The Pickens sentinel. [volume] (Pickens, S.C.) 1871-1903, 1886-07-29
Farming ora Credit.

cr name, and the borrower paws. more
than he thinks he is paying and more
than he would pay if it were called
interest. For instance when q man
buys groceries and other supplies on
credit the merchant usually charges !
more for goods than he would if cash |
were to be paid for them. The diff
ference between the cash price and
the credit price is in it's nature really
interest, for it is compensation char
Scd tor the use Of money. 1t is q per
fectly legitimate and fair transaction
provided the difference is not too
large, and is probably always under
stood on both sides. But when, as is
usually the case i'll the giving and tax
ing agricultural liens, the purchaser
agrees to pay 10 per cent. interest on
the credit price, and the period of
credit is to end not at the expiration
of twelve full months from the time
OF purchasing, but on day seldom
more than nine months, sometimes
only SIX months after the advances
are made, the true rate of interest
per annum is not expressed. Thus
if the cash price of M article is rs
cents and the credit price 81, the diff
terence, 25 cents, would be the com
compensation charged for the use Of
the IS cents. This is equivalent to
333 per cent interest, disguised un-
der the namo Of the credit price Now
10 per cent interest on the credit
price is interest not only on the IS
cents which is the real principal, but
also on the 335 per cent. disguised
interest This is in reality charge
OF l35 per cent. on the cash price
and should be added to the 33l per
cent already charged, making 4G3 per
cent interest, which the purchaser
contracts to pay for, say nine months
time, at the rate of 81 20 per cent.
per annum besides the price of SUD,
plies, IN other words, he agrees to pay
81 .G2 20 for what one dollar in cash
would buy, and he mortgages his
crop to pay it.
This, it will be admitted, is a ruin
: ous rate OF interest, ratio which no
ordinary business can stand. 1t NAV
be that the difference above given be,
tween the cash price AID the credit
price is larger than the average on
all articles. 1t WAS only taken to IL
instratc the idea that interest is somo,
times disguised. But let us suppose
that 62 20 pcr cent. per nnnum is
Just twice the true amount. even then
tho rate would be 81 10 per cent. per
amnum.
Farming would indeed be most
profitable occupation if it could be
carried on to advantage with borrow
eel capital bearing even T per cent i'll
tcrrSt per annum.
But, in addition TO what has already
been sad, there is II stipulation in
some liens that the farmer shall
ship his crop to the merchant who
makes the advances and pay that
merchant n certain per centago for
selling it. This is also II compcnsa-
tion which the merchant receives for
the cash price, but it is disguised un
der the name of commissions.
There is no wonder that the farm
crs are depressed and that there is
feeling of "lunrest" and dissatisfaction
prevailing among them. And vet
they enter into these rtlinOus contracts
voluntarily. There is no compulsiom
on them to do 50, and they carmot
reasonably hope to better their condi.
ton thereby. 1t seems to be perfect
~ plain that it would be better not to
try to farm at all than to try to farm
i'll that way. Nobody can blame
merchant for making large profits on
his goods. And perhaps his profits
are not quite SO large as they seem,
for sometimes his customers fail to
comply with their contracts and he is
loser to that extent.
But This system is suicidal It will
ruin every branch of business in tho
State, for it will inevitably exhaust
tho agricultural interest, which is
the foundation of all our business.
Indeed it seems to have very nearly
worn'out thatmtorest already. There
is but ono remedy, and that is for each
farmer to contract his operations with
i'll such limits as will relieve him of
tho necessity OF buying on credit, to
form, and most stubbornly adhere to
n stern resolution to do without what
he cannot buy for cash If he fails
to do this now voluntarily and through
prudence he will do it next year or
the year after involuntarily, and be- |
cause his credit is exhausted C0l,tna.
di1 Daily Record.
Lien law.
The Grccnvillo News Of the 23d
in ct 0nt in Cl,CoI IiDC, ,f Ilo l,cI IT,,