48 
THE NATIONAL NURSERYMAN 
Trade Acceptances 
Henry T. Moon, Glenwood Nurseries, Morrisville, Pa., 
speaking at the Pennsylvania Nurserymen’s Association 
strongly urged a more general use of Trade Acceptances 
among nurserymen as they would do much towards im¬ 
proving the linaneial transactions of the trade. 
Fred H. Ouleott, Manager Commercial Department, Ac¬ 
ceptance Corporation, New York, writing in the Public 
Ledger, says about them: 
“It would almost seem as though the Federal Reserve 
system came as a providential aid to this country to see 
us through the great war. As is always the case where 
the foundation is sound, the building proceeded rapidly 
and it was a short time indeed until the benelits of the 
new system became apparent. Then the common sense 
and common judgment commenced to advocate it until 
now ^ve wonder how we did without it so long. 
“With the coming of the Federal Reserve bank came 
the campaign to. extend the use of trade acceptances. 
Other countries had found them good; this country hardly 
knew them. Of course, in our dealings with foreign 
countries they were in constant use because the foreign¬ 
ers were thoroughly accustomed to them and sought the 
benefits arising from their use in their exchanges. Then 
a few of our more progressive business men began to use 
them. Rut it took a great deal of effort to obtain even a 
fair start for the trade aeceiitanees, because in sjiite of 
our national boast that we are not hidebound by custom 
and tradition and that we are always ready to ‘try any¬ 
thing once,’ merchants did not like the idea of dejiarting 
from their usual methods of settlement. 
“It soon became apparent that an organized effort must 
he made if the trade aecejitance was to become popular. 
Meetings were held all over the country under the aus¬ 
pices of the various credit men’s associations, hankers’ 
associations, boards of trade, chambers of commerce and 
other similar organizations. 
Accorded Preferential Rate 
“Then money became scarce and credits were restricted 
on account of the war activities. Bank loans were short¬ 
ened and contracted. It became more and more neces¬ 
sary to finance commercial transactions by the most effi¬ 
cient and up-to-date methods. The Federal Reserve 
banks were authorized to offer a ])referential discount 
rate on trade acceptances offered for rediscount, and 
banks found in acceptances a means of keeping their as¬ 
sets very liquid and at the same time sujiplying their cus¬ 
tomers with credits and funds. 
“The retailer realized at once the benefit of having his 
customer agree to pay on a fixed day of settlement, in¬ 
stead of having an open account, the payment of which 
depended upon the humor of the debtor, and which fre¬ 
quently ran four, five and sometimes six months. In the 
I]ast trade acceptances were mostly used by merchants 
who sold staples in quantities or by those who gave long 
credit terms. 
“The decision of the New^ York Clearing House to 
handle acceptances payable in New York in the same 
manner as checks had a stimulating effect, jiarticularly 
on the hanks, who gained greater confidence in the in¬ 
strument that received this recognition by the clearing 
house. 
Realizing the great importance to business of the move¬ 
ment and the rapidity of its grbwth, it seemed necessary 
to have some central organization to guide and regulate 
the general practices and customs that should he followed 
in the use of this new credit instrument. Accordingly the 
American Trade Acceptance Council was formed, consist¬ 
ing of representatives from the x\merican Rankers’ Asso¬ 
ciation, National x\ssoeiation of Credit Men and the Cham¬ 
ber of Commerce of the United States. 
“It is obvious that w hen a merchant changes his sell¬ 
ing terms from the old open account basis to the new sys¬ 
tem and obtains trade acceptances from his customers he 
places upon the bankers the w ork that w as formerly done 
by his own collection department. The merchant has 
been aecustomed to personally correspond with his var¬ 
ious debtors, and unless the bankers collect, remit and 
advise promptly a very bad impression is given to the 
merchant. 
‘‘Therefore, if acceptances are to be popularized, 
bankers must see to it that the machinery of collection 
w orks rapidly and accurately and that information comes 
through promptly, particularly if there is delay of any 
kind or for any reason whatsoever. 
Widening Use Indicated 
“Now, regarding the return to peace conditions. It has 
been demonstrated that the trade acceptance is a good 
thing. It has had a practical test. Facilities are increas¬ 
ing right along, making it easier to handle-or dispose of 
acceptances and iierfeeting the collecting machinery. It 
is only a question of time when trade acceptances will 
have a^ w ide market and will he bought and sold at low" 
rates of discount. 
Firms of high credit and large capital are at present 
less inclined to give trade aeceptanees than the smaller 
firms, wdiich of necessity must consider ‘terms’ wdien 
making their purchases. The large finns seem to prefer 
to pay cash and obtain all the advantages arising there¬ 
from. However, the old practice of cash discount will 
never be entirely abolished, but w ill alw ays continue as 
one method of settlement. Trade accetitanees are reduc¬ 
ing many business evils, such as taking of overtime, the 
unwarranted return of merchandise and other similar 
matters. In this respect they have been of great service. 
“In the agricultural sections and wherever the livli- 
hood of the population is derived from the crops or pro¬ 
ducts of a season, it is quite likely that the acceptance 
will be used between the merchant and the retail cus¬ 
tomer. By iheir use the merchant finds it easier to carry 
his customer over the ‘between season’ periods, and the 
customer, knowing that his acceptance is held by the bank 
and not by the merchant, makes much greater effort to 
