperative credit among the European peasantry was due to the fact that there existed at that time no institution which provided facilities for financing their operations. It is interesting here to note the suggestion contained in the majority report of the American Commis- sion, that existing banks may simply adapt themselves to the farmers' needs, in so far as they do not meet those needs already. It is unfortunate, however, that in the same report the rapid development of cooperative financial institutions for the farmers is suggested. It is well here to call attention to the fact that our country banks are strong in number and resources, and are largely owned by the farmers themselves. The currency law, just enacted, will place country banks in a, stronger position than ever to serve their respective farming communities and it is believed will make a new system of banking unnecessary and expensive to estabUsh with problematical outcome. It is suggested in the majority report that the ultimate method to be adopted by the farmers of this coim- try will be cooperative banking, because the borrowers would thereby save to themselves the interest now paid to others. In considering this phase it would be well to inquire whether recognized customs and past experiences in this country wiU mitigate against the success of a lot of borrowers combining to conduct the business of banking, for imder the plan suggested borrowers alone own and control the bank. This is directly contrary to the American education of safe methods and conservative banking. If a cheaper rate of interest is. the aim sought, State contract rate and usury laws can be made to regulate the matter where present rates are exorbitant, and would seem to be a simpler, less expensive, and less risky method. Presuming a cheaper rate could be obtained through cooperative banking, the difference in the rate would have, to be paid for in. some way, for like all good things, something can not be obtained for nothing. In the first place a great risk would be assumed by the borrower, for he would become personally liable for all the debts of his bank, whick in effect would be a guaranty of the notes of the bank. In the language of the majority report it is to argue, * * * Whether the farmers believe that by cooperating they can save enough * * * to make it worth while for them to take the risk, because there are risks. At the same time that report encourages the belief that the farmers will take this risk and adds: Hence there should be provided opportunity and encouragement for the development of cooperative institutions intended to supply credit to the farmer — that is, institutions for members rather than for outsiders. In other words: "Institutions of horrowers rather than lenders," as the language of that report originally expressed it. Not only would these risks have to be assumed should we adopt the European system, but the conveniences now accorded the American farmer through our system of banking would be abridged. In order to make the rate to the European farmer, these cooperative banks hold their operating expenses down to the minimum. They have little or no taxes to pay, thereby rendering little or no assistance toward maintaining city or county administration or governmental or State affairs . The cashier draws but a nominal salary, usually getting hi Uvelihood mostly from other sources, and holds his position as a secondary matter — no other official salaries. Seldom is a bookkeeper employed. Bookkeeping is simple, as checking is not done as is done with oxrr country banks. Checks on regular banks are not cashed and seldom taken on deposit from a customer. DoOrs of the small banks or societies are opened on stated days; sometimes weekly, sometimes every other week. No fix- tures, and little furniture, are used, as usually a table and chairs — often not even a safe — constitute the entire equipment. Sometimes a room in the home of the cashier is used for its place of business. Such "banks" (in some European countries the use of the word "bank" is prohibited) keep little cash as a reserve against their deposits, whereas in our country considerable cash reserve is necessary and is required in order to AGRICULTURAL COOPERATION AND RURAL CREDIT IN EUROPE. 11 pay checks of depositors and checks on other banks, and to facihtate the business of the community, every business day in the week. The abiUty to loan almost every dollar of a bank's deposits enables a cheaper rate to be made. In suggesting this method of banking for this country it might be well to consider whether such changes in our established systems and customs would be countenanced, especially if such banks are owned and operated by its borrowers alone. In order to understand the point in hand more clearly, the following statement of a typical cooperative bank taken from its books during the European investigation is given: Eesources. Marks.' Liabilities. Marks.' CaalimBafe 1,565.64 6,500.00 126,174.56 200.00 3,011.20 2,127.94 51,608.23 77,692.83 Invested in capital of central bank. .. Loans Deposits Value of safe Due central society- (loan or overdraft) 134,440.20 134,440.20 ' A mark equals about 24 cents United States money. Notwithstanding the ability of this cooperative bank to loan practically all its deposits and obtain 50 per cent more funds from the central than all its deposits combined, its uniform rate is 5 per cent to its borrowers. The following interrogatory that occurred between one of the subscribers to this minority report and the cashier of that bank will be of interest, and illustrates a number of points herein brought out. Q. What is your position in the bank? — ^A. I am cashier, a member, and also a borrower. Q. When did you become a member of the bank? — A. I have been a member for five years. I became a member at the foundation of the bank. Q. Did you borrow the first year you joined? — ^A. Yes. Q. Did you ever pay back anything? — A. No; not yet; but on the contrary I borrowed more money. Q. What has been the average rate of interest you have paid on your loans to the bank? — A. The only rate I have ever paid was 5 per cent, paying same quarterly. Q. Is this the customary rate at which the bank has loaned its funds?