The Daily News. THURSDAY, FEBRUARY 12, 1914. THE CREDIT PROBLEM.

Taranaki Daily News, Volume LVI, Issue 192, 12 February 1914, Page 4

The Daily News. THURSDAY, FEBRUARY 12, 1914. THE CREDIT PROBLEM.

There can be no question that those win lived in the earliest times were free from many of the worries that make pre-sent-day life somewhat burdensome, in so far as they supplied their own few needs without recourse to others, but those requirements which must be obtained from an outside source were matter of barter. When it became inconvenient, and at times impossible, to take live stock about for bartering transajtions, some brilliant genius hit upon tint plan of utilising a piece of ox-hide, with ; the crude figure, of the animal thereon, I to indicate.that it represented an equivalent to the animal itself. It was then that the trouble began, for money is said to he the root of all evil, and these pieces of hide were the origin of our pecuniary system, the word being dei rived from the Latin equivalent for ox. As time went on, probably, there were not enough of these tokens to go round, and it is extremely likely that notes of hand were given, just in the same way as at present. The introduction of, coinage from the East, and its manifest advantages, was a great step in advance, hut even that, in the course of time, led to the issue of bank notes, and at tho present day the bulk of the business transactions are carried out on a paper basis—cheques, drafts, bills of exchange ond promissory notes. The consequence is that the credit system has grown to enormous dimensions, but many of our pioneer settlers can recall that in the early days of settlement in New Zealand barter was the pivot of their existence, and it was the storekeeper who saw them | through, just as he does to this day in tho case of bushfallers and mon on road works in the "way-back." Another phase of the credit system is the advances made by the Government, the, banks and the various financing agencies such as stock auctions and mercantile firms. It will be seen that right through the whole of the business stages credit looms so large over the country that its grim shadow bids fair to obliterate tho sunshine of our lives, just as it certainly causes ever-increasing worry, misery and disaster. In the present prosperous state of the Dominion there is not the slightest excuse for the existence of credit. Unfortunately the Government sets a very bad example in this connection, instead of being an object lesson to the contrary. While giving no credit for what the public has to procure from the various State enterprises, there is a woeful procrastination in paying liabilities, other than wages, and even in that duty the Government takes longer credit than is allowed to other employers. However, that is not the question that need be entered upon. The great evil of the day is "booking," and R entails a vast amount of unjustifiable worry and loss, because its ramifications are so widespread. An employer i= compelled by Act of Parliament to regularly pay his employees in cash, and yet it is frequently with the greute.itdifficulty that be can collect even a very small portion of wkat is due to him. How, then, can he possibly pay for liis goods in cash. In this connection, we. are much struck by what the Wairarap.i Age observes. "The great majority of business people," it says, "would be glad to see a purely cash system of trading, or such a modification of the credit system as would make it equal to a cas'i trade. There does not seem to be any good reason why this cannot be done, but while everyone is prepnred to admit that to buy and sell for cash instead of credit would nuke business safer and pleasanter to traders, and at the same time be advantageous to their custov-r-t, who would not have the temptation ! ; i tt the credit system offers to purchase beyoniL their prospective means, while, gaining all the. benefit in the way of. idlteapeniug cost that cash payments always command, no one has yet found a remedy. There is nn ingrained love of credit, inducing the principle, or want 0$ principle, of indolently or carelessly lett'iiig accounts run on, rather than take the trouble to pay as a purchase is made. The gas and electric-lighting companies, as well as the municipalities who trade in these comm"pai.tit , dutVß hit upon a system whereby a. certain price is fised for the supply, but a large rebate is given if the account is paid by a certain date in the following month." Our contemporary suggests that .stoickeepers and others might well try a' similar system. They could substantially increase the booked price of all goods sold by adding a fixed percentage to the price of every article or commodity. On ;> given day of the' following month a little more than the booked percentage could be allowed as discount off accounts then paid, thus making it doubly advantageous to their customers to pay up, while the increased rate paid by the careless or thriftless ones would pay the. salary of the clerk or book-keeper who must be employed to keep customers' accounts and also allow for bad debts. These latter would, of course, Ijj much more limited in amount than they are under the present system.