The times. [volume] (Richmond, Va.) 1890-1903, 1899-02-17
Farmers and Banks

South and West for more money" when
rightly understood. Is a demand for
larger credit facilities, such as would be
supplied by currency reform which
permits banks 10 issue notes against
their general commercial assets. substan-
taiiy In the manner provided i'm the Nc
Cleary Dill The existing 10 per cent. tax
on state bank notes practically forDids
TO the agricultural sections Of the country
the opportunities for borrowing at living
rates enjoyed by the people Of the North
ern and Middle States. In the South the
want Of better credit facilities causes
Infinite evil, being among other things
responsible for the over-productiOn OF
cotton and the chronic poverty That at
tends the steady decline I'm the price of
that staple Having no local bank 10
borrow from at a reasonable rate-na-
tional banks with $50 900 OF paid-up carl.
tai beng scarce Ia agricultural commu-
niues-the Southern cotton grower IS
commonly In bondage 10 the focal mer-
chant who advances him HIS supplies
and requires him to plant cotton to pay
for them. Discussing THE Southe ml
Farmer and Banking Reform" Sound Cur
rency for December /. 1875. thus states
the custom which keeps the cotton crop
ever increasing while its price Declines
The merchant advances TO the farmer,
be he owner or tenant. the provisions,
implements. seed, farm animals and other
requisites for making a crop, provided
the farmer consents TO plant his cult
waited land IN cotton. 70 give the mcr-
chant a mortgage or lien on this crop.
and to pay for these supplies IN cotton
when the crop Is harvested. The cotton
prices of the merchandise thus obtained
by the farmer are usually from 20 10 so
mo- ..ftf oh ftsf1 ftff
for the farmer there Is no alternative
He is glad 10 accept credIt upon even
such unfayorabe terms, trusting that
the price of cotton will enable him TO
repay his Indebtedness and free him
from the necessity of securing loans In
the future. Unfortunately. his eXpecta-
tons are seldom realized. In 1866 the
average annual price OF cotton was IS
cents. in 1868 it was % cents; in 1873 IL
was IL cents, and ever since with few
exceptions. the price has continued 10
fall" The cotton grower IL. as a rule.
a borrower who borrows his working
capital at very high rates. under a sys-
TEN that tends inevitably 10 depreciate
the price of mis- product. IL is useless 10
preach TO him the wisdom OF diversity
ing his crops-planting corn and raising
his own hogs. etc. lie has no option.
Cotton is money CROP" and II he
does not engage to produce 1t he cannot
borrow at all. AS he often gets a large
part of his food supply from the mer-
chant who finances him, he is under the
strongest compulsion in perssting in a
ruinous system. few OF the more
thrifty manage to pay out and escape
from bondage. IL there were more album
dant facilities for borrowing at low rates
OF interest the number of planters who
would thus ultimately become indepsn-
dent OF the local merchant would yearly
become larger and larger. and the prob
lem Of reforming the Southern planting
system would be in process OF solution.
AT present. the country merchant is the
farmers banker What the thrifty farm
err needs Is a banker who has fewer
bad debts 20 provide against and IS con-
tent with smaller profits. In other words.
the salvation OF the agricultural South
from the all cotton" system IS 10 be
sought in the multiplication OF banks
ready to supply solvent farmers with
moro money" when needed. Only thus
will they be freed from the local shy
locks who exhaust their earnings and
perpetuate a faulty cropping system.
How will the McCleary bill relieve the
situation2 Banks will not take crop liens
as security for loans, yet most cotton
growers must have loans i'm advance Of
harvesting Banks will, however, relieve
the situation II they aid the more thrifty
farmers TO cultivate crops other than
cotton. This will reduce permanently the
cotton acreage and advance the price
of cotton. Very many OF the poorer
whites and a majority OF the negro
tenants WILL under any circumstances,
continue In bondage 10 the local mer-
chants, but better facilities for borrow
ing will year by year increase the num-
Der OF farmers who will diversity their
crops and become independent In parts
OF South Carolina where national banks
abound the better system OF borrowing
on tho personal security of weil-to-do
neighbors already prevails, with most
gratifying results. The amount Of credit
required seldom averages over $3.50. Some
times the supplies required for the small
farmer yearly do not cost over S25 But
even this small amount makes the differ
ence between crop and no crop. Cur
rency reform, with its scheme OF elastic
issues Of bank notes and branch banks.
promises such accommodation as Is need
ed on the easiest practicable terms. To
the Trustworthy and Industrious small
farmer Il promises relief from the
clutches OF the present credit system. II
NAV be hoped that Southern congress
men. putting aside for a moment their
gnecious theories Of bimetallism, will
Give careful attention TO banking reforms
that WILL restore to the people all the
advantage OF state bank note issues with
out their disadvantage. Baltimore sun.
BISHOP CHARLES b GALLOWAY
wwichmond, Petersburg and vicinity THIS
nnssNpNTN(, in the pastors study OF Gen.