INTEREST ON FARM LOANS 71 



14. When we speak of the supply of agricultural capital, do we 

 mean to imply that it is supplied by the farming class? Is what 

 the farmers themselves accumulate a considerable factor in the 

 situation ? 



15. What circumstances tend to direct a generous share of the 

 general capital supply of society toward agricultural uses ? In gen- 

 eral, has the farmer had ready access to these outside sources of 

 supply ? Give several concrete cases to illustrate, and explain care- 

 fully. 



16. If some persons are so wealthy that they are readily able to 

 put aside something for the capital fund, and some are so frugal by 

 nature that they find it relatively easy to save part of their income, 

 and others are so improvident or have incomes so little above the 

 mere necessities of life that saving is extremely difficult, to which of 

 these costs of saving does the interest rate correspond ? Why ? 



17. Does a high standard of living tend to keep the interest rate 

 up ? Does a high cost of living ? How ? 



18. Do you think that the development of industrial insurance 

 systems has any effect on the interest rate? keeping savings banks 

 open all night in industrial centers ? baby bonds ? postal savings ? 

 Explain each. 



19. Show what besides the market price of capital-use is often 

 included in the gross or contract rate of interest. Are these factors 

 in the case of farm loans so important as to justify a large spread 

 between gross and net interest rates ? 



20. Are there wholesale and retail rates of interest ? middleman 

 charges ? Are these high or low ? 



21. Can farmers bring about a lowering of these items in their 

 cost of borrowing? How? Does the competition of lenders tend 

 to reduce them ? Do you think the competition between the federal 

 farm loan banks and other lenders will hasten this process ? 



22. Explain the advantages of the Torrens system of land transfer; 

 the difficulties in the way of its general adoption. What is the present 

 status of the question in your state ? 



23. How do rates actually paid by farmers for loans in different 

 parts of the United States vary ? Are these gross or net rates ? Can 

 you point out where rates are high because of extraordinary risk ? 



24. Show where and why middleman charges are high; low. 



25. If it were possible to strip the gross loan rate down to the 

 actual supply-and-demand price of capital-use, should we still find 

 different rates of payment ? Why ? 



26. Are there zones (similar to the " markets" for commodities) 

 more or less disconnected from one another and having rates peculiar 

 to themselves ? 



