of 25 years, with interest at one per cent. for war cases, and two per cent. for all other cases.

57. Organisation.-The national office of the Crédit Agricole is a public establishment which has financial autonomy. It is administered by a Council which is under the control of a Commission over which the Minister of Agriculture presides. Onefifth of the members of the Commission are elected by the Senate and Chamber of Deputies, two-fifths by the regional banks, and two-fifths are co-opted.

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58. Resources.-The resources of the Crédit are the donation" received from the Bank of France, that is to say, the lump sum and the annual levy; gifts or legacies received; the income of its funds; certain sums repaid from war advances by local agricultural committees; and any other credits which may be allotted to it.

59. Distribution.-By the law of 1920, the resources of the Crédit are distributed as follows:-for short credit, 25 per cent.; for intermediate credit, 10 per cent.; for long-term credits to individual small holders, 324 per cent.; for long-term advances to societies and associations, 32 per cent. The policy aimed at is that the regional banks will use their own capital reserves and deposits to an increasing extent for short credit, and release the funds for longer loans.

60. At the end of 1921, the total public funds allotted to these four credits were nearly 300 million francs, of which 200 million had been disposed of to the banks.

61. At the same date, the total loans through the banks were -for short credit 92 millions, of which 70 millions were public funds; for intermediate credit, 63 millions, 9 millions from public funds being then with the banks; for long-term indivi dual credit, the State had advanced in all 74 millions, of which 9 millions had been repaid, and the banks had lent about 50 millions, the average of about 8,000 loans being about 6,000 francs; for long-term collective credit to societies the advances in being were 57 millions to about 750 societies.

62. It was the intention of the founders of the whole system to organise a credit " par en bas," founded on self-help through the local societies. Its problem has, however, been to obtain the repayment of public loans without the necessity of renewal. On the other hand, the independent Durand Banks, on the Raiffeisen plan, have been notably successful in France, without any subsidy. And it is the chief difference between French and German short credit that so large a part of the funds in France comes from the State, while in Germany the circulation is from below upward to the central institutions.

63. In other European countries, this form of credit has not been maintained by subsidies. Nor has it depended on the fact of ownership, as distinct from tenancy, as the examples of Belgium and Holland show. But it has depended on two

aspects of peasant holdings-a greater need ("Die Kinder der Not "), and a more populous countryside. The latter has Not"), rendered possible a degree of voluntary social organisation among farmers, which easily assumes new functions as the need arises.

64. As regards the conditions of State help, it is to be noted that in both Germany and France the State deals not with the separate rural societies which are the basis of the system, but with unions of such societies. In France, the public funds are distributed through the "regional banks" established for the purpose in 1899, and it is these that are responsible for the repayments. By this means, the method of federation, regarded as indispensable to a strong credit, is made a condition of continued assistance. In Prussia, the State Co-operative Bank deals only with Unions of Societies, that is, with some form of central institution.

65. In this country, there has been a very slow development of rural credit societies. Under the Friendly Societies Act there now exist thirty, and under the Industrial and Providenc Societies Act ten. Our highly developed system of branch banks can be made a strong support to the progress of rural credit societies, and the lines on which an agricultural credit can be built up are two. In the first place, advances to societies, in order to confirm their position; this creates simply availability of credit, and not subsidy, and its justification is that the bank deposits of agriculturists are liable, in times of active trade, to be drawn up to the centres for loans to other industries than agriculture, where the turnover is quicker. In the second place the encouragement to societies to create funds of their own, so that the savings of agriculturists become available for agricultural circulation; and this can be done by passing them into the ordinary banks through the local credit society. Such a power to accept the deposits of their members could not be a matter of objection from the side of the Joint Stock Banks. By this means, the way is open for federation of local societies, in order to circulate their surplus funds; this would still rest on the ordinary banks, and the course of events would determine whether State loans could in time be passed through a central bank dealing with these federations. Public advances to isolated societies, not empowered to accept the deposits of their members, are very liable to restrict the development of an agricultural credit on a large plan. And the power to accept deposits would give a visible office and centre to the rural society in its district. In Germany, rural credit societies derived, before the war, over 90 per cent. of their working capital from the deposits of members and non-members.

66. The British Act of 1923 suggests a limit of three years for advances to rural societies, though the Treasury has power to extend the period. The Act has been in force for eight

months but few societies have yet been formed. It is not to be expected that progress will be rapid; even in Germany it was slow, only 100 Raiffeisen Banks being established in 12 years. But it has been suggested above that the rate of progress in this country would probably be increased if use were made of such local associations of farmers as already exist for the purchase of supplies, so that in these districts the credit could be closely attached to the purposes for which it is most required. A notable use of this principle is made abroad, and it is an important economy of local management. It is therefore important that, under the Regulations just issued, purchasing societies may enter the scheme. And if credit societies may accept deposits, as is now recommended, the fact that purchasing societies will be among their members will greatly increase the funds available for circulation, and build up a credit whose next step should be federation.

B.-Agricultural Education.

