148 COMMISSION OF CONSERVATION 



Difficulties of Obtaining Capital and Rural Credit 



The farmer must have more capital and means of obtaining 

 more ready money. Capital at the lowest possible rate of interest, 

 to assist agricultural development, must be provided by any 

 government in a country which is being opened up for settlement. 

 Gradually the increase of capital will come with increased produc- 

 tion, the only sound way of securing that increase. But as Adam Smith 

 has said, "to obtain increased production we must provide means 

 to incite the natural efforts of the producer." In Great Britain one 

 obstacle in the way of increasing production is the lack of security 

 of tenure; in Canada it is primarily the lack of proper planning for 

 industrial efficiency and convenience, and of efficient organization 

 to enable advantage to be taken of the security of tenure which is 

 given. In both cases it is an absence of opportunity — different in 

 character but equally restrictive in degree. Settlers must be able to 

 enjoy a greater share of the fruits of their industry before they will 

 exert themselves in increasing production. 



The Hon. Walter Scott, late Premier of Saskatchewan, in an 

 address delivered before the Legislative Assembly of Saskatchewan 

 in 1913, on the subject of "cheaper money for agricultural develop- 

 ment," stated that there were four acute agricultural problems in 

 his province. These were: — (1) The excessive cost of loans, (2) 

 lack of any profitable market for the savings of the people, (3) the 

 excessive cost of supplies, and (4) the depressed prices of farm pro- 

 ducts. 



He stated that the farmers of Saskatchewan were paying 8 per 

 cent for loans in 1913, and that, after adding 2 to 2\ per cent as the 

 cost of commissions, etc., on obtaining and renewing the loans, the 

 actual cost to the farmers was 10 to 10| per cent, which he declared 

 to be an excessive cost. On the other hand, the depositor of sav- 

 ings received from 3 to Z\ per cent. In North Dakota, government 

 reports show that the amount of money loaned to the farmers in that 

 state was $100,364,000, at an average rate of 8.7 per cent. In Rus- 

 sia, before the war, the agricultural investor received 3? per cent 

 from co-operative credit societies and borrowed on farm loans at 4 

 per cent. 



With regard to the returns obtained by the farmer for his pro- 

 ducts, Mr. Scott quoted an article by Mr. B. F. Yoakum in World's 

 Work, wherein the calculation was made that the farmers of the United 

 States received six billions of dollars for products that cost the ulti- 

 mate consumer thirteen billions of dollars. The following table 



