The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1856-1888, 1856-10-30

which requires that funds realized out Of any bust
ness should first be appropriated to the payments o.
debts due OF not due, incurred for that business, anc
not diverted to speculations in land or stock, or othel
article foreign to it, as is too often done, running
great risks, which in the greater number OF cases turn
out i'll. We know of many instances IN which houses
originally in good standing have weakened themselves
greatly when they have been flush of money, with nc
immediate obligations 20 meet, by taking lines IL
stocks, or making real estate purchases, which they
have not been able to turn into money again when
their obligations became due; and thus they have
been obliged to put off the payment Of their business
obligations in whole or in part to the permanent injury
of their credit. If returns come in socner than antc-
ipated or calculated on, the corresponding obligations
ought to be anticipated accordingly. Short &C
counts make long friends is another proyerb of no
mean significance. The shortest possible credit,
should be the practise of every trader: and unvary-
ing punctuality in payments will ensure ever the best
results.
"In the economical management of a large bust
ness, it is found that no amount of profit can justify
the risk Of very extended credits. The customary
credit given is in reference to the. time the trade of
the buyer generally requires for obtaining his returns.
Any extension of credit beyond this, is impolitic, and
and can only be required by unsound debtors. The
extended credit requires large additional profit to in
duce the additional risk, which howeverit cannot
justify.
"Such extended or extra credits are often given at
times when the market is surcharged with goods which
consequently are heavy of sale. The receiving and
giving such extended credits is alike foolish; in the
former instance, as being attended with great uncer-
talnty III obtaining returns, as real, bona fide. in
consumption of goods can only be brought
about by a fall in price, which will secure returns in
the ordinary period of credit, or perhaps sooner and
In the latter instance the risk is greater to the seller
than the sale of goods warrants under such cireum-
When the market is glutted, it can only be
safely relieved by holding the goods over for another
season, or by making a large sacrifice in price. The
chances are that those who accept an extended credit
goods, not knowing that they can obtain returns
them In the ordinary time, will lose money; and it
should be an axiom with the seller that his customer
De always able to make fair profits out of his deal
ngs with him. There is a tendency, as the policy of
.ound trading is understood. to limit and diminish
AS capital multipliers, heightened credits
re less sought. The competition of capital with can
tai renders it essential &C the securing of profit, that
,oods be purchased on the lowest possible terms, and
his can only be done by buying on a cash basis, or
limited credit. Credit is an, edged tool. and its
6use will make it cut both ways, to the iniurv of
9th giver and receiver. Unlike the quality of mercy
is twice cursed-it curses him that gives and him
taxes