PAY YOUR DEBTS

Nelson Evening Mail, Volume LXVI, 28 April 1934, Page 8

PAY YOUR DEBTS

(Contributed by the N.Z. Welfare League.) A . cori cr.poiident, to "The Times" (London) suggested that a. definite fillip to trade would result from a general settlement of outstanding trade debts. The writer's idea was that A. is short of rash to btty. now stock because his debtor B. is unreasonably long-winded, B. urges tliat.jtlie only reasoiV why ho is compelled to lake.more time is because C. 'has There is. of course, uotlpug.-Tiew-'-'-iii this..; ■the. fact that, some take needlessly long credit has filtvavs been a grievance. Tho corrosp^gjlcfft^.Apparently, is dess concerned with“rtlre- economist -explatmliou of velocity., d.f.iclVcuffttion tlfaii vvith the practical/point that/ if -at a. given moment everybody would make, an effort to pay up,- tile v-iyipus circle of outstanding credit WQidd bd .broken,,. .The. .customer who draws part of his.deposit at his bank to pay his purchases promptly, enables the retailer to settle ‘with his wholesaler, who settles with file manufacturer who tlnis-can perhaps reduce his overdraft.

The matter does not end there, for the retailer having paid his wholesaler can place another order which is passed on t.o the manufacturer who can keep his men employed and so on. The benefit to trade would bo undoubted, and every person who pays promptly (there, are many who can do so. bid don’t) is thereby expediting recovery. In any case it seems obi ions that business would bo much healthier if there were a reduction all round in the amount of floating liabilities. which are embarrassing many perfectly solvent concerns.