[Footnote: T. N. Carver, "How to Use Farm Credit," p. 2.]

COOPERATION FOR CREDIT

Even though a farmer be thrifty, industrious, and honest, the
conditions of farm business are such that it has not always been
easy for him to borrow capital. Here again cooperation helps. In
some of our states the law permits the organization of CREDIT
UNIONS. The members are farmers of a neighborhood or district and,
therefore, are acquainted with one another. Each member must buy
shares of stock, which provides a certain amount of funds. The
union may also receive deposits of money, paying interest on them
as a savings bank would do. This increases the funds and also
encourages thrift on the part of the farmer. Idle money, or money
that might otherwise be spent unwisely, is thus made productive.
In some unions, as in Massachusetts, children are encouraged to
deposit their small savings, and in some cases half the capital of
the union is made up of such small savings deposits. From these
funds loans are made to members of the union on reasonable terms,
provided they are to be used for productive purposes. The union
may also borrow money from the bank in town on the COLLECTIVE
CREDIT of its members for the improvement of agricultural
conditions in the neighborhood.

NATIONAL AID TO THE FARMERS' CREDIT

Similar aid to the farmers' credit has been given by the national
government through the Federal Farm Loan Act of 1916. This Act
created a Federal Farm Loan Board in the Treasury Department, and
twelve Federal Land Banks, one in each of twelve districts into