Year: 1875

II is reported that in 1874 there were in th'


United States $3.50 failures, with liabilities


amounting to SI53, $4,000; in 1873 the


failures were 5183, and the liabilities S228,-


199 900. OF the correctness Of these figures


we can not speak, but they may be presumed


to be approximations, rather under than above


the actual totals. 1t would be interesting tC


know the amount of assets at cash valuation


that was held by these $3.50 unfortunate


houses, bat in the absence Of any statement,


it may for our present purpose be assumed


that the total assets OF the falling parties were


less than half the amount Of liabilities and
that the bad debts which caused the failures
were considerably more than all remaining
available assets


These bad debts, made in Selling goods
bought on credit represent the losses suffered
by consumers 1t is customary, and even ne
cessary. for the wholesale dealers Of the East
ern cities, who do business chiefly on time,
to SO regulate their prices as to leave con-
siderable margin for covering losses. Where
business is done almost entirely on credit





cent, and yet ve,y often found to be too small.
Every credit buyer who pays contributes to
make up the losses which the seller makes by
his bad debts. Thus those who buy on credit
and pay when due not only pay for their own
purchases, but virtually pay for those who
buy at the same house and fail to pay. The
good customers make up for the bad, and the
punctual debtor suff3rs for tie delinquency
Of other debtors to- the same creditor.


If the manufacturer does credit business
he makes an allowance for losses in selling to
the wholesale dealer; the latter if selling on
credit protects himself against prospective
losses when selling to the jobber; and the |
jobber protects himself in like manner when
selling to local retailers or country merchants.
BY the time the goods and wares reach the |
last purchasers or consumers they are obliged |
to pay in addition to three profits the three
allowances required to make up for bad debts.
Those who buy and pay for what they buy
thus pay for those who buy and never pay.


While the channel of transmission from the |
producer to the consumer is seldom a success
sion of exclusively credit dealers, yet as far
as the element of credit prevails in the series
of transactions so far does the last buyer bear
a portion of the losses resulting from bad
debts. The price Of any article which has
reached the last buyer through many hands
is necessarily made up Of much else besides
the original cost to the producer. In the case
of by far the greater part of what is produced
or manufactured at great distance from the
places where it is used or consumed, the loss
on account of abused credit enters as large
in the cost to the last purchaser.
There is no available means to avoid this loss,
except by abandoning or strictly limiting the
use of credit sales. The abuse Of the credit
system is one of the greater drawbacks to the
of our people of all classes, but
more especially to that of laborers and pro-
ducers. The habits Of mercantile and none
AIRY classes practically Offer a premium on
and bankruptcy while loading
hose who pay up promptly and honorably |
With the debts of those who, from extrav- |
'gance, bad management or intention, fail to q
,ay