Vermont watchman and State journal. [volume] (Montpelier, Vt.) 1836-1883, 1876-07-05
The Credit System.

The Credit System.
Il would be difficult, under our theory of |
government, for political economist to give
good reason why the state should interfere
10 compel any man to pay his debts, except
such As are due to the state itself. The col
lection Of private debts as q function of gov
ernmeui, is an inheritance from the old ar
btrary administration Of Europe. But we
are 50 accustomed 10 IL that movement for
iis adjustment would he regarded as q
startling Innovation calculated to upset the |
whole business of the country. That some |
are thinking the question over, however, is |
certified to us 10y two separate letters, com
menting upon our rather radical article, re-
Gently published under the title Of God in !
the Constitution" One Of these letters
comes from NIiddlebury and one from
Springfield, and both of them speak of the
interference Of the government for the en-
forcement of private contracts as an abuse
and an anomaly under our republican system,
which must some day be done away, One
of the writers says, This would do away at
once with the whole usury question and all
its embanassments.' The other (the Mid
dlebury NAM argues that credit should be
founded on character, and not on property.
He says when man feels that he will,
by want of promptness or honesty in the
payment of debts, be deprived of the ben
efits of the credit system (whatever they may
beg, he will have powerful inducement to
maintain his commercial integrity and in
this way men will acquire habit of honesty
which will not be without powerful results
in the community" This recalls Lord Ches-
terfied's remark, that he "would give fifty
thousand pounds for good reputation, for
he knew he could make one hundred thou
sand pounds out Of it," But, joking aside,
there is good deal of sense in our CORE
spondents remark. A great deal Of the
credit now given is based far more on char
acter than on property, and how far the free
dom and extent of business transactions
would be injuriously limited by the abroga-
ton Of all laws for the collection of debts
could be determined only by actual trial,
That vast amount of petty credit would be
at once cut off. we can hardly doubt. Some
times this might be a hardship, but on the
whole we are inclined TO think it would be
great blessing, alike to buyer and seller
"Getting trusted is very much a matter of
habit, and, so far as it is so, it is bad habit.
Especially is it bad habit for farmers and
one OF the greatest blessings conferred by the
grange is the enforcement of cash payments
in all business done through its agency.
Another vast benefit will be conferred by
this organization, if it can ever get its plan
for the arbitration Of differences, pecmiary
and PERSONAL into general operation. But
the lawyers say this never can be done.
What they viii say TO the idea of our CORE
spondents we don't know. But it looks as
though "Othello's occupation " would be
most gone when that time comes. That
Others besides We insignificant people up
here in Vermont, however, are thinking over
the matter is evident from the following
paragraph which recently appeared in the
Springfield Republican:
One of the results of the economic changes
which we are now going through is likely to be
the disuse Of petty credit, and even the abolition
Of all the laws which protect it, Why the mer-
camille class should sell on credit to u large class
Of people who are prima facie without credit and
who suffer more from the pretense of having 1t
than they would from downright refusal, ii is diff
fcut To understand. " Store credit" at best il
n delicate way Of letting one man have goods for
nothing and charging their cost to the customers
whopay. The abandonment OF itby the Sovereigns
is one Of the secrets of their success The trus-
tee process is an easy and comparatively perhaps,
inexpensive method of collection of such debts,
and better than some other legal processes, but
nevertheless in the gross it is dead loss, which
would be saved il no credit all were given The
old principle Of hw, "let the buyer beware and
not get cheated in the quality Of his goods ought
surely TO have counterpart "let the seller be-
ware and get his pay for what he sells
The Republican is not, however, for a thor
ough abandonment of the principle, since it
-ys in conclusion "There is a line, of
course, above which il is worth the while of
law TO protect credit, but below that line we
believe the state should discountenance
credit as wastefu aud unnecessary ex-
pedient."
Why 1t is "of course that large credit
transactions should have the backing Of the
government, while small creditors must do
their own collecting, does not appear very
plain. But we need not worry over it much
The suppression of the manufacture and
importation of liquor aud the abandonment
of private debt collection by the govern
ment, would abolish so many fat offices, and
so much fat picking, that we must wait for
them till We get government "of the peo-
pie, by the people, for the people in place
Of our present government of the people,
by the politicians, for the politicians Aud
who expects to live long enough to behold
that salvation