Charlevoix county herald., 1914-09-12
How to Use Farm
BY T. n. CARVER, DIRECTOR u. s.
RURAL ORGANIZ ALTON SERVICE

interest rates. Interest rates, like
prices i'm general, depend upon the
law Of supply and demand. When
there is more lOanable capital in a
community than is wanted by the bor-
rOwers of that community, the rate of
interest is low and the borrowers can
dictate terms. When there is less
loanable capital than is wanted by
borrowers, interest is high and the
lenders dictate terms. Obviously,
therefore, it is to the interest Of the
borrowers to increase the number of
lenders, or, at least, to increase the
amount of loanable capital in their
community. The way to increase the
supply loanable capital is not to
denounce lenders and hold them up to
public hatred. That is like throwing
clubs at chickens to cure them of shy
ness and make them come when they
are called. The right way is just the
opposite of that; it is to make the
neighborhood attractive to lenders, so
that they will be anxious to come.
Then the borrowers will be able to
secure favorable terms. So long as
lenders are hated, so long as borrow
ers habitually try to beat the lenders
and force them to resort to legal pro-
ceedings to collect, just so long will
the right kind Of lenders avoid such
community, interest rates will be
high, terms unfavorable, and fore
closures frequent. The only kind of
lenders who will go to such COM
munity are the loan sharks, who go in
for the purpose of taking advantage
of high interest rates and who watch
for chances to foreclose mortgages.
Improving Credit Conditions.
The point to remember is that the
farmers have it within their power TO
a large extent to remedy these con-
ditions themselves, though it may
take some careful planning and hard
work In the first place, they must
disabuse their minds Of the notion
that tangible property, such as land,
furnishes the best security in the
world The business ability and char
acter of the borrower are of even
greater importance in such transac-
tions than the value Of the land he
may own. Where farmers are known
to be capable of paying their debts
and willing to do SO promptly and
without legal proceedings, there credit
conditions are good, because the right
kind of lenders are attracted. The
right kind of lenders do not like to
foreclose mortgages or resort to any
form of legal procedure. They VIII
avoid any neighborhood where such
things occur frequently, and leave it
to others less considerate. The right
kind of money lender merely wants
his principal back, together with the
stipulated rate of interest. Where
these are assured to him without the
vexation of legal procedure, he will
90. Generally speaking, that is why
such vast quantities of loanable cap
ital are going to certain farming sec
tions and lending at low rates, rather
than going to other sections where
high rates might be secured.
1t must be admitted, however that
one farmer can do very little, when
working alone, to give his neighbor-
hood a better financial reputation, or
to attract the right kind of lenders.
This is a problem which must be
worked out by the whole community,
or, at least, by considerable group
of men. Ten just men, it will be re-
membered, might have saved even
Sodom and Gomorrah. If there are
nine other men in YOUR neighborhood
in whom you have confidence, who
have confidence in one another and in
you, you and they may be able to
work out this problem together. If
ten men can not be found in a COM
munity who have confidence in one
another, how can they hope to find
lenders from the outside who will
have confidence enough in that com
munity to risk lending money there? ?
If ten or more who have confidence
in one another, enough confidence to
be willing to trust one another finan-
cially, can get together and hold to-
gether, they can eventually work out
their credit problems.