Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1918-12-03
new BUSINESS
METHODS WILL
FOLLOW The WAR
Trade ACCeptances Now Be.
ing Employed Certain to
Play Big Part in Mer.
. camille Affairs. 49,.

Trade acceptances are instruments
which quicken sluggish open book
accounts into activity.
This was the definition given by
Waiter w. Head of the Omaha Ma
tional bankNo the members of the
Advertising league at the Fontenelle
hotel last night.
The same view was taken by
Charles NJ. Wilhelm of the Orchard
Il Wilhelm company, who spoke on
the same subject from the retailers
standpoint.
While the trade acceptance is be-
ing used very largely in the east
and is being used to some extent
by the mercantile interests of Oma-
ha there still is~-a great lack OF
knowledge on the part of the public
of its possibilities.
In Nature of Draft.
Trade acceptances, according to
Mr.. Head, were used in this country
prior to the civil war and is one
of the time-honored business meth
DDS of Great Britain, France and
Germany. 1t is negotiable certif-
cate of Indebtedness arising out OF
mercantile transaction, an instru-
ment bearing the endorsement of
the buyer and seller, agreeing to a
certain and fixed date of liquidation,
and> which is in the nature of a
draft on the purchaser.
The lack of such a system has
been handicap to American bust
ness men seeking to transact export
business with foreign countries and
especially with the South Ameri-
can republics.
The advantages of trade accept
ances are that they make shorter
extensions of credits, prompt pay
ment of obligations, more careful
buying methods, all Of which tend
to bring about greater solvency in
business.
Has Quick Growth.
Although the system has been in
practice in this country only since
the organization of the federal re-
serve banking system it has had con-
siderable growth. Two years ago,
in 1916, the federal banks had dis
counted only 100000 worth of this
kind of paper, yet in August of the
present year, one of the dullest bust
ness months, the federal banks of the
country had gone into the open
market and had purchased $13,000,-
600 of this kind of paper and had
also discounted $8,800,000 worth
for their customers.
Form Special Banks.
In New York, $5,0OO,00O corpor-
alton has been formed for the sole
purpose of dealing in trade accept
ances and the organization of
similar bank is on foot in St. Louis.
AS the system grows such banks
will be organized in all of the larger
cities of the country and there will
also be competition for this class
of paper.
While the trade acceptance may
seem novel and may be slowly
adopted by the business world in
general it is the natural evolution
of modern business methods, was
the contention of Charles M. Wils
helm.
Heavy export trade will call for
increased capital right on the heels
Of the domestic demand. Mr.. Will
helm stated he had studied a chart
which had shown that there had
been an increase in the costs of 100
basic commodities in this country of
liz per cent from 1915 to April of
this year and this had been still
further increased to IFS per cent at
the present time. 1t requires "a
as much capital to transact the same
volume of business now as it did in
1915.
War May Relieve Tension.
In order to relieve credit condi-
tons during months of the year
when there are dull business condi-
tons and when the seller has to
carry the buyer by credit extern
SONS trade acceptances will relieve
tension by being discounted in re-
gional banks bringing new streams
of cash, and by their liquid charac-
ter automatically affording financial
relief. r.
For the retailer it will help eli
inmate the loss resulting from dam
aged returned goods, which is esti-
mated by expert statesticians at Is
per cent. 1t will, also do away with
accounts past due which represent
liability to most going concerns. Mr..
Wilhelm explained that the invest
'ment of capital in business concerns
operating under old credit systems
was represented\in money invested
IN the plant, in merchandise and that
carried in open book accounts. the
latter item representing 50 per- cent.
Both addresses we're listened to
with great interes. by a large gath
ering of business men. Many per-
tinent question were asked as to the
operation of the proposed system
and it was also found that one Oma-
ha concern has had it in operation
for nearly two years and more than
90 per cent of its trade acceptances
had been liquidated on date of ma
turity.
VioIe Hamilton Denies