Buying an Automobile, 1911

"BUYING AN AUTOMOBILE.”

FEBRUARY 1 – 1911

The Busy Man’s Magazine

MR. BLANK, begins Herbert L. Towle, writing in Recreation, has made up his mind to buy an automobile. Can we help him out with some advice? Well, maybe. But first we must ask some questions, doctor fashion, before we can prescrible.

What does he wish to pay for car, equipment and extras complete? What are his ideas as to power, passenger capacity, and speed? Will he use the car for pleasure only, or also for business; that is, to take him to and from the station or office, or from the farm to town and back? Will his wife drive the car? Will he employ a chauffeur? What is he prepared to pay annually for up-keep? Will he use the car throughout the year, or lay it up during cold weather? Does he expect to sell in a year or two, or to keep the car longer? Has he had previous experience with automobiles? Does his territory include bad hills, and are the roads good or otherwise? Will he stable the car on his own premises or in a public garage? On the answers to these questions will depend the selected type of motive power—electric, steam, or gasoline engine; the type of transmission if a gasoline car is chosen; the power, wheel-base, and body style, the tire equipment, and the extras as regards wind shield, top, etc. The question of whether to buy new or second-hand will also be determined by this information.

For restricted town use, such as shopping or making doctors’ calls, and for running from home to business and back where distances are short, there is nothing quite so convenient as an electric vehicle, provided charging facilities are at hand and the necessary skill is available to keep the battery in order. It is frequently profitable to install a charging outfit on the premises, particularly as the skill available in small public garages is often of doubtful merit. The chief drawback to the use of electric vehicles for local purposes is their high price, $1,500 being about the minimum for a small runabout. The cost of current at meter rates per house-power is also quite an item compared with the half-cent or cent per mile paid for the fuel of a small gasoline runabout.

As steam cars are numbered in the small minority and are limited to a few makes, it will suffice to say regarding them that the choice between steam power and a gasoline engine is mainly one of personal preference. The steam engine runs quietly and its power is very elastic. It takes a few minutes to fire up the boiler, but in most cases that is not a serious objection. The principal drawback is that to hold steam and water under a pressure of several hundred pounds necessitates more or less constant attention to pipe joints and couplings, stuffing boxes, packings, etc., of all of which the number about a steam car is rather large. The fuel, also, is in some cars under pressure, and there is the possibility of some pipe or connection springing a leak, and the escaping fuel being ignited by the fire under the boiler. On the other hand, if one lives in a country of steep hills or bad stretches of road, or where deep snow may be expected, one can get more for his money in the way of ability to surmount such obstacles in a steam car than in either of the other types.

Coming to gasoline cars, we find the greater preponderance of choice in four-cylinder engines. The once common one and two-cylinder runabouts have almost disappeared, owing partly to improvements in manufacture which enable a four-cylinder car to be offered for what was once the price of a one-cylinder runabout. Requirements as to power have also increased and to-day the common type of small runabout has a twenty horsepower four-cylinder engine. Such a car does excellent local and suburban service, and it will perform with credit even in long tours if it is cleverly handled. Such cars can be purchased to-day at from $900 up, depending on their workmanship and on the type of transmission they contain. A genuinely high-grade twenty-horse-power car would be worth from $1,500 to $2,000.

If the purse allows, a slightly larger car, developing from 25 to 30 horse-power, and having a motor of 4 to 4 1/4-inch bore, is better for touring. Such a car will negotiate hills and rough roads more easily than a smaller machine, on account of its power, longer wheel base, and greater weight. For equal speeds and mileage it will last longer, also, and for the same reason—i. e., that it does its work more easily. As a matter of fact, its owner is likely to expect a somewhat higher average speed.

The exact speeds reasonably attainable with given cars will depend on the driver and the road. On good level or moderately rolling highways, even a twenty-horse-power car will average twenty miles an hour during a day’s run and have power to spare. With a thirty-horse-power touring car, the average gait might be twenty-five miles per hour, and with a light roadster of that power a thirty-mile average would be possible, though not usual. Such a roadster will easily touch 50 miles an hour for short distances—fast enough for safety.

