Page:Popular Science Monthly Volume 64.djvu/264

260 everywhere for gold. Louisiana is another state with a very similar record.

These rich banks of the slavery régime lent principally to the large planters, on personal endorsement, stock and bond security, and real estate mortgage. Substantial 'factors' also did an extensive lending business, in a way which made them a sort of predecessors of the modern lien merchant. The factor advanced cash to the planter, secured sometimes by a real estate mortgage, and sometimes only by note, with the promise (not legally enforceable, however) that the crop should stand good for the debt if necessary, and that in any event the factor should enjoy the advantage of handling it. The bank then rediscounted, perhaps at a lower rate, the planter's note as endorsed by the factor. The step to the vampire lien system was made after the war, when the factor was replaced by men who similarly borrowed from the banks upon their mercantile expectations, but who made the handling of the farmer's cotton a subsidiary business, even if they engaged in it at all, and sold him goods at enormous credit prices on such lien security that many a lien merchant has never in any true sense lost a dollar by bad debts, but has simply failed to collect to the extent of more than reasonable profits, instead of the higher ones he set as a standard.

The financial need of the south to-day is more banking capital in close touch with the farmer. Large city banks do not seek agricultural business; they dislike the farmer's business ways, the duration of loans to him, and the character of his security. It is true, however, that the farmer receives fairer treatment at any one of the several $100,000 banks in a large town than at the single very small bank in the very small town.

And rural banking facilities are wonderfully increasing. In several southern states ten years ago there were hardly a dozen banks. One thousand, three hundred and seventy-four of the 2,172 banks existing in the nine States of Alabama, Arkansas, Georgia, Louisiana, Mississippi, North Carolina, South Carolina, Texas and Virginia in November, 1902, were established between that date and January 1, 1893—a period of ten years lacking two months.

Some blundering and some unsafe banking have resulted from this sudden multiplication of untrained hands at the business; for the vast majority of these banks are chartered under state law. Yet the agricultural interests have been greatly benefited: and the evils can be remedied by the employment of expert inspectors. The fact that bank