New Britain herald. [microfilm reel] (New Britain, Conn.) 1890-1976, 1925-12-11

standing deteriorates meanwhile
the result is more acute to every
one concerned than wouli other
wise be the case. And the more
people mortgage their earning |
power in advance the less future
mortgaging they can do. II all
credit customers did 1t the effect
on buying power would be to make
1t lower than II would be II they
were all cash customers.
Cash buying could be stimulated
greatly by Offering substantial dis
counts for cash. as is the case in
many lines OF goods being sold.
Some other lines, however. cannot
be bought cheaper for cash than
for credit. This is manitestly an en-
enlargement to credit buying,
The city is to be congratulated,
however. that there are only 400
risky accounts in It. and these are
not regarded as bal just risky.
The result OF the announcement
will be that every citizen will make
n survey OF himself and determine
how far he Is mortgaged to the fu-
ture. And that is a good thing, es-
pecially as nobody knows what tho
future will bring.
Another good result OF the rating
announcement will be that mer.
chants will watch their step In ex-
tending credit: and this will be a
good thing for the merchants.
IL every person in town would
suddenly decide not to buy needed
goods or luxuries unless he or she
| could pay cash, 1t would be ca
lamity to the business OF the city:
and Of course, they won't do that.
Credit flows easily in this city be-
cause its citizens on the whole have
the character that justifics It, But
the rating bureau does we'll in
! warning merchants and others that
unjustified loading up" is danger
Gus to both merchants and the
| leaders.
Everyone knows his income AMI
everyone ought to know from that
what he or she can afford to buy.
cash or credit. Some business OBJ
servers tell us that there is danger
that instalment buying has been
overdone In some lines; perhaps
they are right and perhaps they
are wrong. But it is certain that in
stalment buying has greatly stimu-
lated trade in this country during
the past few years. Such stimula-
ton likely will continue because
people find it convenient to buy in
that manner. 1t is up to the mer-
chants, through their rating bu-
rcaus, TO keep an even keel and
watch the situation so that the
comparatively few people who are
too eager to indulge in it do not
mortgage their futures too greatly.
But this mortgaging Of the fu-
ture does not altogether rest upon
earning power or income; It partly
rests upon the bank reserves that
arc in the names OF the people in
the banks. No honest person, even
if suddenly confronted with diff
Guilty in meeting charge accounts,
will become dishonest on that ac-
count so long as he has capital In
one or more banks. He will draw
upon his capital in an emergency
10 make good whatever he owes on
charge accounts. This is a point not
TO he overlooked. as a large pro-
portion of charge customers could
If they really desired to do so
dclyc into their capital and pay for
the article in cash. Having II
charged is TO their advantage by
making it possible not to disturb
their capital while paying for The
article. The charge account system
works TO the advantage Of the pub,
lie as well as TO merchants; ant
also works TO the advantage OF tn,
banks whore money is more likci,
TO remain undisturbed while tn
, purchases are being male.