As for larger cars and higher powers than these, they are desirable only as luxuries. Up to a certain limit, the larger and more powerful the car, the more luxurious is the sensation of riding. Beyond that point, a heavy car rides so steadily that the sense of exhilaration is lost, and one has to exceed speeds of thirty or forty miles an hour to feel that one is going at all. The difference is similar to that between a knockabout and a schooner yacht. In the small boat there is “something doing” every minute, whereas it takes a stiff blow to give one a thrill when abroad the larger craft. A big car is almost necessary for touring, as a small car driven all day on rough roads racks its passengers to the point of exhaustion. But for home use, for marketing, for taking friends to the station, and for short weekend runs, the car of twenty to twenty-five horse-power certainly gives the best return for the money.

Other things being equal, it is advisable for the beginner to take a car of moderate power, certainly not over thirty horse-power, and better somewhat less. If he can afford to hire a chauffeur and pay the bills likely to result, his choice need not be restricted. But the larger his car, the more completely will an inexperienced owner be at the mercy of the chauffeur, and the more difficult it will be for him to master the intricacies of the machine himself. A small car, on the other hand, is easily learned; and when you have learned to look after your car—large or small—in person, your chauffeur is not likely to fool you long.

If a woman is to operate the car, planetary transmission is best, unless she has had previous driving experience. Under other conditions, sliding gear transmission with three or four speeds is preferable, and except perhaps in the smaller cars, four speeds are better than three. An air-cooled motor has an advantage in severe winter weather, but elsewhere water cooling is usually preferred. The ignition system is important; a high-grade high-tension magneto is as good a choice as any.

As already indicated, $1,000 is about the lowest price that one can expect to pay for a four-passenger car intended principally for service. By this is meant regular travel to and from the station or place of business, regular household service in place of a horse, regular calls on patients, if the owner is a doctor, and so on. Indeed, the result is more likely to be more satisfactory if the purchase price is a little higher.

If, on the other hand, one does not purchase with an eye to service, but merely for week-end runs and cooling-off spins after dinner, one may get along quite comfortably with a second-hand car purchased for less than $1,000. This subject will be mentioned in a later paragraph. Meanwhile, the reader is cautioned to bear in mind that, with an old car, a low purchase price is apt to be followed by high repair bills, and that a $3,000 car purchased at the end of six years for $450 is a deal more expensive to keep up than the same car would be if new. The worst possible purchases in the secondhand line are worn-out cars of low first price and worn-out cars of foreign make. The first are certain to go to pieces in one part after another with harrowing regularity. The second, if of good original reputation, will stand up fairly well while they last, but it will be nearly impossible to obtain parts for them, and wholly impossible to get such parts at reasonable cost. If one must spend from $500 to $1,000, it is better to get a small than a large car, since, other things being equal, the former is apt to be in better condition. For the lower figure, indeed, the purchaser will be lucky to get a car of any sort, except the smallest runabout, which will not require an expensive overhauling to put it in shape.

Going to the other end of the price schedule, one finds, as is natural, a much more satisfactory range of choice. Here again, however, the rule holds that high quality combined with high power commands a corresponding price. A high-grade twenty-horse-power car which can be bought second-hand for $1,000 would have cost from $1,500 to $2,000 when new. The best thirty-horse-power cars cost to-day about $3,000, though it is probable that within a year or two $2,500 will be the standard figure without loss of quality.

Assuming decent workmanship and intelligent care, what does it cost to keep a car? Unfortunately, this is a question which can only be answered by citing particular cases, since everything depends on the personal equation and on the extent to which the car is used. If a car is used in moderation—say 2,500 miles per year— and is kept as long as it gives good service, instead of being arbitrarily sold off at the end of the first or second year, both the mileage expenses and the depreciation are kept low. Assuming a car to be purchased either new or second-hand for a total cost of $1,000, driven 2,500 miles per year for six years, and then sold for $250, the yearly expense figures will be about as follows: Interest on car and garage, $75; depreciation, $125; tires, $70; repairs, $60; gasoline, $15; license, $5; sundries, $25; total, $375.

The National Ash Heap

W. Lacy Amy

From The Busy Man’s Magazine, May 1 1910.

