Show j The DAY IN I One learns lears a great deal about bout the I methods of ot the te modern commercial Agency in getting a at t the bottom of a Business b by rending reading an article in Duns Dun's Review of February 6 on the causes of textile manufacturing failures failures fail fail- fai ures in 1931 A standard section of present day mercantile reports which interpret financial st st. statements for the benefit of present and prospective creditors says ays Dun is Js Antecedents Antecedent and His Ills tor tory ory It I is i from this section of the report that the reader gets a glimpse of the men flen who are arc managing mangin the concern concer in which he is interested Among the manufacturers of dresses and costumes and the manu manu- of coats and suits suit who failed In n 1931 there tere were a number whose antecedents and history were wee factory Some of the principals seemed distinctly lacking in ethical standards as shown by their very poor fire records or questionable previous previous previous pre pre- bankruptcies Others had never In their careers given Iven evidence e of a sufficient inita tive to warrant the expectation that they hey could extract extrac the full ful benefit benen from rom any situation c A discussion of the method of op op- ration usual usually follows the outline of history in the modern credit report report In n the present survey a number of causes auses of failure were found in the business practices of the concerns anal analyzed zed Coat Cont Coat suit suI dress and cos cos- turne tume manufacturers wore were given to shipping hipping merchandise on approval wIth the result resul that their merchandise disc dise returns were excessively hi high h. h In n a few groups there was WS a tendency tendency ten ten- dency among the failed concerns to produce goods in too high a price range A number of concerns in every group became embarrassed because e of f laxity in credit policy Granting long ong term credits credit and taking unwarranted unwarranted unwarranted unwar unwar- ranted credit risks generally proved fatal atal fatal Doing business with wih a restricted number of accounts was responsible e. e 1 for a number of at failures A manufacturer manufacturer manu manu- was content to deal with a n certain group of customers customer an and madeno made madeno no attempt to increase his clientele When deflation set in his customers were equally affected with the te rest of or the business community a n few sharply failed and ad others curtailed purchases 5 t a 9 I Te The reports on the wholesalers of dry goods and knit kni goods and of the work shirt and the overall overal manufacturers manufacturers who became embarrassed in 1931 revealed as a a cause caust of failure peculiar to them a dangerous tendency tendency ten ten- dency to sell too varied price prie ranges rages and too diversified products In other words these concerns had not practiced adequate standardization A number nuber of immediate reasons for failure were found In the balance sheets and income accounts account of the embarrassed concerns The financial report section in which these state state- meats ment were analyzed showed con elusively that a superficial knowledge of financing was generalA general general A man may be engaged in an occupation for a number of or years and learn thoroughly one important phase of an industry In this time he does docs not necessarily learn lear an anything anything any any- thing about financing Too many associate associate as as- themselves with wih two or three others each a a specialist in some phase of or the Industry and start an independent concern While they are all al able technicians no one is isable isable isable able to administer the finances In Ina a relatively short time the financial position becomes involved A substantial number of concerns which lat later r became embarrassed had consistently kept low bank balances had changed their bank accounts account frequently fre fre and were finally deprived of bank credit a short time lime before the actual failure Few of these concerns paid loans loas frequent frequently Being compelled to renew re renew re- re re new wherever possible the majority were always borrowing at ot the bank bankas as S lon long as they were permitted to todo todo do so |