CREDIT FOR THE ENTERPRISING FARMER

Coulter, John Lee

Credit For the Enterprising Farmer How Co-operation May Bring Working Capital Into the Farmer's Hands When He Needs It---and on Reasonable Terms---to the Great Good of the Whole Country By JOHN...

...To be charitable we may apportion the responsibility between the farmers and the bankers for not having gotten together better...
...At the present time mercantile credit agencies do not rate farmers as extensively as they do other business men of like capital...
...Again, the new school will be fortunate in its alliance with the Cleveland press, so that practise and theory can be combined...
...Four Important Uses for Credit MUCH of the land not now in farms would be occupied and farmed if institutions were available which would furnish prospective farmers with money or credit...
...The package must be plainly marked 'Eggs.' "I have sent several other articles, and they were all sent profitably, especially farm products...
...Let Us Have Credit Unions I BELIEVE that for this purpose 1 Credit Unions are necessary...
...There are in the United States 2,354,676 farms operated by tenants...
...The best bases for rural credit are the different classes of farm property (land, buildings, implements and machinery, and live stock...
...It should be explained to the farmers at every opportunity that the banks of this country are open to them as to other business men, and that the bulk of the short-time commercial loans of this country, as likewise the bulk of the agricultural loans of Europe, are made on the very same security that they are capable of giving, i. e., two-name paper of honest, industrious business men...
...This may be the fault of the farmers or it may be the fault of those in charge of the credit institutions which now exist...
...Where there is an approximation to intelligent vigilance by both of these agencies—school and newspaper—the theories, methods and results of education from the kindergarten to the primary are given publicity by the press, and on the other hand the school uses the chronicle of the newspaper for purposes of illustration in teaching...
...4. December, 1912, page 853...
...second, that we do not at the present time have adequate credit facilities, or if we have them do not use them to their fullest capacity...
...A Broad Program WHAT then is the program...
...The eggs must be wrapped with excelsior, cotton or similar material that will prevent their striking other eggs or the bottom or sides of container, which must be made of double corrugated cardboard, wood or metal, to prevent damage to other mail matter...
...so, having packed three separate five-pound packages of butter, I was pleased when I was told that it would cost me only twenty-seven cents to send it...
...This capital should be invested in the capital stock of a local bank or trust company and the farmers' Credit Unions should have members on the board of directors and might even control many such institutions as time advanced...
...No country in the civilized world is so nearly without satisfactory and adequate rural credit facilities as is the United States at the present time, or, if satisfactory and adequate facilities exist, no group of farmers are so far behind the times in the utilization of these facilities as are the American farmers...
...Or, can it be that the banks are not equipped to supply these needs...
...FOURTH, establish a system of credit by which competent tenants may gradually become owners...
...and so, too, should the agricultural colleges and schools...
...the prospective live stock products and growing crops...
...So, too, all along the line cash would be paid (by the use of money or credit instruments such as checks, notes, and bills of exchange) and bad debts and losses would be less frequent while discounts for cash would be secured...
...First of all it should be noted that aside from the fact that national banks are not permitted to make loans on real estate security which need not concern us here, there is no restriction in the national banking act which would interfere with loans to farmers for agricultural purposes...
...and in the higher institutions it conceives as its duty to give specific training for journalism...
...the range of possible collateral security is practically unlimited...
...increased yields...
...lenders of money would find a better market than at the present time and there would be less risk and uncertainty...
...better utilization of labor and equipment...
...They should learn about the advantages from the bankers...
...But how...
...and better conservation of soils would accompany the first advantage aimed at...
...Farmers should be made to feel that productive loans to them are not in the nature of favors reluctantly granted, but rather in the nature of business propositions as profitable to the bankers as to the farmers and given as gladly as received...
...Rotation of crops...
...Groups of from ten to one hundred farmers could form Credit Unions...
...Third, by securing a line of credit at the bank for this specific purpose...
...It is really remarkable that only 478,451,750 acres, or 54.4 per cent...
...country boys and girls should learn the possibilities of keeping accounts and should study simple banking problems...
...The farmers must learn the advantages of credit as a means to the more economic working of the farm...
...SEVENTH, eliminate as rapidly as possible the present store credit system by the establishment of the co-operative store system, by improved credit and by a reorganization of the system of farming...
...Let us analyze the situation...
...Indeed, from every point of view there would seem to be many reasons for gradually making the various changes suggested above...
