Essays in Social Justice

By Thomas Carver Nixon | Go to book overview

CHAPTER VIII
INTEREST

ONE of the most progressive and beneficent movements of recent times is the organization of rural interests. One of the most important phases of this movement is the development of co6perative or mutual credit associations among farmers. Wherever there is marked progress in agriculture we find an enlarged use of credit, and in order to secure adequate credit facilities the farmers have generally been forced to create their own credit institutions.

The apparent reason for this movement is the enlarged use of capital in agriculture. Before the age of mechanical inventions, capital, that is, tools, machinery and equipment, played a minor part in agricultural development. Now it plays a very important part, -- so important that no farmer can hope to succeed unless he is provided with an adequate supply of capital, that is, of farm equipment. This is expensive, and, when stated quantitatively in terms of money, makes a relatively large fund of capital.

A similar, but much larger increase in the demand for capital in manufacturing began in the middle of the eighteenth century, and in transportation in the first half of the nineteenth century. Taken altogether, this enormous increase in the use of expensive machinery, and the consequent increase in the importance of and demand for capital, is the largest economic fact of modern times.

A common rule, insisted upon by all the successful cooperative credit associations among European farmers, is

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