, 1877-11-17
When Check Takes the p1ace Of Capital,
Disaster Is Inevitable.
Some Illustrations Showing How
tho Whole Thing Works.
Register Fitch's Exhibit Of the Condition
Of a Thousand Insolvsnts.
Fatal Discrepancies netween Lsahil1.
Ties and Nominal Assets.
Interesting Exhibits for Business
Men to Think Over.

Sr.e,n' f'or7,,pondrnrs ot The Trdannt.
New York, Nov. Ii.-1n a recent letter, COM
mrnting upon the improved prospects OF tfldc,
took t#casion 10 say that there was little hope
Of reaching permanent prosperity until there
was sutlic reformation tn our incthtals 6f uDlnE
business. especially referred to tho prevailing
practice among manufacturers, jubbers, and
Wholesale dealers of gtvinG almost Unlimited
credit. without serious question. to almost any
one who tf,ooscs to ask for It. One OF the prln-
cipal causes ot Tic panic of ~ and II. fnng
chain Of subsequent disasters lay In the fact
that the whole country was doing an Inflated
business on Il basis pf cscdits. every nau. to
certain extent, 1raniuE aip"n Ills neigh
bor, nnl when Tho t'Est prop WAS
knocked away from this Nnshstaittal
busincss culirr, tho entire structure
came tumblIng about our cars, and fonr years
of hard work l,avc not sni'iccd 10 clear away
The detra a forrible aud pointed Illustration
Of the iallacy Of gtviug
nArIAzAuD CREDITS
WAS brought 10 light hcrn during tllc past week
by Tic arrest OF a man Tor obtaining goods I'm
der false prc1cnscs. IL nunenrs that . few years
since Two young ,ncn started IN the dry Eoots
blssucFs In small way up.tnwn. They ind
little capital, Int good knowledge OF the
business. For time they did safe md hon.
est business, and succeeded In winning the eon-
ildcncc Of some nf our largest wholesale deal
CTS. Then they bcgat' TO buy largely on credit,
1l.r fact that y. I. Stewart nnu other equally
wcl!-kuown firms gave them credit enabling
thcm to obtain similar favurs frun Other inl-
portcrs md inbhcrs. This ran
III, far suiMe months, during wlici,
time tho young firm had succeeded In ob-
tanug something ltlta sl5u,OO worth OF goods
u various Kinds un credit. Finally a. I. Stew
NJ 90 oeeaie 'li''c ssl..uMs' oei.,' . LINN
Ing some inquiries. anil eventually theif aeens
risltcd the store uf tho proluisllE yahnE t'icr-
:hAnts' lie arslssa last N time sn' 10 "a Tint
~ .,......,.t - a., ....,
ana TINT t'ssF storo was oc"uue" u! Inv '.ou-
sands of loiIars' worth Of gooua thai they iaa
lnush. OIL credit. 1t Was then asucstafne'! that
t11csr ,nrn harl for months been ecnttiur UT
',,t.s ,-L,-o tho,. ,.,ra s,,,,
Roots =" ".stesn e'tns' "n..a 'ass ns ao.A
lat,yc y'ning merchants. Thrsc nersons had
disappeared, unc Of them leaving the country
entirely. ,u, thc r,hcr remaining s.,nrcalcj.
isecai,y ii, @ hc returned m 10 New YorE. WAS arrest
e a y rider "t us s!sIi* ,I1 a%1 o = NV ;t,.. N
a',!"" ~, ,,rs lras r,"s a'' which .J ,,,ycp Tin
rrcit 10 Srsely Slll agerreate oyrg sttal,i ,il0U.
lid tl.sy nrr,, u. ,'ecnt IN tlcir l,auir'es l,e
,,nr s,,n,1,u,,s nj hi. Integrity, tlry would
hayn saved thrir roods, for it wus IcaI,ly nsccr-
talnri thnt thr yt,ug ,rtJ. Ind tr,i sltEhi cap-
al. and tIai .I,eIr business enterprise wus con-
uaese" A'.eG roxr,n,s,.r orru.,,ox.
