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| Industrial Farming In Europe
BY HARVIE JORDAN
Agriculture in the United States
is not keeping apace with the prog
ress and the developement of other
great industries of the nation. Fed
eral statistics clearly indicate the
truth of this assertion. It is a lamen
table fact, and at the same time a
most serious one,that farmers of the
United States are not now produc
ing a sufficient quantity of the prin
cipal staple food products to supply
the daily needs of the American pop
ulation. In 1904 this country export
ed more than fifty million dollars,
worth of beef to foreign nations,
while for this year exports are prac
tically nothing. Instead of exporting,
we are importing large quantities of
meat products from South American
countries, and it is feared the same
conditions will soon apply to bread
stuffs.
Within the past decade the popu
lation of the United States has in
creased 21 percent, while our food
products have increased only 10 per
cent, indicating a shortage of 11 per
cent in production, as compared
with the increase in population.
Again, tenantry on American farms
is rapidly increasing, especially in the
South. Large landlordism is also in
creasing in relative proportion as
small landowners are being shifted
to tenantry.
This most undesirable condition of
affairs has not only attracted the se
rious attention of leading agricultu
ral economists, but that of our state
and federal governments as well.
The step in the effort toward the re
habilitation of American agriculture,
which appeared most feasible, waste
investigate the operations of the
agricultural industry in those Euro
pean countries where the business of
farming had become successful and
profitable.
Commission Appointed.
The origin of the movement toward
federal legislation and eo-operation
on this most important matter began
during the close of ex-Bresident
Taft’s administration. When the con
gress of the United States, last
March, passed an act authorizing the
president to appoint a commission of
seven delegates to visit European
countries, make a careful study of
the various phases f rural credits
and rep< r; hack its findings to con
gress. The act was approved March
4, and President Wilson made the
appointments a few weeks later.
I had the honor of being named
one of the delegates to serve on this
federal commission, which left New
York April 26, together with the
American commission, made up of
sixty delegates from thirty five
states of the union and five provin
ces of Canada. The two commissions,
co-operating together, extended then
investigations by personal study into
the following fifteen countries: Italy,
Hungary. Austria, Russia, Germany,
Switzerland, Denmark, Norway,
Sw-eden, Belgium. Holland, France,
England, Scotland and Ireland.
The investigation covered a period
of three months, and the reports are
now being compiled'for publication.
The report of the United States
commission will be made directly to
congress and become a public docu
ment and the basis for federal legis
lation, while that of American com
mission will be distributed to the
various states and agricultural orga
nizations of this country and Canada.
It is confidently believed that the
information gathered by those com
missions will enable the federal gov
ernment and the vai it us state legis
latures. with the co-operation of the
people, to enact laws a hicn w ill meet
the needs of American agriculaure
for a safe and sound system of rural
finance, which is the recognized fun
damental basis upon which the re
habilitation of American agriculture
must be founded.
Banking For Farmers.
The great masses of American far
mers market their products but once
a year, hence short time loans as ap
plied to the ordinary business of com
merce is of but little value to those
engaged in agriculture. Banks en
gaged in tiie commercial business of
short time deposits and short time
loans cannot supply the needs of the
pit dueers .f the soil, humo rs re
quire a separate and distinct system
of banking, a system which will se-
cure loans upon long time at a low
rate of interest and with a gradual
repayment of the principal.
The best agricultural countries in
Europe realize the importance and
necessity of inaugurating an inde
pendent system of banking for the
farmers, and for the past half century
these purely agricultural banks have
provided financial facilities for
foreign farmers, which would never
have been possiple with commercial
banks. Wherever these rural bank
ing systems have been inaugurated,
the business of agriculture has been
industrialized, and made highly pros
perous and successful.
Lands have doubled and trebled in
value; the yealds of crops have multi
plied in quantity; the lands are bet
ter tilled and fertilized: farmer ten
ants are rapidly becoming lanblords;
the middleman has been entirely dis
placed; co-operative buying and
marketing societies have been orga
nized on strictly business lines and
the producers have won success in
the economic management of their
own affairs in the handling and dis
tribution of their products from the
farm to tne retailer or consumer.
Effect en Pricees
The adoption on these rural bank
ing systems have not only had the ef
fect of emancipating the foreign
farmers from the grip of the usurer
and dominion of the middleman,but
they have had the further most com
mendable effect raising the prices to
! the consumer.
