The Telephone. PUBLISHED EVERY EVENING. GISBORNE, TUESDAY, APRIL 8.

Poverty Bay Standard, Volume I, Issue 102, 8 April 1884, Page 2

The Telephone. PUBLISHED EVERY EVENING. GISBORNE, TUESDAY, APRIL 8.

In every quarter we hear nothing hut gloomy forebodings and fears expressed as to the future prospects of trade during the coming winter months, blended with complaints about the present dulness of business ; but whilst admitting that we are feeling a little of the effects of the general stagnation which at the present time is more or less prevalent all over these colonies, we cannot but attribute the main effect, so far as we are concerned, to local causes. For some time past it has become the habit to indiscriminately ascribe every failure to “the credit system.” This rule, no doubt, applies pretty generally to the retail trade, where storekeepers allow customers to run into debt while in receipt of a steady salary, with the glaring fact plainly in view that if they cannot pay at present, they cannot possibly do so at a future time; but as far as the wholesale trade is concerned, it is the result of a far different state of affairs, and may be traced to the effect of overtrading and unwarrantable speculation. It has become the habit to divert all the capital, which should be used solely for the purpose of improving their legitimate business, in outside speculations in land, shares, &c., and to rely upon the banks in any time of pressure or dulness. The truth is that honest plodding trading is a thin? all but unknown in the district. No sooner does our trader get the handling of outside capital, than he dishonestly appropriates it to speculative purposes entirely beyond the legitimate sphere of his business, and when pressure comes he has to fall back on the banks to enable him to meet his obligations. How is it that we see such enormous stocks on hand—stocks which if only bought for the ordinary demands on the trade, would suffice to meet all the requirements of the place for many years to come. In this over stocking is also found the cause for giving such reckless credit, and accounts for the large number of bad debts contracted. The goods must be sold at all hazards to make room for fresh supplies. This unwarrantable method of trading can have but one result, and must eventually bring its own punishment, and the sooner such a state of affairs is put a stop to, the better for all classes of the community, and the less frequently shall we hear of suspicious and unaccountable fires, peculiar bankruptcies, and facinorous compositions. When stocks are reduced to the bare dimensions which are requisite to meet the current demands of trade, less credit given, and capital confined to the legitimate purposes of business, and less of the pawnbrokering element indulged in, then we shall hear very little about the present dulness of trade, or of despairing forebodings as to our future prospects.