A. ,1,cs. yoHut ir,i.,ws never i;,tc,,Jsd 10 nay
INV uf tl,cir rap,iiy.ayctnulat,ng Inicbtctncss,
tnv " w"r .n'bIr,l /" ',,,,crasli t,,eir lIonest.
uiaiidtnv ncirhmrs, who ux,ccteI to nav lOJ
.rntx ~, ih,. JnIinr. Tno tnlhuFs ani wi,o!e-
sai,rs wbE trusted thc ,,cw flrm wrru titus re-
sp""Sts n" .,s. ~, ~ ffs3 tr 'e'," nIhrr u1 rn..
crs, wl,o do not syll,atl,ze with
linn ycrv Extensively In thclr losses.
lad they exercised ordinary business c;tiltioI,,
iIy M hy m':ls wou Hs I'M ye W. eir d." ' ntsrssls
ri IN" Ronnst tcairrs wI,nse h.stness waa In.
,lrc1 bv tl,r rnntil,eux, t,t,eraturs. Am,;nrr
Instance Of Ibis psTuIcions ssste,a af Ewing
NV ,,ctsnnni E,nwictlrrs A youu,r man who
i",l hrr,, ~ sni"su,at, h, tn;t-nn.l.al,fM atur.
for several years BECAME ambitious to 70 into
iu,sims,s ~ i,imsrn Iiis rnIirs cauta, en,,.
ILL.," n Ali. nir:,sant n,iiir,.ss. nul ,,nlimit,l
,"eT it, r,.,t.,i a stnrc Snr wh,th Lc ,,r",aisrti
~ nv. xGWs,n yrar. and i,ljcI Il viii Nh az.
srlicnt et'xk Of rvula ubtalncd entirely on
,nsi,'r.a fur n years IL thu end uf
iI,at sur mites Which l,a had re-.
ncWcs rv. 'Ist Two or T ,hrco times were pressed
T.. pay,1s, 1a n s s,s,ts issa ts sojs IT, ;1s|y
o1esa VIZ % W. ,r ~ re,,s 1 ~ ~ III.
inr ,aniur },is u,,rs NJ twc,re md IL rirh,reu
,nnn,hs rS.;,s,rI b,s ntorc 1T, rrr.1ft- ami nj.
In t.af tuNn
uitrY vn,r nni n,,nr fuiirIf 'rhIs tItnr n, ,,se
~! ,x,, 49,, .x,,r"s.i''" ~ H., ''1 't ~ $">
W." q ',,yrem ,v,ru orrx.,
lila .,,,,r. ,,int.i,ns. irt.ln,iiry liza MI, nc-
rr.. ~ =, xis, MI III. ~ ""t. wnr,, ~" s,,u
,,' h,nI t,riv 'miI., a,.,.r ,x,r,I, ir.s Nm,
SInIan, ' IT, ,r,r.,"s ow wt'n f,,tmerI, s"nt
ch"", isr',iUs,' 't,,,,.,, ~, H. Ea"t Hi. ny
..u.ns inI, ,.~,,.s.",nn ~ srss,,t II, ~, .1n
,,"u, ,'n;.,tl.rin.,1 ,- .,,,, ,,.v r..It.s ,st'}
far an ,n,v ~, s",n .io,;y t,nt~ ,o ~ ir thc
i'orl hcht"i ni', 1,,,r r. ,srns. rt, rr,iit ill.,
.v.,a, t,,, .,w mutt, pa' ,,,s E.',,icrtat,f.
1I,s a,d 49, ho i,"hs ''n' n. 49," .eI"r.s II.
rc,,,,.a H. ~. n".,n~ t"s -. tIrH <o,"s ms
.,n,',.t, = y,r,, ,hov ' ~ ,c,. IT." sn,rIt".
"p.. Nh, "ur. = h. ,,v.s mia ns,,,.nns.
tn,itr ca,,,li yns sIatv,,"Ii,nii", rT"t'it. wcTt
.,'ii,y If n ,sr..as wr,,nr ~, I,n - II. t,n.t
iu,. - ,sin'.%. n,"i t ,"t. n.v,, ~ ',,.'..-a
ns" tImi St,''nrr.i r., nr'i, ,rh t,.x = T.",Ti,
,' ,s,,,", M sh,suh, t"r h"r ~ ,,r,." .Sas ,,,,"
i,,., s.n %e s.,a NJ I ~ ~. ,,.,,;,,.s. auup
.. -, ',t,o mn, , E,,s, .ma. H.. .'
ssee u' T., .,'.sar,,,n,. "s st.I e.s'