(An ‘Ayer Annual’ describes an Eastern publication The Weekly Underwriter v85 1911 reporting that W. Lacey Amy is working on the insurance magazine, Office and Field, of Toronto.)/drf

IF the legislators of America would grasp the significance of the irretrievable loss of $600,000 every day for the past ten years; if the public would stop to think that every tick of the clock records the vanishing of $800; if the newspapers would devote a space in their columns for a campaign against a needless waste; if insurance indemnity were not misunderstood, then America might put in her pockets a great part of the quarter of a billion dollars that goes up in smoke every year. If we would only understand that fires are not the work of Providence or chance, but of carelessness, ignorance or wilful destruction, we might devote our energies to investigations and remedies that would bring more practical results in money saved than all the lofty aims and aspirations of existing societies and associations for the advancement of mankind.

Each year for the past five years there has been in America an average of 104,543 fires reported, consuming in each week three theatres, three public halls, twelve churches, ten schools, two hospitals, two asylums, two colleges, six apartment houses, twenty-six hotels, three department stores, two jails, 140 flat houses and 1.600 homes.

For the past forty years the losses in Canada alone have amounted to more than $170,000,000. Between 1870 and 1892 the loss averaged $3,500,000 per year, and for the last six years of the century $8,000,000. But the fire waste for the year just ended reached a total of $19,234,196, or $52,696 a day, with a population of a little more than 7,000,000 people. During the month of December there were nine fires a day reported, of which 134 carried a loss exceeding $500, and 25 exceeded $10,000.

The record in Canada for the different months of 1909 was as follows :—

January ........... $1,500,000

February .......... 1,263,005

March ............ 851,690

April .............. 720,650

May .............. 3,358,276

June .............. 1,360,275

July ............... 1,390,000

August ............ 2,091,500

September .......... 1,653,000

October ........... 2,376,000

November ......... 1,200,500

December ......... 1,469,300

$19,234,196

And yet these figures give very little idea of the actual monetary loss from the fire fiend. There must be included the cost of the maintenance of the fire departments, the waterworks chargeable to fire service, private fire equipment and insurance. For some of these there are no complete figures as far as Canada is concerned; but the United States, which is in much the same position as Canada, supplies the following for 1908:

Direct fire combustion . $220,000,000

Fire departments ...... 49,000,000

Waterworks for fire service ................ 29,000,000

Private equipment ..... 18,000,000

Insurance premiums in excess of losses paid. . 146,000,000

$462,000,000

The capital required at five per cent, to pay this loss would be $9,240,000,000, a sum equal to the total combined capital of every business interest in America.

To this again must be added the countless millions lost in forest fires, of which Canada’s share was $25,500,000, the resulting impoverishment of the soil, and the millions represented by what is known in insurance circles as “consequential loss,” that is, loss in revenue as the result of business interruption. The forest fires of the Adirondacks alone in 1908 burned over 347,000, or 542 square miles, 38 per cent, of the timber on which was deemed to be merchantable. In the Crow’s Nest district forest fires reduced an area of 212 square miles of forest until only 33 remain, and the burnt tract is fit for nothing for years to come.

So that the yearly toll in America of the dread fire fiend is little short of the colossal sum of $600,000,000, of which $50,000,000 is lost to our own Canada.

Figures that are indeed startling!

But what is more serious, more worthy of our earnest consideration, is that more than half of the loss could easily have been prevented. The authorities agree that much more than half of the fire loss in America is attributable to arson, gross carelessness, or ignorance. In other words, Canada throws away more than ten milions of dollars without reason or recompense.

In this connection there is a fallacy that receives general acceptance by the public. It is that insurance covers fire loss, that property insured is not a loss when consumed by fire. A moment’s reflection will be sufficient to show how untenable is such an idea. Insurance merely distributes an individual loss among all the policyholders of the company. Each of us pays for his neighbor’s fire.

In the consideration of fire waste due to preventive causes, guessing is largely eliminated by a comparison with the loss rate of other countries. In Canada the per capita loss in1909 by direct fire combustion was $2.63; in America it was more than $3. When we examine European experience the possibilities of prevention are clear. In eight countries of Europe the average per capita loss is only 33 cents. Germany suffers from a 49 cent loss, France 30 cents, Austria 29, and lowest of all, Italy can show a statement of but 12 cents per head, or one-twenty-second of the Canadian waste. Only in Russia and Norway, where construction is largely of wood, does the fire loss per capita approach half that of America.

