308 AGRICULTURAL ECONOMICS 



pointed out that institutional aids to such thrift play an important part. 

 Our chapter on consumption has already pointed out that country 

 people have generally turned a large part of their net income back 

 into the business. Both there and in the present chapter we have 

 suggested that in this process of saving they have sometimes done 

 not wisely but too well. They have pinched highly necessary 

 forms of consumption expenditures in order to make capital out- 

 lays of dubious value. Such errors are to be remedied rather by 

 better instruction than by more aggressive institutions to promote 

 saving. 



However, the problems of thrift and thrift institutions are begin- 

 ning to come into greater prominence today in the more prosperous 

 agricultural sections of our country. For example, in the rich com- 

 munities of the Corn Belt, many farmers are receiving net incomes in 

 excess of the needs both of good living for the farm family and of 

 adequate maintenance and betterments of the farm. In such regions 

 local banks have been growing very rapidly in recent years. They 

 have attracted large accumulations of capital, which otherwise would 

 very likely have gone for the less pressing consumption wants, such as 

 touring cars, or the less productive forms of farm outlay, such as 

 stone barns and ornamental fences. 



Such accumulations of capital in county banks are then available 

 on a loan basis for the better equipment of the younger or less well- 

 to-do farmers of the community. Specifically, country banks have 

 been a serviceable means of keeping the capital of the retiring farmer 

 still at work in the country, instead of being invested in town lots or 

 railway bonds. This is an important service, because the increase in 

 the amount of capital needed in modern types of scientific agriculture 

 creates a demand for a fund larger than can be accumulated from 

 current operations. It is evident that the modern business farmer is 

 often in a position to make productive use of capital much larger 

 than what he can himself supply. 1 Whether these additional funds 

 be the surplus of older or more fully developed farming sections 

 or the savings of non-agricultural populations, it is highly desirable 

 that a means be found for putting them to work in agriculture. 

 This is an important phase of the problem of rural credits (see 

 Chapter XIV). 



1 This is the normal situation of the business enterpriser, in whatever line of 

 production. 