— A. Yes. Q. Do you make loans on real estate? — ^A. Yes; occasionally. Q. Would you mind describing to us one of the mortgage loans your bank now owns? — A. Here is the book entry, which shows the name at the top of the page. You will see here 18,000 marks was voted him by the directors. Q. What is the land worth that secures this loan?— A. 125,000 marks. Q. Is this a first mortgage? — ^A. No; it is a second. Q. What is the amount of the first mortgage? — ^A. 38,000 marks. It belongs to a private corporation * * * Q. What requirements do you make of a borrower (on personal notes)? — A. He must give us two indorsers who are good for the debt. Q. Suppose a borrower loses his property on account of bad crops, or any other cause; would you still loan him money? — A. Yes; if he gets the indorsers. Q. Would he have difficulty in doing this?— A. Not if he wanted a limited amount * * *. Q. What salary is paid the cashier?— A. From 100 marks (about $25) to 350 marks (about $90) per year, according to the turnover. Q. What was his salary last year?— A. 850 marks. Q. What was the total expense of running the bank last year?— A. 554.84 marks (about $140), including the cashier's salary. LAND-MORTGAGE OR LONG-TERM CREDIT. Nothing in this report must be construed as in opposition to the introduction into this country of a system providing for long-term land mortgages on the amortization plan. Such a system would in itself automat- ically reheve a short-time credit situation, in that it would enable the farmer to use annually a large proportion of his earnings in the conduct of his usual business. Thus he would be enabled to accumulate an active bank account, upon which to conduct his seasonable operations, placmg him in a more independent position and with less need for short-term credit. The minority is in heartiest accord with the sentiment contained in the majority report, that: We were told everywhere in Europe that the key to the success of the cooperative method of doing farm business is to develop the cooperative "spirit"— that is the willingness and desire to sink individual opinions and interests to such an extent that a group of men can work together for common interests. When this spirit is developed to a high degree it means a sort of loyalty and patriotism that leads men even to sacrifices, if necessary. Clearly there is in Europe such a thing as the cooperative "spint." Cooperation can not long exist without it. The farmers where they desire to cooperate, must bend themselves to the task of fostering, nourishing, and encouraging'this cooperative "spirit." This spirit can not be created in a day. When it comes it mU be successful if allowed to grow and develop naturally and not forced into an unnatural hfe by desire for too quick results. And when, by this means, the cooperative "spirit" has been instilled into our farmers; when through trial disaster, and further trial it has been demonstrated that the abihty to cooperate has been achieved, 12 AGEICULTUEAL COOPEEATION AND EUEAL CEEDIT IN ETJEOPE. then, and then only, will it be wise, if the need then exists, to take this final step into the field of cooperative credit. In summarizing the sahent points it has been desired to bring out in this report, and in analyzing more briefly the ideas of the subscribers to this report which are in conflict with those of the majority report, and further, in directing attention to the inconsistencies in the majority report, the desire is only to clarify the atmosphere and fix the attention of the student of this question upon the recommendation which is to follow — a recommendation the object of which is to present a specific plan which may aid in devising for the use of agricultmre in this country a system of finance which, while bringing about the desired result will involve the least risk to the farmer. Before offering that pjan it would be weU to analyze the following statements con- tained in the majority report, to wit: The European experience seems to indicate that the cooperative fprm of furnishing credit is likely to be the ultimate method in America, for the very simple reason that credit will be furnished by private joint-stock financial institutions only for profit to the institu- tions, whereas under cooperative credit the members get the profit. It is granted that European experience has demonstrated the fact that cooperative credit has been the solution of the problem in Europe under conditions there existing. But attention is called to the fact that in the words contained in the majority report, A great reform was accomplished, but it never would have been accomplished except for the spur of necessity. And to quote further: It must be remembered that it took a half century for the present system of rural credit (banking) in Europe to become thoroughly established. There is no reason why we should need so long a period of development in this country * * *. The seed of cooperative credit in Europe was sown among a class of comparatively ignorant peasantry, laboring under most distressing conditions, and in coimtries where agriculture had been allowed to decline to a degree inconceivable in this country. The Eiu"opean farmers are fiimly settled in their home localities; it is rare even for a tenant to move from one place to another; they are held together by strong religious and family ties; they are of a single nationality vnth a natural similarity of temperament; their farms are small — in Germany, for illustration, two-thirds of the farms comprise less than 13 acres, and one-third have an area of less than 2^ acres; the farmers live together in village communities; every farmer is familiar with the business of every other farmer in his village, and