THE PRESENT COTTON SYSTEM 177 



from supply stores, while Arkansas and northern Mis- 

 sissippi report that about 75 per cent of the stores sales 

 are for fall payment. 7 Although the amount of credit ex- 

 tended by the supply merchants to the tenant varies from 

 year to year, it is a very small part of their total credit 

 needs. Croppers lack sufficient chattels for security for 

 either the banks or supply stores to furnish them, and 

 are often supplied entirely by the landlord. "It is safe to 

 assume that the landlord furnishes more than half the 

 credit needs of the tenants." 



Various studies of the cost of furnishing by supply 

 stores have shown high interest rates. Clarence H. Poe 

 in a study of the credit system of ten cotton states esti- 

 mated that time prices averaged 23.33 per cent above 

 cash prices. If time prices on an average carry over 

 four months he says "it is equivalent to paying interest 

 at the rate of 70 per cent per annum." 9 Studies in North 

 Carolina farm credit have shown lower interest rates. One 

 survey of 800 farms in three North Carolina counties 10 

 showed that 54.2 per cent of the farmers used merchant 

 credit for which they paid 26.6 per cent interest. It was 

 found that 40 per cent of these advances were fully se- 

 cured by crop liens. R. B. Eutsler found that out of 588 

 Negro farmers 52 per cent used merchant credit for 

 which they paid an average interest rate of approxi- 

 mately 26 per cent. 11 



7 Ibid., pp. 18-19. *Loc. cit. 



9 See news report of Ray Stannard Baker in New York Evening 

 Post, March 10, 1921. 



10 F. R. Yoder, H. S. Beardsley, and A. J. Honeycutt, Farm 

 Credit Conditions in North Carolina, North Carolina State College 

 Bulletin, 1923, pp. 2, 21. 



11 Negro Agricultural Credit Conditions in North Carolina, MS., 

 Institute for Research in Social Science, Univ. of N. C., 1927, pp. 

 33, 34a, 41 a. 



