Community Civics and Rural Life

by Arthur William Dunn

CHAPTER XIII

THRIFT

"THRIFT IS GOOD MANAGEMENT OF THE BUSINESS OF LIVING."

NATIONAL IMPORTANCE OF THRIFT

This definition is taken from "Ten Lessons in Thrift," issued by the Treasury Department of the United States Government (February, 1919). The United States Government sent out these lessons because "America to-day stands in the position in which all her economic problems must be solved through thrift … Unless our people gain a deep, sincere appreciation of the absolute necessity for thrift, we cannot hope to hold the proud position we occupy as the flag bearer of nations …" [Footnote: S.W. Strauss, President American Society for Thrift, in "The Patriotism of War Savings" (National Education Association pamphlet, THRIFT, 1918)]

LESSONS OF THE WAR

The great war taught us some lessons about the importance of thrift to the nation. The enormous expenses of the war were paid and the armies and the civilian populations of the countries at war were fed very largely by the combined small savings of our people. Nearly 20 million people contributed to the fourth liberty loan, by which almost seven billion dollars were raised, an average of about $350 for each contributor. Almost every one bought war savings stamps, by which about a billion dollars were raised in 1918. Practically all this money came from savings. Enormous sums were also given to the Red Cross and other causes. To do this people saved and sacrificed "until it hurt." The provisioning of our armies and of the needy peoples of Europe was made possible by the saving, in American homes, of slices of bread, of teaspoonfuls of sugar, of small portions of meat and fats.

THRIFT AS PATRIOTISM

Thrift, however, is not merely a war necessity. "The time when thrift shall not be needed—needed as vitally as food itself—will never come … Through thrift alone can the rebuilding come—the rebuilding of America—the rebuilding of the world … Thrift is patriot ism because it is the elimination of every element that tends to retard…" [Footnote: S W Strauss, "The Patriotism of War Savings">[

Thrift is necessary both for individual success and for good citizenship. It is only by thrift that the individual may in some measure repay others for the care he himself received during dependent childhood, and provide, during his productive years, for the "rainy day" of sickness and old age. It is by thrift that CAPITAL is accumulated with which to carry on the world's work. The citizen who saves and invests his savings in a home, in business enterprises, in bonds or savings stamps, not only makes his own future secure, but becomes identified with the community and takes a greater interest in it. The thrifty citizen inspires the confidence of the community, and acquires an influence in community affairs that the unthrifty citizen does not enjoy. Finnish farmers in a certain section of New England are said to be able to obtain credit from neighboring bankers and businessmen more easily than many of their neighbors, and to be considered as especially desirable citizens, because of their reputation for thrift and honesty. Thrift is often confused with stinginess and selfish ness. On the contrary it alone makes generosity and service possible.

THRIFT, "THE ESSENCE OF DEMOCRACY"

"Thrift is the very essence of democracy." For democracy means freedom, equality of opportunity, "self-determination." No man is a greater slave than one who is bound and driven by financial necessity. By thrift the mind is "unfettered by the petty annoyances that result from improvident ways." Thrift means providing for the future. There is nothing in the world that will so establish one's faith in the future and that will, therefore, give that freedom of spirit upon which democracy depends, as the wise use of to-day and of to-day's resources.

THRIFT A RIGHT AS WELL AS A DUTY

"Every man must practice thrift and every man must have the CHANCE of practicing it." It is a RIGHT as well as a duty. Before the war it was said that four fifths of the wage earners of our country received less than $750 a year for their labor. Studies in various cities also showed that an average family of five could not maintain health and efficiency on an income of less than from $750 to $1000. Under such circumstances thrift is the strictest necessity, but it is a thrift that means pinching economy and the sacrifice of health and efficiency. It is not the thrift that provides for the future and gives freedom to the individual, the thrift that is "the essence of democracy itself." Every man should have an opportunity to earn a "living wage," which includes an opportunity to provide for the future. Democracy is not complete until that opportunity is afforded.

Thrift, or the good management of the business of living, is shown (1) in earning, (2) in spending, (3) in saving, and (4) in investing.