the amount of borrowings and indorsements are matters of common talk; the credit requirements are small even in comparison with the volume of business conducted, the annual wage account of the average American farmer being considerably more than the average European farmer would require for all purposes. Attention is again directed to that portion of this report embodying a quotation from Bulletin No. 1 of the Wisconsin State Board of Agriculture, wherein is contained this statement : We probably have at the present time enough institutions in this country and onlj' need to change them to make them supply the peculiar needs of the time. Also to the following statement contained in the majority report, that — It is a pretty generally accepted principle that, so far as practicable in any country, it is wise to use existing agencies rather than to multiply new ones, no matter what the object to be gained may be. This is true of rural credit. If we can use tried financial insti- tutions, or modifications of them, at the outset, it is far better than to experiment with a new kird of institution. This is precisely the contention of those issuing this minority report, and had the subscribers hereto been able to have had all portions in the majority report inconsistent with this statement eliminated there would have been no cause for disagreement. There can be but little question that the most practical solution of the problem of long-term farm mort^ gage credit would be best solved if it could be done without introducing into our financial system anv methods with which we are not thoroughly familiar. Would it not be better to rely upon methods whose successful operation is assured by a long record of success under our conditions? Carrying to its logical conclusion, therefore, the idea that it is not necessary to make use of untried methods for the purpose of supplying the needs of the farmers, the following plan is respectfully submitted, in the hope that it may be of some assist- ance in solving what is a real problem, without inviting too many "ills that we know not of." OUTLINE OF THE PROPOSED PLAN. It is proposed that the farmers cooperate with the stocldiolders of banks in rural communities (which banks will be found generally owned by the farmers themselves) in the organization in their respective localities of small unit land-mortgage associations, capitaHzed in proportion to the needs of their respective communities — minimum capital, $10,000. Each association to be organized upon the share capital plan, cooperative (as to sharing profits with borrowers without the mutual liabiUty feature)- or noncooperative (with double liability AGRICULTURAL COOPERATION AND RURAL CREDIT IN EUROPE. 13 of shareholders), as might be desired. It is to become affiliated with and have close interrelationship with the rural bank which may be owned by some of the same shareholders, in that it may have its office with the affiliated bank and be officered, managed, and directed by some of the same men, to which could be added other desirable farmer directors, if such rural banks are not already dominated by that interest. The objects sought by this affiliation are: 1. To utiUze the facilities already in existence; to obtain the accumulated information regarding the inti- mate financial standing of the farmers in the community, with the knowledge of their ability to pay, which knowledge has been gathered by years of personal contact and experience with them by the local banks; to have the advantage of banking quarters, with little of no overhead expenses, excepting such nominal clerk hire as might be necessary as part of the duty of some clerk in the bank. 2. To cooperate with the existing banking facilities in a manner that would lead the bank to foster and develop the growth of the land-mortgage association. This would work in many cases in ffiiding a market for bonds issued by the "central," later referred to, for every bank gathers a hne of deposits upon which it pays interest and upon which there is Kttle profit. It is beheved that if such banks could divert a portion of these deposits to a more permanent use in a manner so that it would share in the benefits at the same time they would gladly do so. The influence of organized banks in recommending such securities would be very great. It must be recognized that banks operate mainly upon deposits and are either restricted or prohibited by law from loaning their funds upon real estate security because of its nonUquidity and length of maturity. It is believed that our country banks have for so long operated under these restrictions they will welcome a system that will furnish the needed f aciUties to their respective farming communities, and will gladly cooperate to bring this about. 3. To place each country bank, whose shareholders join in the organization of such a local land-mortgage association, behind its own "local" to the extent that it becomes sponsor for the goodness of its mortgage loans. Should misfortune overtake any of its borrowers the bank would be interested in furnishing sufficient funds to make interest and amortization payments. Or should the borrower feel the need of using his profits from a season's operations in other directions, such as additional needed improvements, or for stocking his farm, break- ing new land, or for any other provident purpose, he would have an estabUshed institution' sufficiently interested in him and of sufficient strength to advance him the necessary amount to permit of this. It is clear that no small local unit institution could have sufficient financial strength to place its securities in the market so as to comxaand the best rates of interest, if, indeed, it could find any market at aU for its securities. It is, therefore, proposed to federate a considerable nmnber of such locals in a given State by organ- izing a central body in some commercial center of their State. This to be done somewhat similar to the plan of