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Capital in Agriculture: Its Formation and Financing Since 1870



This PDF is a selection from an out-of-print volume from the National Bureau of Economic Research Volume Title: Capital in Agriculture: Its Formation and Financing Since 1870 Volume Author/Editor: Alvin S. Tostlebe Volume Publisher: Princeton University Press Volume ISBN: 0-870-14100-7 Volume URL: Publication Date: 1957 Chapter Title: Financial Assets of Farmers Chapter Author: Alvin S. Tostlebe Chapter URL: Chapter pages in book: (p. 74 - 82) CHAPTER 5 Financial Assets of Farmers BESIDES the physical assets used in farming, farmers own various types of property, including nonfarm real estate and a miscellaneous lot generally bracketed together and known as "financial assets." Among these the more prominent types are currency, bank deposits, surrender value of life insurance, government bonds, and invest- ments in cooperatives (Table 10). Such assets are accumulated and held by farmers for a variety of purposes; hence the holdings repre- sent provision for widely different needs, not all of which, as we shall see, are essential to, or even associated with, the operation of a farm. Financial assets of farmers may be separated into three fairly well defined classes (Table 11). The first consists of assets that are ob- viously necessary to farm operation. Currency holdings and demand deposits in banks fall naturally into this class. They are needed to meet current operating expenses and current expenses of the farm home, and they are likely to vary in amount somewhat in the manner of these demands for them. A second class consists of assets that farmers hold as reserves of one kind or another and as a source of off-farm income. Probably the most prominent item in this class today is government bonds, but time deposits as well as the surrender value of life insurance and other reserves also belong in this category. The third class consists of holdings of shares in farmers' cooperatives. The

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