CREDIT AND ITS ABUSES

New Zealand Times, Volume XLII, Issue 9629, 9 April 1917, Page 3

CREDIT AND ITS ABUSES

A COAOHBUILUEE’S VIEWS. At the Coach Trades Convention, OH Saturday Mr if. A. Whitaker (Hamilton, Waikato) read's .paper cm. “Credit and its Abuses.” His objoot in writing the paper,was. ho stated, more for the purpose of drawing attention to and creating a discussion on the very unsatisfactory relations existing between 1 the client who seeks and the buainee* man who gives credit; and his remarks wero more applicable to the smaller transactions involved in daily business life, matters involving tlnrgo sums being fixed up only after mature consideration. Tbo credit system bad grown rapidly in tho Dominion aud ho had been much impressed by tho way in which credit was practically forced uppit tradespeople hero in ■ comparison -with parts of Australia, The wonderful prosperity of the Dominion had made ft possible for business' people to “arty large books debts and the keenness of rival trading concerns bad also contributed toward the growth of. tho credit system, until to-day people did not ask for credit, they expected and took it as a matter of course. Ho had. heard an auditor of large practice eay that from his own personal observation he was’convinced that the trading capital of many people was represented by their debts to other people, or in other words, if those people paid their debts they wa'iild have no capital loft to carry, on their own businesses. Tlwit from a man in the know- was not reassuring. Many coachbnilders, particularly in the, country districts, were familiar with' tho customer who payed his . account only onco a year, thereby using their capital for his business. ■ “A close study of the business of the Official Assignee,” added Mr Whitaker, “Shows that by far the greater number of his cases come from the class of men who start small businesses with little capital and still smaller business capacity. Every man worthy of the nama Is fired with the ambition.to better his position, and the right to start on hia own cannot bo denied him. But, coming right home to our own trade, how many instances do we know of where such a man will leave a well-paid service job and commence business on lines which, from tbo very commence; ment, can mean nothing but disaster. When his estate gels into the assignee’s hands the debtor invariably tells tho same tale: —Capital nil, or .very nearly so, too many book debts, sickness in the family, etc. He never- adds that be was doing his work or selling his goods at cost or below- cost, and that he never took stock or employed a registered auditor to advise him as to his position at stocktaking periods. The assignee would take a stand for the right,. but usually the creditors ale too busy or too sick of the usual Story to bother their heads or waste time over the matter, and so the bankrupt escapes, and disappears to other parts where he probably after a few- years repeats too offence, and another ambitious chap takes' his old premises and does likewise. The Official Assignees do their best to punish these offenders and ( they utter warnings and threats,, but,” declared Mr Whitaker, "they are praol ticallv powerless under our present laws and few guilty persons are brought to book: hence a premium is placed oh dishonesty.” It was, be said, manifestly, unfair te the business people who were running their trading concerns and factories on sound commercial lines to be placed in competition with these dishonest people. Was it not time that some move was made to purge from the business community the persons who pracuced commercial dishonesty? Could the State not compel every man starting business to register, and disclose his capital to the merchants with whom he desires,to do credit business? Or, better still, compel every business to be registered and to have a stock-taking and bulonct every year, under tho supervision of s registered auditor, copies of the bal-ance-sheet to be lodged with the registrar of companies? Under this scbem< each business man would at least know his position, and if he so manipuated his stocktaking as to got a false bal-ance-sheet he would have no defenct when he ultimately arrived in tbo a* signee’s bands. It was very discourag* ing to members of their trade, and it fact every trade, to be continually U| against the man who. while murdering his own business, did a great harm te the honest trader. Associations like theirs could do much to put down thii abuse- The very act of association, wa< a factor, and from the result of the bet ter understanding, friendships, and in, terchanges of experiences, methods, anc ideas among members, the way wat made clear for their association, to edu. cate the erring members of their frater. nity, and also to impress on the whole sale hardware houses tho fact that hi giving undue credit, etc., to such peo nle.. they won! inflicting handship oi the very people who were doing theil best to place coachbuilding on a propel business footing.” An exhaustive discussion followed tbi paper, and Mr Whitaker was accorded a hcartv vote of thanks.