AGRICULTURAL CREDIT IN THE UNITED STATES 955 



Conditions in Cass County, Iowa, may be taken as fairly 

 typical of the banking situation in the better agricultural sections. 

 The county has 17 banks with a total capital of $6go,ooo, total 

 deposits of $3,563,000 and loans aggregating $3,345,000. These 

 banks are located in eight towns, of which the largest, with a 

 population of 4560, has five banks. Five towns with popula- 

 tions of 1 1 18, 949, 603, 552 and 490, respectively, have each 

 two banks, and two towns with populations of 266 and 239 

 have one bank each. All the towns depend on agriculture for 

 their prosperity, and the owners and patrons of the banks are 

 mainly farmers. 



Holmes estimates that in 102 counties of Illinois 921 banks 

 afford two-thirds of all the personal credit obtained by farmers 

 and that in Vermont the farmers obtain 70 per cent of their 

 credit from the banks, while in the southern states of Virginia, 

 Georgia, Arkansas and Mississippi they get from two-fifths to 

 three-fifths of their credit from the banks. For the country as a 

 whole, outside the South, he estimates that from one-half to 

 seven-tenths of the credit to farmers comes from the banks. 



Closely associated with the question of the amount of bank 

 credit to farmers is that of its cost. Contrary to a common 

 opinion, banks are no respecters of persons, and if the farmer 

 pays more for his credit than other classes of producers, it is be- 

 cause it is more expensive to loan to him. As a rule this is the 

 case. In the first place the credit required by the farmer is very , 

 different from that required by the merchant. The term is longer, 

 renewals are more frequent and partial payments are unusual. 

 While the moral risk is good, payments are slow, supervision is 

 more difficult and the average size of the loan is smaller. 

 Although the farmer's current-account deposits have shown a 

 decided increase in the last twenty years, they are not of 

 sufficient importance to warrant the bank in loaning to him 

 against his balance. 



Since the average farmer receives his income in lump sums and 

 at infrequent intervals, he makes savings deposits rather than 

 current-account deposits. The merchant, on the contrary, receives 

 his income in daily increments, which he immediately puts at the 