Comparing cities on the two continents: The average annual number of fires in European cities is eight for each ten thousand of population. In American cities the average is forty. Glasgow had a fire loss in 1908 of $325,000; Boston, with a smaller population, reported $3,610,000. Berlin, with a population of 3,000,000, has an annual fire loss of less than $175,000; Chicago’s loss is $5,000,000, although its population is only about two-thirds that of Berlin. With all this difference in loss there is an additional surprise in the relative costs of the fire-fighting resources. Berlin's fire department costs a trifle more than $300,000. Chicago’s more than $3,000,000. New York's fire department costs $10,000,000, its high-pressure service involves an expenditure of $3,000,000, and yet its fire loss is $10,000,000 a year. Paris expends only $60,000 on its fire protection. American cities spend $1.65 per head to go to bed feeling safe, while the average cost of fire protection in Berlin is only 26 cents, in London 19 cents, and in Milan 17 cents. In 158 American cities the cost of maintaining fire departments was $38,000,000, and yet the loss in 1908 was $48,000,000.

Compare Berlin’s loss of $175,000 for a population of 3,000,000, with Toronto's $740,931 last year for a population little over one-ninth that size, or Montreal’s $450,000, Hamilton's $99,298, Vancouver's $315,000. Calgary's $82,349. Winnipeg’s complete figures are not at hand, but they must be enormous. In fires with a loss of $10,000 or more, the destruction for the last five months of the year alone in that city amounted to the appalling total of $600,000.

Still another evil in addition to that of property waste attends the carelessness that is so largely responsible. Every year there are 2.000 lives lost in America through fires. Six people every day of the year are sacrificed on the national ash heap. In Canada last year there were two hundred deaths from fire—almost four a week—and the present year has started out with great promise of exceeding that number. It is unfortunate that, while industrial accidents are carefully attended to by our laws, there is nothing on the statute books to protect the hundreds who die in fires from some other person’s carelessness. An unprotected saw, an open elevator shaft, a defective piece of machinery are recognized grounds for damage claims. Indeed, some of the provinces have gone so far as to make the employer liable for the injuries of his employe received through his own carelessness. But there is nothing to punish the man or woman who attempts to light the kitchen fire with coal oil or even gasolene, or the parents who leave small children alone in houses where the stove, the lamp or the matches are within reach. The outcome of the increasing loss of life from carelessness that is criminal, will be that the laws will declare it just as great a misdemeanor for a man to take the lives of six of his family by starting a morning fire with gasolene (as happened near Winnipeg in November) as it would have been had he shot them all in their beds.

There were fifty-one deaths and ninety-seven injuries reported during the last two months of the year, and more fatalities failed to be recorded on account of death not being immediate. Of the deaths no fewer than 24, as well as 32 injured, were the result of unpardonable carelessness. The majority of the fatalities were children whose heartless, brainless parents considered it safe (if they considered at all) to leave small children alone. A woman near Ottawa went out to milk, leaving three children alone in the house—three deaths on the list. A Berlin woman went down town, leaving three children with the stove— three more. In one small village in Ontario a child was burned to death in December, because its parents left it alone; within three weeks another child gave up its life in the same village from the same cause. And so the list lengthens, the parents receiving sympathy for an act that should be considered criminal. With the class of people who will expose their children to such danger nothing but the law will bring recognition of the necessity of employing common sense for the protection of those dependent on them.

“Every fire is a crime,” is the slogan adopted by the National Fire Protection Association, a body of men in the United States united in a great cause. At a glance this assertion may seem extreme. But is it? Was there ever a fire that was not the result of somebody’s carelessness? With the exception of a disturbance of nature, such as at San Francisco, every fire has its origin in the thoughtlessness or wilful desire of someone; and even the San Francisco fire need not have been great had the buildings been of proper construction.

Carelessness that leads to waste is a crime.

