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Show CREDIT. "All honor to the man who pays hla debts." In considering this subject, let us havo a clear conception and understanding under-standing of what credit Is. Credit Is "reputation derived from tho confidence confi-dence of others; esteem, honor, reputation. repu-tation. To confldo In tho truth of; to put trust in; to believe." In the eagerness to do business, with tho continual competition that exists, credit Is, perhaps, too easily obtained; and tho truth of tho old 'maxim is literally exemplified: "That which Is easily gained is llttlo valued." valu-ed." This very fact is undoubtedly responsible for a large proportion of tho failures that tako place In business busi-ness affairs. It is estimated that 90 per cent of tho peoplo ongaglng .In merchandising make a failure of It. Lack ot knowledge or oxperlcnco is another feature. It Is often tho,caso that peoplo go Into tho business of storokecplng without any previous training or fitness for t,ho business. Now If wo add to this last feature pf tho Bubject wo are considering tho fact that his capital Is very limited I as well as his experience can ho rea-sonably rea-sonably ask for, or expect to obtain a lino of credit? Does not tho prospective pros-pective storekeeper rcallzo that tho credit department of (he house of whlch.he Is. an applicant, think that theso things will be Inquired into and duly weighed.. Tho burden rests to prove his worth and right to havo jconfldonco reposed in him. I Present conditions. emphatically demand de-mand that closer scrutiny and greater caro bo exorcised In tho passing upon applications for credit, and that a limit li-mit bo placed upon -accounts In respect res-pect to location, volume of business nnd capacity to spread out and increase. in-crease. Tho pernicious habit of pushing push-ing sales irrespective of tho responsibility respon-sibility of the purchaser Is one sure cause of tho periodical panics that I come upon the country. No sooner Is n storo established and buBlnesi commenced, than every druramor In the" country' Is lifter the' 'proprietor' for patronage and , tho persuasive suavo manners of tho averago drum-mor drum-mor aro too often sufficient to catch tho unwary, Inexporlonccd merchant In his not of sophistry. And tho consequence con-sequence is that ho is overstocked with, goods ho docs not need and of a kind.too often for whii:n Uwre Is absolutely ab-solutely no demand. This Is only ono side, ot the difficulty. Thoro Is always a certain class of people Just looking out for tho chanco of a now or fresh storekeeper whom thoy believe to bo an easy mark. Thoy will como and trado with you, beginning begin-ning by always paying cash. Very shortly, however, they will havo somo excuso for asking credit for n wcok, which will generally oxtond to two wcoks or oven a month and end ultimately ulti-mately In a largo account very difficult diffi-cult if not impossible to collect. Hero Is whore a llttlo erperlonco and tact Is necessary and tho cournqo to refuse credit to a source that will not bear amplo Investigation and inquiry. It s tho nggregato that staggors or paar-lyses. paar-lyses. WORKING CAPITAL. Suppose n rotail merchant has a business of Bay $2,000 per month. Or say 100 customers who buy on an average of $20 each. Thoy will pay up' once a month ot various times from first to last of month and somo may leave balances and some not pay at all. Beforo ho collects his bills, his own to tho wholesaler nro duo and he cannot meet thorn. This shows tho necessity of a working capital of tho amount of at least ono month's business. , SPREADING OF PURCHASES. " This lack of working capital and tho dcslro to increase and spread out too often loads to Indiscriminate buying buy-ing and tho spreading purchases. This pornlclous practice, whtlo It may for n brief period conduce to tho desires of tho mo reliant will unquestionably unques-tionably Involvo him In dimculty from which ho cannot bo extricated, and a meotlng of his creditors ensues. A easo In point transpired not a great whllo ngo. A party commenced business busi-ness with a capital of $1,000. In a-bout a-bout two and a half years his liabilities liabili-ties spread out over GO creditors, a-mounted a-mounted to $20,000. A meeting of his creditors was .immediately called to consider how best to protect thorn-selves. thorn-selves. Ono sees therefore how casy It is to obtain credit and how ninny merchants undertaka risks without proper inquiries. Tho following brief extract from a country merchant I to a largo wholcsalo house reveals tho goncral condition existing: "Wo havo a great many accounts standing out which It scorns impossible to collect." col-lect." Thoy thoreforo havo to ask for extensions nnd favors from thoso to whom thoy nro indebted. Tho store in tho country Is too often mado to carry burdens for which it never was Intended. MISAPPROPRIATION OF FUNDS. Docs tho store neod enlarglngfVoj? Is it necessary to build a now onq Tako tho cost out of the store. In it supposed to be necessary to havo n grist mill? Again tho overburdened store Is mado to stand the brunt of it. Is a creamery to be established? Tho storo will do a big part of It. Storo pay of courso is paid out which means increased obligations to your creditors Tho usefulness and safety of somo stores havo been imperilled by taking tho earnings and accumulations and investing them in prospects and mines which too often vanish into thin air. Sometimes excessive dividends are paid irrespectivo of whether or not they are earned. j Tho extending will demand continually contin-ually the closest watchcaro. Should thoro be any difference between a line of credit from, a, merchant and, a loan . from a bank? Tho bank will demandi amplo security and Interest. Tho tendency 13 certainly to curtail credits cre-dits to proper limits, to insist on payments pay-ments whon duo and to mako people , respect the confidence reposed In them to meet every obligation nnd Just dobt with promptness, In this way confidence Is strengthened, reputation repu-tation is maintained, honor Is vindicated, vindi-cated, and tho whole commercial and moral tone of tho community is enlarged. en-larged. X. Y. Dcseret Evo News |