The Kevin review. [volume] (Kevin, Mont.) 1922-1929, 1923-12-27
FARMERS PAYING
EXCESSIVE rates
Spend Millions NeedIessly for In
terest on Store Credit, Says
Department Of Agriculture.
BANK RATES THE LOWEST
Department Urges Thrift, Industry
and Reliability on Farmers to
Win Credit Standing-Bank
ers Asked to Help.

The cost to farmers Of credit from
stores is more than Is per cent when
calculated on the basis Of yearly IN
terest rate, while banks charge little
more than 6 per cent, says the offlclai
report of the Department of Agrlcui-
ture on its recent survey OF farm
credit in North Carolina.
Farmers would profit greatly II
they could place themselves In posi-
tion to borrow from banks and pay
their bills with cash." the report con
tinues. Merchants would be bene-
fitted. since they could then give their
attention strictly to merchandising
and avoid the risk Of loss which they
now assume. Bankers would also prof.
It, due to the resulting improvement
In farmers financial condition and the
increased business which these farm
ers would give the banks"
A Matter Of Habit
Discussing the question as to wlg'
farmers rely on store instead of bank
credit, the report says that many 90
so out Of habit and do not realize how
high the cost of the store credit is.
"There are others, however, who
cannot obtain credit from banks" 1t
goes on. 'This is often due to the
fact that no contact has been estab-
lished and the farmers credit rating
has not been determined. Banks pre-
fer character and general business
ability over any tangible security in
making loans. A REPUTATION FOR
THRIFT, INDUSTRY AND RELIA-
BILITY is THE BEST POSSIBLE
ASSET FOR A MAN WANTING
CREDIT.
"The first step in giving farmers
better credit is to build up better con
facts. This will require cooperation
of county agents, farm organizations
and the bankers themselves. But the
banks cannot do it ALL Effort toward
a better acquaintance is necessary on
the part of farmers. Frankness re-
garding their business affairs is es-
sential"
The large part credit cost plays in
agricultural conditions is pointed out
by the departments report, which says
North Carolina farmers contract debts
to more than $200,000,000
and therefore a difference Of
only 1 per cent in the average inter
est rate would affect the net income
from agriculture there approximately
100000 each year. More than half
the farmers in the areas investigated
relied on merchandise advances, and
the total merchant credit was nearly
three times the short-term bank
credit.
High Interest Rates
"The average interest rate charged
Tor merchant credit was 1928 per cent"
the survey reveals. "Credit from To-
cal stores was the most expensive,
costing an average of 26.6 per cent
Landlords came next in order, with
ate of 215 per cent. Factories and
heir agents are much lower, with
.ates OF 14.2 and 40 per cent respec-
lively.
Fertilizer and living expenses are
he chief purposes for which merchant
;redit is extended. Stores apparently
handle more Of such business than/I
III other agencies combined, while
,anks carry less than one-sixth OF the
otal. That the farmers fail to obtain
leeded short-term credit direct from
,anks constitutes handicap to agri- (
culture in North Carolina, since the
ate on such loans is materially low
+ than on short-term loans from all
Ither sources"