A BLIGHT ON TRADE.

Taranaki Herald, Volume LV, Issue 13945, 28 April 1909, Page 2

A BLIGHT ON TRADE.

Visitors to New Zealand who are told that there is a financial stringency in the Dominion, that money is scarce, must find some difficulty in believing the state-, ment when they see people spending so freely in travelling about and in amusements of. one kind -\nd another. If a stranger had spent the last four months or so in Taranaki and had seen the people crowding to the various race-meetings and to put their pounds on the totalisator* had travelled by the excursion trains and noticed the welldressed passengers on holiday bent, had visited the theatres, circuses, sports gatherings, and i other amusement resorts, he must have thought: "Well, if money is ! scarce in Taranaki, what must it be like when money is plentiful ?" Yet if he could look below the surface a little he would probably find that the complaints of scarcity of money are chiefly due to the freedom with which the people sp^rnd on their amusements while in very many cases neglecting to pay their store bills. If he were of a lreflective turn of mind and could look behind the scenes he might wonder how this man or that had the — what shall we call it ?— the assurance to elbo. w out of his place at the totalisator the | storekeeper to whom he owes a long overdue account ,and to flaunt under his- creditor's very e\es the money he has to burn. The storekeeper probably takes it vll as a- matter of course, because 'ie may be acting in exactly the *ame way towards the merchant ,\hose bills he has had extended. \nd the merchant may think there is nothing wrong about it \ll because he has perhaps in the sight of his banker, whose request for a reduction of his overlraft he has failed to heed, invested his "fiver" on the favour'te. These remarks have no particular local application ; they are •lfrecl to illustrate what is going on more or less everyday all over \ T ew Zealand. The gambling Spirit and the craving for amusement and excitement have so vtrong a hold upon many people that they fail to realise that it is ■oally dishonest to gamble with, >r spend upon luxuries and amuseTients, money which, is owed to -•i editors. We do not mean, of course, that no .one should spend aoney in these directions until !ie has discharged his every liability, but that people who plead Ibat they cannot pay their bills vvhen they are due should not in--ur unnecessary expenditure. They do not regard" it as dis'lonest because custom has in a •nanner sanctioned it, and they nean to pay when they can. At the bottom, of it all is the vicious credit system upon which 30 much .)f» the trade of this country is conducted!. The banks give the merchants credit, for it is profit\ble to them to } do so; the merchants give credit to the retailers, who in turn allow their customers, encourage them indeed, to run 'iccountsl These accounts may be monthly, at' iir^t, but after- a while they get behind, and an unduly laTge sum grows up in the books of the storekeeper, who presently finds himself on that account unable to meet the merchants' bills, and has consequently to seek more accommodation. So long as the merchant's banker is willing and able to finance him to the fullest extent all may £0 well, but a time comes when the banks cannot make further advances and must have overdiafts reduced; then there is financial stringency and a scarcity of money. No one will question the soundness qf the foregoing; but what is the remedy and who is to apply it ? The remedy, obviously, is a gradual curtailjnent of credit, and it should be applied all round. In some degree it lias been applied already, •but there is more than a danger that as soon as the financial stringency is removed at the top of the tree there will be a general relaxation of effort to bring about a sounder system of trading. If the wholesale people were to keep up the pressure, even to give the screw an occasional extra turn, they would force the retailers to insist upon prompt payments by their customers and to reduce the amounts on their books. A hard and fast system of cash trading is probably impossible of attainment, though every trader knows that it is the best system. Every trader is well aware also that the credit system is abused, but generally he is too anxiouifto maintain his monthly turnover to refuse unprofitable customers who want unduly long credit. Excessive competition is largely responsible for the evil, encouraging, as it does very often, people to buy more than they can well afford,^ and articles they would do without if they had. to pay cash for them. It is, we are fully aware, a difficult thing to change a' credit system for cash trading, but every step taken in that direction .will make the next step easier. During the last year there has been an enforced curtailment of credit, and the commercial community is the sounder for it. Unpleasant as the process is, it would be better to continue it

than to relapse into the old ways, and tlie very fact that people are able to spend so much upon amusements is proof of their ability to stand the continued application of the screw.