The Cause of Bankruptcy.

Feilding Star, Volume IV, Issue 3, 16 June 1883, Page 2

The Cause of Bankruptcy.

TO THE KDITOB OF THE STAB. Sib, — On looking through your very excellent leader upon the cause of bankruptcy, I am led to think that you believe the cause of so much bankruptcy to be the great facilities existing for obtaining credit by both the retailer and the consumer. This is so as regards the consumer, but not always so as regards the retailer. I believe there would be very few bankruptcies among the retailers and i&v fewer retailers, if they would take stock periodically, and ascertain how much profit they made during a certain period of time. "W: ydo not all retailers take stock ? Is it because having forced sales at a loss upon cost, they are afraid that instead of shewing a profit it would shew a loss. j From observing the manner of the * business carried on by retailers in many of our New Zealand towns, I am lead to believe that very many of them do not make 5 per cent upon their capital, even small as it may seem, and a salary equal to the trader's value as employe elsewhere, simply owing to the reduced turnover caused by the number existing in trade. Losses on forced sales, change of fashion, causing depreciation in ralueof accumulating stocks, salaries of assistants, insurances, taxes, errors by assistants in not booking goods sold and small articles getting lost. These, and as your article stated, the losses caused by bad debts, are the causes of traders in a retail way having to seek protection of the bankruptcy laws, which trould be in many cases averted by Taking Stock.