CHAPTER XVII

PERSONAL AND BUSINESS LOANS

§1. Personal Loans

In this chapter, I shall try to show that the theory ofinterest elaborated in this book applies to every speciesof loan contracts.

From the standpoint of the borrower, loan contractsmay be classified as follows:

Private

Loans

Public

Loans

Consumption orPersonal Loans

Productive orBusiness Loans

Consumption

Loans

Productive. Loans

'To offset misfortune or improvidenceTo offset fluctuations in income andoutgo

To anticipate improvement in finan-■ cial condition

Crop liensCommercial paperAccommodation paper; Call loansMortgages on farmsMortgages on city realestate

Mortgage bonds of cor-porations

Debentures of corpora-tions

For military purposesTo offset fluctuations in revenue andexpenses

For public improvements

Short or peri-odic loans

Long or perma-.nent loans

Personal loans are loans of individuals for personalpurposes rather than those arising out of business rela-tions. Of these, the first class comprises loans contractedbecause of misfortune or improvidence. These constitutetoday a very small fraction of total indebtedness. It

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