...The sooner sex equality in suffrage comes, with all that it implies as to woman's civic service, the more immediate the demand for a better equipped type of woman journalist...
...Sugar and other groceries are generally a few cents dearer than in outside towns, but the cost of shipping would bring the price up equal to that paid at the country store...
...Many model laws may be pointed to, especially in England and other European countries...
...They would not in any way conflict with the present banking system...
...SECOND, improve, clear up, and insure land titles and fix boundaries so that lenders and borrowers, buyers and sellers may save time and money and that worry and risk may be eliminated...
...The farm buildings of all members of Credit Unions or of a land Mortgage Association should be insured...
...third, that adequate bases or securities are available...
...men who would now become farmers if they could, would have an opportunity...
...Hence it is not surprising that a place at last is being made in the circle of university departments for the future editor and reporter as well as for the lawyer, engineer, clergyman and farmer...
...In order that the movement may gain headway, farmers should learn to keep careful accounts...
...SIXTH, perfect the system of rural credit by the formation of Credit Unions to supplement and help the present banking system, and make possible the increase and improvement of farm equipment so that crops and other farm products may be increased in yield at lower cost...
...I determined to give the parcel post a trial...
...Likewise no school can be said to be fully alive to its mission in the community that does not face its relations to the newspaper and to all that it symbolizes as a rival agent in social education...
...Probably more important even than the problem of bringing more land into farms is the problem confronting farmers who already operate farms, whether as owners, tenants or managers...
...I was in the habit of making weekly trips to the city, about eighteen miles distant, to deliver butter and eggs to my various customers...
...First, improve the system by which more land may be brought into farms...
...The officers of the executive committee would of course refuse to pledge the Credit Union as a second security unless the money desired was for productive purposes, and also would refuse to sign if the amount desired exceeded the value of the farmer's equipment and his "prospects" for the farm year over which the debt extended...
...Many objections of various kinds will come to the minds of all who read the above suggestions with care, but no legitimate objection has come to the mind of the writer...
...Tenant farmers shift from farm to farm and are generally the poorest farmers In the land...
...Journalism and the Schools NO JOURNAL of today aiming to serve community needs can ignore news originating in schools, using that word in its broadest sense, and be counted either alert or broad-visioned...
...It may be that the Credit Union should indorse notes of members in order that they may secure money or credit and pay cash for supplies...
...The imperative necessity of doing something to offset rising power of commercialism in connection with control of agencies for publicity has forced upon society opinions as to more direct control of journalists, including such as may be brought to bear indirectly during tie period of training for the calling...
...Referring to the state banks, it may be said that the laws governing them are free from restrictions, with a few minor qualifications that would not hamper either the state banks or trust companies in extending credit liberally to responsible farmers...
...One of the first problems to be solved, therefore, is how to provide a system by which farm laborers and tenants or other interested parties may become owners and operators of the land not now in farms...
...At the same time, however, the bankers of this country should be brought to realize that one of the best kinds of paper in the world is short-time business paper bearing the name of two responsible farmers...
...E. W. Kemmerer, American Economic Review, Vol...
...This calls for the amendment of some state and national laws in order that land in farms may be improved...
...Provision should be made by which tenants would be compensated for improvements and betterments...
...The farmers still need literally millions of dollars in money or credit in order that they may improve the land which is in their farms, but which is not now improved...
...the country school arithmetic should be completely reorganized and should contain practical problems in interest and partial payments...
...Eliminate Store Credit OUT what about current expenses of D running the farms, money to buy groceries and other farm supplies, and to pay the blacksmith and the hired laborer to assist on the farm...
...Mutual Insurance AS A further precaution and security, the farmers of each community should form a mutual insurance company...
...and there is no limitation fixed by law as to the period of loans...
...These under the farmers' directions, annually result in the production of valuable goods (especially, food, clothing and beverages) in abundance...
...FIRST, improve the system by which more land may be brought into farms...
...So, too, the farm equipment (implements and machinery, and live stock) should be covered by the farmers' Mutual so that no "member" may suffer, and so that the "group" may not lose as second security...
...The farmers as a result of this change may be able to increase again the annual yield of farm crops, and again make the supply keep pace with the increasing demands...
...THIRD, improve the system so that those who own land may secure small loans, for short periods of time at low rates of interest by the formation of Land Mortgage Associations...
...Sixth, perfect the system of rural credit by the formation of Credit Unions to supplement and help the present banking system, and make possible the increase and improvement of farm equipment so that crops sad other farm products may be increased in yield at lower cost...
