The herald., 1896-06-02
Local, Eastern and Foreign
Commercial Dealings
WALL STREET SPECULATION
Cash Against Credit System ID Retail
Business
A Merchant Presents Practical Suggestions.
What One Cent Per Keg Amounts
to on Nails

w. d. Hopkinson of Paris, Michigan, re-
Gently in an address before the Merchants
Association In his district, speaking OF tne
cash and credit systems of doing business:
mo matter what may be said to the con-
trary. the sooner we. as grocers, come
down to the cash basis IN all business tran an
sactions the better 1t will be for the parties
concerned. To the city merchant, whose
customers are mostly people who 90 no, not
require credit or who, as laborers in shops.
factories, etc, receive their pay weekly;
this seems attainable. and see no good
reason why they could not o adopt the daed cash
] think the city grocer who does credit
business assumes greater risk than the
his customers are transients, moving from
ppioymeMnt pi en- presents itself, while the GUS
lures and usually stay with him. 1t has
been said that the credit system Is the
most ingenious method ever devised TO
promote commerce, but my conclusion OF
the matter is that 1t is the most ingenious
because 1t is the most deceptive method
ever devised for dragging down to certain AIN
fruit of past industry, while credit is the
pledge OF future industry, and when man
OF credit, he is asking you to take, and you
do take, his pledge Of future industry:
and you are. therefore, carrying his risk Of
and yo@ havs m
the customary premium, Losses are inev-
liable II you do a credit business, and we
are in the habit of Understanding these
losses. Did you ever stop to think how
many goods you would have to sell to make
up the loss of a $40 account? Counting the
net profits at the percentage of profit on
which we are at this time realizing, you
would have to sell over $500 worth of goods
to make up this loss! While the cash sys-
tenn is SO very desirable. there are. also
many obstacles to be removed before the
average country merchant can adopt IT,
1t Is such an abrupt departure from the
tlme-honored custom of giving credit that
to state that you are about to adopt the
cash system seems almost equivalent to
announcing that you are on the verge of
bankruptcy. The idea has become prevail
ent, presume. from the fact that so many
discouraged merchants adopt the cash sys-
tenn previous to failure thus hoping to re-
trieve their lost fortunes when too late"
The American Artisan states that ]. IT.
Parks of Boston, the treasurer of the nail
pool receives 1 cent on each keg of nails
sold by the trust, and during the month
of April realized $6750 from this source of
revenue. This is collected through the re-
bers who buy and sell in accordance with
the terms dictated by the trust. This re-
bate is settled every six months, and the
capital thus placed at the disposition of
the trust without interest must have ag-
gregated SCI 500 for the six months ending
April go 1896 If this was an average month
some $3.50 900 is thus kept continuously at
the service of the trust without interest.
Since the repeal of the national bank
ruptcy law II years ago there have been
Ill., 900 failures in the United States, en-
bracing capital of s2,6O0000,000.