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same service has been rendered for commercial credit. I have great respect for bankers, but it will be acknowledged that the bankers of the United States made such a sorry mess of commercial finance, with recurring panics and wildly fluctuating rates, that they were persuaded reluctantly to accept the Federal Reserve device of a college professor, and now they boast it as if it were their own invention. The banker is a slave of habit and custom; to him what is is right and change is dangerous. It is well that he is so constituted, for if he were adventurous he would not be a safe conservator of credit. Let us weigh his counsel in order that we may wisely make haste slowly, but let us not wait too long upon his hesitant initiative.

In this mood let us see what is the need for rural credit legislation.

Consider first the bald fact that dependable farmers in the West and South are paying 9.6 to 15.6 per cent, and distressed farmers 20 to 40 per cent for short-time operating credit, and land borrowers are paying 8 to 10.5 per cent for five-year loans with burdensome commissions for renewals. No industry can pay such rates and prosper. Farmers are not prospering except in rare cases of genius, or under methods of niggard selfdenial. The profits on agricultural lands in the last few years have consisted mainly of enhanced values due to increasing population and corresponding demands for farms.

The

The cause for high-priced agricultural credit is twofold. First, and probably foremost, is inefficient and uneconomic farming. But at the worst that is not altogether the farmer's fault. As a people, we have neglected the business of farming; in our thinking we have put it to one side as a matter rather distinctively, if not exclusively, within the jurisdiction of Providence. Department of Agriculture and the landgrant colleges have done much-incalculably much for the science of agriculture, for increasing the yield of the land and combating plant and animal diseases, but little until very recently for the business of farming. increase the yield may or may not be to increase the profit, for even in normal times a big crop usually sells for less gross money than a small crop, so that the more the farmers produce the less they receive. Without reciting experiences or piling up illustrations, it is sufficient to say that farming is rated as an unsafe or undesirable credit risk.

To

Second-and fully as consequential as in

efficient farming-are American conditions. and habits which heretofore have made speculative adventures and industrial enterprises so enticing to investors and creditors. Railroading, mining, town-building, and high finance of one sort or another have absorbed the most of our available capital. Upon top of that the failure of a lot of wildcat land debenture companies in the late eighties gave a bad name to land loans. Money-lenders are just about as human as other folk. Like sheep, they followed their bell-wethers to the parched prairies of unproved productive value, and, like sheep, they follow their bell-wethers in running away from the present rich pastures of proved productive value. Land loans are not in the fashion, and your custodian of trust funds is a man of scrupulous conventionality.

This premise must be accepted by every thinking man as true: Farming land is the source of all food and raiment; it is the prime means of all human sustenance. By all the rules of economic philosophy it should be the safest basis of credit. Readers of rural credit literature have been told repeatedly that before the European war land loans in Germany commanded a lower rate of interest than Imperial Government bonds. The most eminent of the German rural economists three years ago gave me a reason, in words to this effect: "Governments sometimes fail; they may be compelled to repudiate their debts. Land on the average of the years, under intelligent cultivation, will not fail, because nature never repudiates or wholly defaults." How much more prophetic he was than he then realized! It is certain that the European governments at the close of the war must repudiate in some degree, at least to the extent of a compulsory reduction of the interest charges they are now paying.

Mr. Jacob Schiff says: "We bankers know that debentures based on farm mortgages cannot be as readily sold as bonds of industrial concerns or bonds of railroads." That is true at present, but it is a fact due to circumstances, conditions, and habits, and not to economic truth, as the German economist's philosophy plainly proves. The purpose of rural credit legislation is to institute a reform which will square credit practice with economic truth. This brings us to the crux of the whole matter, to the point of promise and the point of difficulty in American rural credit legislation.

European land credit began a long time

1916

THE BEGINNING OF RURAL CREDIT

ago among the impoverished landowners who pledged their wasted farms severally and collectively for long-time loans to be paid on the amortization or sinking fund plan, like municipal or industrial bonds. That was the Landschaft of Prussia, which in modified form has been adopted in other European countries. The Raiffeisen rural bank, or short-time credit society, began later among the lowly peasants who grouped themselves together in a compact of unlimited liability on the principle of life insurance, as thus described by Leone Wollemborg, of Italy, whom I regard as the greatest of modern rural economists:

Suppose you have before you one hundred small working farmers; they all 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 one hundred men, some will certainly be afflicted 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 will 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 one hundred two individuals are likely to be incapable of repaying their loan, while the others will be able to meet their obligations. Now, in order to meet the liability, the group must undertake to become responsible for the two members who are likely 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 ninety-eight men to repay the loan made to the one hundred. They will thus be able to assume responsibility for a loan of 49 francs each instead of 50, for they will have to assume responsibility for the two 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 multiplied 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. Both systems were stimulated by Governmental aid in money, credit, or other favor,

