The Providence news. (Providence [R.I.]) 1891-1906, 1896-10-06
THEY NEED MORE BANKS
Farmers Are Suffering From
Lack of Credit Facilities.
A RUINops BUSINESS SYSTEM.

N
Farm Productions Cannot DO Paid For
In Currency--Book Accounts Versus
Checks and Credits.
American farmers and planters are
scattered thinly over an enormous ter
ritory. A vast majority not only have
no dealings with banks of deposit and
discount, but do not understand the ma
ture Of such transactions. In the south
and west it Is quite common to find
numerous populated districts, each
larger than Wales and some nearly as
large as England, in which there is not
a single bank Of deposit. In most of the
agricultural regions back of the north
Atlantic states payment by check is
practically unknown. All transactions
are settled either by payment in paper
money or by book accounts.
A moments reflection will show that
&c is literally impossible that the enor-
nous productions of these farmers can
ever be paid for in either coin or paper
money. There never was and never can
be enough money" in the country to
pay for half crop, while two thirds of
all the coin and paper money is and
must be kept in bank vaults, the banks
being compelled by law TO keep on hand
from 10 to 20 per cent Of all their liza
bilities in coin or "greenbacks. I" In the
large towns the gradual evolution of
business has superseded actual money by
the use Of checks, in which more than
nine-tenths Of all transactions are set
tied. But the farmers have no checks
and no bank accounts. Nearly all the
money" is absorbed by the towns.
How shall their crops be sold and paid
for?
In answer to this demand, trade in
wolves the country store. At each crossing
Of the highroads is sure to be planted the
crossroads store, of which the business
traveller will hear in every direction.
Here shrewd manager, with small
capital, good bank facilities and plenty
of local knowledge, is ready to sell to
each farmer on credit
Each farmer opens book account
with one of these stores. He is lucky if
he has q choice between three of them.
But they all charge the same prices,
give the same credit, require the same
security and deal in the same way.
When the farmer has raised his crop,
he must either sell it to his storekeeper
or must direct any other purchaser to
settle at the store. Credit is given from
one annual crop TO the next. In consid-
GRAFTON Of this credit and the risks in
volved, the storekeeper has to charge
prices which include interest and insur-
ance, roughly calculated at not less than
25 per cent, in addition TO the full usual
retail profit of a town store. When he
buys the farmers crop, as he usually
does, he pays the lowest country market
price. He keeps the accounts and fixes
the prices at both ends.
In this manner by far the largest
share of the back country farmers have
to buy and sell. OF course they always
buy in the dearest market and sell in
the cheapest. They do, in fact, bank
ing business at the crossroads stores in
clumsy and costly manner, paying
these primitive bankers interest and
commissions at the rate Of 30 or 40 per
cent Those farmers who only pay 30
per cent grow prosperous; those who
pay 30 barely live; those who pay 40
are eventually ruined.
Millions of farmers live in this man.
ner-know it and are impatient under
it. Hundreds Of thousands grow fiercely
discontented. But the only remedy Of
which they have the smallest conception
is to increase the volume of money TO
such an extent that it shall flood the
whole country and enable them to buy
and sell for actual cash paid across the
counter. They believe that city trade is
done in this manner, and they think
that they are deprived of like privileges
by some mysterious financial conspir-
acy, through which New York and
London bankers monopolize all the
money and contract its volume In order
that they may monopolize it.
No politician and no paper which
they ever read contradicts this theory,
and nobody ever explains TO them the
real nature Of banking or the possibility
of their having or using deposit banks.
Their only idea of bank is a bank note
factory, issuing paper 90 be kept afoat
as long and redeemed IS seldom as pos
sible. And why that olnnipotent being,
the government, should not issue all
this paper itself, sharing the gigantic
profits" among all the people, is some-
thing which they cannot understand and
which nobody until very recently has
attempted to explain.
Is it at all surprising under such cir
cumstances that these small farmers,
hardly pressed for a living, should
clamorously demand more money Of ev-
cry kind-gold. silver, paper or ragsf
The marvel il that there has been
enough common sense among them even
without instruction 20 feel instinctively
that the only remedy Of which they
know anything is, after ALL worse than
the disease.
What is tho true remedy Is II not
obviously the extension 90 the farming
Glasses Of those banking facilities which
l.