New-York tribune., 1921-10-16

The trusteeship plan, under which ,
the National Wholesale Mems Furnish
ing Association has taken, over and
conducted the affairs of half hun
dred retail haberdashery stores in all
parts Of the country. has saved whole
salers about 81 900 in possible losses
IN the past year, which would have
been incurred if the usual bankruptcy
course had been taken, according to
Willard B. Stevens, secretary of the
association, who serves as trustee in
the cases coming under the organiza-
tion's jurisdiction.
When the retailer gets into financial
difficulties and the good Offices OF the
association are solicited, either volun-
tarlly on his part, as is often the case,
or through the advice OF creditor whole
salers who belong to the organization,
the first step is tho signing Of a trust
placed in direct control of the business,
with power Of attorney to sign all
papers, including negotiable and nom
negotiable instruments, The business
IS virtually his, to do with as he wishes.
The creditors are called in and sur
Vey OF the business is made. If il is
apparent that the business is a fat fail
ure and cannot be rehabilitated. the
assets are liQuidated at auction or
through other sales method and dis
trlbuted to the creditors. If, on the
other hand, as is more frequently the
case, 1t appears that the business can
be run proftably. Mr. Stevens proceeds
to build II up. Either course prevents
thc well known bankrupt sale, with
] IS unfair competition to other haber-
dashers in the vicinity, which is the
prime object desired in the plan.
Failure Hurts Morale
"Ihe small retailer who fails" said
Mr.. Stevens, "and is able to effect
a composition in bankruptcy on low
basis IL rs his moral fiber, no matter
how honest and ethical he may have
been at the beginning. One failure
usually leads to another, if the man
continues in business. 1t is to pre-
Vent this sort Of thing, and also to cut
down the dissipation of assets through
receivers fees and other heavy ex-
penses connected with liQuidating a
business at bankruptcy, that we have
devised and perfected this trusteeship
plan. When merchant settles with his
creditors cheap he conducts a bank
ruptcy sale at prices which his COM
petitors cannot meet. His competitors
lose, and in turn the wholesalers lose
three ways; first, through the small
ness Of the settlement; second, through
the large expenses OF bankruptcy,
and, third, through the smaller orders
that come IN from the bankrupt retail
er's competitors. Tle usual bankruptcy
means that the retailer buys his goods
cheapIy. say, for 4 half or quarter
of what his competitors pay, ana he
is granted this advantage at the ex-
pense Of the wholesaler.
I'VE want to make bankruptcy DIFF
ficult. We fnd any number of cases Of
crooked failures and we are bringing
them up short when We do find them.
In such cases we try to close the man
out entirely, for he is not the proper
kind OF customer for our members
and does the entire trade more harm
than good
In the majority Of cases, however,
the business is continued. Few out Of
the eighteen cases in the last year have
] been liquidated. On file in Mr. Stew
sens's Office are letters from many re-
tailers who have gone through the as
sociation's trustecship plan ana who
commend it highly. One man in n
large upstate city who took the
course few years ago is now pre-
pairing to buy new store Another
fairly large firm on Fifth Avenue that
got into difficulties short time ago
has been rehabiitated through the
plan and is now making q good profit.