513

but they originated in the necessities and were wrought out in the thinking of the people most concerned. In this country we are by legislation anticipating, with the hope of averting or ameliorating, the dire distress which was, as it were, the birth-pangs of rural credit in Europe. To change the figure of speech, the European system was an evolution. We are endeavoring to fashion a system out of hand. The European land credit system was two hundred years in the making, the rural credit society some seventyfive; we are trying to reach the same end in less time-that is all. The danger is that we will neglect the important factor of education; our people are habituated to individualism; the great task will be to show them how they may work together as groups, with limited common liability, and yet retain their personal freedom of business conduct. The process will be slow and doubtless beset with much blundering, but I confidently believe we will make much faster progress than the Europeans made. The Federal Farm Loan Act is designed to establish standards of agricultural land value and to give deliberate official appraisal of land securities. It will economize the process of land-borrowing by bringing the borrower and the lender closer together. It will require the several States to revise, simplify, and standardize their land registration statutes. Most important of all, each borrower, in becoming a member of a local association in which he owns stock, becomes thereby a lender as well as a borrower. As a lender he will have a personal interest in making safe the loans of his association by seeing to it that the land is not appraised too highly, that the loan is used for productive and not for speculative purposes, and that the land behind the loan is conserved and intelligently cultivated. The importance of this dual relation of the borrower and the lender is clearly set forth by Wollemborg as follows:

It is a well-known fact that public opinion is nearly always inclined 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 public 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, public opinion in this case is on the side of the creditor and not of the debtor.

If there are those who fear that the Federal system will put private money-lenders and mortgage companies out of business, they are reminded that the total capitalization of the system will not exceed $9,000,000; the bond issuing limit will be twenty times that, or $180,000,000; outstanding farm mortgages in the United States amount to nearly $4,000,000,000. The Federal system, therefore, can do little more than set the pace for private capital to follow, as has been the case throughout Europe. Assuming that the States by State legislation will multiply such organized resources tenfold, there will remain ample opportunity for private initiative and enterprise.

But to

But, after all, is this a National problem? Is its solution a Governmental duty? In the sense that government is only a policeman, the answer is, "No." But I think we have got beyond that narrow conception. Farming is feeding and clothing the Nation. Surely that is a National concern. say that is to state only a small part of the problem. It is sociological and political as well as economic. Thirty-seven per cent of the American farmers are tenants; in my State, Texas, the percentage is more than fifty, and I think the percentage is as much in several of the Western States. Between 1900 and 1910 the ratio of tenants to farm-owners increased sixteen per cent. Presently the farmowners will be a minority. Those who have not will outnumber those who have. Are there fears of Socialism? Of communism? Of revolution in property rights? Let us beware of a majority of voters who despair of acquiring homes or who have lost the homestead sentiment. I could name States with a preponderating industrial population congested in seething centers. I could name countries where landlordism and tenantry evolve aristocracy and serfdom. To name either is but to recall civil strife or political desperadoism or both. It is sheer conceit for us to assume that we can defy the teachings of history and the passions of human kind. Friction kindles fire; discontent foments upheaval. The farmers know that they are creating most of the Nation's wealth; they are accumulating but little of it. However much of the fault may be theirs, much of it is due to the neglect of the body politic and the body economic, to the mass of us who have given no proper thought to the means whereby we live, but have pursued

our toll-taking ways by taking as much as we could and giving only what we must, and meantime have drunk the wine of prosperity without fairly considering the sweat or the wage of the man who treads the winepress alone.

There is in this observation nothing of the delusion of making men prosperous by law or of creating security values by fiat of government. The poor and the landless we will have with us always, but when it comes to the point that the average man of industry cannot prosper it is time for the Nation to study the portents. Show me a prosperous farm-owner, and I will show you a thoughtful, patriotic citizen who will cheerfully give his time, his talents, and his life, as occasion may require, for his country and its free institutions. Show me a despairing tenantry: and I will show you a powder magazine inviting explosion by any spark of agitation. that may fly from the forge of hammering industry.