In connection with the present sys
tem of rural credits in this country,!
desire to especially point out the fol
! lowing important facts: The only
food products raised on American
farms which are ample to supply the
| ever increasing demands of our pop
ulation, are those products, such as
butter, poultry, eggs and vegetables,
| the sale of which yields a cash return
i each week and thereby properly fi
nance themselves.
Those staple products requiring
twelve months or longer in their
; preparation f< r market, and which
must t< gre..t extent be financed in
the production on borrowed capital
or with supplies bought on high cred
it pr’ces, we find gradually .falling
behind and unable to supply the
needs of the Air.ercan nation.
These facts clearly emphasize the
imperative need- of a system of rural
finance which will enable our farm
ers to'improve the present methods
of ; griculture and to multiply the
productive capacity of their soils
The foundation capital for rural
banking systems in European coun
tries were supplied many years be
fore the successful organization of
co-operation marketing socities was
made possible.
In Europe, land mortgage banks
provide all the facilities for supply
ing land owners with ample capital
on long time loans at a very low rate
of interest. The rate of interest is
low because the character of secur
ity offered is regarded as absolutely
safe. Likewise, the improved farm
ing lands of the United States should
become a liquid asset in supplying
all the active capital in re-
quired in carrying on the busi
ness of the farm, instead of lying
practically dormant as it does today,
and only being utilized for the single
purpose of crop production, while the
land owners have to secure then
credit from outside sources at usuri
ous rates of interest.
The operation of the European land
mortgage banks is simple. Loans to
farmers are usually granted for a
period of fifty years, in amounts at
from 50 to 60 per cent at the market
value of the lands offered as security
All loans are made upon the mortiza
tion plan of gradual redemption, that
is. the payment of a small annuity on
the principal each year by the bor
rower, so that at the end of the period
for which the loan is granted, the
principal, as well as the interest, is
paid in full and the debt cancelled.
lo illustrate: .a land owner, with
improved farming lands, valued at
say. 610,000 desires a loan for $5.0 n
for a period of fifty years. The appli
cation is tiled with tneland mortgage
bank operating in tr.e territory of the
a ►plicant. and after inspection, i!'
b'und satisfactory, the loan isgrante 1
and tiie money laid over to the bm
THF, COFFEE COUNTY PROGRESS, TK)Ur;f A c . GEORGIA
row r er after a mortgage on the lands
i offered as security has been executed
to the bank. The interest rate on
these European land mortgage loans
is uniformly 4 per cent per annum;
the annual amortization payment to
gradually pay off the principal in 50
years, is one-half of one per cent, and
the usual charge made by the bank for
handling the loan, is one quarter of
one per cent, which makes a total an
nual interest charge against the bor
rower of four and three-quarters per
cent. The amortization payments each
year gradually reduce the amount of
interest. In some instances these
farm axe made for periods of 20,
40 and 60 years, the table of the a
mortization payments being regulat
ed to meet the period of the loan.
Against these mortgage loans
bends are issued by the banks,
which are guaranteed not only by the
underlying security of the land mort
gage, but by the entire assets of the
bank: In some countries the govern
ments guarantee these bonds in ad
dition to the securities already stated.
The land bonds are sold in the open
market to all classes of investors, and
are by law made as safe for the in
vestment of trust funds and savings
deposits as are government bonds.
These European land mortgage banks
are prosperous institutions, and.„my
investigations did not disclose the
record of a single failure among them
in any of the countries visited. Where
the gorernment furnished the foun
dation capital for these banks they
are non-dividend-paying institutions,
all the profits which are accumulated
going into the reserves and thereby
j increasing the resources for addition
al loans. There are likewise joint
! stock land mortgage banks, which
aie very profitable and pay good div
idends each year to their stockholders
| besides accumulating splendid re
iser ves. Hundreds of millions of
dollars have been loaned to farmes
! under this system of financing agri
! culture, and the commercial banks
of the European countries are in no
wise antagonistic to these land mort
gage banks.
The result of this system of farm
finance, based upon long ti ne loans,
low rates at inrerest and amortiza
ti n, with land as security, has been
■t< revolutionize agriculture in Euro
pean countries and has had the effect
of placing the business of farming j
upon a modern progressive and prof
itable industrial basis. The Eurc-j
pean farmers are therefore, far a- i
of the American farmers in the m:th \
ods employed in the cultivation and j
fertilization of the soils, the yields
of crops per acre, systematic mark
eting of their products and the co
operative purchase of their supplies j
Their entire business is carried on
upon a strictly spot cash economic
basis. Being able to secure am
ple cash capital through the liquifica
tion of their landed assets, the farm
ers of Europe are able to economize
the production of crops,organize eo-
operative marketing societies and to
own and operate great supply stores
where their needs are secured at the
lowest possible prices.