THRIFT IN EARNING

(1) Since the earning of a living was the subject of Chapter XI, we need not dwell upon it now except to note that a thrifty person is an industrious person—he makes wise use of his time; and also to note that many of those who are now in want, or who, in advanced years, are receiving small wages, owe their condition to a failure at some time or other to make use of the opportunity for thrift. Many people do not recognize the opportunity when it is presented, or lack the wisdom or the courage to seize it. Thrift involves MAKING A CHOICE, and in many cases a wise choice requires courage as well as wisdom. It is a choice between the satisfaction of present wants and the sacrifice of present enjoyment for the sake of greater satisfaction and service in the future.

When a boy in school has a chance to take a job that will pay him wages, he has to make a choice between it and remaining in school. It may seem to be the thrifty thing to go to work; but real thrift is shown by careful choice of vocation, and by thorough preparation for it, even though it requires sacrifices that seem difficult (see pp. 137, 139).

We may note here, also, that physical fitness is essential if earning power, which means power to perform service, is to be fully developed. The "conservation" of health and life is so important that a chapter is devoted to it later (Chapter XX).

THRIFT IN SPENDING

(2) After money has been earned, thrift shows itself first of all in the way the money is spent; and many of us have the spending of the money that some one else has earned. Every time we spend a nickel or a dollar we make a choice—we choose to spend or not to spend, how much we shall spend, for what we shall spend.

A lawyer in a small town reports that in one month he made out the necessary papers to enable 75 men to mortgage their homes to buy automobiles.

Butchers say that during the war they more often sold expensive cuts of meat to wage earners who were by no means well-to-do, but who happened for the time to be getting good wages, than to people of larger means. One reason, perhaps, for extravagance in food and clothing on the part of unintelligent people who find themselves unusually prosperous, is that they see no better way to spend their money. Those who find pleasure in books, in education for their children, in travel, in investing money in serviceable enterprises, and in the higher things of life, have to make A CHOICE in regard to what they shall enjoy, and as a rule prefer to sacrifice the grosser pleasures.

CHOOSING WHAT TO SPEND

People, and especially young people, need a certain amount of sweets in their diet. But when we know that the candy bill of the people of the United States amounts to $400,000,000 a year, that this is almost as much as the total amount spent for public education, that it is about double the amount used to keep Belgium supplied with food for a year during the war, or that it will buy 234 million bushels of corn at $1.70 a bushel, we may well think twice before deciding to spend MUCH money for candy.

TESTS FOR SPENDING

The few cents difference in the price of two articles between which we must choose, and the nickels we spend for immediate enjoyment, may seem to amount to very little; but the New York City street railways collected in a year $95,000,000 in five-cent fares, and the Woolworth Building in New York, one of the largest office buildings in the United States, was built from the profits of "5 and 10 Cent Stores." One thrift stamp a week amounts in five years to $65, and 14 cents a day at 4 per cent interest amounts in twenty years to more than $1500. In one of the "Ten Lesson in Thrift," the following "tests in buying" are given:

Do I need it?

Do I need it now?

Do I need something else more?

Will it pay for itself in the end?

Do I help or injure the community in buying this?

Do you have instruction in your school in home economics that relates to wise spending or buying?

If you do not have such instruction, apply to the home demonstration agent in your county (if there is one), or write to your state agricultural college, or to the States Relations Service, Department of Agriculture, Washington, D.C., for circulars or bulletins relating to thrift in buying food, clothing, etc.

In writing for such material, why is it an example of thrift to ask for ONE copy of EACH publication for your CLASS or for your SCHOOL, rather than to ask for a copy for each pupil?

In what ways is thrift shown by having a class committee write one letter making the request for the class instead of having each member of the class write?

Has any home demonstration work relating to thrift been conducted in your community? What methods were employed, and what results achieved?

Who in your family makes most of the expenditures for the family living?

For what items in the family living is most of the money spent?

What are some of the things that have to be considered in buying food? clothing? house furnishings? books? amusements?

