Some of our banks, particularly those serving rural areas, counted a great many farmers among their customers. Their business underwent a lasting transformation in the course of the First World War.
Agriculture, the basis of our national wealth, has also prospered but in many quarters the shortage of labourers has paralyzed industry, so that it has been impossible to properly cultivate the soil and thus the benefit of higher prices has been lost in certain districts.
Northamptonshire Union Bank's chairman, speech to shareholders, February 1917
In peacetime, Britain had relied on food imports but now, as both sides tried to starve the enemy by blocking cargo movements, food had to be produced domestically. Instead, however, productivity actually fell, because so many farm labourers had joined the army that there weren't enough hands left to work the land. From 1916 onwards the government devoted significant attention to increasing Britain's agricultural output.
Ground was converted to agricultural use, both on a small scale – for example, ploughing up sportsgrounds to create family allotments – as well as on a larger scale, creating more farmland. Efforts were put into educating farmers and finding other ways to increase efficiency, including encouraging the introduction of tractors. The result was that, despite shortages of fertilizers and skilled farm workers, the yield per acre showed a substantial increase during the war years. The harvest of 1918 was said to be the biggest since 1868, despite bad weather striking before the crops were all gathered in.
The government made a particular request to bankers to lend financial assistance to farmers, but in fact relatively little help was required. The difficulty farmers faced was the practical challenge of getting the work done; provided they managed that, the prices they received for their crops were good. Many prospered, and became depositors rather than borrowers during the war years.
Much may be expected from the increased use of motor tractors. The improved tyres now available are gradually breaking down the prejudice with which they were viewed in some quarters.
Northamptonshire Union Bank's chairman, speech to shareholders, February 1918
One group of farmers who did depend on their bankers in this period were tenant farmers. From around 1917 onwards, land ownership underwent a major shift, with long-standing large estates being broken up and sold off. This gave tenant farmers a once-in-a-lifetime opportunity to buy their own farms. Northamptonshire Union Bank received many requests for large loans to buy farms. In order to meet them, it had to break with tradition. Banks at this time did not normally provide loans to buy property where the loan’s security was the property itself. For these farmers, however, the bank made an exception, helping many to become the owners of farms that in some cases their families had worked for generations.