224 THE FUTURE OF OUR AGRICULTURE. 



farmer, who is just the man most needing financial assist- 

 ance ; and it leaves the host of small holders whom we hope 

 to settle on the land altogether out in the cold. The 

 merchant or the manufacturer borrows when he has a 

 business in view which, if only he can provide himself with 

 the money required, will bring him in a gain. The farmer 

 thus far has borrowed only when he found himself in straits, 

 to make good a loss already sustained, or to tide over a 

 difficult season. That may prevent further loss. But it 

 does not earn a profit. It does not produce new value. 

 The money obtained for such purpose is not, properly 

 speaking, working capital. 



To what extent farmers' credit, as thus far practised, is 

 salving rather than enterprising credit, is to be judged from 

 the ^methods by which it has been procured. The favourite 

 supply for it is dealer's credit. It is useless to belittle the 

 extent of such borrowing. On this point Mr. A. D. Hall 

 remarks : 



" The greatest source of loss to our farmers is their bad credit 

 and indebtedness to dealers. In all parts of the country, when 

 one gets below the surface, one nearly always finds a large pro- 

 portion, even a majority, of the farmers entirely tied to some 

 trading intermediary who has advanced them money. In some 

 districts it is the cattle salesman, in others the corn and cake 

 dealer, but with one or other of these traders the farmer has to 

 deal, and dares not grumble at either the quality of what he buys 

 or the price of what he sells." 



Indebtedness to dealers is very general. And it is so in 

 part because farmers do not reahse how extortionate and 

 wasteful it is, and to what extent it cripples a farmer's 

 freedom of action. In the United States, being a new 

 country, where fresh settlement is still in progress and 

 where the future is liberally discounted in business, such 

 credit is more openly practised and more methodised. And 

 it culminates in what Americans themselves confess to be 

 pure " peonage," the borrower being bound to do business 

 only with the man who gives him credit on his own terms, 

 which to the borrower are impoverishing. It is no less 

 crippling, though less openly carried on, in this country. 



