Financial Capital

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Financial Capital
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What is Capital?

• Capital is any resource capable of producing
  other resources.
• Examples of capital include cars, machines,
  buildings, land and money.

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Public and Private Capital

• Public capital are community resources schools,
  roads, utilities, parks.
• Private capital are individual resources land,
  buildings, equipment, money.

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Financial Capital

• Financial capital represents resources that are
  liquid having the ability to be turned into
  other assets.
• Common forms of financial capital are stocks,
  bonds, market futures, letters of credit and
  money.
• Financial capital is extremely mobile today which
  results in growing problems for rural communities.

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Availability of Financial Capital

• Loans short-term or long-term (bonds) funds
  borrowed from a financial institute.
• Stocks selling shares of a business to obtain
  financial capital in exchange for dividends and
  voting rights that determine management controls.

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The Rise and Fall of Banks

• 1780s 1920s banks were easy to start due to
  lack of regulations.
• During Great Depression, tens of thousands of
  banks failed. Many were located in rural
  communities. Federal and State regulation of
  banks instilled trust in the system and helped
  insure financial capital would be reinvested into
  the local communities.
• Deregulation of banks in 1980s caused a change
  in flow of financial capital. Mostly out of
  rural communities in search of short-term
  returns.
• income multiplier- tool used to determine to
  what extent capital is reinvested into a community

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Maintaining Local Financial Capital

• Community Reinvestment Act of 1977 aimed at poor
  urban areas, rural area at this time seemed
  stable.
• Brownfields Act in 1995 revised the CRA to target
  a broader range of low-to-moderate income
  communities.
• New programs and community foundations are
  arising to address the financial capital issues
  for rural communities.

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The govt that Failed?

• Governments can provide tax concessions to
  certain investments or geographic areas.
• Although this can bring more businesses,
  industries people into a struggling community,
  it puts additional stress on publicly provided
  services, like schools, utilities, roads, etc.

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Livingston County Statistics

• 1994 total personal income 281,287
• Net earnings 54.0 of TPI
• Dividends, interest, rent 27.0 of TPI
• Personal current transfer receipts 19.0 of TPI
• 2004 total personal income 366,570
• Net earnings 55.6 of TPI
• Dividends, interest, rent 20.9 of TPI
• Personal current transfer receipts 23.5 of TPI

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Livingston County Statistics Continued
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Livingston County Statistics Continued
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Livingston County Statistics Continued
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Business Patterns

• In 2003 there were 8,888 jobs in Livingston
  County.
• Retail Trade 1,204
• Farm employment 845
• Manufacturing 828
• Local government 799

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Income Patterns

• Percent of income by Industry
• Manufacturing 9.2
• Local government 7.0
• Retail trade 6.5
• Construction 4.1

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More Livingston County Statistics
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More Livingston County Statistics Continued
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Industry Incentives in Chillicothe

• Farmers Electric Cooperative Companies offer loan
  programs of 400K zero-percent interest for 10
  years.
• Electric services are provided at no cost with no
  franchise fees or facilities charge.
• City of Chillicothe offers revolving loan
  programs.
• Chillicothe Industrial Development Corporation
  (CIDC) provides business loans.
• Green Hills Rural Development offers low-cost
  interest loans.
• Chillicothe Industrial Development Authority
  (IDA) offers revenue bonds.

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Resources

• Rural Communities Legacy Change
• Flora Flora, 2004.
• U.S. Department of Commerce
• Bureau of Economic Analysis
• www.bea.gov/
• Chillicothe Chamber of Commerce
• www.chillicothemo.com/index.html
• Chillicothe Missouri
• http//www.chillicothecity.org/index.html
• U.S. Census Bureau
• http//censtats.census.gov/
• Office of Social and Economic Data Analysis
• http//oseda.missouri.edu/index.shtml
• Images and Photos
• http//www.google.com/imghp?hlentabwiq