Lower coast gazette., 1913-06-07
The Need of Better Banking Facilities
Among American Farmers.

avail themse YES of the credit facilities now
at their command. There is no means of de-
termining accurately how nearly such credit ia
ciiities meet their demand. Undoubtedly IN
some localities the farmers secure from the
existing banks satisfactory accommodations
Undoubtedly in others they do not. 1t may be
said, however, that the banking system OF the
United States is a machine designed to accom-
modate those engaged in industries other than
agriculture; that the farmer is the outside" /;
and that where the existing banking facilities
are sufficient for their needs 1t is rather be-
cause of the fact that the farmers in that par
ticular locality are so essential to the welfare
of the bank that it is willing to make it's bust
ness conform to the demands of the farmers
than that the banking system OF which that
bank is a part is entirely suited to serve the
farmers. However, no one but the individual
farmers can say whether the banking facilities
now offered him are sufficient.
The American Commission on Agricultural
Cooperation has undertaken the study Of the
European system of banks, or rather of Dor
rowing and lending societies, designed to meet
the short time credit needs of farmers. Such
a system cannot be installed ready-to-order in
any country. The most that can be done by
the advocates of this system is to establish a
few experimental institutions in localities
where the absence of banking facilities is par
~ticularly noticeable. If success is attained in
such trials it is to be supposed that the farm
ers of other localities will adopt the plan. So
it would spread from place to place. That
is the history of the European institutions. They
will take root and flourish where they are
needed. They will probably never prosper in
localities where the farmers are not borrowers
or where there are already established instl-
tutions that can satisfactorily meet their de-
mands. But there are localities where the alb
sence of banking facilities for the farmers is
seriously retarding the development of this
country and the successful operation of such
societies as have been established in Europe
in those localities would open a mine Of wealth
to The nation, would profit the farmers, the i'm
plement makers, the railroads. the bankers,
and the entire community.
Much has been written in discussions of the
cooperative banking systems, OF the 3 per cent
money which the European farmers borrow.
Certainly it is absurd for American farmers
to approach this subject filled with the idea
that they are going to get loans at such a
rate. Money is cheaper in Europe than in the
United States just as everything else is. The
American merchant pays more for money than
the European merchant. Only in their bond is
sues and big transactions can the Americans
secure the advantageous rates OF the European
money market. For their everyday, short-time
credit every American, including the farmers
no matter what system they adopt, will proba-
bly, for a long time to come pay a higher rate
than is required in certain of the countries of
Europe. The hope of the American farmers
considering the adoption of the cooperative
credit plan should be that they can secure cred
it as cheaply as men engaged in other indus
tries in the United States.
A far greater consideration, however, than
the rate of interest is the availability Of cred
it. Is it convenient for the farmer, is it posi-
BILE for him always to get credit when he wants
it; when it would be profitable for him to Dor
row? Is it easier for the merchant in the near
est town to get an accommodation from the
banks than it is for the farmer? This is, gen.
orally Speaking, the most serious handicap I'M
der which the farmers labor in this country.
When a farmer gets his money he generally Sc
cures a fair rate of interest. Not always, for
there are sections of the country where the
farmers are obliged to get their credit from
local merchants, selling their crops through
the merchant with whom they have an account.
In such instances the farmers generally suffer
severely. But taking the country as a whole,
it is not so much the high rate of interest de-
manded as it is the difficulty of obtaining credit
that hampers the farmers. Again it should
be said that this does not apply to every loca-
lity in the country. / have in mind a bank
located in Montgomery County, Maryland, that
is owned by farmers, situated in a district
where there are nothing but farmers, existing
primarily as a farmers bank. Unquestionably
farmers could secure satisfactory accommoda-
tions from such a bank. But you may go to
many other localities in that same state and
find entirely different conditions, localities;
where it is simply impossible for the farmers
to secure the credit accommodations they need:
AS an instance, a village of five hundred peo-
pie in central New York, the center of a COM
paratiyely prosperous farming district and ty-
pical of that section of the country, has no
bank of it's own. The farmers must either
transact their business in one of two towns,
the nearest of which is about twenty minutes
distance by rail from the village. Obviously it
would not be very profitable for a bank in one
of those nearby towns to cater to the farmers
outside that village. Now that postal savings
banks have been established it is probable
that a considerable portion of the savings Of
the village people as well as of the farmers are
nlacod in tho custodv of the Government Re-