THE NEED OF CAPITAL 453 



limits, the better, and this question of the need of capital 

 takes us at once into one of the most pressing problems 

 of American farm life, how to secure, under the 

 best terms, the capital requirements for the ordinary 

 farmer. 



How May Capital be Secured? There are but two ways 

 open to the farmer to secure the capital he needs, he may 

 spend less than he earns or he may borrow what he re- 

 quires from others. 1 



If a person is obliged to wait on his own efforts for the 

 money he must have in business, he will be obliged very 

 often to skimp along through life with scant productive 

 power. If, however, he can borrow some money, not to 

 pay living expenses, but to add to his power as a pro- 

 ducer, he may be able soon to pay back the amount loaned 

 from the increased earnings. 



Some farmers think that it is not respectable to borrow 

 money and thus carry a debt. It gives them greater joy 

 to have a little bag of gold hid in a safe place in the floor, 

 having the sweet consciousness that they may be able 

 to add a little to this sum in miserly fashion from year to 

 year, than to plan on borrowed capital a wider, a richer, 

 and a more productive farm life. Wise borrowing is re- 

 spectable, for the reason that it is the only means of in- 

 creasing the earning power open to many farmers. 



Where to secure the Capital. There are four sources of 

 supply open to the average farmer, private individuals, 

 stores, banks, and cooperative associations. , 2 



When a farmer comes to one of these sources for funds 

 the first question asked him is, What credit or security 



1 Neither of these methods, of course, includes what may be obtained by 

 the laws of inheritance. 



2 Borrowing from private individuals is the simplest method, and it 

 would be the best if the borrower and the lender could readily find each 

 other. 



