The New Orleans bulletin. [volume] (New Orleans [La.]) 1874-1876, 1875-09-04
CREDIT.

interest on his purchase, and then he is N
: done paying. He must compensate the SELF
for the risks which he has taken, not onl
! the risk on his own individual purchase, br
the average risk on all the credit purchase
made from the same seller. Where goods
= the amount of million dollars are sold o
: credit in good times, three-fourths wi
: be paid promptly, another fifth porto
$ will be paid with some extension and delay
while perhaps twentieth part of the entir
amount will be passed to the account of prof
and loss, not as irrevocably gone, but as spu
rious or bad or doubtful assets, on which n
certain calculation can be made. If seasol
of distress comes on soon after the million j
sold, and before any part of it falls due, tn
amount of loss is far greater.
Ii the manufacturer buys his raw materials
on credit, he pays about five per cent more
than the strictly cash price. When he sells
on credit to the wholesale merchant the latter
pays the manufacturers profits and five pei
cent of his risk When the wholesale dealer
sells to the intermediary or jobber on credit
he adds to fair profit interest, and another
allowance for risk, say five per cent more. II
the jobber sells to the retailer on credit he
charges interest, profit, and another per-
centage for his risk. And SO by the time the
goods reach the hands of the last buyer OF
consumer in a country village. even though
he buys for cash, he is compelled to pay a
tribute of interest on the value of what
he buys from the time when the raw material
was put into the factory warehouse until it re-
turns to him, also four or five profits of mid
dlemen, and also these four or more successive
percentages charged for risk or as a tribute
to credit. The result is that what the con-
sumner buys costs great deal more than it is
actually worth. He pays for what he GETS
He supports succession Of middlemen
in a style of living far from economi-
cal. But, worse than all, he is COM
PEELED to pay for what has been bought
by insolvent buyers. There is no es-
CAPE The consumer of any article that
has gone through the routine of transmission
from producer, and through the manufacturer
and succession Of merchants to his hands,
must pay for the labor and capital and time
of production, the expense and risk of trans
portation, with cost and commissions of pre-
liminary handling, the expense of manufac-
turing and the profits of the mill owner the
interests and profits Of Wholesale dealer, job.
Der and retailer, and in addition to all, four
or more successive and cumulative allowances
for possible bad debts, fourfold tribute to
credit. which makes up nearly fourth part
of the last or consumers price.
By general law of compensation and in
Jurisprudence, the loss which results from
swindling, or improvident, or careless or un-
lucky insolvents, settles at last with dihused
pressure upon the whole community. The
default of those who buy on credit and who
fail to pay becomes a general affection and
burden. Therefore the abuse of the credit
system becomes an evil in which the people
Of the entire republic are interested in a
greater or less degree. Every bankruptcy
hat occurs represents loss of the gen.
'ral body of the people. The masses
ire in effect insurers by common risk against |
hat it is not difficult to trace the influence Of |
my great failure, like that which lately oc-
cured in New York, or that which has just
tartled the financial world from California,
Town through all the avenues and ramif "a
ions OF business to the laborer and consumer.
Abused credit, chief among the vices Of
american business, bears last, bears most
leavily, and bears always upon productive
abor, increasing its necessary hardships and
decreasing Its legitimate gains.
Whatever the evils of credit may be the
ystem is one which can not be dispensed
nth. Even if by the common consent of
ivilized nations all laws to compel payment
debts we're wholly abrogated and annulled
redit in trade could not cease. Commercial
is that necessity of civilized life
hich can not be supplied without credit
he necessity of confidence between man and
ian is one of the great lessons of morality
lught by modern enlightenment, and it is
n the reason that such confidence is
that the violation of CONNER.
al good faith is in the nature of crime.
ct liability to be abused is inseparable from
redit There can be no laws so cunningly
evised as to put stop to deliberate
auds and violations of confidence. There
An be no caution or sagacity sufficient
} prevent losses by unfortunate or fraudulent
solvents. The laws may be made more
ringent, and perhaps ought to be, especially
to insolvents who conceal their condition,
,ntinue in business and increase their Iabl-
les long after they are reasonably certain of
leir inability to meet their engagements
ut even such laws, under the sanction of
,vere penalties, will do but little towards
indering spectators in their schemes of
aud
This abuse of credit grows out of other vices,
nd will decrease or grow with them, and {
specially with the vice of avarice. Our
cious monetary system based on paper
romises creates financial atmosphere con-
Il 49, e |