10 BULLETIlSr 409, U. S. DEPARTMENT OF AGEICTJLTURE. 



capital invested it is the duty of the adviser to visit the faiin from 

 time to time to see if the plan adopted is adhered to and if the 

 investment is yielding proper results. Such a plan means added 

 protection to both the farmer and the banker. 



RELATION OF THE FARMER TO THE LOAN AGENCY. 



The banker often makes a difference in his interest charges between 

 the regular patron and the man who is not a regular patron, other 

 conditions bemg equal. If it is a question of favoring the one or the 

 other, the banker generally favors his patrons. Tlie farmer, there- 

 fore, who desires credit on favorable terms at a bank usually finds 

 it important to establish banking connections by opening a checking 

 account. In this way he becomes familiar with banking methods and 

 with the general banking requirements for the extension of credit. 

 A farmer who maintains this direct relation with his bank will 

 understand something of the need for a definite basis for his financial 

 rating, and will realize the importance of keeping farm accounts so 

 that he can make a faii'ly definite showing of his resources and 

 liabiUties and of his farm income. The value of this reahzation can 

 not be emphasized too strongly, in view of the fact that relatively 

 few farmers keep accounts sufficient to give them a knowledge of 

 their faiTQ income, partly because of lack of training and partly 

 because of a disinclination for this kind of work. Moreover, many 

 farmers are occupied so completely with other duties that they feel 

 they have little time to keep accounts. 



Attempts are being made to overcome these difficulties in various 

 ways. In one rather thickly settled farming region in Massachusetts, 

 for example, the farmers have hired a bookkeeper cooperatively, 

 who visits the farms and keeps the farm accounts. In certain States 

 a plan has been adopted whereby the banker virtually becomes a 

 bookkeeper for the farmer. Under this plan the farmer agrees to 

 deposit all his receipts with the bank and to make aU his payments 

 by check. The fanner's deposit sHp shows the source and character 

 of each item, and there is a space on each check in which to indicate 

 the pm"pose and character of the expenditure represented. Under this 

 plan the banker is in a position to send the' farmer a fairly complete 

 monthly statement of his receipts and disbursements. 



HOW COLLECTIVE ACTION AMONG FARMERS MAY IMPROVE THEIR RELATIONS TO 



LOAN AGENCIES. 



In some parts of the country where farmers, if they obtained loans 

 at aU as individuals, were compelled to pay very high rates of interest, 

 plans have been tried out under which groups of farmers have been 

 able collectively to estabhsh improved relations with banks. In 

 several locaHties of the Central Western and Rocky Mountain regions, 



