That was very helpful.
"On New System" was enabled and that was the problem.
For clarity in case someone else ever has this problem, here's what I did.
1 Right click the first measure of the 3rd system (the one with 3 measures that i want to combine with the previous system).
2) scroll the resulting menu down to Measure Layout and hold the cursor there. Two choices will appear:
On New System
On New Page
3 In my case, On New System was checked: click it again to uncheck it.
4 Select the first measure of the 3rd system
5) Again Right click the first measure of the 3rd system
6) scroll down to Measure and click To Previous System
the measure will move to the second system where it will be scrunched up at the end. Don't worry about the scrunching.
Repeat 3 to 6 for each of the 2 remaining measures.
7) Select all measures in the 2nd system (which now has 4 measures)
8 ) Use the mouse to drag the bar lines into reasonable positions.
9) one by one select each measure and then right click it and scroll down to Auto Format Measure, which will space out the notes and lyrics.
Notes: I tried selecting multiple measures for the To Previous System and Auto Format Measure operations but it had to be done one measure at a time.
Well, it's tedious, but at least it works.
many thanks, borate, for your help.
And ---- I just found a better way to do it which also answers my other question about setting a max number of measures per system.
1) remove the "On New System)" selection as above, or select the little box with the return arrow in it, just above the first measure in system 3 and delete it.
2) Select the Edit tools (very top of the crescendo window, select Edit) which will bring up the Edit tool bar.
2) Click Layout (at the far left of the tool bar)
3) set the maximum measures per line to 5 (it was 4 - what ever it was, set it to something different) and click OK
crescendo will redo the entire layout
4) Click Layout again and set the max measures to 4 and click OK
presto! my 8 measure score is evenly divided into two, well spaced out systems.