The Wichita daily eagle. [volume] (Wichita, Kan.) 1890-1906, 1896-07-07
CREDIT AND CONFIDENCE.


We are told that the agitation for the
restoration of silver TO its place as money
undermines credit, destroys confidence
and thus paralyzee industry. once cease
this agita1aon, and, declare the gold con-
tractionists, capitalists who now hesitate
TO loan their money, fearing repayment IN
deprecated dollar. will hasten 10 invest
their funds in productive enterprises, that
consequently industry VIII revive and
prosperity rteurn.
Want of confidence is loudly proclaimed
as the source of all our ills, but want OF
confidence is the effect, not the cause OF
industrial stagnation- Confidence Is based
on credit and credit on the ability of debt
ors TO promptly pay their debts. When
the retail trader cannot dispose of. for
cash and at fair prices the goods he buys
from the wholesaler on credit and as a
consequence is obliged to ask for re-
newal in whole or part of the note given
in payment for such goods when due,
then his credit is impaired and the con-
idence Of the wholesaler in the ability of
all other retailers, similarly placed. to
promptly meet ther indebtedness IS de-
stroyed. And so in turn, when the whole
saler is unable to collect promptly for the
goods sold 70 the retailer. he cannot col
lect the necessary funds to pay promptly
his Indebtedness to the manufactures or
other producers from whom he buys
the goods in the first place. and as a con-
/ sequence his credit is impaired, and the
confidence born of prompt paymnt of in
| debtedness is destroyed.
Thus want CT confidence is born of the
inability Of debtors to promptly take up
their Indebtedness when due, and the in
ability of debtors TO meet their indebted
ness is born of their inability to realize on
their property. Hence credit and conf
dence is based primarily on property
When property is rising in value, then
the debtor can readily find a buyer for
and readily realize on his property and
consequently promptly meet his indebted
! ness. But when property is depreciastng
then credit is impaired and confidence de-
stroyed, for the ability OF the debtor 10
pay is dependent upon his ability TO re1-
lie on his property, and while property is
depreciadng ii IS unSakable save At a.
sacrifice, for the would-be buyer hest stes.
saying 10 himself: Tomorrow 1 can buy
cheaper"
But it is not only inability to sell. but
| inability TO collect promptly for goods
sold, that impairs the ability Of debtors 20
promptly pay their debts, and hence I'M
dermsnes credit and destroys confidence.
It Is therefore in falling prices that we
find the source OF the want of confidence
OF which we hear so Yuch. The reSSora-
ton of confidence. We are told, Is all that
is reeded 10 bring renewed prosperity,
but how IS confidence TO be restored while
prices are falling, while the value OF prop
erty. the basis Of credit IS deprectating,
and while the ability Of the debtor TO
meet his Indebtedness as being impaired
by the shrinl1age of his assets? Just as
the creditor SEES the property of his debt
o. on which he relies for payment de-
preciat1ng IN value, he must lose con-
fdencs. for the property IS the security
for the prompt and fun payment OF the
debt.
So when money Is approaching and
prices falling. credit is impaired and con-
ndeuce lacking Failing prices destroy
the ,,rOfits Of Industry, and consequently
lead 20 Gun .si'ed / -odUct;cu. the throw
Ing OF wee earne.S out Cf work and
lowe vages. An a. tins trcome OF the
vase-earner f. cut into by enforced Idle
ness and lower wages he must res<rsst his
purchases and for what he has bought
on ored.t he cannot pay promptly. Con-
seuuently. jus, as the wage-esrner u in
poyerished his credit rs curtzIed. for the
/ corner groceryrnan, who was g-ad 10 eel
10 him OK credit 50 long as be promptly
paid HE weekly or monthly bill, and so
| long IS Re knsSF his customer was work
iuy regularly and az good wages. hssitsaes
TO sell on credit just as sooa as ne hnos
his customer. the wage-ea-Eer' no longer
e. work. Eor when be knows the wage
Garner - earning nothing he doub,s his
ability 20 pay promptly his weekly Bill
/ The result - THAI when the wage-earner
I = pfrched for m0oey he mus pay cash
/ for al he buys. and he necessity OF Do
t-g s.. and the scarcity Of money AZ Us
/ command forcss him 20 buy IN small guar
I ties and 10 pay CORES pondlngiy hish
{ prices.
Ana lust as TIE vzgs-earner finds his
| crssti. impaired when ogt OF work. The
+ farmer ar1s his creditor, - other z-orlis.
/ the confidence % those from whom n
buys n hls Assl.ry 20 pay-lnpasred jusi
a. prices IAN ard BIS labor b~coHes -
{ rsrnua.ratfve 81. as he becomes less
/ eb.e % pay promptly. - finds that tsaose
I from whom be has bsen in THE habit q
buying Or credit hesitate 20 81 for zHy-
/ tang but cash L - trze. rhe pro--l'ce-s
I Of some ar1scies. ~rste t5ey lhslike 70 eel
- crezz. are osEze1 20 % 50 % haf
F market for their rsroduor: but q = noos
+ the Iezs -rre thar e the fzrus- = In
< pave-zshed rs c-e5H - fmTair-i- Al
g. 8 3 zsrh a. prcdUcsrs
I Coahseaoe VII return TbeE. tbe rEIinczs
I fa-l n pre- cue 20 the ap.reess'to1 q
/ sod s. checked. AID vhez iz1uztrT D.
cones p-01taa3e. -. hes0rr- fST eouh-
( ss-se = seae-sse1t soieiy o. the ability .
+ tae 5c5.ers - rzy fhsr 1e5ts. ss1 -
Ably T. sez<rsezt eutlT~ly upon ne
value q goods o. which credits are graft