Had Canada her $20,000 a year to expend in public works, two Dreadnaughts could be built every year, or a formidable fleet of smaller war vessels. A railway could be constructed from Toronto almost to Winnipeg at a cost of $20,000 a mile, or 1,600 miles of prairie road. She could construct 4,000 miles of the best stone or gravel roads. She could pay for the maintenance of all the sick and poor in the country. She could buy up a million acres of as good land as the west possesses. America’s fire loss money would “evangelize the world, in this generation.” What presents, such possibilities is nothing short of criminal.

Fires are said to be due to three crimes: the crime of ignorance, the crime of carelessness, and the crime of arson. And the first two can be combined under the second. And yet the criminal calmly collects his insurance without a penalty save for discovered arson, while his neighbors, whose losses, due to his carelessness, were not covered by insurance, must struggle along under the burden he places upon them with immunity. The effects of his carelessness are just as disastrous as if he had deliberately applied the match—but there is no punishment, no explanation even.

How different it is in Europe! And it is owing largely to this difference that the loss rate is so low. In France the responsibility for any loss caused by his negligence is placed upon the landlord or tenant of the building where the fire started and the results are wonderful. In Paris a fire rarely goes outside the building in which it starts. In Vienna, where the same law exists, there is not a case known where a fire is not confined to the building in which it started, and in few fires did it reach another floor—conditions due to the solid construction brought about by the law of responsibility. In Paris flimsy unsprinklered department stores with well-holes to the roof, and crowded aisles that would frighten away any American insurance company, secure a rate of 50 cents. In Belgium and Holland the laws are somewhat similar. In Germany the assured must save everything he can, and must notify the police within three days and the company within twenty-four hours. In Sweden an inquest must follow every fire. The same condition exists in Switzerland, and some cantons refuse indemnity if carelessness or neglect is proven. In Spain and Italy the assured must make affidavit to the proper officer as to the cause and circumstances of a fire and furnish the insurance company with a copy thereof.

The other reasons for the low fire waste in Europe are the restriction of high buildings, the necessity of solid, fireproof construction, the absence of litter and combustible accumulations on the streets. In London there are no buildings more than eight storeys high, and few beyond six. German cities are superbly built, from an underwriter’s standpoint, and the police supervision is excellent and wonderfully effective.

Then, how can this serious destruction of the country’s wealth be decreased?

There are three great powers in the fight for less fire waste:

1. The Government.

2. The civic authorities.

3. The individual.

Unfortunately we make the great mistake of fighting fire from the wrong end. What counts in decreasing the waste is not the extinguishing of fires, but their prevention. The comparative merits of the two systems of fire elimination are demonstrated by the difference between the fire loss in Europe and that in America. In Europe they demand that the builder and the owner conform to definite laws that exclude risk. In America we spend money in apparatus and men, and allow the public a free hand. There they start at the beginning to fight the waste; here we start at the last scene. And the results are evident. Our method of decreasing the waste is similar to the establishment of hospitals as the only means of fighting typhoid fever.

If the Governments of the different provinces would undertake only one task they would fulfill at a very small cost all that would be expected of them. Across the border twelve of the states have appointed a man, whose duty it is to investigate every fire of doubtful origin. These fire marshals have supreme authority at certain times. In case of a fire they can order the owner from the damaged building in order that a thorough, untramelled investigation can be made, with no opportunity for the owner to remove evidence. They can condemn any property as a fire-breeder, compel the cleaning up of litter, and enforce protection for life and property. They and their deputies make suggestions for building ordinances, and see that the laws are obeyed. They secure the aid of the newspapers in publishing the fire losses and common preventive measures.

The result of the appointment of such men has been beyond expectation. In Massachusetts incendiary fires have decreased fifty per cent. In Ohio in one year 72 persons were convicted of arson, and in another state as many men were punished for arson in two and a half years as had been convicted in the previous existence of the state. It has been found that few men will risk burning their own buildings if there is an official whose duty it is to follow them up. The same fear prevents the firing of an enemy’s barn. In Ohio the fire loss during the first year of the fire marshal’s department was eleven millions ; in the last five years it averaged less than seven millions, and this in spite of the fact that insurable property has doubled in value. The per capita loss in states with fire marshals averages $1.47 per head, and in states without fire marshalls $2.47. Only Manitoba has a fire marshall, and although he has been in office but a short time and has not sufficiently wide powers and assistance, the value of the office is apparent.

