CREDIT COMPLEXITIES

Hokitika Guardian, 19 September 1929, Page 2

CREDIT COMPLEXITIES

borrower AND LENDER

Many and complex are the problems which are raised by such a case as that of the medical practitioner at Auckland who attributed his bankruptcy mainly to the fact that outstanding accounts had not been paid. “Neither a a borrower nor a lender be,” is a safe axiom, and there can be no doubt that a person who obtains the- services of a doctor on credit is a borrower, inasmuch as he has not paid his fee. Equally so is the doctor a lender when he gives his services without the payment of cash, but with the reasonable expectation that his bill will be met. The case of doctor and patient is by no means isolated; many professions and many aspects of modern life are involved.

The question involves a great deal of psychology, and one of its aspects was very simply expressed by a retail tobacconist, who pointed out that to refuse credit to a good customer might mean that he would lose his customer hut also that, if he allowed credit there was just the possibility that he would not only lose the amount- involved but also the customer of the man to whom the credit had been given. “Such cases are often met,” said tile tobacconist. “When a mart owes you more than a few shillings, and is experiencing financial difficulties, he may have every intention of paying you, and often he will pay you eventually, but he dosen’t like come into your shop unless he has the -cas'h in his pocket. Consequently, lie goes;,somewhere else to buy his cigarettes and his tobacco. It might be cigars, in some cases.” That credit is the life-blood of trade was wisely said in a recent address to, the members of the Auckland Creditmen’s Club, when the speaker pointed opt that cases of wilful default were comparatively rare, and said, what was very interesting, that at many meetings of creditors there was a great deal oif sympathy for the debtor,, whose position was frequently caused by circumstances for which he could not be held responsible. Similiar views were expressed by a number of business men when interviewed on the subject, but it was emphasised by more than one of them that there were instances when it would be better for the man concerned if credit had been refused. “The problem is to know when such is the case,” said one. A curious feature of the credit problem is the difference in points of view which customs has created, or which usage and tradition —who '(knows? have allowed to become established. These cases might well bo clessified, as so many aspects are involved, but one or two will suffice to illustrate the point. There is the case of the newsvendor with whom the amount owing is so small that credit cannot be refused, but in which, ns in every case, the small amounts grow to be large. There is the retailer of collars, ties*and and socks, who is never asked to give credit, and that of the tailor who is seldom asked to do anything else. There is the hotelkeeper who has no such thing as a “slate”—and the other who has; there is the small property owner to whom the delay in a week’s rent receipts may mean a serious hardship ; and there is the landlord to whom no harship is involved. And there are many other cases. The whole problem is so involved and it is so true that “circumstances alter cases,” that it is utterly impossible to lay down a definite scale of conduct.

Debts of honour bring in another phase of a most complicated question but it must suffice for the purpose of a brief article to recall a case in which a borrower was greatly helped by a loan and in which the lender reaped a rich reward for his kindness. Just before the war a needy journalist borrowed £2 10s (from a colleague. The war broke out and both joined up, one in the north of England and the other in the south. One went to Gallipoli and the other to France. The debt had been forgotten by the lender, but not by the borrower. The lender had been invalided home but was going to another battlefront, and ten days before his departure he received a fat registered envelope which contained over £l4O cash. His colleague of ancient days had been invalided home from Gallopoli and had returned to journalism. Receiving sound information about a horse which was running in an important race, and having a few pounds in his pocket, he had a bet himself and pnt on £2 10s ifor the friend to whom the money was owing. The horse won at a long price ancl themonev came as a welcome windfall to the man who had a week’s leave to enjoy before he went back to the front. Curiously enough the friends never met again, for the borrower volunteered for active service at a later stage of the war and was killed.