Discuss the topics mentioned in the following statement of "values in buying" (from "Ten Lessons in Thrift"):

Food: nutrition, healthfulness, cleanliness, attractiveness, flavor, quality, price, economy in preparation (of time, strength, fuel, utensils), buying from bulk or in package, buying in quantity or small unit, buying for the day or laying in stores, calculation of portions, calculation of meals, varied diet.

Clothing: design related to material, color, and becomingness; style, durability; adaptability to fine or rough wear, to repair and remaking; suitability to season, health, occupation, comfort; home-made VERSUS ready-made; conditions of manufacture, use of child labor, the sweat shop, the living wage, health.

Make a study at the grocery of the relative prices of articles bought in small and large quantities: for example, laundry soap by the bar, by the quarter's worth, by the box; canned goods by the can, by the dozen, and by the case; flour by the pound, by the 25- pound sack, 50-pound sack, by the barrel; etc.

Make a study of the relative prices of articles in bulk and in package; for example, vinegar by the bottle and by the gallon; bacon in bulk and in jars, etc.

Why may it be economy to buy some food articles in packages rather than in bulk, even at a higher price? Give examples.

Which is likely to be more economical, to buy groceries by telephone or in person? To buy by mail order or at the store in town? Why?

At Christmas time the Park View community center in Washington, D.C., ordered 140 turkeys from a rural neighborhood center in Maryland. The turkeys were brought by the producers to the schoolhouse of the rural neighborhood, taken by a postal service motor-truck to the schoolhouse of the Park View center in Washington, and from there distributed to the 140 families. The city buyers paid an average of 15 cents a pound less than the price prevailing in the Washington markets, and the producers received 6 cents a pound more than the Washington markets were paying.

Why was there a saving to both producer and consumer in the above case? What costs of marketing were cut out or reduced?

What is the "middleman"? Does he perform a real service to the community? Should he be paid for his service? Why? Is it just that the middleman should be "eliminated" by cooperative marketing and buying organizations? Why?

Is there any cooperative buying organization in your community? If so, how has it benefited the community? If not, why? (Consult your parents, your county agent, and others.)

Get publications from your state agricultural college relating to cooperative buying and selling.

THRIFT IN MANAGEMENT

Wise expenditures depend not only upon knowledge of prices and qualities, but also upon good management, as in planning ahead. One plan that has been the means of lifting many individuals and families out of financial difficulties and of enabling them to lay by as savings a portion of their income, however small the latter may be, is the BUDGET, which means the apportionment of expenditures according to a plan laid out in advance. No budget can apply to all families alike, but the following illustrates the principle:

House (rent, taxes, insurance, repairs)……………………25%

Food (all expenditures for the table, ice, etc.)……………30%

Clothing (materials and making, repairing, cleaning, pressing, millinery, shoes)……………………………………….13%

Housekeeping (labor and materials for laundry, fuel and light, telephone, supplies, and furnishings)……………………..12%

Educational (school and school books, club dues, church and charity contributions, gifts, books, magazines, newspapers, amusements, medical and dental treatment)……………………………..6%

Luxuries (all items not necessaries and not coming under "educational," such as candies, etc.)………………………4%

Savings………………………………………………..10%

Total…………………………………………………100%

Before a budget can be planned, and in order to know whether it is being lived up to, it is necessary to keep accounts of receipts and expenditures. With such accounts, it is possible to determine where savings can be made under some heads and where, perhaps, it is necessary or advisable to spend more.

Is a budget used in your home? Find out from your parents their reason for using, or not using it.

Could you use a budget in your own personal affairs?

Find out whether a budget system is used by your local government and your state government in apportioning expenditures.

How may we "budget" our time? Is the time you spend in school "budgeted"? Make a daily time budget for yourself.

When is clothing a necessity and when a luxury? [Footnote: This and the following topics are adapted from "Ten Lessons in Thrift.">[

When is food a necessity and when an amusement?

When is amusement education and when a frivolity?

When is fuel an item in rent and when current housekeeping expense?

When are club dues education and when amusement?

When is vacation health and when amusement?

When is the theater amusement and when indulgence?

When is rent a necessity and when an extravagance?

