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The Pamphlet Collection of Sir Robert Stout: Volume 30

The Effects of Limited Credit

page 8

The Effects of Limited Credit.

What would be the effects of a limitation of credits on individuals P How would a short credit system suit the book of the majority of people of the present day? I take it that it would raise them to a position far more safe, far more sound, than that in which they now stand. It is impossible to get over this fact, viz., that if a debt is to be liquidated at all, the sooner it is paid the better. The exchange or capital value of money is closely bound up with its value in usance, or daily circulation. Every moment it lies idle something is lost: the original debt is in reality increased. It may be said that the majority of people would be the gainers by not paying promptly, as they would gain the interest on their money. But what if they are creditors themselves? It must be admitted that in most cases individuals have have assets as well as liabilities, so that they are not really gainers, as the amount lost on the overdue assets balances the interest gained by not paying for interest, and as private individuals are equally careless as to the daily value of money, it follows that this amount is practically discarded, and is to all intents lost to the community. Surely the times are hard enough without adding to their sting by doing away with an appreciable item of value, in the shape of the interest on money?