The watchman and southron. [volume] (Sumter, S.C.) 1881-1930, 1912-09-18
UNJUST TAX ON OUR FARMERS
NO SOUND REASON FOR HEAVY
INTEREST CHARGES.
Is. !. GOakum Shows How Eurone
las Great Advantage Over Amer.
lea - Cause Of High Prices -
American Agriculturists Pay S5lO.-
100000 Year for Use of Capital
Germans Half as Much.

The United States Government can
borrow money at per cent annual in
terest; American business men can
borrow on commercial paper at Al
per cent; loans on the mortgage Sc
curity Of city property cost only 8
per cent, but the American farmer
mas to pay an average rate Of S.5 per
cent for the money he needs to oper-
ate his business.
Why this is so, and how the Euro
pean and even the Egyptian farmer
are able to borrow more cheaplv than
their American competitor, is told in
terestingly by Mr.. B. F. Yoakum,
president Of the st. Louis and San
Francisco Railroad, in the first Of his
series of articles on The High Cost
of Living" in the Worlds Work.
Writing in the September number
of that magazine under the title, "The
High Cost Of Farming" Mr.. Yoakum
places this excess burden of inter-
est borne by the agricultural pro-
ducers Of this country first among the
causes Of the high cost Of liying-a
problem that is more serious here
than abroad since, as he points out
the American dollar shrank 80 per
cent in purchasing power between
1897 and 1911, while the English dol
lar lost only % per cent of its value
In the same period and the German
dollar still less.
Cheaper money for the farmer"
says Mr.. Yoakum, lis the first of our
agricultural problems. When l make
that statement l am not thinking of
the bonanza farmer or Of the owner
of few thousand acres Of highly de-
veloped and carefully cultivated land.
He borrows on a business basis. Often
the large planter borrows to meet his
current needs from a couple Of nearby
banks in which he owns large inter-
ests His business has nothing to do
with the agricultural prosperity, or
the reverse, of the average American
farmer. His problems are as different
from the troubles of the average far
| mer as are the troubles Of the United
I States Steel Corporation from the
trials Of the local foundry in cross
roads town.
After all. when you come to talk
of agricultural borrowing. you have
| to come down to talk In terms Of the
'one-bale farm The farm Of 50 to
100 acres, titled and worked to it's
| limit, is the real agricultural unit. The
foundations of a permanent agricul-
ture in any country are laid only when
the land is made to support as many
families, owning their own land, as
the land can properly support. There
fore, the fundamental question in
farm money is the question whether
the individual farmer, owning and
operating his own land, is supplied
with ample capital at reasonable
rates or whether he is stinted in capi-
tai and gouged in his interest ac-
| count"
citing Government statistics to show
that the total Indebtedness Of Ameri-
can farmers is $6,O46, 900, Mr..
, foakum continues:
The farmers debt is about half
on account Of fixed capital--mostly
mortgage loans-and half on account
OF current loans. The total number of
farms in the country is about 6.0OO,-
600. Therefore, the average farm has
mortgage debt of $500 and a cur
rent debt of about the same amount
outstanding against it
The rate of interest paid on this
tremendous volume of borrowed capi-
tai is, according to the best estimates
can find, between and 9 per cent
per annum. The actual rate OF interest
, l'seit is only a part of the burden Of
borrowing. To it must be added the
constant drain of renewals for mort
cages on farms, Of loans, fees for re-
cordlng mortgages and other loans to
farmers, most of which are made on
snort term, and commission fees and
compulsory insurance on renewals.
From all | have been able to gather
from the best available sources. | esti-
mate that an average rate paid by our
farmers is 1-2 per cent per annum
WhIch Is Il conservative estimate of
the full cost paid on farm money
used in the financing and capitaliza-
tlOn Ot the larms Of the United States."