42 BULLETIN 1295, U. S. DEPT. OF AGRICULTURE 
tendency to oversell was especially likely to occur in the case of 
those firms which made a practice of listing their land for sale with 
local agents in prospect territory on a commission basis. Unless 
the colonization company exercises firm control over such agents, 
they are likely to oversell the prospects. 
Trading for other property is a practice that usually results in 
selling the settler more land than he ought to have. If a company’ 
trades in 60 acres of land at $1,800 for a $2,000 house, the company 
has not really made any sale as yet. The $2,000 house must still 
be sold. If, however, 160 acres of the same value per acre is ex- 
changed for the $2,000 house, then the company has really sold 
nearly 100 acres. Of the 15 companies studied, only one, Project VI, 
had followed this policy, which it abandoned in 1918. Nevertheless, 
it was a factor partly responsible for the average of 146 acres for the 
farms on this project. 
CONDITIONS AFFECTING CREDIT POLICIES 
Credit policy is one of the fundamental phases of the problem of 
land settlement. The discussion thus far has made it clear that a 
credit policy can not be adopted without reference to the other cir- 
cumstances and policies which characterize the plan of land set- 
tlement. Thus the credit policy must be largely determined by the 
class of settlers selected. On the other hand, the more liberal the 
system of credit, particularly as regards the percentage required as 
initial payment, the more likely that the class of settlers attracted 
will be those of small means with the personal qualities usually as- 
sociated with and partly responsible for small means. 
The discussion of land settlement methods and policies has also 
made clear the fact that it is impracticable and undesirable to apply 
a cut-and-dried credit plan rigidly to all settlers. Prospective set- 
tlers differ greatly not only in ability but in financial condition. 
They vary in prospective income. Some may have prospective in- 
come from other property. Others may have some kind of steady 
employment which will yield a source of income, or they may have 
children who are earning something which can be contributed to- 
ward the making of subsequent payments on the development of 
the property purchased. 
In considering the problem of credit under the circumstances of 
land settlement in the Lakes States, it is therefore desirable to start 
with the basic conditions: (1) Farm captial requirements; (2) the 
amount of it supplied out of the beginning net worth of the settlers; 
(3) prospective receipts from the farm and from outside sources, 
including increases in farm inventory. 