There are no supply merchants in
European eountries who sell to
farmers on credit as we have
in this country. The European far
mer could not exist under such a
system. It violes every law of eco
nomics and will ultimately work out
in disaster for every farmer who is
subjected to its influences.
The Reiffeison System
For the small European land-own
ers and tenants the system of rural
banks bearing the name of Reiffeison
the originator of them, has been most
successfully organized. These smali
| banks supply the requirements of
short time loans of six ar.d twelve
months’ duration, and in some in
stanese.for a longer period. They are
organized by farmers in local com-
munities, practically without capital,
and are non-dividend-paying institu
tions. They receive deposits from
o itsider.-, but grant loans only to
tneir members. They are known as
banks of unlimited liability. 1 e -ause
tin men.tiers <f the institution a;e
j'nntly and severally liable for an
urn made to a member. Kenceeae::
mem be is closely watched 'egardifij.
hi energy, morals and inp-^ritfr.
Each small Reiffei-on bai k is fed-
1 erated with a large central bank, or
ganized to rediscount the paper of
the smaller banks, and which in turn
is connected with the big state bank
of issue; so that, in case a loan can
-1 not he promptly granted to a
! cause‘of insufficiency of funds, the
I note is indorsed by the brnk, obligat-
I ing all the membership for its pay
; ment, and then sent up to the cen
tral bank has not sufficient funds to
rediscount the note owing to heavy
demands for loans, the note is again
. indorsed by the central bank and
forwarded to the state bank of issue,
where the final rediscount is made
and the needed funds at once sup
plied.
Here we find a system of pyramid
banking for the small farmers lead
ing upward from the little commun
ity banks through the larger central
banks with which they are federated
to the government banks of issue. In
times of depression from tempoary
crop failures or money tightness
from any cause, the government
provides a cheap, simple and elastic
system of rural credit which relieves
the farmers from the embarassing
pressure of creditors and funishes
ample capital to meet their needs at
all times. There are many thousands
of the small Reiffeision banks in op
peration in all the countries of Eu
rope, doing an annual business of
hundreds of millions of dollars upon
a prefectly safe and sound basis,and
supplying a medium of help to small
farmers which could not possible be
secured through any other source.
The annual rate of interest on these
short time loans is uniformly 4 per
cent, and under this system of rural
member by the small bank be-credita
thousands of tenant farmers have
been able to buy and pay for small
farms and thereby become happy and
prosperous landlords, the best asset
any ration ever posessed.
Farm Production
The cultivated farm lands in the
European countries I visited are
maintained up to the highest point
of fertility. The area of farm land
cultivated per family is small, aver
aging about one-third of the acreage
j planted per family in the South. The
' most of the farm work is done by
hand, and the ox is the usual draft
j animal employed on the farm. The
hand is deeply plowed, thoroughly
I pulverized and a splendidly prepared
! seed bed arranged before the crops
are planted. A perfect system of
| diversification is strictly adhered to
: a change in crops, planted on the dif
ferent plats, being made each year.
| Nearly every farm is stocked with
| cattle, ar.d the barnyard manure is
| carefully preserved and spread over
the soil. The most fertile land I saw
was in those sections where cattle
were m st abundant, while the most
unproductive lands were in sections
! where Lut few cattle were kept. No
matter how heavy the application of
i commercial fertilizers, it has become
an established fact, from long exper
ience. that real soil improvement
could not be built up and maintaind
without cattle and barnyard manures
European farmers use commercial
First Class Auto Service.
* V !>-i ‘ ;fr ‘* *' *•
. ALSO AGENTS FOR
STUDEBAKER, CHALMER
l fertilizers quite extensively, even up
lon a greater .scale than the farm
j ers of this country.
As an illustration of this fact. I
call attention to the use of potash
by German farmers. Practically all
of the potash used in commercial
fertilizers throughout the civilized
world comes from the great under
ground deposits in German mines.
One-half of the entire output of the
potash mines in Germany each year
is used up by German farmers on
their cultivated lands, one-fourth
comes to this side of the Atlantic for
use by American farmers, and the
other fourth goes to other agricul
tural countries in Europe; hence
German Farmers use twice as much
potash as do all the farmets of Am
erica combined, and as much as Am
erica and all other agricultural coun
tries combined. But their method
of cultivation and fertilization gets
results.
