230 THE PARMER AS A COOPER ATOR. 



is safe in excess of seventy-five per cent of the outstanding 

 amount due on unpaid stock. Allowance must always be 

 made for subscriptions which will never be paid. The stand- 

 ing of the subscribers, however, has much to do with this, and 

 the directors will usually be fair judges of the value of the 

 unpaid subscriptions. Subscriptions on which no payment 

 has been made at the first call are usually of no value. They 

 should be counted as nothing, at all events. If payment could 

 be enforced — which is often doubtful — it would be foolish to 

 do it. In case of indebtedness to be met by deferred pay- 

 ments on stock, each stockholder should perfectly understand 

 tliat he lias an obligation that must be met, so that there is no 

 surprise on his part, or complaint of " assessments." Except 

 for permanent plant, for which stock has been subscribed, and 

 for a limited amount calculated to pay running expenses not 

 to exceed a half year, there should be absolutely no debt 

 permitted, except for advances on products under the control 

 of the corporation. 



Caution in Making Advances. — In this matter it is best 

 to be governed by your banker; indeed, you will probably be 

 compelled to be so governed, as he will lend you no money if 

 he is not satisfied that you are making safe use of it. It may 

 be best, however, to consider the matter a little for ourselves. 



Farmers are apt to consider banks as the owners of the 

 money which they lend. This is true, however, only to a 

 limited degree. The greater part of the funds available for 

 loans fro.m banks is the property of depositors, wlio are liable 

 to call for them at any time; banks, therefore, have to be 

 extremely cautious in lending; the time must be always short, 

 and the security such that it can be instantly converted into 

 cash if necessary, and the margin between the amount of the 

 loan and the market value of tlie security must always be 

 such that the amount of tlie loan can be realized in any 

 emergency. Some farm products form such a security, and 

 some do not, and some would be considered good security in 

 one locality and not in another. Their value as security 

 depends, first, upon the usual demand for them; secondly, upon 

 their keeping qualities; and, thirdly, upon their situation. 



