BUSINESS PRINCIPLES INVOLVED. 4-77 



less favourable the local and temporary conditions of the timber- 

 market, the less must one insist on conditions of sale which reduce 

 competition ; and this is more necessary when the purchasers are 

 dealers than when the wood is disposed of among- local persons. 



One of the most important points is whether cash-payments 

 should prevail, or credit be given. The question is regarded 

 from different points of view in different countries. In most 

 German State forests, except quite recently, cash-payment was 

 the rule, but this has been considerably modified of late. 

 Credit increases the woj-k of accountants, often encourages 

 swindling and indiscretion on the part of certain purchasers, 

 but all this shady side of the credit system disappears 

 compared Avith the disadvantage of reducing competition by 

 demanding ready money. Credit is now-a-days such a necessary 

 condition of all trade and business, that the forest owner cannot 

 avoid it. Sufficiently long credits, up to a half-year and even 

 longer, in the case of trustworthy large dealers, are conditions 

 which much experience, far from verifying the fears of extensive 

 loss which have been expressed, has proved thoroughly jus- 

 tifiable in the interest of forest owners.* 



It is self-evident that credit can be given to doubtful pur- 

 chasers only on sufficient security (after payment of 25/^ 

 of the purchase money, deposition of valuable documents, 

 promissory notes on good banking houses, &c.). In the 

 different German States and in Austria, various systems of 

 credit prevail, for instance, in Baden, 3% discount is given for 

 cash payment, otherwise three to eight months' credit. 



[In India, depositiou of Governmeut promissory notes, on which 

 interest continues to be payable to the depositor, is the best form of 

 security in wood-sales. It can also be stipulated that in sales of 

 standing trees, one-third of the purchase money is payable after 

 the wood is converted, and the balance on removal of the wood from 

 the forest, more than sufficient wood being retained in the forest to 

 cover the balance of the purchase-money. — Tr.] 



The date fixed for removal of the wood from the forest or 

 depot is also an important condition of the sale. If the limit 



* The accountant's office at Ascliaffenburg, which receives payment for the 

 oakwood from the Spessart, had to receive between 1863 — 73, £111,400, of which 

 only 27s. was a bad debt. 