The civic authorities have in their hands the most ready solution of the fire problem. After all, the great preventive of fire waste is proper construction. Fireproof construction, or a style that is sufficiently fireproof to enable the fire apparatus to do effective work is at the command of the local authorities. The “fire limit” can be definitely fixed to exclude all conflagration risks. Fire walls projecting above the roof at frequent intervals are the most effective obstacles to devastation. The height of buildings should have some control of its fireproof qualities. Buildings should be carefully inspected at regular intervals, and litter and loose paper prohibited in lanes or on private property. Strict theatre laws should be made, fireworks prohibited, the use of combustibles restricted, incendiaries punished, exposed windows protected with wire glass or metal doors. The excellence of the fire-fighting system is, of course,

a most important consideration, but an ounce of prevention is worth more than a pound of cure.

So important are the duties of the city authorities in this respect that in the recent Boston elections the platform of a candidate was largely the reduction of fire waste.

Did the Government and civic authorities do their duties comparatively little would depend upon individual effort. As it is, much of the prevention is in the control of the citizen. Fireproof construction is becoming popular through private effort rather than through public demand. The factory or store owner has adopted “fireproof” ideas that are doing more than anything else to save the lost millions of property. Wire glass, covered openings, fire-retarding walls and floors, sprinkler systems, the avoidance of concealed spaces, closed elevator shafts, automatic trap doors, private fire alarms, watchmen, private fire brigades, water tanks, university course in fire education, etc., are some of the individual efforts towards decreasing the fire waste.

In England there is a society called the British Fire Prevention Committee; in the United States the National Fire Protection Association performs the same work. These associations are composed of prominent men interested in the subject—fire insurance officials, large property owners, college professors, Government officials. Tests are made of every material and style of construction, as well as of every kind of fire-fighting appliances and invention. Large amounts of money are spent in experimenting on new ideas in construction, on the dangers from different gases, oils and materials, and the relative values of the various kinds of hose, fire-engines, pumps, sprinklers, etc. Pamphlets dealing with almost every subject that could be of interest in the reduction of fire loss are sent free upon request and published in the newspapers.

The fire insurance companies have a weapon at their disposal that provides them with great opportunities. As many life insurance companies refuse to insure the Christian Scientists, so fire insurance companies are refusing such risks as moving picture theatres, dangerous manufactories and localities where the moral hazard is great. The association of the companies has established high rates for properties that are unnecessarily risky, and the owners are forced by this means to provide protection and sensible improvements. The companies can govern construction, exposure, and expenditure in fire-fighting appliances, and it is to their credit that they are learning to exercise their powers. The Canadian Fire Underwriters’ Association is not a combination for high prices, but a combined effort to reduce the fire waste. Last year, in Montreal alone, about 18,000 inspections were made, 1,844 defects were discovered; and it is a proof of the efficiency of this method of dealing with the question, that all but 25 of the defects were remedied.

With all working together, with even one of the three great powers in control of the situation doing its best, Canada could be spared a great part of the twenty millions that disappear in smoke. Millions more could be saved from fire department expenditures and as it is the people make the fire rates, whatever might be said to the contrary, there is no reason why this country should not decrease its loss from the fire fiend by fully fifty per cent, in a very few years. When Canada reduces its loss to the proportion of European countries the tardiness of present Governments and civic bodies will be a matter of shame and surprise.

The Credit System in the West

The Credit System in the West

W. Lacey Amy

Busy Man’s Magazine 1 October 1909

This magazine is presumably the parent of MacLean’s Magazine.
It is also the background to the "Luke Allan" novel The Westerner, 1923/drf

TO the query as to what had been the foundation for the great progress in the Canadian West, a student of the country would unhesitatingly answer: “the credit system.” And yet when questioned as to what was now doing as much as anything else to retard the growth of the country, the same man would answer in the same way. The business system that has been and is the all-prevailing feature of exchange in that country is credit.