federating the short-term credit societies throughout Europe, in that these locals are to own and control the central, and not the central to own and control the locals. In the latter case the control and management woiild be taken out of the hands of the farming communities and put into the hands of the city financiers; whereas in the plan proposed the rm-al communities would retain control, so as to insure against exploitation at the hands of outside interests. The central should have sufficient capital to give it strength and standing in the money markets, sub- scribed and paid for by the different locals in proportion to their respective capitals. This foUows the prece- dent established in our own country also in the new Federal reserve act (cmrency bUl) just passed, which act requires our existing national banks to provide the capital of the Federal regional banks, paying for same out of their own capital. While the system created by the enactment of the currency law will undoubtedly make it easier for the farmer who could safely be loaned under any system, to obtain short-time credit, it will place him at a stUl greater disadvantage for long-term mortgage loans, for the very clear reason that our existmg banks wiU imder- take to restrict their loans to the class that is eligible for rediscount under the new system, and real estate mort- gage loans are not eligible. Therefore, the greater reason why our existmg country banks wiU feel the need of cooperating for this purpose. It is proposed that each local shall invest a percentage (say, about one-fourth) of its own capital m the capital of the Central, keeping the balance of its own capital for the purpose of making loans. Such loans can be held temporarily in their finished form for the advantages of the accrued interest and sent to the Central with its indorsement, when funds are needed for the purpose of meeting new apphcations. The locals should not be permitted to issue bonds running for a long tune, for several reasons: 1. Its capital would be small and its market necessarily restricted. European investigation revealed no smaU associations or societies doing this class of business. . i. ^ ^ . ,. 2 Should it place a number of long-term loans running over a considerable period, it might find itself suddenly in a very embarrassing situation either by reason of its inabihty to market the loans or by lack of 14 AGBICULTUKAL COOPEEATION AND BUEAL OKEDIT IN EUEOPE. a sufficient volume of business to justify its continuation. In either case it would find itself up against a losing proposition, without the power to liquidate on account of its outstanding long-time bonds. Its finan- cial embarrassment would therefore be inevitable. "Whereas in a federation as proposed any individual local could be liquidated by the Central substituting loans received from more successful locals and withdrawing the loans bearing the indorsement of such unsuccessful local, turning such loans over to the nearest success- ful local, whose indorsement could be substituted for the unsuccessful one on some agreed basis. In this way the unsuccessful local could retire its liabilities and liquidate without a receivership. Or the Central could easily perfect a consolidation of two or more of its federated locals to save such a situation. Provision for such consolidation should be made by law. There should be a limit as to the maximum amount of any one loan to be made by any local, say, not exceeding 25 per cent of its own capital and surplus. By being in a federation, a desirable loan that would exceed this limit could be "split" between two or more conveniently located locals on some agreed basis. All loans should have the amortization feature, giving the option of time limit not exceeding 30 years. Such land-mortgage associations should be prohibited from receiving deposits, excepting savings, and the total amoimt of such savings deposits that may be held at any one time should not exceed 50 per cent of the capital and surplus of such association. It would be advisable to permit this in order that these associations might build up savings accounts which could be converted into the bonds of the Central. The Central alone should have power to issue bonds or debentiu-es, these to be secured by the collective mortgage loans made on the amortization principle on productive farm property received through and having the indorsements of the different locals. When the Central receives loans aggregating a given amount, say, one-half of its own capital stock, it would be empowered to issue a "series" of bonds or debentiires against such mortgage loans. The loans from any such local securing any one series of bonds issued by the Central should not exceed a reasonable proportion of the whole. Thus, by this plan will be built up an aggregate of diversified, well-secured, and indorsed mortgage securities, not dependent upon the conditions of any single locahty, against which the bonds would be issued and which should find a ready market and command the cheapest possible rate of interest, for this seasoned bond would have behind it: First. The signer of the original loan. Second. The combined judgment of the local banker and his farmer associates as to the desirability of the signer as a borrower and as to the value of his security. Third. The land itself, upon which not exceeding 50 per cent of its value would be loaned. Fourth. The indorsement of the local and the moral obhgation of the bank with which such local is affiliated. Fifth. The double Uabihty of the holders of the capital of the locals, protecting all loans indorsed to the Cen- tral by the locals. Sixth. The judgment of the officials and executive committee of the Central and its rechecking of the securities as hereinafter provided. Seventh. The capital of the Central. The securities placed behind each series of bonds as issued should be under the joint control of the Central and some fiscal agent or disinterested commercial bank or