FARM FINANCE 123 



United States to establish a system of rural credits un- 

 der national supervision. 



A banking system which is inspected and approved 

 by the officials of the United States would certainly be 

 an improvement on the private banking system to which 

 the farmer heretofore has had access. In a system of 

 this kind all land of a community becomes pledged for 

 the debts of the members of the union. Thus the se- 

 curity which is given is of the best quality, and the 

 rates of interest thereon can be of the lowest. If first- 

 class city property and securities can be pledged at a 

 bank for 4% or 5 per cent, interest, there is no reason 

 why the associated securities of a rural community 

 may not secure an equal benefit. Too often the rates 

 charged farmers for borrowed money have been exorbi- 

 tant. In many localities they have reached eight or 

 even ten per cent. Only the most happy combination 

 of events can render the borrowing of money by a 

 farmer at this interest profitable. 



THE LONG-TIME NOTE. 



One of the principal points connected with a system 

 of rural credits is the long-time note. In the city a 

 merchant who needs money, usually with the aid of the 

 name of another responsible citizen, may go to the 

 bank and borrow money on call or for 30, 60 or 90 days, 

 at a very low rate of interest. The bank soon receives 

 this money again and it is kept in continual circula- 

 tion. If the rural banks are to be established in the 

 near future, under authority of Congress, and handle 

 the funds of the community in a manner whereby it is 

 possible to give long-time notes, it will be of immense 

 benefit to the farmer. For instance, in the purchase 

 of a farm by a man capable and industrious and honest. 



