reater familiarity with business methods. Even the burden of
debts will be lessened when farmers understand and appreciate the
advantage of systematic credit. The dangers from over expansion of credit
are lessened when all the people clearly understand the essential
conditions for maintaining credit. The final perfection of a banking
system depends upon the interest of the whole people, with a fair
knowledge of the growth already made.

Chapter XII. Deferred Settlement And Credit Expansion.

The general bearing of settlement in trade, deferred by promises to pay in
the distant future, has been several times referred to in preceding
chapters; but its bearing upon the general welfare is so marked in many
ways as to deserve more particular treatment. The special form by which
one man becomes a purchaser on the strength of future abilities may have
little importance in the total result, but some peculiarities of the
different forms are worthy of mention.

A _standing account_ without definite period of settlement easily becomes
a temptation to waste, as well as a source of worry, when the account is
extended. A friend remarks, "You never seem so well off as when you don't
expect to pay for what you buy, although the reason may be that you can't
pay for it." The fact that the day of settlement may be indefinitely
postponed makes the temptation to overestimate the chances of future
ability. An account almost certainly insures the purchase of ordinary
supplies without asking the price, and only frequent and complete
settlement makes safe for ordinary people the expenditure of income
through store accounts.

_Promissory notes_ due at a definite time have less effect upon the
imagination; yet payment a year hence seems always easier than payment
now. Only repeated bitter experiences teach one to say, as I once heard an
old gentleman, when offered a horse to replace his dead one without limit
as to the time of payment, "That sounds very well, my friend, but it is a
mighty hard way at the latter end." Every farmer familiar with country
auctions, with a year's credit upon purchases, sees the effect of such
postponements in magnifying the value of articles purchased.

A note secured by _chattel mortgage_ in the nature of the security is less
extended and has the distinct hardship of future payment presented in the
possible loss of the chattel offered as security. The chattel mortgage,
therefore, becomes a favorite method