trust company. As amortization and interest payments are received by the locals they would be remitted to the Central without charge, such amortization payments when received to be used to call in bonds of hke amount of the same series for which such loans have been pledged. Each local should have one member of the board of directors of the Central, and each of such directors should have one vote in the election of the officers and executive committee of the Central. Restrictions should be placed upon the amount of loans that can be indorsed by any one local, to the extent of, say, 15 times its combined capital and surplus, and restrictions should be placed upon the amount of bonds or debentm-es that can be issued by the Central in proportion to, say, times its own combined capital and surplus. The Central shoiild have its own inspector and appraiser to check the examination and appraisement made by the different locals of the securities sent in by them, as well as audit the locals from time to time. If upon his visit and report any loan that had been sent in by a local should be found not up to standard or had been mis- represented, that local to be required to either take up the loan, reduce the amount, forthwith, or put up some additional collateral for the purpose of margining the loan to the required amount, which additional collateral would be deposited with the securities behind that series of bonds until the loan itself shall have been reduced to proper proportions by the borrower. The local having an established country bank behind it wiU be amply able to make the necessary arrangements to do either of these required things. AGEICULTUKAL COOPEBATION AND EUKAL CKEDIT IN EUROPE. 15 The directors (one for each local) should be required to audit, through its own committee or independent auditor, the affairs of the Central at stated intervals, this audit to be reported to the full board and made a matter of record. It might be found advisable to even provide the Central with a larger capitahzation than the a,ggregate amount to be taken by the different locals. In that case provision could be made for selling founders' shares, similar to the plan working most excellently in Hungary. Such shares could be made preferred, if deemed advisable, or could be placed upon an equahty with the shares owned by the locals. This might be found neces- sary in order that the country bankers and farmers might have desirable financial assistance and strong coimec- tions in the recognized financial center of their State in assisting to establish a market for the securities. The names of the financiers in such local commercial center, who would be more widely known, added to the names of those local persons selected by the fanners from their respective communities, upon the board of directors of the Central would. undoubtedly assist materially in fiuding a favorable rate of interest. It is not determined whether it would be more advisable to organize such land-mortgage associations under National or State charters. There are arguments on both sides. The subscribers hereto are incUned toward State organization and regulation until a sufficient number of States have built up such a system to a point of successful conclusion, and then to advocate Federal legislation looking toward federating the State centrals, somewhat after the plan proposed by Senator Duncan U. Fletcher, the chairman of the American and United States Commissions, under certain terms and conditions to be then determined. This might be highly necessary at that time, in order to find a cheaper and world-wide market. But it is believed a satisfactory home market can be found for such securities for some years and maybe for all time, provided rigid State laws are enacted covering such proposed associations. It is not believed foreign capital will look with any special favor upon such securities until an American system for making long-time farm loans has been tried and proven. Therefore the organization of a central higher up to be national in scope but adds another "middleman" between the borrower and the lender, and it is not beUeved a sufficiently lower rate will be obtained at the outset to justify the additional charge or machinery. It is believed a new division of State banking would be foimd imnecessary, as our States all have depart- ments under which the regulation and the enforcement of such new laws as may be necessary to enact can be administered. It might be found desirable to add another examiner or two with some especial experience ia farm knowledge and valuations to augment the present corps of bank examiners. Should national legislation be deemed advisable at this time, it would probably be necessary to create a new division of banking, puttiag the Secretary of Agriculture on the Federal board of control, the same as the Secretary of the Treasury has been placed on the Federal Reserve Board in the new currency law. While some preference is expressed for State charters, the subscribers hereto would not oppose an effort to create a national law granting charters imder Federal Government, somewhat along the lines of tentative suggestions herein contained. This plan, submitted ia its tentative outline, is respectfully offered to the people of the United States as a basis for the organization of land-mortgage associations and the mobilization of the security and concentration of the credit of our farmers in such manner that the cheapest possible rate might be obtained and the safest possible system devised — safe both for the investor and the farmer who mortgages his farm. Respectfully submitted. F. J. H. Von Ekgelken (Farmer), East Palatka, Florida. Gordon Jones (Banker), Denver, Colorado. J. S. Williams (Farmer), Paris, Texas. E. F. WooDsiDB (Cotton manufacturer), Greenville, South Carolina. Marshall E. Thrailkill (Lawyer-farmer), Columbus, Ohio. John G. Ruge (Cotton manufacturer) , Apalachicola, Florida. Washington, D. C, February 11, 1911^.