The farmer and mechanic. [volume] (Raleigh, N.C.) 18??-19??, 1907-04-23
LOANS PAID
BY FARMERS
A Bank Can Have No
More Desirable Gus
toners Than Farmers
A Prominent Banker Replies To NIeccii
OF DIR. knapp and Gives His IN
pcricncc i'm Dcaiin. With Tar
mers i'm Eank Business.
u, JOSEPH G.. BROWN.

Hv JOSEPH &. BROWN.
To 'he Editor: In one OF IA" best
ever delivered in THIS stat"
printed in the News and Observer last
SUNDAY, DIR. Saman 4 Knapp said to
the educators Al Pinehurst the other
day:
Farmers can deposit in 4 bank bnt
they cannot borrow from liza bank
even their own money u make a crop
II ~couire at least six months {"
make an ave age crop upon a farm
Tanks IAN loan only for ninety lays.
suppose all Of the deposits Of a village
bank were made hy farmers, that
money must be loaned upon Short
time and hence is not available for
crop-raiSing TO any extent. Thus the
banking capital of our ountry a
considerable portion Of which belongs
10 farmers, has not promoted agricui-
lure; but has stimulated cOmmerclat-
ism and BY its concentration in cities
has fOstered gambling in stocks. The
great f~iuctuationS in the values OF
farms and farm products lies in the
fact that the money OF the country
is not backing them. 1t has been loan
I'd TO the merchants, the manufac-
turcr and the specializing interests"
The above from the li.tS of 81 we'll
posted and gifted a man as Or. Knapp
IS but one of the Straws that show the
,nlScOnceptlOn about the attitude OF
the banks TO the farmers. Among
many of the most intelligent farmers
in this section there has been, and TO
considerable extent, still is an impress
sion that the banks, and especially
the National Banks, will not lend
money directly to the farmers. There
is nothing farther from the real state
nf tho naCa Tho nrrIfar hnC haEn nnn~
ncCted with a National Bank for thirty
years. Every dollar Of its stock is
owned by home people, mo it cOnsid-
ers itself as much n citizen of North
Carolina as any domestic corporation
can be. Its officers and directors, as
we'll as its stockholders, are home peo-
pie, and they are in fullest sympathy
with every local enterprise. whether
II be IN the city or on the farm. Among
the customers Of the bank are not a
few farmers and non of its patrons
are more thoroughly appreciated than
they. 1t has been always Il pleasure
to deal with them, and no class of
people have been found more trust
worthy, and more certain to pay their
debts-and, ] say it deliberately, a
bank AN nave no more desirable Gus
TONER than an honest substantial
farmer My own bank has never failed
to their business, and our
experience is, I am sure. a common
oit we Il carrying lOOdy u ldTSe
amOunt of armer paper for money
loaned directly to the farmer and we
think no assets of the bank are safer.
But the trouble has been that many
of our farnerS have been imbued with
the idea advanced by DR. Knapp,name-
~, that the farmer cannot borrow
from the bank" and h investi-
CATION, they have sought needed help
through other and frequently more ex-
pensive channels-for the banks are
usually satisfied with the legal rate
Of interest. My own bank never
charges more than 6 per cent. In this
section, the principal security that the
1afmer has IS his cotton, and nowhere
can there be had q better collateral.
1t 5 hard to realize that an intelligent
man IN this day and time could be led
to believe that a bank, even though
a National Bank. would not be glad
to have its lOanable funds in the hands
of a substantial farmer and secured
by cotton. And yet jus a little while
ago one of the most intelligent men
IN Wake county, WhO was a customer
OF our bank, wanted to borrow money
upon personal endorsement, and ex-
pressed regret that we would not lend
him upon his cotton i'm the warehouse.
ana yet the personal endorsement he
olicred US vas not worth q dollar, al
though We We're willing TO lend our
customer because we knew he would
personally take care of it.
Out OF ms endOrSer we could not
have collected a cent by law. while
any day We could have sold his cotton
Tor twice the amount of the loan. How
much more desirable, then, the cotton
loan than the present onei
1t IS true, as DR.. Knapp says, that a
banks funds are supposed to be
loaned on short time, say not longer
,han 80 days. 1t is equally true, how
ever, IN an agricultural section like
ours, that no bank expects to be able
TO coIec within ninety days the mon
ey it lends locally in the early part of
the year. The farmer goes to the mer-
chant and makes his for
the year-Dut the merchant, whose
own capital as a rule is limited, must
go TO the bank and make Il similar
arrangement to carry him Until the
crops come in.
Now. as a matter of fact. a hun
Gred loans Of $3.50 each to as MANY
farmers is of more value to a hank
IMAM any one loan of $4,000 to q sim
gle person, for the reason ,haf every
one OF the twenty-five farmers il ant
10 become a friend and depositor of
the bank making the loans. thus
bringing to the bank not only their
own business but frequently that of
their friends. Besides all this. the
farmers are good payers. and When
theif crops are marketed they seem
70 take peculiar pleasure in paving up
thelr obligations. This has certainly
Deen u experience with them. and I
mas been our gOod fortune to have
many customers among the country
people.
Just one other point in DIR. KnaDp's
remarks l would all tentiO to: He
says that h banking capital. by CON
cehtratlon in cities has not onIv not
promoted agriculture but "has fos-
tered gambling in stocks" SO far as
my knowledge goes gambling of any
hlnu is discouraged by other financial
institutions
we presume the banks in Raloiyb
are about d fair average of the banks
IN TINS section. At their last state
n'ent they showed in capital stock of
in loans largely 10
loral industrial enterprises. merchants
and farmers they showed more than
$4,000, 600. "1'
All legitimate business thjs-no
gambling,
VI course a large part of these
iodhs were 10 merchants but il must