...First, by encouraging diversified agriculture of such a nature that there will be some income each month to take care of current expenses...
...We must conserve the natural resources of the country, and, therefore, we must establish a system which will make it possible to conserve our natural resources and at the same time allow more freedom in operating farms...
...Eggs Sent by Parcel Post A FARMER gives the following account of his experience sending eggs by Parcel Post in Farm and Fireside: "The first week of the parcel post brought me to recognize its value as a money and time saver...
...The trip of eighteen miles to the city and back would have spoiled one day, and the work I performed that day by remaining at home amounted to at least eight times the amount paid for the shipment...
...Probably the real reason for this is that it is too expensive, and also that there is very little call for the ratings of individual farmers, while there are many inquiries for financial reports of mercantile establishments...
...It would seem, therefore, that banking facilities are available if only they were properly and extensively used...
...To be sure there will be opposition, but good statesmanship would not allow this to obstruct progress...
...As a second signature on the note, the business manager or chairman of the executive committee of the Credit Union would sign the name of the organization (with his name as official representative...
...Certainly it must be admitted that at the present time the needs are not supplied...
...Whenever any farmer desired money or credit he could make out his note...
...Although in use for only a short time, the parcel post has been most useful...
...production would be cheaper...
...Inasmuch as rotation of crops seems best, and inasmuch as diversified agriculture has many advantages over most forms of specialization, and, further, inasmuch as stability and permanency is far better than constant changing and uncertainty for the tenant class, a system of leases should be worked out by which owners of the land might lease to tenants for periods of, say, five years or longer...
...those who have neither surplus nor are able to secure satisfactory treatment at local banks depend upon "store credit" almost entirely...
...the agricultural press should tell them of its importance...
...II., No...
...Farmers would become better business men...
...The question immediately arises as to whether the present banking facilities are sufficient to supply these demands or needs in connection with improved farm practice in addition to those considered before...
...At the present time those who have a fair surplus or balance generally pay cash...
...Recent reports as to the workings of the school of journalism at the University of Kansas show that expert aid on technical matters is being given to rural journalists with the same success that the state's soil experts make possible larger crops for the farmers...
...At the present time, almost every farmer at some time during the year, or during a series of years, needs more money or credit than he has available...
...no individual farmer would suffer from loss if the mutual insurance system were universally adopted...
...farmers who are now tenants would have a chance to become owners, even though unable to save much during the year...
...Third, improve the system so that those who own land may secure small loans, for short periods of time at low rates of interest by the formation of Land Mortgage Associations...
...The Problem ADMITTING then, first, that farmers need a great deal of money or credit...
...This would make it possible for them to occupy and operate this land...
...Fifth, improve the leasing system so that oven with tenancy the yields may be improved, the tenants may be more permanent, and the resources may be preserved...
...The Kansas school already is serving the state community in very practical ways.—Christian Science Monitor...
...Personal security alone is legally acceptable...
...This is sensible...
...The new school of journalism at Western Reserve University is to know no sex line...
...Some lawyers and abstract companies will object to an improvement in the title system because they gain more from the present uncertainty...
...The real problem then it seems to me is to determine the simplest way to arrange among farmers the best form of the two-name paper...
...Nor is this trend made less significant or prophetic when it is borne in mind how political activities of the hour tend to increase the direct political responsibilities of citizens, who in turn are correspondingly made the more dependent upon accurate, honest and balanced journalistic service...
...Even crop insurance is commencing to be better understood...
...In order that the two classes may get together, it is important that some system should be worked out by which financial ratings of farmers may be prepared and may be as satisfactory in every respect as the financial ratings of other business men...
...The postal savings funds and various state funds might be brought into use at this point...
...With co-operative stores and the purchase of supplies in large quantities further discounts would be in order...
...In this event prices charged for supplies should be reduced...
...It would then doubtless be possible for farmers to secure all the money or credit necessary to use on their farms as "going concerns...
...They must weed out lazy and inefficient animals and substitute productive ones...
...those who have a fair amount of property and any knowledge of good business principles secure the necessary credit at the local bank, and pay cash as the season advances...
...They are the land robbers par excellence...
...It is quite likely that this Credit Union should have a small capital and members should purchase shares...
...Agricultural Credit in the United States," by Prof...
...I have also shipped eggs, and find it a very safe plan, for I received a letter from my customer a few days later stating that not one egg had been broken, and they were perfectly satis-fled...
...At the same time no country is more able to provide the necessary facilities than the United States, and no people can offer better bases for credit than the American farmers...