67. Agriculture has become a science as well as a business and a method of life, and it is evident that the problem set in our Reference must to a considerable degree be attacked by scientific knowledge, and-what is equally important-by the use of that knowledge. The provision of adequate educational facilities is one of the duties of the State to all industry. In manufacture, the application of the results of scientific discovery has taken place under the pressure of competition between great concerns, whose organisation and outlook make them alert to invention, and whose capitalisation enables them in many cases to retain their own experts for research. Agriculture, on the other hand, is a craft in which competitive relations are much less fully realised, which works for a balance rather than for a rate of return, accepts the yield and the price which the seasons give, and has been slow to modify traditional habits and customs. Besides, the farmer is away from the centres of scientific education; the results must be brought to him, and their use demonstrated to him. The science of the experts at the top must in this case by somewhat special methods be made the practice of the industry.

68. But technical knowledge is not the only aspect of the problem. The extent of general education is even more fundamental. There are some countries, notably Scotland and Denmark, in which this asset has shown its value over a long time; and it is only by a broad view, such as their history gives, that its importance can be realised. Denmark is a country of whose system of rural education the most famous part is nonVocational. The momentum of her agricultural progress has been due largely to an outlook and an enthusiasm which are the creation of the interest aroused in her People's High Schools in national history, biography, and literature. In her ordinary rural schools, there is no encouragement of rural instruction. In the same way, our evidence is that the skill and success of the Scottish farmer

are based on the national standard of general education. The children of the farmer and labourer will be in industry soon enough; and if rural life is to be attractive enough to hold them later, they will require, even more than the city artisan, general capacities and reserves which will enable them to appreciate, not only the country, but the libraries and lectures and other facilities which aim at maintaining life in the villages.

69. It is easy to speak in general terms about the influence on agricultural prosperity of education, and any discussion must he pointed with particular examples. We have had striking evidence from the Agricultural Education Association of the economies which are in this way realisable. In our First Interim Report we referred briefly to some definite instances; and these may now be extended:

(a) An experiment instituted at Cockle Park in Northumberland, and continued ever since," has demonstrated beyond the possibility of doubt that the productive power of much of the poorer pastures in this country can be doubled and even quadrupled, leaving a large profit to the farmer after paying for his outlay." This experiment has been tried and confirmed in other parts of the country.

(b) Experiments made at Cambridge have shown that new varieties of wheat can be bred whose yield is much greater than that of ordinary varieties. We have been supplied with a table showing the threshing results obtained from 23 farmers scattered all over England. The average yield of the scientifically bred "Little Joss" wheat was 44 bushels, and of the approved local variety 39 3. Still better results have been obtained from "Yeoman wheat. In Canada," Marquis" wheat, a product of wheat-breeding research, is now grown to a greater extent than all other varieties put together." In India, one of the new wheats is stated in our evidence to have given 25 per cent. increase.

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(c) The food-producing capacity of the land is capable of great increase if the method known as arable stock farming can be shown to be profitable under English conditions. This is the method followed in Denmark, and a large part of Germany. But in the former case which is the only one comparable with England, since there is no fiscal protection of the system-this method is forced by the nature of the soil. It is also carried on to a considerable extent in Scotland. Its application to English conditions would be specially valuable, since it would combine stock farming with the maintenance of arable land.

"From the purely technical point of view, these two requirements (of tillage and livestock) are not incompatible." "Abundance and uniform prices require both an extension of tillage farming and the maintenance of a large head of livestock." The reason is, that livestock stabilises supplies, and constitutes a form of reserve. "With an intelligent use

of this system, when corn prices fall, the farmer relieves the market by feeding more grain to his cattle, sheep and pigs." When corn prices rise," he reverses his procedure, and automatically a larger supply of energy, in cheap vegetable foods, goes to market."*

(d) The progress of Milk Recording, under the scheme instituted by the Ministry of Agriculture in 1914, shows for some of the chief societies very great improvement in the average yields. The largest (Essex) Society shows an average yield increasing from 637 to 708 gallons between 1917 and 1921, or about 11 per cent. The systematic application of the system of records in this way has been one of the main conditions of Danish agricultural progress. Only 5 per cent. of the cows of this country are as yet under the scheme. The first requirement is that the interest of the dairy farmer should be aroused, and that the results obtained, here and abroad, should be disseminated.

(e) Our attention has been drawn to the need for the extension of farm accounting, and have received valuable evidence on this point from the University of Leeds. The organisation of farm accounting is the latest of the Danish methods of control, and has enabled her Economic Bureau to trace the course of farming profits during recent years, from 10.6 per cent. in 1918-19, to 1.2 per cent. in 1921-22. The evidence given to us shows the great variation of profit between farms in this country during the recent depression, and indicates how the industry can be braced up to a higher level of management based on accounting. Perhaps in no aspect can old traditions be modified to better purpose. Economists may be suspected of partiality for their own study in urging this point. But there is abundant evidence on this point from those who are in direct contact with the industry.

70. These instances have been quoted from our evidence in order to avoid a merely general treatment of the large question of agricultural research and its application, and to show how there may be specific margins for the realisation of economies.

71. The scheme of agricultural education has in most of the European countries similar features. There are at the top institutes for the training of future leaders of the industry, as teachers, officials, investigators, or estate managers; such as the Agricultural High School at Copenhagen, the Agricultural Colleges and University Institutes of Germany, the National Agronomic Institute in France, the Wageringen Institute in Holland, the State College at Gembleux in Belgium, together with a number of special schools for Veterinary, Horticultural, Dairying and other aspects of applied science. To these correspond the Agricultural Colleges and University Departments of this country.

* Middleton: Food Production, pp. 327-8.