The  mischiefs  of  long  credits,  even  so  far  as  banks  are  con-
cerned, are  not  confined  to  the  cases  where  such  paper  is  dis-
counted by  them.  The  banks  nre  so  largely  interested  in  the
movements  of  credit,  that  any  irregularity  in  the  general  system
soon  reaches  them.  The  adjustments  of  the  credit  system  con-
template not  the  evasion  or  postponement  of  payment,  but  actual
set-off  and  final  payment.  If  a  hundred  tons  of  iron  are  sold
six  times  in  a  year,  each  time  at  a  credit  of  two  months,  for
93000,  the  notes  taken  by  the  persons  selling  furnish,  through
the  banks,  the  means  of  paying  all  without  risk ;  for  no  one  is
liable  longer  than  two  months :  but  if  one  of  the  intermediate
sales  is  at  eight  months,  a  link  in  this  chain  of  credit  is,  if  not
broken,  so  drawn  out,  as  to  interrupt  the  progress  of  adjust-
ment With  the  short  credits,  the  notes  furnished  the  means
of  payment;  but  the  long  credit  stops  the  process.  The  long
note  can  furnish  no  facility  for  paying  the  note  preceding  it  in
order,  and  it  must  be  paid  in  money,  or  from  other  resources.
Long  credits,  therefore,  interrupt  the  regular  order  of  payment :
and. even  if  the  proportion  of  these  long  credits  do  not  exceed


500    .     MISAPPLICATION    OF    CREDIT    FUNDS.
ten  per  cent,  of  the  whole,  the  effects  of  the  intermption  maj
extend  with  bad  results  throughout  the  whole  of  the  Tast  opera-
tions of  the  credit  system,  and  be  distinctly  felt  and  perccir^
by  the  banks.  Long  credits  are,  then,  not  only  violations  of  the
proper  laws  of  trade,  but  they  are  a  dangerous  interferenoe  with
the  safe  working  of  the  credit  system.
