THE FARMER AND THE BANKER 243 



his first loan just before the spring planting, that 

 is, in February or March, in order to put in his 

 crop. He has to sign a mortgage on his horses and 

 some 75 or 100 acres of his land. The banker in- 

 sists that he must plant nearly all of his land in 

 cotton, in which crop the banker sees the most 

 money, even if it would be more to the farmer's 

 advantage to plant some of it in grain. Finally, 

 he receives $200 as a loan and makes out his 

 note for $237.50, payable at "potato-digging" time, 

 about July 1. He is thus pa3dng interest at the 

 rate of 55 per cent, per annum. He has no ready 

 money on July 1, for he has planted no potato crop 

 and never intended to do so. But the banker gra- 

 ciously allows him to renew his note, although com- 

 plaining about the difficulty of getting money. 

 The rate of interest is now greatly increased. The 

 farmer's note now reads $287.50, payable October 

 1, which is an interest rate of 100 per cent, per 

 annum. On October 1 the process is repeated, for 

 the farmer still has no ready money, although he 

 has now begun picking his cotton crop. He hast- 

 ens the picking, takes some of the crop to town, and 

 pays off a considerable portion of the loan. On the 

 remainder he pays $10 a month for each monthly 

 extension, which usually amounts to an interest rate 

 of about 60 per cent, a year. During the fall and 

 winter he again pays off some of the principal but 

 extends the rest, a process which goes on through 



