_ American Agriculturist, October 18, 1924 
What Does Your Credit Cost? 
Buying Credit More Efficiently May be the Means of Lowering Your Production Costs 
By W. I. MYERS 
T HE story is told of an aged farmer who, 
realizing that his end was near, called his wife 
to his side to tell her whom he wished to have as 
pallbearers. In naming them over he included 
the feed dealer, the implement dealer, the store 
keeper, the blacksmith, and a couple of other 
merchants. His good wife looked troubled, and 
finally, after assuring him that she would carry 
out his wishes, asked him why he included only 
merchants and left out all his good neighbors. 
“Well,” replied the farmer, “these men 
have been carrying me all my life, and 
they might as w r ell carry me to the end.” 
In too many cases, this story reflects 
the actual farm credit situation, even to¬ 
day. Whenever expenses exceed receipts 
credit in some form becomes necessary. 
There is no system in farming in which 
the receipts exceed the expenses every 
month in the year. Even in dairy farm¬ 
ing there are some months when the cows 
are dry and the milk checks small, but the 
farmer’s family insists on eating and wear¬ 
ing clothes just the same. In crop farm¬ 
ing, the receipts are largely in the fall, and 
more credit is necessary to carry the ex¬ 
penses until the crops are harvested and 
sold. Hence, credit is as necessary for 
farm production as for other business. It 
is important, therefore, that the credit 
necessary for agricultural production be 
obtained as economically and efficiently 
as possible. 
A study of actual farm credit conditions 
in a typical dairy farming region in Tioga County, 
New York, show r ed that these farmers could pay 
nearly fwo-thirds of their year’s expenditures for 
business and living without borrowing. For the 
other third, some kind of credit was necessary. 
Country stores were the most important source 
of this credit. About three-fourths of the neces¬ 
sary credit for these dairymen was obtained by 
buying feed or groceries or other things “on time, ” 
to be paid for at a later date. About one-fifth of 
the necessary credit was obtained by giving notes 
to merchants or relatives, or neighbors—persons 
other than banks. Less than one-twelfth of the 
credit necessary to carry on farm production was 
obtained directly from hanks. 
Similar conditions were found in a crop-growing 
region in Genesee County, New York. Here also 
it w r as found that credit in some form was neces¬ 
sary to finance one-third of the year’s expenditure, 
and here again, country stores w ere found to be the 
most important sources of credit. About one- 
half of the necessary credit was “store” credit, 
about one-fourth w T as obtained by notes to others 
than banks, and about one-fourth by notes to 
banks. 
In both regions, only a small part of the credit 
necessary for farm production was obtained 
directly from the institutions whose most im¬ 
portant business is the selling of credit, that is 
the hanks. 
As a part of this same study, information was 
obtained from country merchants in these same 
regions as to the costs of the “store” credit that 
they extend. The average costs for different 
kinds of stores w'ere found to run from about 11 to 
about 21 per cent, per year, the average of about 
180 stores of all kinds being 13 per cent. The 
principal items of cost were interest, accounting, 
collection and bad debts. 
The business of merchants is to sell goods. 
They are not equipped to sell credit, and cannot do 
it economically. When they are asked to extend 
credit, the costs are included in the price of goods 
and gre borne by the people who buy them. When 
a merchant sells cheaper for cash, the 
customer wdio gets credit pays for it, as 
he should. When a merchant sells at the 
same price either for cash or credit, the 
cash customer is forced to pay for part of 
the credit furnished to others. A large 
part of the necessary credit now being 
used to carry on farm production is ex¬ 
pensive and inefficient—store credit. This 
situation is not good for merchants, for 
bankers, or for farmers. 
The merchant is blamed for the high 
cost of retailing. A large part of this 
cost is credit. A merchant can and 
should do business on a smaller mar¬ 
gin for cash. The merchant who charges 
the same price for cash as for credit is 
literally encouraging people to ask for 
credit. 
An important part of the banker’s 
business is selling credit. He is equipped 
to do this, and can do it at a lower cost 
than the merchant. The banker lends 
only to those who have a reputation for 
paying theiy bills promptly, and so saves the costs 
of collection and of losses from bad debts. 
A feed store is an excellent place to buy feed, 
but a poor place to buy credit. It is just as 
sensible to go to a bank to buy feed as it is to go to 
a feed store to buy credit. 
Farm profits ean be increased by increasing 
prices or by decreasing costs. The individual 
farmer cannot change prices, but he can reduce 
costs by more efficient production. More efficient 
financing of the credit necessary for farm pro¬ 
duction offers one way of reducing costs. 
