26o POPULAR SCIENCE MONTHLY. 



everywhere for gold. Louisiana is another state with a very similar 

 record.* 



These rich banks of the slavery regime lent principally to the large 

 planters, on personal endorsement, stock and bond security, and real 

 estate mortgage. Substantial 'factors' also did an extensive lending 

 business, in a way which made them a sort of predecessors of the 

 modern lien merchant. The factor advanced cash to the planter, se- 

 cured sometimes by a real estate mortgage, and sometimes only by 

 note, with the promise (not legally enforceable, however) that the 

 crop should stand good for the debt if necessary, and that in any event 

 the factor should enjoy the advantage of handling it. The bank then 

 rediscounted, perhaps at a lower rate, the planter's note as endorsed 

 by the factor. The step to the vampire lien system was made after 

 the war, when the factor was replaced by men who similarly borrowed 

 from the banks upon their mercantile expectations, but who made 

 the handling of the farmer's cotton a subsidiary business, even if they 

 engaged in it at all, and sold him goods at enormous credit prices on 

 such lien security that many a lien merchant has never in any true 

 sense lost a dollar by bad debts, but has simply failed to collect to the 

 extent of more than reasonable profits, instead of the higher ones he set 

 as a standard. 



The financial need of the south to-day is more banking capital in 

 close touch with the farmer. Large city banks do not seek agricultural 

 business ; they dislike the farmer 's business ways, the duration of loans 

 to him, and the character of his security. It is true, however, that the 

 farmer receives fairer treatment at any one of the several $100,000 

 banks in a large town than at the single very small bank in the very 

 small town. 



And rural banking facilities are wonderfully increasing. In several 

 southern states ten years ago there were hardly a dozen banks. One 

 thousand, three hundred and seventy-four of the 2,172 banks existing 

 in the nine States of Alabama, Arkansas, Georgia, Louisiana, Missis- 

 sippi, North Carolina, South Carolina, Texas and Virginia in ISTovem- 

 ber, 1902, were established between that date and January 1, 1893 — 

 a period of ten years lacking two months. 



Some blundering and some unsafe banking have resulted from this 

 sudden multiplication of untrained hands at the business; for the 

 vast majority of these banks are chartered under state law. Yet the 

 agricultural interests have been greatly benefited : and the evils can be 

 remedied by the employment of expert inspectors. The fact that bank 



* Banks to-day furnish a large amount of money to the business and agri- 

 cultural interests by means such as rediscounts, large deposit accounts, etc., 

 item far less important in ante-bellum banking. The relative amount of actual 

 accommodation supplied now and formerly would be an interesting question 

 for bankers acquainted with both past and present conditions in the south. 



