FARM FINANCE 125 



have ample time, in the case of having a large part of 

 their deposits invested in long-term notes, to secure the 

 amounts necessary to meet the time demands. 



EUEAL CREDITS. 



The details of a system of rural credits can be worked 

 out in this country only after a few years of experi- 

 ence with banks in actual operation. It would be im- 

 possible for any financier, no matter how keen his in- 

 sight might be, to foresee all the problems which will 

 come in connection with supervised rural banks. The 

 problem, however, is not one that is insolvable. Nat- 

 urally supervision of the expenditures of the money 

 secured from the banks on long-time rural credit notes 

 must be in the hands of the banks themselves. From 

 each one who borrows a written statement of the pur- 

 poses to which the money is to be devoted should be se- 

 cured, and the bank officials should see that the money 

 is expended strictly in harmony with the purposes for 

 which it was borrowed. Otherwise it might be possible 

 for borrowers from the bank to keep it in continual 

 trouble. 



This would be most easily done if the money secured 

 on the loan were spent for the unnecessary or frivolous 

 purposes which were mentioned above. 



I do not believe that farmers should be encouraged to 

 go into debt. The best farmer is the one who owes 

 nothing and still has money in the bank. But I do 

 believe that for the purchase and proper equipment of 

 the farm in all the respects which I have mentioned 

 it is advisable, permissible and necessary, for the farmer 

 to go into debt. Debts of this kind, however, will be 

 like debts of honor, and there is little possibility of loss 

 to rural banks which extend all the courtesies possible 



