The Dolores star., 1924-04-11
FARMERS PAYING
EXCESSIVE RATES
Spend Millions Needlessly for In
terest on Store Credit. Says
Department Of Agriculture.
BANK RATES THE LOWEST
Department Urees Thrift. Industry
and Reliability on Farmers to
Win Credit standins--eank.
ers Asked to Help.

The cost to farmers OF credit from
stores is more than rs per cent wheo
calculated on the basis OF yearly IN
terest rate. while banks charge ht'ie
more than s per cent. says the of1cia'
report Of the Department of Agricni
ture on its recent survey OF taFm
credit In North Carolina.
Farmers would profit greatly
they could place themselves in posi-
tiop to borrow from banks and pay
their bills with cash" the report con
tinues. Merchants would be bene
fted. since they could then give theh
attention strictly to merchandising
and avoid the risk of loss which they
now assume. Bankers would also prof
II, 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 why
farmers rely on store instead Of bank
credit, the report says tina, many Dc
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" II
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 RELlA
BILITY IS THE BEST POSSIBLE
ASSET FOR 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
q better acquaintance is necessary on
the part of farmers. Frankness re
gardins 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
amounting to more than 100000. 900
annually. and therefore difference Of
only l per cent In the average inter
est rate would affect the net income
from agriculture there approximately
100000 each year. More than hall
the farmers in the areas investigated
relied on merchandise advances. and
the total merchant credit was nearly
three times the shortterm bank
credit
High Interest Rates
"The average interest rate charged
for merchant credit was 223 per cent"
the survey reveals. Credit from 10
cal stores was the most expensive.
costing an average Of 26 s per cent
Landlords came next in order, with a
rate Of 21.6 per cent Factories and
their agents are much lower. with
rates OF 14.2 and ITO per cent respec
lively.
Fertilizer and living expenses are
the chief purposes for which merchant
credit Is extended. Stores apparently
handle more Of such business than
all other agencies combined, while
banks carry less than one.sixth Of the
total That the farmers fail to obtain
needed short-term credit direct from
banks constitutes handicap to agri.
culture In North Carolina. since the
rate on such loans is materially low.
er than on shortterm loans from all
other sources"