278 PRINCIPLES OF RURAL ECONOMICS 



be exorbitant, though it is never low. The bank is virtually a 

 middleman, performing much the same function, and entitled to 

 a reward for the same reason, as a merchant. So long as a bor- 

 rower can borrow directly from the lender, the bank's profits can 

 be saved ; but where it is difficult for the borrower to find a 

 lender, or a lender to find a borrower, or where the personal 

 relations are such as to prevent dealing in a personal way with 

 one another, the bank performs a real service. They who have 

 money to spare can deposit it in the bank, and they who need 

 money can always find it there. Both are saved the trouble of 

 finding one another. 



Again, the bank generally deals impersonally and accord- 

 ing to fixed rules, which it will not vary for personal considera- 

 tions. In such delicate transactions as borrowing and lending 

 this is a matter of greater importance than farmers commonly 

 realize. Probably no one thing has worked so much disaster in 

 farming neighborhoods, or produced more bitterness of feeling or 

 more financial loss, than making use of personal considerations 

 in matters of credit. In every neighborhood all over the Middle 

 West there are men who remember to their sorrow transactions 

 of this kind, where they were induced by personal appeals to lend 

 money or indorse the personal notes of friends. There is prob- 

 ably not a farmer above threescore years of age, who has had a 

 reputation for business capacity and integrity, who has not been 

 burdened more than once because of his reputation. Such men 

 are always acceptable as indorsers of notes for their less scrupu- 

 lous neighbors. In times past they have continually been besieged 

 by requests for favors of this kind, and he may regard himself 

 as exceedingly fortunate who has never lost money in this way. 

 One of the chief advantages of a good banking system is to 

 protect men of honor and integrity against appeals of this kind. 



Cooperative credit. Cooperative credit has not had a high de- 

 velopment in this country. In European countries, particularly 



