Page:Popular Science Monthly Volume 64.djvu/251

Rh crude department store dealing in every article from medicines to wagons that he is likely to need in his simple existence. He requests the merchant to 'run' him during the year, that is to say, to sell him supplies on credit until the crop is harvested. He promises the merchant to plant a certain acreage of cotton and signs a mortgage upon this yet unplanted crop. He is now at liberty to buy on credit from this particular merchant anything he requires; but he can not buy anywhere else, for he has no cash, and his credit and security are all pledged to his patron merchant. The merchant has two scales of prices, cash and credit, the latter much higher than the former, the excess constituting interest which the lien farmer must pay. With a few merchants the credit prices are scaled down each month, so that the rate of interest remains approximately the same on all goods purchased on lien; but ordinarily the prices remain unchanged up to the last day before settlement, so that the rate of interest rapidly increases as the time before settlement diminishes. On goods which the farmer gets late in the summer, he frequently pays interest above the cash price at the rate of 200 per cent, per annum. For the whole term of credit, extending from February to October, he pays on the average, in different localities, from 40 to 80 per cent, per annum. The usury law forbids the bank to lend him money at a higher rate than 8 per cent., but 'protects' him by allowing the merchant to charge him 200 per cent., on the principle, apparently, that a man may consent to pay any price he chooses for capital in the form of merchandise, but that he is not at liberty to offer more than a moderate price for capital in the form of money, no matter how badly he may need it or how great the benefit to be derived from its possession.

Some large merchants employ a sort of traveling inspector of securities, on whose report of the condition of each customer's crop the question of further advances is determined. Possibly by July the farmer has so much charged against him that the merchant considers it unsafe, in view of the uncertainty of seasons, to allow the crop to cover any further credits, and accordingly declares himself under the painful necessity of declining further sales except on additional security. The farmer then gives a mortgage on his slight furniture, bedding, cows, everything. The law does not allow him to give a mortgage on his wife and children.

Late in the summer the crop is sold. Not to lay the price upon the counter of the lien merchant is, in law, a misdemeanor; but in farming it is starvation for the next year—or at least, the farmer thinks so. Very commonly in good years, and as a general rule in bad ones, the price of the crop does not equal the amount on the merchant's books against the farmer. Sometimes the sheriff is called in to supply the deficit from the real and chattel additional security; but not