The Kalida venture. [volume] (Kalida, Ohio) 1841-1865, 1847-05-28
The Credit system.

business with small capital, and at first glance
this would appear 70 Be true, bat sless sbssrvatisn
will show thas whore one rises from poverty 10
sfIlusnes BY its aid, ten are crushed down by Its
weight and eventually rxinsd. II the yeung me-
ehsnic gets credit ferihs s,eck he works int the.
wares Of his trsds he in turn has to credit those
wares TO which he has added double'or treble va
lue by his labor and skill. If he would effect
Gales; here the credit system 10 far from being
in his favor. fer he has to credit much more than
he gets credited with. But its disadvantagss DO
not stop here, while the mechanic has 70 pay all
his dues OF finds his credit stepped, many Of che
larger circle Of his debtors asvsr pay At all, or
only after long delays and after half the debt has
been consumed in legal charges for eollestisn.--
Again, he never gets his stock as chsapo on cred.
is as IL he paid dswn for il, and ye. he has to
ter into competition with older aAd wealihisr bu-
siasss men. whose capital enables them ts give
credits, sell low, and pay for their stock on its
receipt, yos no muH sell as low ana credisas lib
orally as they do, OF give up trade.
Upon the ready pay system his capital on start.
| ing business might be less, butii his customers
paid him on recsipl Of his wares, by energy, in
dus,ry. and frugslity, he could sson enlarge his
capital. No way trammellsd by the idlsness,
negligence or dishonesty Of others his progress
would bo sure, and his gains ssrtain. and he
would be free from the risk Of insolvency and
failure to which the credit system exposes him.
! TO the merchant and the farmer the srsdi, sys-
tenn 10 little better. To il We owe the excess Of
small dealers whs overrun the country, and vhe
trading on borrowed capital, can pay the farmer
cash for nothing they buy, but help very sasctu
ally to drain ths country Of meney to pay their
foreign debts. Having their existence from cre-
dit, they see no advantage in better state Of
things, and make no effort to rsosh it, These
shut out real capital, and preventive settlement
Of genuine business men. They credit the far
mer, il s true, and charge him well Tor the credit
gwen. and in return take his produce at their
own price in payment Of his debts due .hem.--
But cash and the liberty to trade where they
please they cannot give tho farming community.
In consequence Of this state Of things money dses
not cire ulats; much Of the farmers produce pos.
sesses no cash value; he 10 denied the means Of
paying tho mechanic, g. the mechanic hes thus no
opportunity Of meeting his engagements in cash
Barter and high prices are the natural result Of
this excessive credit, driving rs still further from
the hope Of prompt payments & pro sPsrous times.
John Randolph snce said that the secret Of the
| PHILOSOPHERS stone was contained in feur words,
Pay as you go. But who can avail himself OF il
under tho present rules OF business? There are
few who deny the evils Of the present system,
but still fewer sugges.a remedy; and many sup.
pose that the excuses Of the credit system are
t-hniiy nwine to the newRess Of the coun try, and
the consequent want Of settlers who are capital
lists. This has undoubtedly its effect, bu, cnnnot
have evon an approach to tho effect attributed 10
it, In the earliest stages Of settlement, there is
ne surplus beyond the wants of the settlers, bu,
this condition is Of short continuance. Luxury
and extravagancs are NO, the produce Of new set
tlemsnts-;dlers are almost unknown. Each in
habtant produces more THAI sufficient for his
wauts, and his famy's, and this surplus should
bin money into circulation, bu, that those who
purchase 1t have not money to givein exchange
The city merchant has large credit with the
banks. In addition to his capital, he uses this
credit to enlarge his stock. This he not unfre-
quently presses upon country dealsrs often with
Q recklessness, that returns upon him in wide
spread bankruptcy. The mersha mt or mechanic
is equally anxious to push sales, and but few
refuse liberal credits to the farmer. 50 lang as
there is prespss, that he will have any thing to
pay. Each puts a tariff on their credit charges
with view to cover losses, interest, &c. The
former his credit to pay store pay to his hired
hands, and in this way the system Of credit ex.
: tends itself throughout the whole framework ei
society. ~ EgG aiN 5gaa11a 'sF# .54aE
We hear much about foreign overtrading, but
the excess Of home trading is Little dwelt upon.
Yet the habit Of dealing on credit is at the bot
tenn Of the evil. Il interposes no check to extra.
vagance, offers no inducements 70 economy, while
the tax it imposes and the wastsfulness and ruin
to which i. leads are inoalsulable. 81 ir6
Banks possess privileges Exclusive and exten.
sive beyond all parallel, and whish returns them
enormous profits. by this means they absorb the
surplus capital of the country. and fix ii in the
bank vaults, to bsoose the basis of an unnat aral
credit. Banks hoard capital and prevent its be-
ing freely circulated, and as they depend upon
extensive credits, thsy neosssariIy promote wha,
TO them is source profit and essential to their
existence by evety means in their pswer. Quick
returns OF their loans being also an Ingredient Of
their system their credits are almost confined tc
those who deal in the exchange and transfer Of
commodities rather than to the producer or man.
ufactsrer. This circumstance still further stim.
ulates credit, and forces ii into irregular chan
Incls, promoting feverish activity on the one
hand, and stagnation and lsthargy on the other
Thus from one impure fountain spreads in ever