The Hawaiian gazette., 1883-05-09
.h8GOnS.
rhs open Aeeount vs.. the Note sy.tcm.


The following advice from the Public Pri"ts''
may not come amiss here: Perhaps there is
no portion Of the United States where business
is carried on in such a slovenly and loose man
ner as il is upon the Pacific Coast; and the re-
suit OF this is, that the failures arc more
numerous here TO the population than in any
other part of the country. The fault lays en-
tirely with our Wholesale merchants, in eX-
tending credit to irresponsible parties, and TO
the careless manerC taking and collecting set
Elements of accour l. In the Eastern cities,
when wholesale house sells country mcr-
chant bill Of goods, it is the usual custom TO
take a note in settlement at three, four, five or
six months, according to the character of the
goods sold. For instance, staples, or goods
that carry small margin Of profit are sold on
q short credit OF two or three months; and ar
ticles carrying larger proportion OF profit arc
sold or four to six months, but not upon open
account, a settlement by note is demanded, and
that note must be paid at maturity or the max
er loses his credit entirely. Now what is the
natural result Of this system of taking notes?
1t makes the buyer cautious; he knows exactly
what the liabilities are that he has to meet
each month, and buys accordingly; it makes
him also collect more promptly from his Gus
toners, and by so doing saves himself many
losses. In fine, the system of giving and TAX
ing notes in settlement of accounts makes both
the buyer and the seller more cautions in their
purchases and sales, and therefor is a safe
guard TO business. The way business is con-
Quoted on the Pacific Coast is aboihinablc. A
country merchant comes TO San Francisco, or
Portland, or Sacramento, buys say from a doz-
en- different wholesale houses some thousands
of dollars worth Of goods, upon the theory
that the goods are to be paid for at four
months, or if you can't pay at that time, says
The accommodating wholesaler, why do the
best you can for us, and We will charge you
interest until you do pay up. Here is the en-
tering wedge that finally " breaks the couu-
try merchant He not being, in most instances,
a trained business man, does not count the
cost of such an arrangement There being no
definite paying time, he naturally allows him
self to overbuy, and he gets overloaded with
stock which he is unable to sell, and then in
terest accumulates and accumulates, until,
finally, he has TO settle up at forty or fifty cents
on the dollar. Now if the Pacific Coast mcr
chants would take profit by the experience of
their Eastern brethren, who have been thro'
the mill, they would only sell upon the note
plan, and have it understood that when a note
was due it had to be paid, and if it was not
paid at maturity, credit would be stopped TO
the maker Of the note, then business would be
IN much Detier shape.
linen again. inc wholesale merchant VINO
does business on The note plan can DO 1t upon
a much smaller capital than the merchant who
does business upon the Open-acCount go-as-
you-please system nTin mat mas capital
oil from hity 10 a hundred thousand dollars
ana q gooa reputation ana trade, upon Ihe pan
oil taxing hoies Ior safes cna 10 yearly Dusl-
ness oil iouT hundred and NIFTY to ilve hundred
thousand dollars or even from SIX 10 seven
hundred thousand II the creulIs are SNORT
because theY can open an account al any
DaDH ana get their customers paper discount
ca; PUP II tey 40 business on inc open account
pian' they coulu not 40 nan lhe business the
hrm could that conducted It's business upon
the note SYSTEM and would require double the
capital because they couiu no' Dorro" money
from DahA upon open DOCK accounts Inns
is lhe reason tlaI Oaillornia merchants are un-
aersolo py inelI Eastern cohireIes. an East
eIi mn VIII IN start business Win CASH Gapl-
q