TOO MUCH SYMPATHY FOR INSOLVENTS

Sun (Auckland), Volume I, Issue 132, 25 August 1927, Page 15

TOO MUCH SYMPATHY FOR INSOLVENTS

STATEMENT BY CHAMBER OF COMMERCE Too much sympathy has been wasted on insolvent traders whose irregular conduct has brought them within penal clauses of the Bankruptcy Act. It is important in the interests of a clean commercial life that such cases should not be dealt with leniently and should not be made the occasion for seriously critical remarks from our judiciary reflecting on the commercial community in one of the most difficult functions of their business —the giving of credit. These comments appear in an official statement issued yesterday by the Auckland Chamber of Commerce, which goes on to state: “It is important that the failure to keep books should be impressed upon the community as a most undesirable practice, and this can only be done if substantial penalties are imposed without exception, where obvious legal duties in this respect are disregarded, CREDIT ESSENTIAL “It cannot be disputed that the giving of credit is absolutely essential for the conduct of modern business, and, from years of business training and experience, those who are managing large businesses have been forced to the necessity of making due and proper inquiries a. to the stability and suitability of their customers to be granted credit. To the end of exercising every care, various inquiry agents and credit associations are called to their aid. “It is therefore surprising to find that comments have recently been made in connection with a bankruptcy case that due care is not exercised in this very important matter by wholesale houses, and further, that this laxity may be caused through the fact that they make an extra charge on their regular paying customers to cover the losses mad© through bankruptcy, etc. “Business men will agree that In times of keen competition such as the present it is an impossibility to make any such provision for covering bad debts, and further, if a considerable increase is made in the stringency of credit arrangements it must re-act unfavourably on the business community and the public In general.”