54 ECONOMICS OF LAND TENURE IN GEORGIA [54 



' Usually there are several merchants in each town com- 

 peting vigorously for business. In case one merchant, 

 after securing through a mortgage or otherwise the trade 

 of a farmer, makes heavy exactions by means of exces- 

 sively high credit prices throughout the year, the more 

 alert of his customers, after being so dealt with, will 

 negotiate the following year for lines of credit with other 

 merchants. In this way standard credit percentages to 

 be added to the cash prices are established for the staple 

 commodities. These percentages are higher in some 

 communities than in others owing to variations in local 

 economic conditions. They are higher for some com- 

 modities than for others, owing to the varying circum- 



j stances that affect the commodities. 



The last-mentioned fact suggests a thought or two as 

 to the real nature of this credit business. From the 

 standpoint of the merchant it is a loan of capital. All 

 the goods in the merchant's store are capital goods. 

 When the farmer buys any of these goods on credit he, in 

 the act of buying, contracts for a loan of capital from 

 the merchant, and from the funds arising out of this loan 

 he buys one or both of two distinct classes of economic 

 goods; that is to say, he buys either goods for con- 

 sumption or goods for production or both. The one 

 class of goods is bought for the purpose of directly satis- 

 fying wants; the other class is bought for the purpose 

 of aiding in production, and thus of indirectly satisfying 

 wants. Meat and shoes belong to the first class; wagons 

 and plows belong to the second class. As a usual thing 

 the credit percentage is smaller in the latter than in the 

 former class, for the reason that, being more or less 

 durable capital goods, they stand as a partial security for 

 themselves and they easily produce a rent and a sinking 

 fund. 



