Catoctin clarion. [volume] (Mechanicstown, Md.) 1871-1940, 1914-12-03
CREDIT is MOST IMPORTANT
Not More Than IL or 13 Per Cent
Of Farmers Able to Pay Their
Bills Promptly.

One Of the most Important factors
IN all business operations Is that
intangible thing called credit. In the
city as business is conducted nova
days we who have to struggle along
with the white mans burden are
forced to meet our payrolls every week
while our commercial or running ao.
counts must be paid every 80 days or
our credit is broken and we go into
the scrap heap with the thousands of
other derelicts who 60 down In the
great maelstrom Of commercial fail.
ure, says Denver Field and Farm The
farmers, on the other hand, depend
more on credit and If they did not sue.
ceed in getting 1t the big business en-,
terprises of this country would not
proceed very far without coming to
great CataClysm that would involve
the stability of everybody engaged In
transportation, banking and mercan,
tile activities.
We have been looking into this
question of rural credit and find that
not more than 12 or l3 per cent OF
farmers are able to pay their bills
promptly and but very few of them
ever take advantage of discounts In
their purchases. The country mer.
chant is the fellow who Is doing the
most OF the packing of the other fell
lows lead. Their book accounts run
anywht re \from three months to two
years, but the average account is car
ried about one year. The farmer con-
templates making payment immediate
ly after his prospective crop is mar
keted. In case of crop failure the re-
taller is generally inclined to carry
the account over until the next har
vest season. A crop failure in q
country where the farmer depends on
single crop forces the retailers to
carry the book accounts one whole
year beyond the first harvest.
1t is quite common for the dealer
to obtt II a note from the farmer,
which generally bears a 10 per cent
interest rate from date it Is issued.
Often, however, the note does not be-
gin to bear interest until the farm
er has failed to make the payment
at the expected time-that Is immedi-
ately following the harvesting season.
Usually an interest rate is added to
the credit price depending on the du-
ration Cf the account. There Is no
common discount rate for cash pur-
chases although per cent is some
times allowed. This brings the credit
price OF a $1GO binder down to $152
for cash. AS a matter of fact, all
dealers quote two prices, the cash and
the creGit price, the difference between
the two depending upon the reputa.
ton of The buyer, the shrewdness of
the seller and the degree of competi-
ton.
Everybody is agreed that cash pay.
ments would be preferable II rates on
bank notes were reduced. The farm
er, however, is often afraid to ap-
proach the banker for a loan and pre-
fers to rock along with his merchant,
although be may have to pay the lat
ter a St a profit and higher rate
of interest. The farmer does not al.
ways see that the book credit Ia
quite as excessive as bank credit, II
not more SO, and the worst fault of
the whole system as we view it from
afar is the abuse of the privilege by
ignoring the obligation entirely and
forgetting all about it. If we had
better monetary system with a com.
mon piece Of money for hand to hand
circulation 1t would help some.