72 OUTLINES OF AGRICULTURAL ECONOMICS 



27. Does this mean that conditions of demand within one zone 

 differ from those in another ? Show how and why. Are there also 

 different demands within the zone? If these are equalized for the 

 whole of any given market in accordance with demands at the margin, 

 why are not the different zones so equalized ? 



28. Is there one supply of capital for the whole United States, 

 equally accessible to the borrowers of all zones or districts ? Is the 

 supply of capital more mobile than that of wheat ? labor ? straw- 

 berries ? 



29. If financial institutions were so changed as to make capital 

 extremely mobile, would that tend to equalize the supply in all 

 markets and bring interest rates to a parity ? How ? Do you know 

 of any movement which contemplates doing this ? 



30. Is there a seasonal fluctuation in the demand-and -supply 

 situation of agricultural capital which causes variation in interest 

 rates? Is there a similar fluctuation in industrial demands for capi- 

 tal ? Is it conceivable that a very highly developed banking system 

 would offset these seasonal and sectional variations in such a way as 

 to equalize demand and supply and stabilize interest rates ? Can you 

 point out how this is being done today ? 



31. How do you account for the rapid increase in the number of 

 small banks in farming communities, particularly in the Middle West, 

 in recent years ? What effect do you think they have had on the 

 farmer's method of conducting his business? Have they had any 

 effect on his interest rates ? 



32. Do you believe that the reduction of the minimum capital 

 required of national banks from $50,000 to $25,000 has had any bear- 

 ing on the situation ? What is the minimum capitalization of banks 

 organized under your state laws ? 



7,7,. Can you give any reason to show that the bank might be 

 justified in charging the farmer a higher rate of interest on his short- 

 time loan than it charges the merchant or manufacturer for similar 

 accommodations ? 



34. In general how do the rates of interest upon short-time loans 

 compare with those upon long-time loans ? Why ? 



35. What is a usury law and why are such laws passed? Are 

 they ordinarily effective? Why? May they be made so? How? 



36. Is a more effective line of attack upon high interest rates to 

 be found in the elimination of all unnecessary demands upon the loan 

 fund ? in the facilitating of capital accumulation ? in the directing of 

 capital toward regions now relatively undersupplied ? What forms 

 of legislation might have such aims in view ? 



