Rural Credit 281 



of farming are shiftless, the credit may be secured by a crop 

 mortgage or lien. The store system of credit in one form 

 or other has dominated the rural life in the cotton-growing 

 states, in the past, and it is in common use to a greater 

 or less extent in every rural community. In the South it 

 is combined with a crop lien or chattel mortgage form of 

 security. It has proved to be a haphazard, unsystematic, 

 extravagant, and often vicious system for both the store- 

 keeper and the farmer. It prevents the permanent im- 

 provement of a community. It is based on a false se- 

 curity, because the lien or mortgage is given on the crop 

 before it is developed and often before the crop is planted. 

 In order to make the risk secure, the Southern storekeeper 

 generally charges an average of twenty-five per cent more 

 for the goods sold than the charge for similar supplies 

 when bought for cash. The supplies are usually of com- 

 paratively low grade. The farmer therefore pays an 

 equivalent of this abnormal rate of interest on his credit. 

 To protect himself still further, the storekeeper in the 

 cotton states may have to direct the farming operations 

 of those to whom he extends credit, dictating the crops 

 to be grown, the crop rotations, and the tillage systems. 

 When an able man handles this system of credit, the 

 agriculture of a community may be built up to a high 

 state of productiveness, but, taken as a whole, the system 

 is open to the gravest abuses. The farmer sells his prod- 

 ucts at the lowest wholesale price and buys his supplies 

 at the highest retail prices. It has proven detrimental 

 to the best interests of an agricultural community, to the 

 social and economic advancement of the farmers, and 

 equally detrimental to those who furnish the credit. 



