Pullman herald. [volume] (Pullman, W.T. [Wash.]) 1888-1989, 1912-09-27
me High Cost of Farming in the
United States

| INV IhlhS that helps to mako tho
COST OF living about 10 per cent high
eF IN the United States than in En-
.ope Is an undue interest tax of
S@lo'ooO,OOO year on the American
iarmer' This phase of the GREATEST
ploolen at present confronting us" is
discussed in the Worlds Work for
september by President B. r Yoa-
KUN of the st. Louis & San Francisco
railroad. Food and clothing the
fundamentals of life, cost more and
more each year, and according to Mr..
ioakum lit is this simple fact that
underlies nearly all the disturbing
phenomena of an era full of disturb
ances. Diminishing those factors
winch are international in their eff
Iect' he names four paramount
causes OF soaring prices in this coun-
Ivy the first of these being the ex-
cessiye burden of interest charges
lald upon the agricultural producers
OF the country because of Inadequate
money-lending facilities" The other
three may be grouped as "the exces
lslye cost of distribution" Cheaper
money for the small farmer is the
first of our agricultural problems. :"
AS things stand, this class of citizen.
the fundamental wealth producer of
the country" is given poorer service
by our banks than almost any other
man in American industry And
IWhen we compare the financial ac-
commodation given him with that &C
corded his brother-agriculturis in
Europe the discrepancy is still great
err.
Mr. Yoakum estimates the aggre-
gate Indebtedness of American farm
ers, including mortgages and current
loans on crops, at $6,046, 900, 900. On
| this they pay interest at an average
rate of 8R per cent per annum,
whereas were they farming in France
or Germany they could get the same
accomm odation at rate never high
er than per cent. The reason is
| that France and Germany have sys-
tens of agricultural cooperative
banking. Italy, Switzerland, Den
| mark, England, Ireland and India
| have to some extent followed the eX-
ample set by Germany and France,
with the result that 1.-The German, the
French, the Italian, the Irish the
Danish and even the Egyptian and
| Hindustanee farmer borrows on cur
rent account against his crops, his
| equipment, and even his chattels at
Il an interest rate a little more than
| half what the American farmer has
to pay"
Mr.. Yoakum finds that the indebt-
edness of the American farmer IS
about half on account of fixed capt.
tal-mostly mortgage loans-and
half on account of current leans. The
total for all our farm ers, as already
stated, amounts to about $6,O46,-
| 600 900, and the number of farms in
| the United States is about 5000, 900.
| Therefore The average farm has a
mortgage debt of $500 and current,
debt of about the same amount out
standing against it. We read
further:
1.-THE rate of interest paid on this
tremendous volume of borrowed capt.
tai is, according to the best estimates
I can find, between s and 9 per cent.
per annum. The actual rate of inter-
est itself is only a part of the burden
| of borrowing. To it must be added
the constant drain of renewals for
mortgages on farms, of loans, fees
for recording mortgages, and other
loans to farmers, most of which are
made on short terms, and commission
fees and compulsory insurance on re-
newals. From all I have been able
1
10 gather from the best available
sources. I estimate that an average
rate paid by our farmers is IL per
cent per annum, which is conserVa-
tive estimate of the full cost paid on
farm money used in the financing
and capitalization of the farms OF
the United States.
"The annual interest bill, there
fore paid by the farmers is about
s51O.OOO,OOO. The total value Of
the wheat crop of the United states
as of December l, 1911, farm value
was s54S,OOO,OOO. Practically the
interest account of the farmers ate
nm the total wheat crop OF the en-
tire country"
No thinking man, looking the tac's
fairly ia the face, believes that the
rate to the farmer is just ahu
reasonable rate, declares Mr.. foa'
KUN Comparing the rate the farm
err pays for loans with that PAID o'
o,ioan merchants and manuIac