The Complete English Tradesman (1839 ed.)

Every tradesman both gives and takes credit, and the new mode of setting it up over their shop and warehouse doors, in capital letters, No trust by retail, is a presumption in trade; and though it may have been attempted in some trades, was never yet brought to any perfection; and most of those trades, who were the forwardest to set it up, have been obliged to take it down again, or act contrary to it in their business, or see some very good customers go away from them to other shops, who, though they have not brought money with them, have yet good foundations to make any tradesmen trust them, and who do at proper times make payments punctual enough.

On the contrary, instead of giving no trust by retail, we see very considerable families who buy nothing but on trust; even bread, beer, butter, cheese, beef, and mutton, wine, groceries, &c, being the things which even with the meanest families are generally sold for ready money. Thus I have known a family, whose revenue has been some thousands a-year, pay their butcher, and baker, and grocer, and cheesemonger, by a hundred pounds at a time, and be generally a hundred more in each of their debts, and yet the tradesmen have thought it well worth while to trust them, and their pay has in the end been very honest and good.

This is what I say brings land so much in debt to trade, and obliges the tradesman to take credit of one another; and yet they do not lose by it neither, for the tradesmen find it in the price, and they take care to make such families pay warmly for the credit, in the rate of their goods; nor can it be expected it should be otherwise, for unless the profit answered it, the tradesman could not afford to be so long without his money.

This credit takes its beginning in our manufactures, even at the very first of the operation, for the master manufacturer himself begins it. Take a country clothier, or bay-maker, or what other maker of goods you please, provided he be one that puts out the goods to the making; it is true that the poor spinners and weavers cannot trust; the first spin for their bread, and the last not only weave for their bread, but they have several workmen and boys under them, who are very poor, and if they should want their pay on Saturday night, must want their dinner on Sunday; and perhaps would be in danger of starving with their families, by the next Saturday.

But though the clothier cannot have credit for spinning and weaving, he buys his wool at the stapler's or fellmonger's, and he gets two or three months' credit for that; he buys his oil and soap of the country shopkeeper, or has it sent down from his factor at London, and he gets longer credit for that, and the like of all other things; so that a clothier of any considerable business, when he comes to die, shall appear to be £4000 or £5000 in debt.

But, then, look into his books, and you shall find his factor at Blackwell Hall, who sells his cloths, or the warehouse-keeper who sells his duroys and druggets, or both together, have £2000 worth of goods in hand left unsold, and has trusted out to drapers, and mercers, and merchants, to the value of £4000 more; and look into his workhouse at home, namely, his wool-lofts, his combing-shop, his yarn-chamber, and the like, and there you will find it – in wool unspun, and in yarn spun, and in wool at the spinners', and in yarn at and in the looms at the weavers'; in rape-oil, gallipoli oil, and perhaps soap, &c, in his warehouses, and in cloths at the fulling-mill, and in his rowing-shops, finished and unfinished, £4000 worth of goods more; so that, though this clothier owed £5000 at his death, he has nevertheless died in good circumstances, and has £5000 estate clear to go among his children, all his debts paid and discharged. However, it is evident, that at the very beginning of this manufacturer's trade, his £5000 stock is made £10,000, by the help of his credit, and he trades for three times as much in the year; so that £5000 stock makes £10,000 stock and credit, and that together makes £30,000 a-year returned in trade.

When you come from him to the warehouse-keeper in London, there you double and treble upon it, to an unknown degree; for the London wholesale man shall at his death appear to have credit among the country clothiers for £10,000 or £15,000, nay, to £20,000, and yet have kept up an unspotted credit all his days.