It was not the trust of one man in another that made credit a success. It was the knowledge that the creditor was debtor to some other person and that barter was only possible under such a condition. It is not trust and confidence that makes credit still reckless, but the force of habit and the apparent inability to break it. Credit between man and man is almost as great as ever, although now everyone sees its disadvantages.

Until a couple of years ago all business was done on paper or on trust. Transactions involving thousands of dollars were carried on without the exchange of a cent or of only a few dollars. The country was new, settlers had little available cash, men had to live and supplies had to be procured. From crop to crop or for the first couple of years of a settler’s life there the merchants carried the people, the seller put the buyer in possession on paper payment. Credit was an absolute necessity. Bills would run for three or four years and yet be just as good at the end of that time as when incurred. Year after year the same farmer would buy his provisions without even explaining that he couldn’t pay the last bill. Then when he got the money from a good crop he would usually pay up and proceed to keep his credit good by running another bill. Without this accommodation the country could never have been settled.

But conditions have changed. Credit is not much more a necessity to the west than it is to the east. Still in the ordinary business it continues almost as strong as ever, the banks being the only ones to curtail reckless lending. Up to the winter of 1906 the banks were as free and easy credit-givers as were private individuals. Money was offered to every man with a fairly straight eye and any proposition short of a tram-car line to the moon. Men secured money when they didn’t need it, bought real estate in order to find a place for it, made their profits and returned the money—with a request for another loan. In 1906 the profits were irregular and after a few losses the banks began to use judgement. However, credit had got such a firm hold of the people that in many towns they seemed to know of no other way of doing business. Thus it continues to the present time, only a few of the smaller towns and villages having seen the inauguration of a cash system.

The extent of credit varies according to the district. In agricultural districts fed by small towns the merchants carry the farmers from crop to crop with non-payment in bad crop years. In ranching districts it is much worse. Ranchers may not visit their supply town more than once a year and often not that often. I know of several ranchers who “come in” only once in two years. As one old two year-variety rancher said to me, “its terrible the money you spend when you get to town.” In such a town ranchers will run bills for years. One rancher will cart out the supplies for a half dozen and the merchant may never see his debtor for several years. The result is that the amount in a merchant’s books will run to incredible amounts. In one city in Alberta, the proprietor of what would be called a small hardware store in the east had $40,000 on his books, and another store of the same kind in the same city was carrying $30,000. The slump of 1907 and 1908 forced them to a closer inspection of “charges” and the amounts were materially decreased.

Accounts are sent out only quarterly by many merchants and often at greater intervals, although this is rapidly changing. What I discovered in the fall of 1906 upon landing in the west was the quarterly account system prevailing in my line of business (newspaper). I started right in on monthly accounts and was met for the first few months by angry merchants wanting to know if I didn’t think them good for the money or was I so hard up that I had to collect every month. Fortunately I persisted and had the satisfaction of convincing them of the wisdom of monthly collections, many of them being displeased when their bills were not collected monthly.

Therein comes another feature of the credit business—that you can bill nine out of ten business men till you eat up the bill without getting any recognition. You have to make a personal call to collect. And the majority of those who owe you will have to figure from their bank book to see if there are enough funds to meet their checks. It is not an uncommon thing to have checks returned marked “no funds,” the maker merely saving in answer that he didn't think the bank would cash it, but he thought he'd risk it.”

Several attempts have been made to start a cash system in western towns but only a few have succeeded. Sometimes the jealousy of the merchants interfered, sometimes they will not trust each other, and sometimes the public itself rises in protest. A railway town is sure to be a strong credit town. Railwaymen are paid by check on the 15th of each month. Bills are always sent out in consideration of this date and more payments are made at the stores in the four days following pay day than during all the rest of the month. A railway man never pays cash. Invariably he pays for last month’s purchases out of this month's check. As a rule he sets aside so much to deposit in the bank, and the remainder is spread around in payment, the deposit never being touched however small a part of his indebtedness the remainder may cover. Thus a merchant may be omitted on pay day while the bank account grows, or while investments in real estate continue. It was a knowledge of the manner in which they were being held off while the banks or investments were receiving the money that banded many merchants together last year to demand quicker payments.

