Evening Republican, Volume 20, Number 293, Rensselaer, Jasper County, 8 December 1916 — Personal Character and Short Time Farm Loans [ARTICLE]

Personal Character and Short Time Farm Loans

Washington, D. O. —Bulletin No. 409, “Factors Affecting Interest Rates and OtheF Charges on Short-Time .Farm Loans," by C. W. Thompson, k’i ecialist in Rural Organization, IL. S. Department of Agriculture, gives tie following discussion of the bear- , Ing that the borrower’s personal ' characteristics have an his ability to obtain short time loans on satisi factory terms. v "The borrower who Is known to be a man of honesty and Integrity and who shows ability and judgment in tije conduct of bis farm business will , q dinarily command the confidence of his banker and obtain credit on , terms relatively favorable for his I class of loans, whereas the individual who is uncertain in his personal character, elrktic in his judgment, and Irregular in his business habits will be considered a less desirable ! r<sk and, If he obtains a loaa at all, usually must pay a higher rate of Interest. In any case, if'credit Is to ' be extended wisely it is just as Im- ' portant to discourage its use among those who can not be trusted as It Is to grant credit to trustworthy bor- ‘ rowers who will use the borrowed money profitably and repay it prompt-

"Oftentimes the borrower may be honest *gnd upright in his intentions, but may fail to' appreciate the importance of being prompt in meeting his obligations. Possibly he thinks that a few days after the date ■of maturity is soon enough to make payment, and that a little delay is unimportant. He may not stop to consider that extra work and expense are involved when notice must be given of overdue paper, or that bank examiners do not take kindly to notes that are overdue. "Again, the business ability and business habits of the farmer are tested when the banker asks for a statement of the borrower’s business. This information is needed by the tanker as a basis for injelllgent rating. If the borrower is in the habit of keepi/ig accounts anß can explain the nature of his resources and liabilities and thus indicate accurately his financial standing, the wisdom of granting a desired loan as well as the proper terms thereon readily can be determined. On the other hand, ’f this information is lacking and the banker is id doubt about the safety of a particular loan, he is likely to charge up his uncertainty to the borrower’s account in the form of a high-* er rate of interest "The requirement that a borrower shall submit a statement of his business is being applied by bankers in their dealings with merchants and manufacturers. Accordingly, business men in general have become more or less familiar with this requirement, and are prepared to furnish such a statement whenever ,it is called for. Some bankers, in inaugurating a similar plan in connection with their farm loans business, are supplying farmers with especially prepared blarfks, or rate sheets, on which the farmers furnish the desired information.”