COOPERATIVE AGRICULTURE


sold An issue of debentures was recently sold at 4 per
cent Intermediate credit banks, therefore, can not now
charge more than 5/, per cent No credit paper may be
discounted for, or purchased from, any bank or other insti-
tution if the rate charged by that institution to individual
borrowers is more than 11/ per cent above the discount
rate. At present, therefore, the intermediate credit banks
can not discount any paper carrying an interest charge to
the farmer of more than 7 per cent.

Can an individual farmer borrow direct from the inter-
 mediate credit bank?

 No If the banks should loan to the farmer direct, the
cost of setting up machinery for this purpose would make
interest rates too high. The banks serve wide districts and
would find direct dealings with the individuals too expen-
sive.

Must farmers necessarily obtain credit from the intermedi-
 ate credit bank through local banks or other existing
 institutions?

 No In most States they can form agricultural credit
corporations of their own to discount paper with the inter-
mediate credit banks. Such corporations must have a capital
of at least S10.000. Intermediate credit banks help in
forming such corporations Some of them have prepared
suggested articles of incorporation intended to comply with
State laws in their districts.

Can persons other than farmers from agricultural credit
 corporations to obtain discounts from the new banks?
 Yes Bankers or business men who wish to help the
farmers to obtain cheaper credit can form such corporations.
In fact, any group can do so Bankers in some cases may
find it desirable to conduct such credit corporations in con-
nection with their banks Several of the kind have been
organized.