The following story from Monroe Enquirer, says the Statesville Landmark, could just as well have been written from any other town in North Carolina as from Monroe:
A Monroe merchant, who runs a general store, told me of a young married man who had gone to him several months ago requesting credit for a lot of groceries. The merchant knew the young man’s father to be a most honorable man, but he did not know the son. However the merchandise was duly delivered, but a mortgage was taken on the young man’s milk cow—as a precaution. The young man said he had some cotton he did not wish to sell at the time, but would soon settle the account.
A few weeks after the transaction, the merchant glanced out upon the street and saw the young many driving home a nice new automobile. Of course, then the merchant was not so sure of getting his pay in cash for the groceries. He requested payment and the young man said: “If I don’t keep up the payments on the car, I will lose it.”
“Then you are going to lose your cow,” the merchant told the young man.
I saw the merchant a few days ago. He was trying to collect for other goods sold on credit to other persons, and was making little progress. “The country is busted,” he said, “and automobiles have done it.”
“Oh, no,” I assured him: “your customers you have credited are perhaps purchasing goods from other merchants who will credit them. You don’t know who is defrauding your fellow merchant down the street, nor he you.”
“Well, we’ve just got to do something,” said the merchant, “for automobiles are about to break the country.”
“Automobiles, your grandmother!” I told him. “It’s you merchants who are about to break the country. If you would only quit crediting everybody, there are lots of folks who would have to go to work.”
“Maybe you’re right,” said the merchant.
Another thing I told him: “You ought to observe how prosperous and how well the stores of Monroe are patronized that are selling for cash and giving folks bargains.”
Also a merchant told me the other day that he would possibly lose 24 per cent on customers he had credited, and besides that he had several hundred dollars’ worth of worthless checks in his safe.
There should be no fault found with a merchant or any other business man who wants to do as much business each day as he possibly can. At the same time, a business man must pursue a policy that will insure not only the permanency of his business but that will be best for his customers. When he sells on credit, he naturally expects to collect. What happens? He has to pay the follow from whom he buys. He has to borrow to do this. When his credit is exhausted, there is nothing left except bankruptcy. As long as he can borrow, he has to pay interest on the loan and this expense has to be added to his cost of doing business. This is passed on to the customer who pays, adding to the cost of what he buys, an extra cost he ought not to have to bear. The result is that he looks elsewhere for the merchant who does not do a credit business and who does not have to add on the extra to take care of what is lost by the fellow who does not pay. So the merchant who extended credit and failed to college lost the trade of the one he credited and the one who paid for what he got. Added to this is the loss of the goods he sold on a credit and for which he failed to collect and also the interest on the money he borrowed to keep going until he broke.
The business man who does a promiscuous credit business can not expect to compete with the fellow who does only a limited credit business or extends no credit at all. The former has an added expense that the latter does not have and can not bid for business at as low price. The majority of buyers are honest and entitled to credit, but they would rather pay cash and buy at a price minus the cost necessary to take are of those who will not pay. The trouble can not be blamed on automobiles. The automobile salesman’s methods are more business-like than the merchant’s. He makes sure to get his.
From the front page of the North Wilkesboro Hustler, July 22, 1925
newspapers.digitalnc.org/lccn/sn92072938/1925-07-22/ed-1/seq-1/
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