...Here is the explanation of the increasing frequency with which schools of journalism are being established in both privately endowed and state universities...
...What Is The Program...
...At the same time the local bank where the Credit Union and all its members did business would be sure that money or credit advanced to members was safe...
...They could pledge the farm equipment (the implements and machinery and live stock) now on their farms...
...The merchant would not have the present losses due to poor customers, and they in turn could pay cash for goods purchased and thus take advantage of discounts, etc...
...They also need to increase the live stock equipment on farms in order that the supply of dairy products, poultry, and eggs, honey and wax, wool and mohair, and meats of the different kinds may keep up with the increase of population, and they need to improve the live stock which they have...
...Apply the Best Statesmanship THE WHOLE country would be benefited by the changes recommended above...
...This calls for the amendment of some state and national laws in order that land in farms may be improved...
...it discriminates between sources of news on the basis of accuracy and integrity...
...Establish...
...and, fourth, that credit would be forthcoming if slight changes were made, or farmers understood the possibilities of the present institutions, it behooves us to take active steps either to make the changes which are needed and which can be made with so little effort, or to show farmers how to take full advantage of the present opportunities...
...Provide Personal Credit ASIDE (1) from the bringing more land into farms and establishing new farms, (2) improving much of the unimproved land now in farms, (3) substituting land ownership for tenancy where possible, and (4) providing for longer leases where necessary, farmers need more and better implements and machinery, also more and better power with which to cultivate their farms and carry on other farm work...
...Second, improve, clear up, and insure land titles and fix boundaries so that lenders and borrowers, buyers and sellers may save time and money and that worry and risk may be eliminated...
...This would eliminate the necessity for establishing new banks except in special cases...
...They would take the place of the commercial agencies but would go much farther...
...and, in general, the season's 'prospects" and the farmer's good name...
...Now as to the money and time saving of this small shipment...
...This is the last or lowest and the most expensive form of credit and it is to be discouraged...
...Seventh, eliminate as rapidly as possible the present store credit system by the establishment of the co-operative store system, by improved credit and by a reorganization of the system of farming...
...This is done in various countries and has proved to be thoroughly practicable...
...Some mortgage loan companies now in existence would probably object because it would take from them the large commission which they now make...
...A century ago conditions were different...
...This must proceed not only in order to supply the new demands for live stock products, but also in order that the immense outlay for commercial fertilizers may be reduced...
...A few years hence it may be possible (with the development of crop insurance companies) for a group of farmers to furnish better security than is now found in any part of the world...
...Second, by the establishment of the co-operative stores equipped to supply the current needs of the members...
...National banks, therefore, have a very free hand in regard to loans to farmers...
...If the farm property, which is the basis of this remarkable production, could be pledged to advantage in time of need (1) without months of delay, (2) without great cost for negotiating loans, and, (3) without having to pay such high rates of interest, it would be of great advantage to the people...
...Cf...
...The problem was not so difficult nor so important...
...Possibly some insurance companies would object because now they frequently reap great profits from insuring farmers against loss...
...consumers would get farm products cheaper...
...Lowered standards of ethics and vulgarized methods of publicity used by conspicuous winners of notoriety as newspaper proprietors have brought about in academic circles a keener realization of the duty of the university to journalism...
...of the land in farms in the United States, is reported by the farmers to be improved...
...Of course farmers should understand that money or credit should be secured only when it is perfectly clear that additional capital can be used to advantage in some productive way, but it is certainly true that practically every farmer in the United States could use some additional capital profitably every year if they could secure small amounts at reasonable rates of interest without having to go to too great trouble to secure it, and also without having to wait too long a time when the money or credit was desired...
...Credit For the Enterprising Farmer How Co-operation May Bring Working Capital Into the Farmer's Hands When He Needs It---and on Reasonable Terms---to the Great Good of the Whole Country By JOHN LEE COULTER NO PROBLEM which confronts the farmers of the Twentieth Century is more important than that of farm finance...
...Fourth, establish a system of credit by which competent tenants may gradually become owners...
...Legislation is necessary in order that a system of land loans may be evolved by which tenants or others may buy farms, and by a process of amortization gradually buy them...
...FIFTH, improve the leasing system so that even with tenancy the yields may be improved, the tenants may be more permanent, and the resources may be preserved...
...The bankers should advise the farmers in the same friendly way as they advise their city customers...

Vol. 5 • May 1913 • No. 19


 
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