[Footnote: From "Suggestion for Home Demonstration Agents regarding Methods of Teaching Thrift," States Relations Service Circular, Dec. 27, 1918.]

THRIFT IN SAVING

(3) The object of thrift in spending is both to get the greatest value for our money now and to insure savings that will provide for the future. Every budget should make as definite provision for savings as for rent or clothing. The purpose of a budget and of accounts is to assure a surplus rather than a deficit. Successful men and women make it a practice always to spend less than they earn, no matter how little they earn, and they cannot be sure of this without planning ahead and keeping accounts. Saving in this way is largely a matter of habit; but it is astonishing how many fail to form the habit. Court records show that out of every 100 men who die, 82 leave no income-producing estates, or that about 85 per cent who reach the age of 65 are dependent upon relatives or upon the community. "Out of every 100 widows, only 18 are left in comfortable circumstances, while 47 are obliged to go to work and 35 are left in absolute want." [Footnote: S.W. Strauss, "The Greater Thrift," National Education Association PROCEEDINGS, 1916, p. 278.]

AMERICAN EXTRAVAGANCE

Wise buying means saving money; and so does the wise use of what we buy. It is said that an American ship can be distinguished from the ships of other nations in harbor by the flocks of gulls that hover around to feast on the food thrown overboard. Whether this is true or not, Americans have a reputation for wastefulness. It has been called our chief national sin. It is said that a family in France can live in comfort on what an American family in the same circumstances ordinarily throws away. An average load of garbage in New York City has been shown to contain fifty dollars' worth of good food materials.

WHAT SMALL SAVINGS WILL DO

Investigations by the Food Administration showed that there is enough glycerine in a ton of garbage to make explosives for 14 shells, enough fat and acid to make 75 bars of soap, and enough fertilizer to grow 8 bushels of wheat. It is said that 24 cities wasted enough garbage to make 4 million pounds of nitroglycerine, 40 million cakes of soap, and fertilizer for 3 million bushels of wheat. On the other hand, 300 cities produced 52 million pounds of pork by feeding their garbage to hogs.

The Department of Agriculture has shown that the waste of a half- cup of milk daily by each of the 20 million families in the United States would equal in a year the total production of 400 thousand cows; that one ounce of meat or fat saved daily would in a year mean 875 thousand steers, or a million hogs; and that if 81 percent of the whole wheat were used in bread instead of 75 percent, the saving in a year would feed 12 million people. During the war our government organized a campaign for the salvage of "junk," and the total amount collected had a value of 1 1/2 billion dollars. The school children of Des Moines, Iowa, are reported to have gathered and sold two thousand dollars' worth of waste paper in one week, and those of many other communities obtained similar results.

VALUE OF BY-PRODUCTS

Every successful business man is constantly vigilant to discover and remedy waste in his business—waste of materials, time, and effort. Many of the most valuable products in certain industries are "by-products,"—that is, products produced as an incident to the main industry and from materials that otherwise would have been wasted. In the manufacture of gas from coal, for example, important by-products are coke, tar, and ammonia. There has been great waste in the lumber industry, but now practically every scrap from the tree may be used. In the Forestry Products Laboratory at the University of Wisconsin, a process has been discovered of producing from 15 to 25 gallons of wood alcohol from a ton of sawdust—and sawdust has many other uses. These are only illustrations. Scientists and inventors, many of them employed by the government, are constantly at work finding uses for waste products.

WASTEFULNESS IN FARMING

Wastefulness is found in great variety in farming activities. For example:

Why plant seed only 60 or 70 per cent of which will germinate when, for a few dollars extra and a little work, seed may be procured that will average 90 to 95 per cent in the germination test? Why purchase or cultivate a worthless crab apple tree or a hybrid when Rome Beauty, Northern Spy, or Grimes Golden, and other standard varieties of apples may be secured for a few additional cents? Why feed and care for a "scrub" pig, calf, or colt when it will bring at maturity only half or two thirds the price of a thoroughbred? … It is not thrift to invest money in second-rate products.