As

It

The period of the Republic's greatest achievements in social welfare, in general comfort, in sane statesmanship, in spiritual elevation, in genuine culture-in all the real and endearing things of life-was the period when a majority of our people were homeowning and prosperous country folk. The American farmer was then a country gentleman, from whose loins came our greatest statesmen, warriors, philosophers, preachers, and poets. The farmer nowadays is derided as a "jay" or cajoled as a simpleton. we speak in the language of the street and the newspaper paragraph, so we think in our hearts. To a considerable degree we cause things to be what we think them to be. is time to face about, to begin thinking of farming as man's earliest and noblest vocation, and of the country as the garden which the Lord commanded Adam to" keep and to dress," which may be properly interpreted as to conserve and to beautify. Thus we may cause it again to become what it should be, what it was ordained to be-man's natural abiding-place and the means of sustenance to which cities in their proper relation are only market-places for the exchange of commodities, and to which manufacture, transportation, industry, and commerce are but the useful servants. But sentimentalizing will not work the reform. Rhapsodizing will not materialize its blessings. Country life will revive when we make agriculture pay.

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THE READER'S VIEW

LAW SCHOOLS IN CHINA

I should like respectfully to call your attention to an incorrect statement that appears in The Outlook for March 15, 1916. On page 601, in in the course of an article on "The Comparative Law School of Saochow University at Shanghai, China," you say:

"This law school for Chinese is unique in many ways. It is the first and only professional school of law in China."

The Pei-Yang University of Tientsin, China, which from the very beginning has had a law department, was organized in 1895. Graduates of the University are to be found in positions of importance in various parts of the country. Of the graduates in law, one of whom the University is particularly proud is Dr. Wang Ch'ung-hui, who is a member of the Faculty of the institution that forms the subject of your article-the Law School of Saochow University.

The Law Department of the Pei-Yang University offers a four years' course of instruction. Among the subjects included in the course are constitutional law, administrative law, criminal law, civil law, commercial law, international law, English law, Roman law, political economy, and finance. The students are trained for professional careers.

The present law faculty includes the following gentlemen: Messrs. R. T. Evans, A.B., LL.B. (Harvard); G. J. Thompson, A.B., LL.B. (Harvard); H. Y. Feng, A.B., J.D. (University of Chicago); and three Chinese professors in addition to Dr. Feng.

Among those who have held positions on the law faculty in the past are Messrs. E. P. Allen (now practicing law in Tientsin), W. A. Seavey, J. A. Crane (now of the George Washington University), I. L. Sharfman-all Americansand Mr. T. L. Chao, A.B., LL.B. (Harvard), who is now President of the University.

It may be mentioned in passing that there is a law department at the Peking University. Both the Pei-Yang University and the Peking University are Government institutions. TIEN LUD CHAO, President.

Pei-Yang University, Tientsin, China.

AN INTERESTING AND NOVEL SCHOOL
ACTIVITY

Washington High School, in Portland, Oregon, for the past year has been perfecting a Junior Chamber of Commerce to promote the general activities of the school. This organization is now on a practical and successful working basis. Our constructive work has greatly interested such local organizations as the Portland Chamber of Commerce, Realty Board, and Rotary Club, who have made it possible for us to cooperate with them in various undertakings. This, of course, has very materially helped our work.

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AN ANCIENT HERESY REVIVED

I was both surprised and shocked by your article "What Did Jesus Christ Think of Himself?" What our Saviour thought of himself is fully expressed in these words, "Except ye believe that I AM ye shall die in your sins." This is the term that Jehovah used to Moses, "Tell them I AM hath sent thee!" These two quotations exhibit the clear teaching of God's Holy Word from its beginning to the end of the Apocalypse. In the closing of the Old Testament it is written, "Jehovah, whom ye seek, shall suddenly come to his temple." Jesus said, "Destroy this temple, and in three days I will raise it up," absolutely proving what the Bible everywhere teaches-"I Jehovah am thy Saviour and Redeemer, and besides me there is no God!" Read Isaiah xliii, 10, 11, " Before me there was no God formed, neither shall there be after me. I, even I, am Jehovah, and besides me there is no saviour," which thoroughly proves, if language can prove anything, that the Council of Nice, which originated the gross error of two separate persons, each of whom was God and Lord, and consummated the enormous falsity at Byzantium a quarter of a century later by adding another divine person, and which is now called the Nicene Creed, is totally without foundation in the Bible, as it has never been in the rational mind! Jesus Christ has "ALL POWER in heaven and on earth." No other being has any except from him; he was "God manifest in the flesh," and is the first and the last, "the beginning and the ending, who was and is THE ALMIGHTY.”

WILLIAM W. HULSE.

[Your view is a revival of a doctrine known in historical theology as the Monophysite heresy. The denial that Jesus was a true man and subject to the limitations of finite humanity has never found acceptance by the majority of Christian believers, not only because it seems to them inconsistent with the simple narratives of his human life in the four Gospels, but because its acceptance would make it impossible for us to obey his command, "Follow me," and would make unthinkable the universal aspiration of his followers to become Christlike.-THE EDITORS.]

