INTEREST ON FARM LOANS 711 



personal property ? Banks pay taxes on their capital stock and sur- 

 plus. They do not pay taxes on loans. The individual depositor is 

 supposed to pay taxes on his deposit in the bank, but the bank's taxes 

 are not increased when it lends the funds represented by that deposit. 

 But if the depositor makes the loan instead of the bank making it, he 

 must pay taxes on that loan or dodge the tax ferret, and the borrower 

 must pay taxes on the property mortgaged to secure that loan. A 

 farmer cannot lend money to his neighbor on the same terms that the 

 bank can make the same loan. Ten farmers cannot pool their 

 resources and make chattel loans to their tenants or neighbors without 

 having to pay taxes on them. But these ten farmers may start a 

 bank with $10,000 capital and lend the rest of their money and all 

 they can get from other folks, and escape taxation upon all of it except 

 the $10,000. It may be good politics to fine a farmer for saving money 

 and lending it to his neighbor but it doesn't look like good business. 

 Two earnest and sincere men came to see me some days ago. 

 They are farmers and believe that practically all human ills may be 

 corrected by the right kind of legislation. We talked things over. 

 One of them admitted that he grew his first garden and potatoes for 

 home use in 1915. And he had been farming for 20 years. He said 

 that in his locality he was the only farmer who did that much toward 

 making the farm produce the living. And we all agreed that at least 

 half of the financial troubles which Oklahoma farmers have are of 

 their own making and cannot possibly be remedied by any sort of 

 laws. 