Some farmers are so careless … that they do not husk their corn in the fall but leave it standing in the field until late winter or early spring. By this time the fodder is somewhat decayed and unfit for feeding purposes. Possibly a third of the corn has been eaten by the birds, a third of it has rotted, and a third of it remains in a damp and moldy condition. … Many boys could make good wages by going over the corn field at cutting time and collecting the ears lying on the ground. … Often a farmer will cut down his hay, paying no attention whatever to the reports of the weather bureau … Apples shaken from the trees by the wind decay on the ground …

The bearings of mowing machines and reapers often suffer excessive wear because the owner neglects to keep them properly oiled. Often a wheat drill, a mowing machine, a threshing machine, or an engine is left out of doors for a whole year, or for several months after the farmer has ceased to use it. A good piece of machinery, if judiciously used, properly lubricated, and put away in a dry place, may last from ten to twenty years, while the life of such machinery will only be about half as long without proper care. If a wooden handle rots loose from its fastenings it is an indication that the handle has not been thoroughly dried after it has been used. Tools rust out very readily if they are not kept dry and thoroughly oiled … So careless are some farmers that hoes, shovels, mattocks, wrenches, saws, and axes are thrown down in the field or woods to lie there until it is again necessary to use them. It often takes hours to find an article thus misplaced or thrown aside. It is economy of time to know just where to find everything on the farm. [Footnote: The Teaching of Thrift, by H. R. Bonner, Assistant State Superintendent of Schools, West Virginia, pp. 22, 23.]

The topics on page 180 from publications of the States Relations
Service of the Department of Agriculture are suggestive:

Preventing loss of food in the home:
Suitable food storage places and equipment.
Essentials of a good refrigerator.
The care of winter vegetables and fruit.
The care of perishable vegetables and fruit.
Prevention of spoilage of milk, meat, and fish.
Preservation of eggs.
Care of bread and other baked products.
What should not go into the garbage pail.
Good cooking and attractive serving.
Failure to use perishable food promptly.
Failure to use left-overs completely.
Failure to use all food materials (fats, meat and fish bones, etc.).
Leaving small portions of food in mixing and cooking dishes.
Lack of accurate measuring and mixing, so that food is not palatable.
Allowing food to be scorched or otherwise spoiled in preparation.
Providing over-generous portions in serving.
Failure to eat all food served.
Preventing loss of food in the market:
Sanitary display cases for food.
Prevention of "sampling" and handling of food.
Food protection in food carts and delivery wagons.
Proper care of milk.
Proper care of meat and fish.
Prevention of cereal products from deterioration.
Protection of fruits and vegetables.
The care of bread and bakery products.
Careful selection of food.
Following are special points which might be discussed:
The well-planned house.
Saving steps by better arrangement of equipment.
Lessening work by systematizing it.
Menu-planning for lessened work in preparation.
Household lighting.
Labor-saving equipment in the laundry, the kitchen, and the sewing room.
Labor-saving devices for house cleaning.
Leading a simple life.

Apply to your home demonstration agent, or write to States Relations Service, for publications relating to thrift in food, clothing, fuel, etc.

THRIFT IN INVESTMENT

(4) Thrift involves a wise use of savings. They may be invested in a home, a wise use because of the satisfaction that a home produces. If the home is well located, well built, and well kept up, it will probably also increase in money value. Savings may be invested in machinery for farming, manufacturing, or mining; in a stock of goods to be sold at a profit; in houses or office buildings to be rented to others; or they may be lent to others who pay interest for their use. In all these cases money represents CAPITAL—capital being the machinery or tools and other equipment with which wealth is produced.

Capital is brought into existence in only one way—that is, by consuming less than is produced. If one has a dollar one can spend it either for an article of consumption, say confectionery, or for an article of production, say a spade. He who buys a spade becomes a capitalist to the amount of a dollar—that is, he becomes the owner of tools. The process is precisely the same whether the amount in question is a dollar or a million dollars. [Footnote: T.N. Carver, "How to Use Farm Credit," FARMERS' BULLETIN 593, U.S. Department of Agriculture, p. 2.]

