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

whole performance Is that he cos,
Of renewing the loan is almost a.
great as the initial venture
You viii not he surprised. there
fore. when You ind that the Ameri-
can farmer pays down $500. 900 coo IN
interest each year. This huge fixed
charge is equal 10 the entire return
on our vast wheat crop. Looking a.
II from another angle. II the farmer
raised only wheat. he would sacrifice
ms whole income 10 meet the cost OF
the money he had borrowed.
viewing this interest charge from
sun another point. you ind that With
In the last generation IL has consumed
lhc whole increase I'm the value of our
farms Every twelve years IL ab>ortn
TIC value Of all our farm buildings.
each nine years the value OF all our
i've stock. In short. Of all business
the average profit upon
agriculture IL the least Cumpatiblc
with the rate of interest charged for
necessary capital. II city borrowing
mad TO pay the price of country bor-
rowing. most enterprises would cease.
But all the hardship i, rural credil
IS not TO the mortgage on
Iano or the cost Of operating capital
There IS still another expensive
source, Very widespread and seldom
Included IN discussions of the subject
it IS known as store" credit, the nro-
~ tl tItlf Ltn-
ants run accounts with merchants
and pay an enormous bonus for their
supplies.
In the South this system is little
short of peonage. 1t is estimated that
in some communities the merchants
exact a toll of not less than so per
cent on groceries bought. as the
phrase goes, ION tick
or course there are TWO sides 10
this farm picture. Many farmers are
lenders instead of borrowers. thou
sands own bank stocks and some
even put the screws to the urban Dor
rover But they are considerably in
the minority.
The fact remains that the whole
system of farm credit has been extra
VACANT and impractical: that il has
hampercd rural development and
driven many farmers to the towns.
The Trouble.
One more detail remain 10 be OK
planned before we turn from the sor-
did drama of credi oppression to the
rosy prospec of promised relief
There is a nation-wide farm debt
Of nearly $4,000, 900 600. Half of il
IS on real-estate But
| these mortgages and their allied obi
cations do not spell failure any more
than do the liens on our huge cor
porate Institutions. On the contrary
the farmer, like any other intelligent
person, realizes that debt may mean
: expansion if the proceeds are devoted
to constructive purposes. The late T..
4 h. Hartman had strong ideas ON
I TINS subject. When people asked him
what constituted a millionaire he did
not say that it was a man who had
a million dollars. He always replied
/ It's a man who owes a million"
! He assumed that the individual who
u could borrow a million either had
u equity that represented more thar
[ this sum or natural qualities tina
q made for big material success. HI
d had more respect for "A person in deb
: than for one who Was not. Credit in
I his empire-building game proclaimed
s triumphant advance.
Our trouble has een that there is
e not enough debt on the American
F.? farms. Contrast them with the rail.
e roads which represent an inVcstmen,
q of SIS, 600 600. 600. Yet they ar.
II m~Ortgaged up to 81 900. OOO. OOO. o,
e nearly so per cent. But this indebt
cdncss has meant new equipment, en-.
e larged service. increased efficiency
worth approximately $40. 900. 900 .OO(
and carry debt burdens Of barely So.
n 600, OOO, 900, or Is per ccnt. With &
r larger mortgage load they would hav,
u a bigger producing power.
The best answer perhaps is in tn
statement tItdl OuI HUI SdSeu a III
e are more valuable than the unmort
gagged. Their average of acreage un
der cultivation is greater, their yielt
larger. their equipment better, anC
their assessment higher.
II the farmer can accomplish thesa
results with mortgages obtained un
der excessive conditions, what Coul'
he do if the credit machine were gear
"a ed up to help and not hinder him?
le urn for a moment to Continenta
IS Europe and you see what a rationa
system Of rural finance can accom-
plish. With poor soil, more primitiv
methods. and lower prices for com
le modities the German, French an
II Italian farmers are not only prosper
Gus, but save enough TO become in
%vestors.
re They do this simply be~-use thei
'e credit system considers the rights an
, resources of the borrower. This prin
N cipte, combined with cooperate
"