When he is dead, and his executors or widow come to look into things, they are frightened with the very appearance of such a weight of debts, and begin to doubt how his estate will come out at the end of it. But when they come to cast up his books and his warehouse, they find,

In debts abroad, perhaps £30,000 In goods in his warehouse £12,000

So that, in a word, the man has died immensely rich; that is to say, worth between £20,000 and £30,000, only that, having been a long standard in trade, and having a large stock, he drove a very great business, perhaps to the tune of £60,000 or £70,000 a-year; so that, of all the £30,000 owing, there may be very little of it delivered above four to six months, and the debtors being many of them considerable merchants, and good paymasters, there is no difficulty in getting in money enough to clear all his own debts; and the widow and children being left well, are not in such haste for the rest but that it comes in time enough to make them easy; and at length it all comes in, or with but a little loss.

As it is thus in great things, it is the same in proportion with small; so that in all the trade of England, you may reckon two-thirds of it carried on upon credit; in which reckoning I suppose I speak much within compass, for in some trades there is four parts of five carried on so, and in some more.

All these things serve to show the infinite value of which credit is to the tradesman, as well as to trade itself; and it is for this reason I have closed my instructions with this part of the discourse. Credit is the choicest jewel the tradesman is trusted with; it is better than money many ways; if a man has £10,000 in money, he may certainly trade for £10,000, and if he has no credit, he cannot trade for a shilling more.

But how often have we seen men, by the mere strength of their credit, trade for ten thousand pounds a-year, and have not one groat of real stock of their own left in the world! Nay, I can say it of my own knowledge, that I have known a tradesman trade for ten thousand pounds a-year, and carry it on with full credit to the last gasp, then die, and break both at once; that is to say, die unsuspected, and yet, when his estate has been cast up, appear to be five thousand pounds worse than nothing in the world: how he kept up his credit, and made good his payments so long, is indeed the mystery, and makes good what I said before, namely, that as none trade so much upon credit in the world, so none know so well how to improve and manage credit to their real advantage, as the English tradesmen do; and we have many examples of it, among our bankers especially, of which I have not room to enter at this time into the discourse, though it would afford a great many diverting particulars.44

I have mentioned on several occasions in this work, how nice and how dainty a dame this credit is, how soon she is affronted and disobliged, and how hard to be recovered, when once distasted and fled; particularly in the story of the tradesman who told his friends in a public coffee-house that he was broke, and should shut up his shop the next day. I have hinted how chary we ought to be of one another's credit, and that we should take care as much of our neighbour tradesman's credit as we would of his life, or as we would of firing his house, and, consequently, the whole street.

Let me close all with a word to the tradesman himself, that if it be so valuable to him, and his friends should be all so chary of injuring his reputation, certainly he should be very chary of it himself. The tradesman that is not as tender of his credit as he is of his eyes, or of his wife and children, neither deserves credit, nor will long be master of it.

As credit is a coy mistress, and will not easily be courted, so she is a mighty nice touchy lady, and is soon affronted; if she is ill used, she flies at once, and it is a very doubtful thing whether ever you gain her favour again.

Some may ask me here, 'How comes it to pass, since she is so nice and touchy a lady, that so many clowns court and carry her, and so many fools keep her so long?' My answer is, that those clowns have yet good breeding enough to treat her civilly; he must be a fool indeed that will give way to have his credit injured, and sit still and be quiet-that will not bustle and use his utmost industry to vindicate his own reputation, and preserve his credit.

But the main question for a tradesman in this case, and which I have not spoken of yet, is, 'What is the man to do to preserve his credit? What are the methods that a young tradesman is to take, to gain a good share of credit in his beginning, and to preserve and maintain it when it is gained?'45

Every tradesman's credit is supposed to be good at first. He that begins without credit, is an unhappy wretch of a tradesman indeed, and may be said to be broke even before he sets up; for what can a man do, who by any misfortune in his conduct during his apprenticeship, or by some ill character upon him so early, begins with a blast upon his credit? My advice to such a young man would be, not to set up at all; or if he did, to stay for some time, till by some better behaviour, either as a journeyman, or as an assistant in some other man's shop or warehouse, he had recovered himself; or else to go and set up in some other place or town remote from that where he has been bred; for he must have a great assurance that can flatter himself to set up, and believe he shall recover a lost reputation.

