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.