The Hawaiian gazette. [volume] (Honolulu [Oahu, Hawaii]) 1865-1918, 1916-02-18
BUSINESS FAILURES
AND WHY MENTAL
incompetence and Lack Of Cap
~ ltaI Were Chief Causes s..
During 1915
Bradstreets Analyses the Course
Of Trade For the Year lust
- Ended :

b. adstreet = discusses editorially the
question:, What is a business failnref y
and enters into a broad analysts Of the
reasons why men fail. The credit au-
th0rities take no aceouht Of failures of
I professional men, such as actors, doc
tors, lawyers, stock brokers and real es.'
tate men, nor of old bank ruptcies pass.
ing through the United States courts.
, They oply consider business failures
involving some loss to creditors or in
diyiduals, firms or expectations engaged
in ordinary commercial operations.
a hey take no account Of mere failures
70 succeed, where there is no loss to
creditors. E.E Ak
War Caused Some Failures X
! THAT man is, largely speaking, the
architect of his own fortunes--that, in
i o;her wo Dis, success or failure in bust
ness depends largely upon the indiyid-
uaI--was true in 1915 as in other
, years." Bradstreet 5 says, "but il Is
worth noting that last year, rs in 1914,
eztrancous causes exercised larger
influence than in some other years In.
| deed, not for seventeen years have
causes outside of aud apart from the
| individual had such free expression as
in the year recently ended.
In 1918, ga per cent of the fail.
ures in the United States were attrib-
! uted to the faults of those failing,
, while 25.6 per cent were due to extran
eous causes. In other words, three
tourths of the failures We're attributed
to weak ness Of the individual, as
against 1913 per centNin 1914, S0.5 per
cent in 1913, and SO per cent in 1910.
The proportion due to outside influences
was the highest reached since 1898,
| when 80 per cent wps thought to BE-
centage was Is per cent ia 1910, and
the record Low, 80 per eeht in 1896.
But Incompetence More
Examining the eauses of failure IN
detail, 1t is found that Incompetence
with 800 per cent of all 70 tlures, alone
! showed On increase, comparing with 2S
per cent in 1914, bnt still not equal to
The record percentage of 80.2 in ,9le.
Lack of capital aeeoun+e ed for only
27.5 per cent of the failures in 1915
InCxperience was blamed for STA PEI
cent; nnwise credits, "a per cent; spec
ulation, with o. of / per G mt. Fraud
with only. SO per cent Of failures
showed a significant decline from 1914
when 81 per cent was credited TO THU
cause. ,s.'
I'm non.persoDal causes, specific con
ritions, such as wars, panics, floods RnC
disasters not within the control Of in
'ividuals accounted for 1879 per cent
a proportion not egualed since l90;
@or exceeded since 1904. Outside com
Petition caused 81 per cent of all fail
urts; failures of others with only on.
per cent was less fatal than in aug
year but one, 1910. 49,
Summed up, Incompetence, specif'
conditions and competition were NOR,
fatal than in most years, while fraud
lack of capital and all the other cause
were less hurtful. In other words, 200
personal equipment, combir ed with un
toward happenings, explain the bnk o
the increases in failures IN 1915 over re
rrntlg preceding years. ~
r tnrns of capita employed and o
liabilities reported by failing traders
as well as the ratings allowed those sue
rumbing, support the theory TINT th
rountry's mrrcantile community ha
heen greatly diluted'0f late years.
the United States md Canada, 9S5 pc
cent Of all individuals, firms and coz
poratiops which failed in business dur
ing 1918, had capital amounting to !onl
5000 or leAs. and 96.4 per cent ha,
only very moderate" or no err dit
rating. Failures among good credit
ratings embraced only 80 per cent o
all fad ngs. Failures among very goo
credit rated houses were only 0.4 of
3 p,r cent, the smallest ever recorded
Losses Almost Negligible ~
0 The to al number of failures in tn
United Stats and%Cahada during 1871
' was 2l,d6l. In the United States alon
+ the liabilities, 1884, I9T, l29 were 20 pc
= cent less than in lol4. The per eentag
, Of assets to liabilities was sos pc
cent. Losses of capital amounted t
$l23,000, $40, but in Comparison wit
|, total carital employed, estimated O
eighty billion dollars, thesn were yer
J SINAI indeed. The total volume Of do
e ne tic and foreign trade in the Unite
t states dnr ng '0l5 is estimated ut owe
hv" hundred hiiion dollars. Only 10
he per cont of the American bushes
e houses fQiled dnring 1915, AVID as state
i above over 80 per, cent Of these had