Saturday press. [volume] (Honolulu, H.I.) 1880-1885, 1884-11-15
THE cREDTT SYSTEM.

Several weeks ago the Press con
tanned an editorial article commenting
unfavorably upon the three months
credit system Of this town. We have
always thought that long retail credit is
unsound in principle, and injurious
alike to buyer and seller Our position
is strengthened by the following extracts
taken from a recent editorial review in
the Sacramento Record Union;
One of the most important, certainly
one Of the most interesting, volumes
that has come from the government
printing office in many years is that just
out, embracing the reports Of / "a con-
suls of the United States, in answer to
a circular from the department of state
The book has nearly GOO close pages,
and comprises library Of concise in
formation drawn by our representatives
abroad from official resources concern.
ing the extent, character and results of
the credit systems OF England, Ireland,
Scotland, Wales, Germany, Belgium,
Holland, France, Switzerland. Italy,
Portugal, Spain, Austria Hungary, Den.
mark, Sweden, Russia, Canada, Mexico,
Central America, all the governments
and dependencies in South America,
the West Indies, all the governments
Of Asia, and all the governments of the
Continent of Africa and of Polynesia
1t will be seen that such a multitude
of reports and tabulated statistics, all in
response to sixteen brief questions relat
ing to credit, sumptuary laws concern
ing credits, proportion of credit to the
volume of business, extent of losses in.
cidental to business, effect of credit
upon laborers and artisans, the advan-
tages to cash buyers, conspicuous evils
of the credit system, bankruptcy relief,
readily made and lost fortunes, etc,
must be of interest to all who study the
economic phases of trade and com
mercia venture, as well as to students
of civilization s,eking to fathom the
causes of pauperism and the problems
of the labor question.
1t is, of course, impossible to give
any accurate idea Of the burden of the
reports in an ordinary newspaper article.
The work should be possessed by every
leading merchant and large dealer and
manufacturer and read with deliberator.
Such perusal would result in disseminat-
ing a vast deal of useful information,
and serve to corret erroneous and con-
firm sound ideas relative to the present
status Of the system and great number
OF cognate subjects. But we may say
that in the great majority OF cases the
testimony is that credit certainly stlmu-
lates trade; that the people of the world
are not averse to contracting debts; that
there are few sumptuary laws concern
ing credits; that cash buyers have de-
cided advantage in credit discounts and
in safe business; that retail credit is
alike injurious to creditor and dealer;
that large amount of pauperism is in
vast amount of human misery and
improvidence is fostered by the same
system; that a credit system among
large dealers and jobbers is necessity
and not weighted with serious ills, and
that without it commerce could not be
carried on between foreign countries or
between producers, jobbers and retailers
in most countries.
b. As to the classes of evils of credit,
the report shows that within proper
limits credit is recognized in England,
as in all modern communities, as useful,
and the evils of it reside in its excess
Invariably the lower classes suffer most
from the ills Of credit. The large class
of men who come into small legacies,
or hoard up small sums and seem
possessed of an uncomfortable desire to
"go into business" are great sufferers,
They lack experience, they sell upon
credit, their customers are largely bad
in repayment; the management is apt to
be loose, and, as their small capital is
tied up largely in supplies crippled by
credit, they soon come to grief To all
such the granting Of credit is a positive
evil