1282 isEw YoKK State Agricultural Society 



States for 1912 at $9,500,000,000, a ligure so tremendous as al- 

 most to stagger human conception. 



President William 11. Taft, in a circular letter to the various 

 governors of the states on October 11, 1912, on the subject of 

 agricultural credits, makes the following impressive statement: 



" The twelve millions of farmers of the United States add each 

 year to the national wealth $8,400,000,000. They are doing this 

 on a borrowed capital of $6,040,000,000. On this sum they pay 

 annually, interest charges of $510,000,000. 'Counting commis- 

 sions and renewal charges, the interest rate paid by farmers of 

 this country is averaged at 8^ per cent., as compared to a rate 

 of 41/^ to 3I/2 per cent, paid by the farmer, for instance, of France 

 or Germany." 



In other words, the farmers of the United States are paying a 

 penalty annually of $270,000,000 in interest more than our 

 foreign neighbors on the same amount of borrowed money, for 

 the privilege of doing business with banks capitalized and operated 

 in this country under existing' national banking laws, rules and 

 regulations. 



It is also a well established fact, that merchants, manufacturers 

 and transportation companies pay an interest charge in this coun- 

 try on their borrowed capital, not exceeding 5 to 6 per cent, per 

 annum, and yet it cannot be denied that the collateral security 

 offered by the farmers is much safer than the securities offered 

 the banks from the various industrial corporations. 



Why do those peculiar conditions exist ''i It must be due to the 

 fact that farmers lack the financial machinery to place their se- 

 curities before investors or bankers in an attractive an<l quickly 

 negotiable form. 



American farmers, representing, as they do, the real wealth pro- 

 ducers, have no well defined systems of rural finance. They are 

 fubjected to the whims and fancies of our banking institutions, 

 and forced to pay whatever interest rate is charged, without the 

 power of resistance. 



DYNAMIC AND STATIC MONEY 



In discussing tlie subject of rural finances I wish to make 

 myself clear. Tlicre are two forms of money in this country, one 