BORROWING

Every business requires capital, some more than others. Farming requires more capital to-day than formerly because of the increased use of machinery. The necessary capital must either be saved by the person who wants to use it, or borrowed from others who have saved it.

The advantage of borrowing is that one does not have to wait so long to get possession of the tools and equipment. One can get them at once and make them produce the means of paying for themselves. Without them the farmer's production might be so low as to make it difficult ever to accumulate enough with which to buy them. With their help he may be able to pay for them—that is, to pay off the debt—in a shorter time than it would take to accumulate the purchase price without them. That is the only advantage of credit in any business, but it is a great advantage to those who know how to use it. [Footnote 2: T.N. Carver, "How to Use Farm Credit," FARMERS' BULLETIN, 593, U.S. Department of Agriculture, p. 2.]

CREDIT

Credit is simply a person's ability to borrow and depends upon the confidence that others place in him. This confidence depends on his reputation for honesty and his known ability to repay. A man, as a rule, has to HAVE something—land or property of other kind— that he can offer as security before he can borrow much. It is for this reason that thrift is essential to a man's credit—thrift and honesty.

There is no magic about credit. It is a powerful agency for good in the hands of those who know how to use it. So is a buzz saw. They are about equally dangerous in the hands of those who do not understand them. … Many a farmer would be better off to-day if he had never had a chance to borrow money at all, or go into debt for the things which he bought. However, there is no reason why those farmers who do know how to use credit should not have it.

Shortsighted people, however, who do not realize how inexorably the time of payment arrives, who do not know how rapidly tools wear out and have to be replaced, or do not keep accounts in order that they may tell exactly where they stand financially, will do well to avoid borrowing. Debts have to be paid with deadly certainty, and they who do not have the wherewithal when the day of reckoning arrives become bankrupt with equal certainty.

On the other hand there is nothing disgraceful in borrowing for productive purposes. The feeling that it is not quite respectable to go into debt has grown out of the old habit of borrowing to pay living expenses. That was regarded, perhaps rightly, as a sign of incompetency. … But to borrow for a genuinely productive purpose, for a purpose that will bring you in more than enough to pay off your debt, principal and interest, is a profitable enterprise. It shows business sagacity and courage, and is not a thing to be ashamed of. But it cannot be too much emphasized that the would-be borrower must calculate very carefully and be sure that it is a productive enterprise before he goes into debt. [Footnote: T. N. Carver, "How to Use Farm Credit," p. 2.]

COOPERATION FOR CREDIT

Even though a farmer be thrifty, industrious, and honest, the conditions of farm business are such that it has not always been easy for him to borrow capital. Here again cooperation helps. In some of our states the law permits the organization of CREDIT UNIONS. The members are farmers of a neighborhood or district and, therefore, are acquainted with one another. Each member must buy shares of stock, which provides a certain amount of funds. The union may also receive deposits of money, paying interest on them as a savings bank would do. This increases the funds and also encourages thrift on the part of the farmer. Idle money, or money that might otherwise be spent unwisely, is thus made productive. In some unions, as in Massachusetts, children are encouraged to deposit their small savings, and in some cases half the capital of the union is made up of such small savings deposits. From these funds loans are made to members of the union on reasonable terms, provided they are to be used for productive purposes. The union may also borrow money from the bank in town on the COLLECTIVE CREDIT of its members for the improvement of agricultural conditions in the neighborhood.

NATIONAL AID TO THE FARMERS' CREDIT

Similar aid to the farmers' credit has been given by the national government through the Federal Farm Loan Act of 1916. This Act created a Federal Farm Loan Board in the Treasury Department, and twelve Federal Land Banks, one in each of twelve districts into which the United States was divided for that purpose. Through the organization provided by the board and the banks, a farmer may now borrow money on more favorable terms, but only on condition that he agrees to use the money for the purchase and improvement of land or for equipment, and to engage in the actual cultivation of the farm for the development of which he desired the money.

