The times. [volume] (Richmond, Va.) 1890-1903, 1895-02-23
THE NUMBER THAT SUCCEED

We take from the New York Journal OF
Commerce the following highly interest
ing analysis of the figures pertaining to
the average failures in business:
A good many years ago a distinguished
Boston merchant said that % per cent. OF
all men il. business failed sooner or later.
Without any attempt at YerihcatiOn this
general estimate has been repeated often.
sometimes to give young men solemn
sense Of what was before them, some
times to console man who never went
into business on their own account, and
very frequently for the purpose of Halter
ing The SIppOsititiOus per cent. VINO mad
run their business career without going
through bankruptcy.
The very complete statistics Of in
SOlVency collected and arranged by
"bradstreets' afford US the means Of
comparing this estimate that antedated
commercial agencies with the facts, and
we find that the dangers of insolvency
were exaggerated, but the chances OF
achieving success were also oYerStatcd.
For the past thirteen years the number
of ,nsoivcnciCs has not varied much in
normal years from ] per cent. of the
whole number of concerns in business.
This was about the percentage in 1892
the percentage was over this In 1891 and
AoItt anu luSt 10 dbouA | - III 1850 OF iBt
firms in business i'm that year. What
may be regarded as business life We 10
not know, but il l per cent. of the con-
Germs fail annually the chances would be
less than ] in that any particular mer-
chant or firm would fail within any given
thirty years. ON this basis the estimate
that % per cent fail sooner or later is
seen TO be an oyerestimate.
But "Bfadstrects" record shows that
annually an average of li2,OoO business
houses drop out OF existence, and Of this
10000 fail in one sense or another or
these between nine and ten thousand are
failures to settle with creditors. and the
rest, about II per cent. annually on an
average for the whole period. fail TO sue
coed: they go out of business not because
they have made losses, but because they
do not make profits. At this rate, on
general average, the whole business com
munity would go out of business every
ten years. and the estimate Of % per cent.
OF failures in what may be assumed 90
be a business life is seen to be an I'M
derestimate.
As to these failures to succeed We have
no further informat,q The business
that dies with assets enough TO pay its
debts knows its own bitterness, but is
not obliged to disclose 1t. The COM
mercial cadaver that is found by the
WAAS.lt NtNHbuN HibltA III us IDNht'c -
sat upon" by the commercial coroner
and Is finally buried In the Potter's Field
of the Insolvency courts, and Brad
streets" has tabuIated the causes OF
mortality and the general appearance of
the deceased a short time prior 10 his
demise. As in human mortality tables
the death rate is largely the result OF
infant mortality, so in these business
vital statistics the mortality is largely
among the little ones. The death rate OF
per cent is really not high, but an over
whelming majority OF the number that 90
10 make up the l per cent. are very small
concerns. For the past seven years the
percentage OF failed concerns in the
United States and Canada. whose capital
did not exceed $500 was 80. or very close
TO II. The largest departure from this
was In 1898. when the disasters that be-
fell the larger concerns reduced the per-
centage of bankrupts with less than 5000
capital 10 Sc. Six 10 eight per cent. more
had capital ranging from $500 10 $4,000.
From 1883 TO 1872 inclusive. more than
nine-tenths OF all the failing cppcerns had
very moderate or no credit ratings, In
the past two years so many failures have
been caused by the misfortunes Of others
that the percentage OF those who had
good or better credit ratings rose to 81
per cent. in 1893. and fell again TO 70 per
cent. in 1881
OF the business failures for the past
four years insuficienay Of capital 10