Evening star., 1915-11-21
RURAL CREDIT NECESSARY
IN FARMING BUSINESS
Aids Farmer in Obtaining Capital
for Investment in Farm Property
and Permanent improvements.

Necessity for the establishment of
some system whereby farmers of the
United States may obtain bank accom-
modations, or rural credits, to enable
them to carry on the farming business
in an economically adequate manner, is
becoming increasingly obvious as old
methods go into the discard and agri-
cultural operations are conducted more
and more along the lines of other in
dustries.
In the old days when the American
farmer produced for a local market and
bought in a local market under condl-
tions largely determined by local
needs; when crops were staple ana
methods of production We.= standaId,
lied there was little need for extended
credit Each crop paid the way for the
next and store credit was sufficient Tor
the farmers needs. Nowadays all TINS
is changed; the commercial farmer to-
day produces his crops under condi-
tions that are affected by world con-
ditions. He sells in a market that is
fixed by national and international con-
ditions, and he buys under conditions
similarly fixed. The old careless meth
ods of production are no longer efh-
cient; the impoverished land demands
more intensive cultivation. drainage,
fertilization more live stock and more
labor. All of these call for more capi-
tai; the question is, where snail the
farmer get this needed capital?
Under existing conditions farmers
cannot establish credit at the banks
Our whole banking system has been
created and organized to meet the
needs of commerce, trade and manufac-
turing industry, and is not suited to
the requirements of the farmer.
To carry on his business effectively
the farmer must have two distinct
types of credit, neither of which is
adequately provided by our present
banking system: First. long-term
credit, by means of which he may Sc
cure capital to buy his land or to
ond, short time credit, which will sup
ply him with capital for the purchase
of seeds. fertilizers. machinery, live stock.
labor etc. He needs longtime credit
because the returns from one or two or
five years crops cannot be expected to
repay capital invested in the form of
permanent improvements. He needs
short-time credits because crops do not
mature within the limited credit periods
customarily allowed by our commercial
tries are provided with two distinct types
Of credit agencies which are especially
designed to meet these needs. The one is
the Land Mortgage Association, which
enables him to issue and sell bonds, rum
ming for long periods Of years, bearing
low rate of interest, and secured by the
value of his land The other provides
a special form of personal credit not
limited to thirty, sixty or ninety days, or
even six months, but extending from six
months to three years. These are the
rural credit banks, which play SO inn
portant a part in the development of eff
ficiency in European agriculture.
These two types of institutions, in some
form, should be placed at the disposal
of American agriculture for until the
American farmer is permitted to mobilize
his assets and his credit as fully and as
freely as does the merchant. the manu-
facturer the industrial corporation, his
productive capacity must necessarily be
limited and the progress of the industry
is bound to be retarded.