Free trader-journal. (Ottawa, Ill.) 1916-1920, 1918-09-23
Effect of Method
and Character of
Farming on Loans



! Washington, D. C.-Bankers are
more and more requiring of farmers
who wish short-time loans. state
9nents as 10 their business similar to
those that are required of merchants
land manufacturers. In certain cases
bankers supply farmers with special.
" prepared blanks or rate sheets
which the farmer is required to fill
out before his application for a loan
IS considered In discussing this
practice the writer OF L. S. Depart
ment OF Agriculture Bulletin No. 400,
Factors Affecting Interest Rates and
Other Charges on Short.Time Farm
Loans says in part:
Zone important purpose OF the
rate sheet is to show how far the
farmer devotes his energies to rails.
ing . single crop. or how far he di
,versifies his farming and gives at
tention to the raising of foodstufis
for his family and feed for his ami.
mails. II, for example A has garden
and raises enough vegetables and
fruit to supply the family needs, if
he keeps enough poultry pigs. and
other live stock to meet the require.
ments OF his household for eggs,
meat, milk and butter il he pro,
sides enough pasture. hay and fod.
der 10 iced his live stock be has this
advantage, that when the cash crop,
whether cotton or grain. is ready
for sale in the fall, it is not tied UP
with a lien to lleet seasons nd
N6fce fof food g feed. He ID in a
position, therefore, to sell Lis ca h
crop whenever the marketing con-
dlttons are favorable. The relatively
fayorably position of such farmer
assists him in commanding the con.
fdence OF lenders.
ION the other hand, consider far.
mer B, who comes to the local mer-
chant and makes credit purchases CT
bacon, cornmeal. and canned goods
for table use, and who goes back to
his farm with a bale OF hay or a
sack OF feed in his wagon box. In
his cotton field there are patches
where the yield is poor because OF
low soil fertility and Indifferent
methods Of cultivation. The only
enterprise on the farm is cotton
growing and this crop is mortaeed in
advance to supply the food and feed
purchased in town and consumed on
the farm. Farmer has little if any
credit at the bank. He gets a limited
store credit on an advancing basis
from local merchant. His is the
most expensive kind of credit and
probably he is the farmer who is me
least able to pay for it.
Responsible for the Ore.Crop System
In some regions the lender even
more than the farmer is responsible
for the continuance of a one-croi
system of farming. There is espe
cially true where bankers refuse tc
extend credit to farmers except Gil
the basis of a single crop, such as
cotton in the South or cereal cror
In the North. Such mistaken
policy can be corrected Only to the
extent that the banker realizes the
evil effects Of one-crop farming ant
undertakes to cooperate actively witt
tn, farmer in the extension of credi,
on a proper basis.
1T is scarcely possible to lay toe
much emphasis upon the practica
Importance Of TIE method and char
acter of farming as factor affect
ing interest rates on farm loans
Every agricultural region has It's owr
peculiar problems of adapting farm
ing methods and practices to loca
conditions. There are progressiy,
bankers in various parts OF tn,
country who realize the importanc,
~ OK cooperation with the farmers il
. promoting the kind Of farming tina
Will be permanently beneficial to tn,
community. This suggests com
Lon interest between bankers an,
& FARMERS which should be made th,
A basis, for futher cooperative effort
Attitude Of the Loan Agency Towar,
~ the Farm.Loan Business
j In many regio" the banks are no
accustomed to dealing with farmer
to any extent, especially will
q tenants and troopers, and the latter
therefore, must obtain their loan
from other sources. This is especial
" true in the cotton States, wher
the system OF advances from mel
chants to farmers still prevails.
Few banks are breaking away from
this traditional attitude. however. Il
ono community OF South Carolina th
banks are actively soliciting bushes
With choppers and renters as well
with farm owners. One Of thes
banks began This policy Il Years a..