{Continued on page 269) 
Credit Necessary for Nearly Every Farmer 
T HE article on this page was broadcast recently from the 
Schenectady station by W. I. Myers on the Farm Bureau 
radio program. We want to call attention to Mr. Myers’s state¬ 
ment that there is no system in farming in which the receipts 
exceed the expenditures every month in the year, and therefore 
credit in some form must be used by every farmer. But the diffi¬ 
culty is, as we have many times pointed out in these columns, 
this credit is costing the farmer on the average of from two to 
five times as much as it should. Therefore, perhaps the biggest 
job of farmers, more important even than marketing, is to find 
some kind of a plan that will enable the farmer to buy his credit 
at a reasonable price. 
You will be interested in Mr. Myers’s practical suggestions as 
to how this may be done. We have a letter from one of our read¬ 
ers suggesting that it does not help the average farmer any to 
pay cash because he can buy just as cheaply for credit as he can 
for cash. In next week’s issue we will publish this letter and an 
answer. In the meantime, read Mr. Myers’s article and write us 
your opinion as to the solution of this problem.—The Editors. 
Getting the Hens Ready for Winter Production 
An American Agriculturist Wednesday Evening Radio Talk Broadcast from WEAF 
T HE last time I was on the air, about six 
months ago, I gave a ten-minute chat for the 
special benefit of suburbanites and other folks 
who have a small backyard flock of hens. At that 
time I said that if there were any city folks listen¬ 
ing in who were not interested, I wouldn’t feel 
bad at all if they cut out while I held forth. The 
same holds true to-night. 
Last spring my topic centered around the care 
of the young chicks, to give them the right start 
in life. In the brief time allowed me I was able 
to mention only a few of the more essential points 
that must be taken into consideration. 
Now by this time, those baby chicks should be 
in laying condition, but the precautions which we 
must take with these pullets are quite similar, in 
a general way, to those that applied to them as 
baby chicks. The layers that are going into 
winter quarters must be watched and cared for, 
just as thoroughly and diligently. Of course, an 
older bird can take care of itself better than a 
baby chick. It can rustle for its food. But unless 
we give them the right conditions to live under, 
we arc going to run into difficulties. 
The winter quarters must meet only a few 
requirements, but those must be adhered to 
closely. Dampness in the house is without ques¬ 
tion responsible for more poultry troubles than 
any other single factor. Dampness makes possible 
the contraction of colds and attendant diseases 
which are responsible for huge losses in our poultry 
population. Roup can almost always be traced 
to a damp hen-house. If the house is to be kept 
dry, ventilation is necessary, so that both of these 
By F. W. OHM 
Associate Editor, American Agriculturist 
factors go hand in hand. A dry, well-ventilated 
but cold house is not nearly as serious as a damp 
one. In fact, the man who closes up his poultry 
house tight, is simply courting trouble. A tight 
house is almost always sure to be damp. In the 
place of at least half of the glass windows, cloth 
or muslin curtains should be substituted. If the 
wind is high a burlap curtain may be hung in 
front of the roosts to act as a baffle and stop any 
drafts. But under no consideration close the 
house up tight simply because a wind is 
The home stretch and lanky is gaining. 
— Capper’s Weekly 
blowing. Stop the drafts, but allow the air to 
circulate. 
Of course, the house must be clean. No one 
can expect a hen to lay eggs while she has got a lot 
of hce and mites feeding on her body. And right 
here it may be said that it is useless to apply 
insect powder to the hen as long as the roosts and 
the interior of the house have not been taken care 
of. There are a number of commercial prepara¬ 
tions on the market for spraying the interior of the 
hen-house that will destroy all insect life. They 
are convenient for they need little preparation. 
These sprays, any spray in fact, must be applied 
thoroughly in every crack anti crevice, otherwise 
those little red mites are going to continue to live 
and make the hen’s life miserable. A very cheap 
substitute for these sprays is ordinary lubricating 
oil that has been drained out of the automobile 
engine. This is applied very thoroughly to the 
roosts and walls about the roosts. It is painted 
into every last nook and corner. When once 
applied, no insect will ever live there. It is a 
cheap remedy, but a little more unpleasant to 
apply. It may be diluted slightly with kerosene. 
Kerosene is a good insecticide, but it is a little 
dangerous, because of the possibility of fire, at 
least for a while after it has been applied. 
1 he ration of the hens naturally is very im¬ 
portant. However, that subject is so thoroughly 
discussed in our agricultural bulletins, and on 
account of local conditions, may be modified in so 
many ways, I shall only summarize a few es¬ 
sentials. The hens should always have mash in 
{Continued on page 276) 
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