I saw fields of growing, wheat in
northwest Germany that would
thrash seventy-five bushels of grain
per acre, and fields of oats that
would yield 125 bushels per acre.
The average yield of wheat in Ger
many is about forty bushels per acre
on lands which have been in constant
cultivation for the past thousand
years, while the average yield of
wheat per acre in this county is from
twelve t© fourteen bushels per acre,
and the stumps of the trees from our
virgin forest are still standing in the
fields.
The difference in yield is due to the
scientific culture and fertilization of
the soil by the German fanners and
to their system of crop rotation, the
heavy use of barnyard manure and
the intensive methods of planting.
There are no barb wire fences in
Europe, very little pasturage'&nd no
waste land. Cattle generally are
kept in stalls, well bedded with wheat
rye, or oat straw. Residences, barns
and outbuildings are constructed of
brick or stone and generally thatch
ed with wheat straw’. I saw roofs of
buildings covered with straw which
had withstood the storms of fifty
winters and w’ere still in good con
dition. The barns are large and
roomy and generally constructed as
an extention of the dwelling, so that
the farmer’s residence and barn are
all under the same extention roof.
The principal field products are
wheat, oats, barley, rye, alfalfa,
clover, sugar beets and vegetables.
Live stock is a leading industry, and
nothing but pure bred animals are
kept on the farms. Graded stock has
practically played out.
In all of the fifteen countries vi. ited
1 did not see a single Jersey cow.
The average European farmer de
pends upon the dual purpose cov;
a cow 1 red* for milk and
butter, and aiso f beef. Ti e finest
t
catue m tne w<>nd oi tms type are
large b’ack and white i o vs of H< band
and Germany, known in this country
as the Holstein-Friesan breed. These
cows weigh fr >m 1,40(1 to 1,600
pounds and sell on an average for S2OO
per head for milking purposes ar.d
for about $l6O per head f. r beef.
Marketing and Buying
In Germany alone there are more
than 60,(»00 co-operative farmers’
societies. When it is considered
that Germany is hardly more than
twice the size of Georgia, we can
j have some conception of the extent
; to wich European farmers are organ
l ized.
These societies are organized strict
ly for business and are regularly
chartered, with ample working cap
ital, rules and regulations to carry
on each special line of industry in
which they are engaged. 1 visited
and personally inspected some of
their large dairy manufacturing fac
tories in Germany and Holland. At
these establishments butter and
cheese are manufactured in large
quantities. All the capital invested
in these plants is owned by the far
mers in the surrounding territory,
stock being issued on the basis of the
number of cows owned and milked
by each farmer. Milk from these
farms is delivered daily to the facto
ry. The cream is at once separated
from the milk, which is then deliver
ed back to each farmer, who takes
it home to be fed to the calves and
pigs. A well equipped laboratory is
operated in connection with these
factories, where the milk from each
farm is tested for butterfat twice
each week, and if the butterfat in
the milk falls below a certain fixed
percentage of, say 3 per cent, the
owner is notified to give more atten
tion to the feeding of hie cows, and
a second failure will bring about the
imposition of a heavy penalty. Like
wise the milk is tested for cleanliness
by straining samples through cotton
for the detection of particles of dirt,
trash, etc. The products of these
factories are shipped to large con
sbming centers and delivered into the
hands of the retail trade by agents
in the employ of the factory so that
the middleman has been discarded
entirely.
The same system of business ap
plies to the societies of truck, grain
and live stock growers. The farmers
i through co-operative effort and the
: ability to secure abundant supplies
of cash capital, market their products
and distribute them through their
own representatives to the various
towns and cities for consumption.
They regulate the supply to meet the
| demands of consumption, and, know
ling the market value oi their pro
j ducts, so manage the sales as to make
good profit on their industry.
If the methods of these European
farmers could be applied to agricul
ture in the South, our cotton grow
ers would soon become the most pros
perous and independent farmers in
the world.
Aside fr.-'in marketing and distri
buting. Europe in farmers have learn
ed the economic advantages of co
operative l uyir g. In practically eve: y
large agricultural country which 1
visited 1 had the opportunity of in
specting a great supply More, < wn- ; |
and operated by farmers, in the oby'
Co. ti rued on page seven