But take a young tradesman as setting up with the ordinary stock, that is to say, a negative character, namely, that he has done nothing to hurt his character, nothing to prejudice his behaviour, and to give people a suspicion of him: what, then, is the first principle on which to build a tradesman's reputation? and what is it he is to do?

The answer is short. Two things raise credit in trade, and, I may say, they are the only things required; there are some necessary addenda, but these are the fundamentals.

1. Industry. 2. Honesty.

I have dwelt upon the first; the last I have but a few words to say to, but they will be very significant; indeed, that head requires no comment, no explanations or enlargements: nothing can support credit, be it public or private, but honesty; a punctual dealing, a general probity in every transaction. He that once breaks through his honesty, violates his credit – once denominate a man a knave, and you need not forbid any man to trust him.

Even in the public it appears to be the same thing. Let any man view the public credit in its present flourishing circumstances, and compare it with the latter end of the years of King Charles II. after the Exchequer had been shut up, parliamentary appropriations misapplied, and, in a word, the public faith broken; who would lend? Seven or eight per cent, was given for anticipations in King William's time, though no new fraud had been offered, only because the old debts were unpaid; and how hard was it to get any one to lend money at all!

But, after by a long series of just and punctual dealing, the Parliament making good all the deficient funds, and paying even those debts for which no provision was made, and the like, how is the credit restored, the public faith made sacred again, and how money flows into the Exchequer without calling for, and that at three or four per cent. interest, even from foreign countries as well as from our own people! They that have credit can never want money; and this credit is to be raised by no other method, whether by private tradesmen, or public bodies of men, by nations and governments, but by a general probity and an honest punctual dealing.

The reason of this case is as plain as the assertion; the cause is in itself; no man lends his money but with an expectation of receiving it again with the interest. If the borrower pays it punctually without hesitations and defalcations, without difficulties, and, above all, without compulsion, what is the consequence? – he is called an honest man, he has the reputation of a punctual fair dealer. And what then? – why, then, he may borrow again whenever he will, he may take up money and goods, or anything, upon his bare words, or note; when another man must give bondsmen, or mainprize, that is, a pawn or pledge for security, and hardly be trusted to neither. This is credit.

It is not the quality of the person would give credit to his dealing; not kings, princes, emperors, it is all one; nay, a private shopkeeper shall borrow money much easier than a prince, if the credit of the tradesman has the reputation of being an honest man. Not the crown itself can give credit to the head that wears it, if once he that wears it comes but to mortgage his honour in the matter of payment of money.

Who would have lent King Charles II. fifty pounds on the credit of his word or bond, after the shutting up the Exchequer? The royal word was made a jest of, and the character of the king was esteemed a fluttering trifle, which no man would venture upon, much less venture his money upon.

In King William's time the case was much the same at first; though the king had not broken his credit then with any man, yet how did they break their faith with the whole world, by the deficiency of the funds, the giving high and ruinous interest to men almost as greedy as vultures, the causing the government to pay great and extravagant rates for what they bought, and great premiums for what they borrowed – these were the injuries to the public for want of credit; nor was it in the power of the whole nation to remedy it; on the contrary, they made it still grow worse and worse, till, as above, the parliament recovered it. And how was it done? Not but by the same method a private person must do the same, namely, by doing justly, and fairly, and honestly, by every body.

Thus credit began to revive, and to enlarge itself again; and usury, which had, as it were, eaten up mankind in business, declined, and so things came to their right way again.

The case is the same with a tradesman; if he shuffles in payment, bargains at one time, and pays at another, breaks his word and his honour in the road of his business, he is gone; no man will take his bills, no man will trust him.

The conclusion is open and clear: the tradesman cannot be too careful of his credit, he cannot buy it too dear, or be too careful to preserve it: it is in vain to maintain it by false and loose doing business; by breaking faith, refusing to perform agreements, and such shuffling things as those; the greatest monarch in Europe could not so preserve his credit.

