HEADY MONEY V. CREDIT.

New Zealand Times, Volume XXXIV, Issue 5791, 21 October 1879, Page 3

HEADY MONEY V. CREDIT.

TO THE EDITOB OF THE If EW ZEALAND TIMES. _ Sib, —It is a very remarkable fact that in looking over the returns of the earliest English co-operative store in Rochdale, and also over those of a much later one—“ The Civil Service,” existing in an old country where there is so much competition, the yearly profits are found to average about 33 per cent, per annum (one-third) of the subscribed capital. This fact naturally leads one to ask, How is it that such largo profits can be made? It also answers the question, How is it that the merchants of England make such large fortunes and become large landed proprietors in so short a time ? These co-operative stores, selling their goods at a cheaper rate than other shops, can yet make such large profits, and why ? Simply because they have—(l.) No bad debts; (2.) Their capital, instead of lying in the pockets of their debtors, as far as the particular businessis concerned, unimproved, is being continuously employed in the business. (3.) The loss of time and the expense which the credit system involves is saved. Now, upon whom does this credit system press most hardly ? The reply is, upon those who have small incomes, and little credit. Such buy in small quantities, have to pay, as a rule, for their goods as soon, or almost as they get th»ra, and yet they pay as high as those who get three months’ credit, and much dearer than those who can afford to buy theirs in quantities from-the wholesale merchant at three or four'months’ credit. Now this is a matter affecting more nearly than political schemes the welfare of the working man of small means, and one that is within the easy reach of those most concerned

for settlement. There is no reason in the world why those who are careful and denying in their expenditure should [<av for the credit which the shopkeeper gito others, or for the bad debts which he incur.-. It is unreasonable that the :nau v.'ho pays ready money should not deal to much ter advantage than the man who wan:-: cre--.it, and if the shopkeepers will not rue-ignis'* r -^’ s right on the part of those who deal for ready money, then there is nothing for it hut lliat the reacly-rnoney people must take the matter into their own bands and pr -t-'CI. th’-oi-eh i. against those who are either over-Uaoing o. over-spending their capital by starting cooperative stores. New Zealand is cursed wi’h credit, it would be interesting and profitable to know how much money is annually taken out of tins country by interest on loans, mortgage-’, foreign capital, and discount on commercial transactions. I fear it would show that the labor of the country is very heavily taxed indeed, as well as Us raw products. It is not as if the money borrowed by the country at large in one form or another were all W'-Il spent and reproductive. Too much of it is spent upon comforts and luxuries which carry the money out of the country again. Now, seeing that wo are chiefly supplied with manufactured goods, as well as with most articles for consumption from abroad, save flour, meat, timber and vegetables (for even fiuit and coal are largely imported), it is quite time that we were making the most of our borrowed capital by buying tlie.se things as cheaply as possible. A system of ready-money dealing would accomplish this end, and besides it would induce habits of thrift, increase the working capital of the colony by enabling us to employ every fraction of it continuously, tend to lessen drunkenness by inducing more comfort and less anxiety in the homes of the land, and enable us with greater ease to bear the taxation which is inevitable. —I am, &c.,. Observer.