DRY-FARMING CONGRESS, WICHITA, 1914 



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business. That is to say, as a producer the small farmer has no equal. 

 As a bargainer, he is often at a disadvantage. 



From the standpoint of the statesman, efficient production is more 

 important than efficient bargaining. Something should be done, there- 

 fore, to put the small farmer, who has proved to be the more efficient 

 producer, on an even footing as respects bargaining with the large farmer. 

 If that can be done, we shall enable the small farmer to flourish, and 

 through him we shall have the most efficient agricultural production pos- 

 sible. 



One of the best ways to begin is to find some plan which will enable 

 the small farmer to borrow capital on terms approximately as easy as 

 those which the big farmer can secure. If the small farmer lacks both 

 character and collateral, it is difficult to see how anything can be done 

 for him. But if he possesses character, there is a way out of the difficulty. 



By character is meant the possession of such economic virtues as 

 industry, frugality, sobriety, forethougiit, and honesty. Let us suppose 

 that a certain farmer, Jones by name, possesses these virtues, that he is 

 willing to work and to save, that he is sober and forehanded, and that 

 he will always pay his debts if he can possibly raise the money. But 

 there's the rub ! Can he raise the money to pay a debt when it is due ? 

 If he can not, it is unsafe, no matter how honest he may be. 



Here is where the banker may come in and amply justify his exis- 

 tence. It is not enough that he sit in his office and scrutinize the security 

 and collateral of would-be borrowers. That is the job of a cashier, or 

 some one without discretion who must follow fixed rules. It is the banker's 

 job to see that the money which Jones borrows is so used as pretty surely 

 to provide him with the money with which to pay his debt when it is due. 

 By this is meant that the banker's function is to finance productive enter- 

 prises, and his first qualification is the ability to decide what is and what 

 is not a productive enterprise. That is what a good investor is. The 

 banker, especially the country banker, ought to be a good judge of in- 

 vestments. There may be room for a finer differentiation of functions in 

 a city, where some bankers may be financiers, and others mere custo- 

 dians of funds, to receive deposits, on the one hand, and lend them out 

 on good security on the other. But a country banker must be both. 



Now, if our country banker is a good financiar, that is, a good judge 

 of investments, one who can tell what enterprises are likely to succeed 

 and what are not, he can be of great service to Jones. That is where 

 Jones is weak. He has probably had little training or experience in that 

 direction. His expertness lies in other fields. He may be an excellent 

 judge of livestock, a good hand at growing corn, cotton, or wheat, but 

 he has not, more's the pity, been trained in the keeping of cost accounts. 

 His investments are therefore largely guesswork. He thinks that he would 

 like to have this or that — a purebred bull, a few dairy cows, some brood 

 sows, a silo, some tile for the drainage of his land, a new barn, etc. 

 If he could get the money, he would have them. But it is hazardous to 