Nothing but probity will support credit; just, and fair, and honourable dealings give credit, and nothing but the same just, and fair, and honourable dealings will preserve it.

CHAPTER XXV

OF THE TRADESMAN'S PUNCTUAL PAYING HIS BILLS AND PROMISSORY NOTES UNDER HIS HAND, AND THE CREDIT HE GAINS BY IT

As I said that credit is maintained by just and honourable dealing, so that just dealing depends very much upon the tradesman's punctual payment of money in all the several demands that are upon him. The ordinary demands of money upon a tradesman are —

I. Promises of money for goods bought at time.

II. Bills drawn upon him; which, generally speaking, are from the country, that is to say, from some places remote from where he lives. Or,

III. Promissory notes under his hand, which are passed oftentimes upon buying goods: bought also at time, as in the first head.

IV. Bonds bearing interest, given chiefly for money borrowed at running interest.

1. Promises of money for goods bought at time. This indeed is the loosest article in a tradesman's payments; and it is true that a tradesman's credit is maintained upon the easiest terms in this case of any other that belongs to trade; for in this case not one man in twenty keeps to his time; and so easy are tradesmen to one another, that in general it is not much expected, but he that pays tolerably well, and without dunning, is a good man, and in credit; shall be trusted any where, and keeps up a character in his business: sometimes he pays sooner, sometimes later, and is accounted so good a customer, that though he owes a great deal, yet he shall be trusted any where, and is as lofty and touchy if his credit be called in question, as if he paid all ready money.

And, indeed, these men shall often buy their goods as cheap upon the credit of their ordinary pay, as another man shall that brings his money in his hand; and it is reasonable it should be so, for the ready-money man comes and buys a parcel here and a parcel there, and comes but seldom, but the other comes every day, that is to say, as often as he wants goods, buys considerably, perhaps deals for two or three thousand pounds a-year with you, and the like, and pays currently too. Such a customer ought indeed to be sold as cheap to, as the other chance customer for his ready money. In this manner of trade, I say, credit is maintained upon the easiest terms of any other, and yet here the tradesman must have a great care to keep it up too; for though it be the easiest article to keep up credit in, yet even in this article the tradesman may lose his credit, and then he is undone at once; and this is by growing (what in the language of trade is called) long-winded, putting off and putting off continually, till he will bear dunning; then his credit falls, his dealer that trusted him perhaps a thousand pounds previously, that esteemed him as good as ready money, now grows sick of him, declines him, cares not whether he deals with him or no, and at last refuses to trust him any longer. Then his credit is quite sunk and gone, and in a little after that his trade is ruined and the tradesman too; for he must be a very extraordinary tradesman that can open his shop after he has outlived his credit: let him look which way he will, all is lost, nobody cares to deal with him, and, which is still worse, nobody will trust him.

2. Bills drawn upon him from the country, that is to say, from some places remote from where he now dwells: it is but a little while ago since those bills were the loosest things in trade, for as they could not be protested, so they would not (in all their heats) always sue for them, but rather return them to the person from whom they received them.

In the meantime, let the occasion be what it will, the tradesman ought on all occasions to pay these notes without a public recalling and returning them, and without hesitation of any kind whatsoever. He that lets his bills lie long unpaid, must not expect to keep his credit much after them.

Besides, the late law for noting and protesting inland bills, alters the case very much. Bills now accepted, are protested in form, and, if not punctually paid, are either returned immediately, or the person on whom they are drawn is liable to be sued at law; either of which is at best a blow to the credit of the acceptor.

A tradesman may, without hurt to his reputation, refuse to accept a bill, for then, when the notary comes he gives his reasons, namely, that he refuses to accept the bill for want of advice, or for want of effects in his hands for account of the drawer, or that he has not given orders to draw upon him; in all which cases the non-acceptance touches the credit of the drawer; for in trade it is always esteemed a dishonourable thing to draw upon any man that has not effects in his hands to answer the bill; or to draw without order, or to draw and not give advice of it; because it looks like a forwardness to take the remitter's money without giving him a sufficient demand for it, where he expects and ought to have it.