"People call the Negroes 'triflin','" writes a subscriber, "but I have a colored maid who puts to shame the procrastinating, unpunctual, fashionable white 'lady.' She comes to my house at seven o'clock for her hard day's work: and she is at my door just on the striking of the clock. The other day she told me she was going to a dance-for she is comparatively young. I thought, 'She will surely be late the next morning.' But she wasn't; and she afterwards told me that the dance lasted till 5 A.M., and she had only time to go home and change her dance dress for her working garb. But when the clock struck seven, she was at my door. Can you beat that?"

A letter from England says that the new time schedule adopted in May, by which the clocks were set forward one hour, was productive of some amusing situations. "My laundress came at 6:30, an hour early," says the writer; "the butcher came an hour late. He said, 'The time that was good enough for my father is good enough for me.' I was invited to tea; I arrived an hour early, as my hostess had not changed her clock. The Protestant church adopted the new schedule at once; the Catholic church held to the old. But after a little no doubt things will adjust themselves and we shall all have that extra hour of daylight."

This joke, credited in an exchange to the "Meggendorfer Blaetter," must be from an ante-bellum issue. Nowadays nobody in Germany spills milk: "Peter (sent for the milk): 'Oh, mercy, I've drunk too much of it! What shall we do?' Small Brother: 'Easy. drop the jug.'

We'll

Among the "summer schools" whose announcements appear in the papers there is one that will make even the unstudious student take notice. It is that of a 66 Summer School of Flying" to be held at Hempstead, Long Island. What an appeal to the youth who is weary of books!

Official figures from the British Embassy, says "Shipping Illustrated," show that up to the first of May neutral nations had lost 121 ships sunk by submarines. In the list appears the name of only one American ship-the Leelanaw. Norway lost 62 vessels, Denmark 24, Sweden 20, Holland 7, Greece 5, and Spain 4.

"New York, New Jersey, and several other States," according to "Rider and Driver," "have started a movement that is rapidly becoming general for the provision of strips on the sides of the motor highways suitable for horse-drawn vehicles." The idea is to have a roadway in the center not less than fifteen feet wide for automobiles, and a section on each side not less than six feet in width for horses. The motor cars can then spin along their part

of the road and give a fair chance to the slower horse-drawn vehicles on the side.

Referring to the German East African campaign, the London weekly “ Times" prints this curious despatch: "Owing to transport difficulties rations were at one time reduced to a cup of rice and a piece of sugar-cane. Our cattle have now been successfully protected, and a campaign is being waged against giraffes, which have been destroying our telegraphs by scratching their necks on the wire." Not content with inviting extermination by big-game hunters, the foolish giraffes now incur the enmity of industry. The wires will undoubtedly prove the fittest to survive this contest.

The feelings of newspaper men who have to tackle the spelling of foreign geographical names during these troubled times are indicated in the following stanzas from "The Wail of a CopyReader" in the Philadelphia "Bulletin:"

"I have learned to locate Sdolbunov; when stories mention Szizz,

I do not need to hunt a map; I know right where it is.
Cettinje doesn't puzzle me, I'm wise to Medvinik
And all those weird localities where consonants are
thick.

But that can't help me any now; to-day I've got to settle
Disputes about Tolacatalplan and Popocatepetl.
Przemysl was an easy one when once I'd learned to read
The name without the consonants I found I didn't need.
Mahhalades and Kalabak, Prilip and Velvendos
Were just as soft as any names I ever came across.
But that avails me nothing now; to-day I've got to show
The same familiarity with all of Mexico."

Ezra Meeker, eighty-four years old, is crossing the continent in a "schoonermobile,” a motor car built on the lines of an old-fashioned prairie schooner. It contains bedding, a cook stove, à dining-table, and a hunting outfit. He has one companion, a younger man, and is repeating, it is said, a journey he once took in

an ox cart.

"It is wrong to go into the water for a short time and come out and rest on the warm sand in the hot sun," says J. H. P. Brown in "Modern Swimming." "If you desire a sun bath, take it either before or after your swim." The alternate chilling and roasting practice of the sea-beach bather is declared by this swimming instructor to be enervating and productive of diseases of the heart, circulation, etc.

Changes in social habits are strikingly illustrated in a book entitled "Pittsburgh: A Sketch of Its Early Social Life," by C. W. Dahlinger. In early days, it says, "whisky was the indispensable emblem of hospitality and the accompaniment of labor in every pursuit, the stimulant in joy and the solace in grief. It was kept on the counter of every store and in the corner cupboard of every well-to-do family." And today the movement for prohibition is almost National in its scope.

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