DRY-FARMING CONGRESS, WICHITA, 1914 



105 



nor does the productivity of the purpose for which he wishes to use the 

 borrowed capital depend upon that kind of security. In order to secure 

 the maximum economy of capital, which is the banker's function, he must, 

 therefore, look beyond the tangible security, and scrutinize the character 

 of the borrower and the purpose for which he wishes to borrow. 



The banker who secures an economic use of the capital which he 

 controls is one of the most productive members of his community, con- 

 tributing largely to its prosperity. The banker who does not secure an 

 economic use of capital is a parasite, living off the community, and con- 

 tributing nothing to its prosperity. He does, of course, help to secure 

 an economic use of capital when he merely borrows, or receives deposits 

 from those who have no immediate use for their capital, and lends to 

 those who do. But he should go further than this, and see to it that 

 the capital which he lends is put to a productive rather than to an unpro- 

 ductive use. 



One of the most important of all economic problems is the preserva- 

 tion of the prosperity of the small farmer, who does most of his own 

 work on his farm. His salvation depends upon his ability to compete 

 with the large farmer or the farming corporation. Aside from the ques- 

 tion of securing credit, two things threaten to place him under a handi- 

 cap and to give the large farmer an advantage over him in competition. 

 If these two things are allowed to operate, the big farmer will beat him 

 in competition and force him down to a lower standard of living and 

 possibly to extinction. 



One thing which would tend in that direction is a large supply of 

 cheap labor. The small farmer now has an advantage because of the 

 difficulty which the big farmer has in getting help. So great is this 

 difficulty that many of the bonanza farmers are giving up the fight and 

 selling out to small farmers. That is, the big farms, the farms that 

 can only be cultivated by gangs of hired laborers, are being divided. 

 Give the owners of these farms an abundant supply of cheap labor, make 

 it easy for them to solve the problem of efficient help, and they will begin 

 again to compete successfully with the small farmer who, because he does 

 his own work, has no labor problem. If we can keep conditions such that 

 the capitalistic farmer has great difficulty in getting help, the small 

 farmer will continue to beat him in competition, and the bonanza farm 

 will continue to give way to the one-family farm. 



One thing which threatens the prosperity and even the existence 

 of the small farmer is the handicap under which he finds himself in buy- 

 ing and selling. The big farmer who can buy and sell in large quantities 

 and also employ expert talent in buying and selling, and in securing 

 credit, has an advantage over the small farmer who must buy and sell 

 in small quantities and give his time and attention to the growing of 

 crops rather than to selling them. Much of the supposed economy of 

 large-scale production even in merchandising and manufacturing, is found, 

 upon examination, to consist wholly in an advantage in bargaining — 

 that is, in buying and selling. When it comes to the work of growing 