A tradesman comes to me in London, and desires me to give him a bill payable at Bristol, for he is going to the fair there, and being to buy goods there, he wants money at Bristol to pay for them. If I give him a bill, he pays me down the money upon receipt of it, depending upon my credit for the acceptance of the bill. If I draw this bill where I have no reason to draw it, where I have no demand, or no effects to answer it, or if I give my correspondent no advice of it, I abuse the remitter, that is, the man whose money I take, and this reflects upon my credit that am the drawer, and the next time this tradesman wants money at Bristol fair, he will not come to me. 'No,' says he, 'his last bills were not accepted.' Or, if he does come to me, then he demands that he should not pay his money till he has advice that my bills are accepted.

But, on the other hand, if bills are right drawn, and advice duly given, and the person has effects in his hands, then, if he refuses the bill, he says to the notary he does not accept the bill, but gives no reason for it, only that he says absolutely, 'I will not accept it – you may take that for an answer;' or he adds, 'I refuse to accept it, for reasons best known to myself.' This is sometimes done, but this does not leave the person's credit who refuses, so clear as the other, though perhaps it may not so directly reflect upon him; but it leaves the case a little dubious and uncertain, and men will be apt to write back to the person who sent the bill to inquire what the drawer says to it, and what account he gives, or what character he has upon his tongue for the person drawn upon.

As the punctual paying of bills when accepted, is a main article in the credit of the acceptor, so a tradesman should be very cautious in permitting men to draw upon him where he has not effects, or does not give order; for though, as I said, it ought not to affect his reputation not to accept a bill where it ought not to be drawn, yet a tradesman that is nice of his own character does not love to be always or often refusing to accept bills, or to have bills drawn upon him where he has no reason to accept them, and therefore he will be very positive in forbidding such drawing; and if, notwithstanding that, the importunities of the country tradesman oblige him to draw, the person drawn upon will give smart and rough answers to such bills; as particularly, 'I refuse to accept this bill, because I have no effects of the drawer's to answer it.' Or thus, 'I refuse to accept this bill, because I not only gave no orders to draw, but gave positive orders not to draw.' Or thus, 'I neither will accept this bill, nor any other this man shall draw;' and the like. This thoroughly clears the credit of the acceptor, and reflects grossly on the drawer.

And yet, I say, even in this case a tradesman does not care to be drawn upon, and be obliged to see bills presented for acceptance, and for payment, where he has given orders not to draw, and where he has no effects to answer.

It is the great error of our country manufacturers, in many, if not in most, parts of England at this time, that as soon as they can finish their goods, they hurry them up to London to their factor, and as soon as the goods are gone, immediately follow them with their bills for the money, without waiting to hear whether the goods are come to a market, are sold, or in demand, and whether they are likely to sell quickly or not; thus they load the factor's warehouse with their goods before they are wanted, and load the factor with their bills, before it is possible that he can have gotten cash in his hand to pay them.

This is, first, a direct borrowing money of their factor; and it is borrowing, as it were, whether the factor will lend or no, and sometimes whether he can or no. The factor, if he be a man of money, and answers their bills, fails not to make them pay for advancing; or sells the goods to loss to answer the bills, which is making them pay dear for the loan; or refuses their bills, and so baulks both their business and their credit.

But if the factor, willing to oblige his employers, and knowing he shall otherwise lose their commission, accepts the bills on the credit of the goods, and then, not being able to sell the goods in time, is also made unable to pay the bills when due – this reflects upon his credit, though the fault is indeed in the drawer whose effects are not come in; and this has ruined many an honest factor.

First, it has hurt him by drawing large sums out of his cash, for the supply of the needy manufacturer, who is his employer, and has thereby made him unable to pay his other bills currently, even of such men's drafts who had perhaps good reason to draw.