284 PROVISION OF BORROWING FACILITIES. 



Credit is a necessity, and borrowing and indebtedness are useful or 

 dangerous in proportion not merely to the use made of the sums 

 borrowed, but in proportion as they are the result of a prudential 

 foresight, or of necessity extraneous to the demands of agriculture. 



As a matter of fact the agricultural classes all over the world are 

 in a state of extreme indebtedness, due very largely to causes outside 

 of the demands of agriculture, such as to poverty, ignorance, careless- 

 ness, the laws of inheritance, foreign competition, seasonal disasters 

 and epidemic diseases, and the demands of usury ; this indebtedness 

 is recognized in Europe as a position of danger, and every country 

 is seeking its remedy, usually in the direction of organized credit. 

 While recognizing, however, the necessity for organizing and . cheapen- 

 ing credih, it is obvious that, since indebtedness is not due merely to 

 the action of the usurer, no mere change in the machinery of credit 

 can, of itself, effect a radical cure ; it can, per se, only palliate the 

 symptoms, or retard the catastrophe. 



The conditions of credit. The conditions of credit may be summed 



up as follows : absolute proximity of lender and borrower ; complete 



security to the lender as regards the title of the property offered, its 



freedom from prior encumbrances, the recovery of his capital and 



interest at due date, inconvenient amounts, with facilities for enforcing 



such recovery in case of arrears; thorough safety and facility to the 



borrower, in his ability to obtain cheap loans, at any time, to an 



amount proportionate to the security he can offer, and upon terms 



which will be so equitable in themselves, so convenient as regards 



repayment, so free from all risk of deliberate entanglement, so based 



upon published rule ; so devoid of any tendency to discount necessity 



or urgency otherwise than by an equitable insurance, that he can 



calculate on reaping the full fruits of his prudence, and find, in credit, 



a powerful auxiliary to his productive powers and stability. In 



particular, the terms of repayment must be such that he can replace 



the loan from the profits of the transaction for which it was' obtained ; 



an improvement to land must be repayable by instalmentst'over a long 



series of years; a purchase of stock must be similarly repayable over 



a shorter series ; advances upon crops or for maintenance may be 



repayable in lump or by instalments according to convenience. It is 



axiomatic that loans sunk in improvements or enterprises in wbicL 



the returns are gradual, shall not be repayable except by instalments 



over a period proportionate to the nature of the enterprise. 



