The Cordova daily times., 1922-02-07
TUESDAY, FEBRUARY 7, 1922
CASH OR CREDIT

The question is often asked why prices on commodities are as high as they are in AL aska. The reply most generally IS that the freight rates are the cause of high prices. They have some effect, it is true, but freight rates are not the only determining factor which causes the Alaska merchant to charge more for his wares than on first consideration seems justified.
 One of the biggest reasons behind the ap- parently high prices in Alaska stores that serves as excuses for our citizens to send to mail order houses is the credit system that prevails in all Alaskan towns. Of course the nature of our industries which provide work mainly in the summer has great deal to do with the existence of this evil. But the sys- tenn is far too extensive to be be justified by this excuse.
 This credit system affects prices in two ways First it has an effect on the whole sale price which the Alaskan merchant has to pay in the States. Often times individuals can send to mail order house even for groceries, and get them at prices that the Alaskan mer- chant must pay for them at wholesale. The reason for this if you should ask wholesal- CT in the States is that it costs them more money to do business in Alaska and they must charge for their goods when sold to Alaska firms than when sold to local firms.
 The reason for this, of course, is two fold. They must wait for their money the length of time it takes for the goods to reach the Alas kan merchant and get his payment in return. This means that their money is tied up for a certain period of time.
 In the second place, many of the Alaskan merchants fixed that they must. wait until after the first of the month to make their remittances to the States because they must wait on the monthly payments of their credit customers This adds further time that the Seattle wholesaler must wait for his mon ev and he must charge for the time that his money is tied up.
 The second manner in which prices are af- fected by the Alaska credit system is more decided. The exact situation is this: that where a merchant is doing business of $1OO, GOO yearly, $10,00O of that business will be turned poor collections. The merchant does not mark this off to profit and loss and forget about it. He does not add ten per cent interest to these poor bills This would be of no avail for if he cannot collect the principal what chance is there to collect the interest It means that the merchant must figure on add ing at least ten per cent to the price of a com modity to cover his losses >
 If everyone would pay cash for what they get from the local merchants they could afford to charge at least ten per cent less for their wares. When you send to a mail order house you pay cash, and pay it in advance. You pay cash for many things, why not all7
 There is no excuse for the extensive credit than an Alaskan. merchant must carry. The load reacts on the consumer and he has not realized it. Of course he complains of high prices but never stops to think that his manner of doing business is chiefly responsible for such prices. Freight rates may be a little high and we may howl to have them lowered; but, before asking someone to relieve us we had better try to help ourselves. cash pay ment for what you buy of the local merchant will do more toward bringing prices down than all the lowering of freight rates that could be effected.-Seward Gateway.