ECONOMIC CAUSES OF DEPLETION 89 



viduals belong to the same economic school as did the 

 farmer who, when a horse of his was killed, said that 

 it didn't matter, for the horse had cost him nothing, 

 as he had paid for him in labor. Credit is one of the 

 strong factors of modern progress. The farmer needs 

 it for the utilizing of production in advance of sale. 

 Too much capital is idle in the hands of farmers. 

 When the manufacturer has a hundred plows in his 

 warehouse he can realize upon them at once by bor- 

 rowing upon them as security. When the farmer has 

 a thousand bushels of wheat in his granary he cannot 

 borrow upon it, although it is the best collateral security 

 in the world. Our banking laws expressly forbid the 

 banks to make such loans. The farmer must secure 

 current loans by personal note or by chattel mortgage. 

 In consequence, although the farmer is the safest of pri- 

 vate borrowers, he nevertheless pays the highest rate of 

 interest. Xot in all countries, however. France and 

 Germany, for instance, have provided adequate farm 

 credit. And thus, while strong national governments 

 obtain permanent loans at 2 per cent, interest; while 

 call loans in Xew York bear 2.46, and the Bank of 

 England's discount rate in 1911 averaged 3.47; while 

 the best commercial paper in !NTew York bears 4.10, 

 strong railroad bonds 4.60, public utilities 5.00, the 

 best industrials, 5.50, and average industrials, 6.50; 

 while French farmers borrow at 4.30, German farmers 

 at 4.40, and even Arab farmers in Egypt at 8.00, the 

 American farmer borrows at an average of 8.50 per 

 cent. Farmers in the Canadian West are charged 10 

 per cent, by the banks. 



Our general system of taxation is an economic injus- 

 tice to the farmer. All taxation should fall upon value 