The provisions of the Federal Farm Loan Act afford an excellent illustration of how government promotes citizen cooperation. The government does not lend the money to the farmers; it merely provides the machinery by which the farmers may cooperate among themselves, and also secure the cooperation of investors in all parts of the country, to obtain capital necessary for the proper development of the land. As a rule the farmer can borrow money from the land bank only by being a member of a local "national farm loan association." His dealings with the bank are through this association. His membership in the association gives him better standing and secures for him better terms than he could get if acting separately. Moreover, the money that the bank lends to the farmer comes from the farmers who belong to the association, and from investors in all parts of the country, who buy shares of stock in the bank and bonds issued by the bank on the security of the farmers' land and equipment. The whole scheme is one of cooperation which would be impossible but for the legislation, financial support, and supervision of the government at Washington.

PARTNERSHIP IN THE NATION'S BUSINESS

It will be seen then that much of the capital that a farmer uses is borrowed, and is made up of small savings of other people—some of them his neighbors, others in distant places. The same is true with respect to the capital used in all other businesses. The enormous capital of railroads is derived chiefly from the savings of millions of people, some of whom buy shares of railroad stock directly, but most of whom deposit their savings in banks or other institutions which, in turn, lend it to the railroads or invest it in their stock. The farmer or the school boy who has a savings account in a neighboring bank thus may become a partner in various business enterprises of the country. His dollars or dimes, added to the dollars and dimes of many other people, are used to buy machinery and tools and materials, and to pay labor. Because of the service performed by his savings he receives interest on his money.

OPPORTUNITIES FOR INVESTMENT

There are many opportunities for young people to invest savings in productive enterprises,—perhaps more in rural communities than elsewhere. The different kinds of boys' and girls' clubs illustrate the variety of channels through which money may be both earned and invested. As soon as a boy invests a little money in a pig, or a calf, or garden tools, he becomes a capitalist to that extent. It is to be hoped that not many have the experience of the boy described in the following lines: [Footnote: Read by R.H. Wilson, in an address before the National Council of Education, N.E.A. PROCEEDINGS, 1917, p. 133.]

Johnnie bought a little pig with money he had earned,
He named her Nell and fed her well, and lots of tricks she learned.
But Nellie grew to be a sow, had piggies quite a few,
Then father up and sold them, and kept the money, too.

Johnnie took a little calf as pay for hoeing corn,
He loved the calf and the calf loved him as sure as you are born.
The calfie grew to be a cow, as all good calfies do,
Then father up and sold her, and kept the money, too.

Now, Johnnie loved his little pets, but father loved the pelf,
So Johnnie left his father's farm and struck out for himself.
Said Johnnie's pa, one summer day, "I often wonder why
Boys don't like life upon the farm, 'the city' is their cry."

"It always will be strange to me," continued Johnnie's pa,
"It only goes to prove, though, how ungrateful children are."
When Johnnie heard what father said, he gave a bitter laugh,
And thought of his empty childhood and of his pig and calf.

Savings may be deposited in savings banks, which accept small deposits and pay compound interest, usually at a rate of 3 per cent or 3 1/2 per cent. Such banks operate in accordance with state or national laws to protect the depositor against loss. Many schools conduct school savings banks. The pupils bring their small amounts to the teacher or to some pupil acting as "teller," the collected funds then being deposited in some bank in the community. These school banks promote habits of thrift and afford experience in business methods, besides bringing into use in the world's work many small amounts of money that would otherwise be lying idle or spent unwisely.

POSTAL SAVINGS SYSTEM

In 1910 Congress established the Postal Savings System under which any post office may be a savings bank. Any person over ten years of age may deposit money at the postal savings bank in amounts of from $1.00 to $25.00, receiving from the postmaster POSTAL SAVINGS CERTIFICATES as evidence of the deposit. Provision is made for savings accounts of less than a dollar by selling POSTAL SAVINGS STAMPS at ten cents each, ten of which may be exchanged for a dollar certificate. Two per cent interest is paid on postal savings, but savings certificates may be exchanged for POSTAL SAVINGS BONDS, bearing interest at the rate of 2 1/2 per cent.

