Pocahontas star herald., 1925-07-02
The Farmer and His Credit

AT this time Of the year all farmers |
who can, have arranged their line Of |
credit For those who were success
full it might be well to ask themselves
whether they will make this credit an
asset or turn it into liability.
Credit, when sought for legitimate
purpose and rightly used, can easily
become the greatest asset of poor,
though honest farmer imbued with
ambition. He can so coordinate his
honesty, ambition, and willingness to
toll with his credit that the result will
be nice little farm paid for in a few
years time.
A man who uses his credit well sell
dom uses his credit to buy feed to
make a crop. OF course, there are
times of severe drouth and other CON
ditions over which he has no control
which might make this necessary. This
type Of man will be considered a good
financial risk by the banker.
The life insurance companies in their
mortuary tables figure out how many
will die in each thousand of popula-
tion per year and then charge a pre-
MUM based on these calculations.
Credit prices are calculated practically
i'm the same way. The merchants
know that so many dollars in every
thousand advanced will be a total loss.
They make their credit prices high
enough to cover the losses plus pro-
fit. These prices sometimes run from
GO to so per cent higher than cash
prices.
1t might be argued, if that is the
case, why not go to the bank and bor-
row money at 6 to per cent. Too
often this cannot be done because the
farmer sometime in the past has fail
ed to meet his obligations promptly or
his diverted the proceeds of a loan,
causing himself to be classed as an
undesirable risk. A few years ago a
banker told the writer that 9S per |
cent of his banks farmer customers
failed to meet their obligations when |
due or to make other satisfactory ar
rangements.
The general opinion prevails that |
banks are cOld-blooded, hard boiled, |
and very particular as to whom they |
loan money. The opinion is correct. |
The banks have to be particular. No
bank could stay in business long if it |
operated on its paid up capital and |
surplus alone. They loan other peO- |
pies money placed with them on de-
post. The banker should, as a mat
ter of protection, see that every note |
he takes is better than money. If he |
exercises good judgment in "sizing up |
the borrower andN makes only good |
loans, then the bank prospers, does
not break up and is never hard up.
The poorest risk is the farmer who |
tries to plant all cotton and buy his |
corn, hay, oats, and meat, and pay |
other expenses. A cotton crop can be |
planted and worked to laying by time
in about 30 days. Help will have to
be had i'm gathering it, Expenses go
on for 365 days. 1t is asking too |
much of cotton crop made with 90 |
days work to pay all the expenses of |
a farm for 365 days and those who |
persist in trying it usually quit farm
ing via sheriff's sale.
good risk is one who sticks to |
diversihcation, raises enough food for
man and beast, keeps good milk COW,
IA brood SOW which will give him two
litters year and 100 hens in the poul-
try yard. He also has garden pro-
ducing vegetables all the year round |
and a cane patch for syrup This kind
of farmer makes cotton his money crop |
and has no trouble in securing credit |
when necessary.
May the farmer soon realize that |
he is business man and ambitious to |
succeed but tina the is an ethical man |
and wishes no success that is not |
founded on justice and morality.
A. Redhead, in The Progressive Farm |
or.