DIVERSIFICATION When one seeks to ascertain why growing cotton should require so large a percentage of credit, he is confronted with two types of answers. One answer explains the situa tion in terms of human defects—incompetence and lack of thrift and industry. Another answer may be found in the nature of cotton and the system under which it is produced. The cotton farmer receives his income all in a lump sum at the end of the season. Students of budgets will agree with agricultural economists that "if the year's income is all received at one time, it is difficult to make the money last through the year, even when the same amount of money coming at convenient intervals might provide very well."' The dependence on the one crop also increases the chance of crop and market failures, and when the farmer is once thrown a year behind in his financing it is difficult for him to escape from a credit economy. Dairying or live stock farming provides an in come at regular intervals, while a diversified system of farming also provides against total failure from any one crop.
Sufficient evidence exists to show that a large part of the credit used in financing cotton is borrowed for con sumption rather than productive purposes. In a survey of 1,014 North Carolina farmers it was found that they used an average of $182.40 credit a year. Of this 50.9 per cent went for food, clothing, and home supplies, leaving slightly less than half for productive uses in the purchase of fertilizers, tools, and stock feed. For the landowners only 43.8 per cent of the credit secured was consumptive, while for the renters 62.4 per cent went for living ex penses during the growing season. The effect of cotton culture is most significant to our discussion. It was found in a mountain county in which no cotton was grown that the average amount borrowed per family was $10 a year; in the cotton producing county each farm family bor rowed on the average $436 a year.' "We feel rich after the crop is sold," one cotton tenant said, "rich, till we meet the people we owe."
The answer is, of course, the familiar one of lack of diversification. It is not only that cotton farmers have too little income distributed over the year from other crops, but that they have too many things to buy. "While we need and must have a better system of financing the cotton crop of the South," said Harvey Jordan, president of the Southern Cotton Association in 1906, "yet I tell you, the strongest financial institution for every farmer is a well-filled corncrib and smokehouse." Henry W. Grady, Seaman A. Knapp, Walter Hines Page, Booker T. Washington, all of the South's good friends who have been close to things of the soil, have talked and dreamed of the diversification of production on cotton farms. Yet no canon has been more persistently preached and more consistently breached than diversification. The old South had agricultural reformers and experimenters i4 who railed at the one-crop systems based on cotton and to bacco. In 1876 a cotton factor 18 wrote a pamphlet to his friends, the cotton growers, in which he plead for diversifi cation in a strongly contemporary tone: We cannot break off from old ways all at once; but we are untrue to ourselves and our children if we do not make the trial, when our conditions show that the old ways are un profitable. The course to our mind is plain: Plant only as much land in cotton as you can cultivate and manure thor oughly; and raise on your own place everything that is needed to feed your family and stock. Such luxuries for the table as must needs be bought, let them be provided for from your surplus butter, eggs, poultry, and dried fruit. You will then find that when your crop is sold you will have a balance on the right side of your factor's ledger, on which he will be glad to pay you interest until you are ready to use it in enhancing the value of your estate by improvements, or in giving a lift to a worthy son who has been made a man by the example of a father who knew how to make available what providence had vouchsafed him.