The farmer and mechanic. [volume] (Raleigh, N.C.) 18??-19??, 1914-05-05

and the TACT that ne has SCant social
relation with the moneyed nen Of the
town. mbin TO make him a figure
with no great appeal TO the accredited
banking facilities.
\ sad fact. too. IL that many farm
CTS arc very unbusincss-likc. \ farm
er will keep money in a bank that
pays a small rate Of intere>t-if any
and yet at the anne time he will buy
his fertilizer on credit and pay a
heavy charge for the accommodation.
He has not yet learned tho value Of
buying for cash in order TO get the
liberal discount even il Nc has TO bor-
row to get this discount.
Then again the farmer wants long
time credit. and the banker and the
general country investor do not want
to have their money tied up over a
considerable period. This means con-
slant refnancing for the farmer. and
refinancing. as everybody knows. is a
very expensive piece of business.
The MiilStOncs.
Small wonder tina the rural banker
preferred to do business with the mer-
chant and the manufacturer who were
close to his elbow and who mainly
wanted short-time credit, and that he
exacted a pound of flesh from the
farmer when he did deign to accom-
modate him.
The natural result was that the
farmer. unable to get credit at the
bank, turned to the next worst thing.
which is the local Iender-familiar
figure in the rural melodrama-Who
is always pictured as holding the lash
of imminent foreclosure over the un-
happy heads of the aged couple about
to be turned from their hearthstone.
But there is more truth than fiction
in the conditions that bring about this
resort to the village shylock.
Unpleasant as was the alternative,
the farmer had to take his choice OF
two highly unsatisfactory courses.
One was to borrow from the bank and
lose his farm through excessive de
mands: the other was to operate With
out needed capital and fail in the
end. Iii that traditional person
caught between the proverbial mill
stones, he was ground whichever way
he turned.
The Bondage to Home Capital.
Now we arrive at the real leash tina
has held the expansion of rural
credit in check. 1t lies in what nigh,
De called the geographical limitation
Of our farm mortgages. Astounding
as it appears, it is seldom that a farm
loan is cbtainable-save in rarely ia
vOred COmmunitieS-OutSide it's imme.
date neighborhood.
The effect Of this restriction of tn
resources Of credit canno be over
estimated. Though it may appear
trifle far-fetched, let me quote on
of the b~est-known American authori
ties on rural credits on this subject
He said:
People do not realize the hardship
works on the farmer. When you turl
to some striking parallel O begin
to see just what it means. VIVA
would happen, for example, it eacl
mile Of oadbed of the Pennsylvani;
Railroad depended for its financing
on the country through which i
passes? How would the United State
Steel Corporation nave Jared il it ha'
relied OIL the vicinity of Gary for tn
erection of it's mammoth plant there
Or, to reduce the proposition TO tn
nth power of a~bSurdity, where YOU
the magnificent new Grand Contra
Station in New York City be if tn
New York Central had been compel
!, ed to raise the funds for it from tn
residents of the adjacent streets?
These huge organizations dra'
, their funds not only from every paI
of the country, but practically frol
every section Of the world, while GU
agricultural industry-the greatest {
| all-rarely gets beyond hailing dist
ance for its capital. The consequent
is precisely the same as it would b
III tno case Oh any Oh tHo OlI1oT il
dustries hat l have quoted Agricul
ture does not get all the capital ths
it legitimately needs; when it doe.
: get credit, it pays an exorbitant price.
l Probe the source of rural credit
and you find it bound hand and fot
to local conditions. Sixty-seven pc
: cent of it comes from the so-calle
home banks; 16 per cent from tn
neighbors. A bare Is per cent
: supplied by loan agents who represer
: outside investors. In a very few con
: munities the building Ut loan asst
t Citations are able to accommodate tn
t farmers, but the number is SO sma
t that it scarcely figures in b eener;
g statistics. ~
a Many reasons are given for tt
e widespread farm failures. 1t may
h that some farmers do not farm prof.
erly, that others do not raise enoug
-? crops per acre or realize adequate,
n upon them. All these nay be tru
d but the main reason which has ju
begun to soak into the co~nsciousne
O Of q large body of the American pc.