LENDING TO THE GOVERNMENT

The purchase of Liberty Bonds or Savings Stamps and Thrift Stamps is a good investment and a patriotic act. The money raised in this way is used for the national defense and for reconstruction after the war. The Savings Division of the United States Treasury Department carries on a campaign of thrift education. Among other things, it promotes the organization of savings societies and thrift clubs, because thrift is a habit which is encouraged by the example and cooperation of others. In Randolph County, Indiana, for example, each consolidated school has its thrift club, and over 75 per cent of the pupils are members. One of these schools sold over $11,000 worth of thrift stamps, and others sold from $1500 to $3500 worth. Savings societies exist among the workmen of many industries, and employers report that these have increased the purchase of homes, and have resulted in a saving of materials and tools because of the habits of thrift established.

INSURANCE

Among the many other agencies to promote thrift we shall only mention BUILDING AND LOAN ASSOCIATIONS and INSURANCE. The purpose of building and loan associations is to help people of small means to purchase or build homes. Insurance affords a particularly good illustration of organized cooperation. The PREMIUMS paid by thousands of policy holders produce a large sum of money, part of which goes to pay the expenses of the insurance company, but most of which is invested in enterprises that cause the amount rapidly to increase. Out of this fund the occasional losses of individuals are paid. Life insurance is a good form of investment. It provides for the future of the family of the insured in case of his death. By the ENDOWMENT plan the insured may himself receive, at the end of a specified number of years, all that he has paid in premiums together with interest.

During the war our national government itself insured the soldiers against death or injury. This was known as WAR RISK INSURANCE. At the end of the war the soldier had the privilege of converting the war risk insurance into a regular form of insurance, still provided, however, by the government itself. One of our states also, Wisconsin, sells life insurance to its citizens.

As we proceed with our study we shall encounter other aspects of thrift in various chapters. As a nation we may be thrifty or unthrifty in the use of our resources (see Chapters XIV and XV). Thrift is as essential in our "community housekeeping," which is carried on by government, as in our homes and business. But we can hardly expect thrift to become a national characteristic unless it first becomes a personal habit.

Are you a capitalist? If so, explain in what way.

What forms does the capital take with which your father does business?

What capital does an Eskimo have? the American Indians when the country was first settled?

Do you belong to a thrift club? Would it be desirable to organize one in your school? Confer with your teacher and principal about it. Write to the Savings Division, U.S. Treasury Department, Washington, D.C., for literature regarding organization.

Is there a credit union, or a savings association, or other organization to promote thrift in your community? If so, find out how it operates.

Write a story on the subject, "What my five dollars may accomplish after I put it in the savings bank, before it comes back to me with interest."

Why are people willing to accept a lower rate of interest from a postal savings bank than from an ordinary savings bank?

READINGS

In LESSONS IN COMMUNITY AND NATIONAL LIFE:

Series A: Lesson 6, Capital.
Lesson 13, U.S. Food Administration.
Lesson 14, Substitute foods.
Lesson 15, Woman as the family purchaser.
Lesson 21, Borrowing capital for modern business.
Lesson 22, The commercial bank and modern business.

Series B: Lesson 7, An intelligently selected diet.
Lesson 22, Financing the war.
Lesson 23, Thrift and war savings.

Series C: Lesson 7, Preserving foods.
Lesson 8, Preventing waste of human beings.
Lesson 14, The U.S. Fuel Administration.
Lesson 16, The Commercial Economy Board of the Council
of National Defense.

Write Savings Division, U.S. Treasury Department, for materials; especially "Ten Lessons in Thrift," and "Teaching Thrift in Elementary Schools." Both of these contain lists of readings.

The Post-Office Department has publications descriptive of the postal savings service.

Farmers' Bulletins, U.S. Department of Agriculture, relating to thrift.

Federal Farm Loan Act, How It Benefits the Farmer, Farmers'
Bulletin 792.

See references in footnotes in this chapter.

Dunn, THE COMMUNITY AND THE CITIZEN, Chapter XIV, "Waste and
Saving."

The local public library, the State Library, and the State Agricultural College, will doubtless furnish lists of references and perhaps provide materials.

The United States Bureau of Education will send list of references.