One of the schemes adopted to encourage cash buying was the offering of a ten per cent, discount for cash. And yet this had surprisingly little effect, the majority of the people preferring credit even for a month to a discount for cash.

When the discount was first spoken of in one city some of the merchants thought it was impossible to give that much. In spite of the high prices asked they claimed they would be losing money on such a discount. A man interested in bringing in the cash system visited a certain store in a city and was met by that argument given in all honesty. The man did not show the merchant, as he could have done, where he was making a profit as high as 200 per cent, and even more on some of his stock.

He argued, “What is the average length of time your accounts run—average in amount?” (for the large accounts run much longer than the smaller ones, as a rule).

“Oh, about a year,” answered the merchant.

“And what is money worth here?”

“Eight per cent.”

“At what do you figure your percentage of loss?”

“About three per cent or maybe more.”

“Now,” said the advocate of cash, “you argue that you would lose money on allowing a ten per cent, discount, whereas on your own figures credit is costing you eight per cent, for interest, and three per cent for loss, with all the extra cost of billing, a higher-paid bookkeeper, inability to take advantage of cash discount at all times, to say nothing of the worry. In all, fifteen per cent, would scarcely cover your credit system.” And the merchant had been so brought up to credit that he had never thought of it in that way.

Scarcely any man in the west knows what he is really worth nor within a wide margin. He may estimate himself as worth a hundred thousand, and he might have to borrow to buy a new hat—but the chances are he would run a bill for it. To do business in the west a man must have a large bank account or buy on credit. People expect him to give credit, and many a good business received mention in Dun’s bankrupt list during the past two years, only because the ready cash was not available. A man worth fifty thousand dollars can be forced into bankrupcy for as many cents.

In real estate deals the credit system or something similar is in force, although to a limited extent since the slump. Up to 1907 men were most reckless with their real estate speculations. A man bought with a five dollar bill and sold for another bill, the transaction being repeated a dozen times on a five-dollar bill. And yet each seller would probably be making a few thousand dollars. A speculator would buy an option for a week or a month. In the meantime he would sell, and sometimes two or three sales took place on options before the first option had expired. Or perhaps a man’s last cent might be expended entirely upon a re-sale before the second payment was due. In fact four-fifths of the real estate purchases were made with no prospect of a second payment being available unless another sale was made. Thus, it often happened that a man might make his first payment on property, the title to which was in the hands of a man who figured in a half dozen sales before. The last buyer might make all his payments in due course, and yet never secure the title to the land because some one of the previous half dozen buyers had failed in his payments. The credit system as carried out in this, led to some roguery, of which little was heard outside the west.

Small payments, and even notes only, would buy most valuable property. A company of eight young men purchased a quarter-section close to a town, by giving their notes only to the owner. It cost them $50 apiece to have the company formed and the land divided into lots. Not another cent did those men put up. The property was immediately put on the market and double the price of the land was realized in a month. And, strange to say, the title was handed over when the notes were given. Scores of instances of a similar transactions took place on a basis that would never be entertained in the east. At the present time hundreds of acres of British Columbia fruit lands are being sold from options only, the middleman being willing to stake all his money on his ability to dispose of the land, and the owner freely allowing the middleman to try it.

The hard times of 1907 is working a great change in the business of the west, and one that is already proving a fine thing for the country. Directly it has curtailed credit on account of the inability of the merchants to collect the bills they had allowed to run so long a time. The banks closed down on promiscuous money lending, and the merchant must pay his bills from his receipts. It was not the experience of others who attempted to do a credit business, it was not the arguments against credit, but the chilling knowledge that thousands of dollars were uncollected, that forced him to use the cash register instead of the day-book. Honesty in the speculator did not pay his store accounts. When his real estate deals did not pan out, he left town and all his debts; he would have paid if he could, and that was all the merchant got for his leniency.

But still the credit system abounds to an extent that should be understood by the Easterner who contemplates entering business in the west. More is required than sufficient capital to purchase a business. It is some time before the cash receipts will pay the expenses. He must remember that while he may have five thousand dollars of good debts on his books, there may not be five dollars in the till to pay the wages.

But then it is probable when that time arrives that he has fallen into the system in his own transactions. He will simply pay by running a bill.