Investigation of a new grocery account is left largely to the local salesman. If he recommends the account, the order is generally filled without further investigation, except that the mercantile agency's rat ing book may be consulted. So largely is this prac tice followed that in many wholesale grocery houses the salesman is virtually also the credit man in his territory. He is expected to see that all accounts are promptly paid, and while he is not held legally or financially responsible for them, he is responsible in a moral sense.
Few wholesale grocers appear to insist upon the customers' strict observance of credit terms. Ac cordingly, the discount period is not infrequently lengthened by the customer without the formality of first obtaining the creditor's permission for an ex tension. Likewise the thirty or sixty days, as the case may be, are often extended considerably be yond the credit limit imposed by these terms. This evil is being vigorously resisted in certain other lines, but appears to have met but little concerted opposi tion in the grocery line.
3. Customary credit terms in the meat and pro vision large packing houses, such as Armour and Company, and Swift and Company, sell fresh meat to retail butchers. They also sell pro visions, which designation includes hams, bacon, lard and barreled goods (barreled beef and barreled pork). Fresh meat is sold on what is called "cash terms," which in this business means that they are to be paid for within seven days after delivery. One week's purchases must acdordingly be paid for during the week following, failing which the delinquent butcher may be refused additional supplies while that bill remains unpaid. Provisions, on the other hand, are sold on thirty days net, no cash discount being given. They are sold to grocers as well as to butchers.
The packing companies have a third class of goods to market, designated by the general term, by-prod , ucts. Such by-products are chiefly soap, curled hair, glue, sandpaper and ammonia. Since these goods have a variety of uses, they are of course sold to vari ous lines of business. Such goods arc sold mostly on thirty days, tho soap is frequently sold on sixty days. The salesmen are looked to for information about their new accounts, and also for keeping all accounts paid up according to terms of sale.
4. Customary credit terms in the hardware busi ness.—The metal trade is highly diversified and sub ject to many influences of which no account can be taken here. In general, however, what is commonly
classed as hardware is composed of "builders' hard ware" and "shelf hardware." Builders' hardware is usually sold to contractors, many of whom are not financially strong and in view of the more or less hazardous nature of their business are not regarded as specially good credit risks. In many instances, therefore, such contractors are re quired to pay 85 per cent of their month's purchases on or before a certain day of the month following—in some cases, the tenth day, in others the twentieth. Under this arrangement the remaining 15 per cent is not paid until thirty days after the completion of the building operation into which the supplies enter.
The regular credit terms in the hardware trade are 2/10/30, which means 2 per cent off for payment within ten days of invoice, or net thirty days. Con siderable latitude exists, however, in the observance of these terms, a common practice being to give 2 per cent e. o. rn. (end of month), which latter term in practice means the tenth of the month following. While some wholesale hardware houses appear to insist upon a strict observance of discount terms, others are more liberal in this respect and permit sev eral additional days to be taken without protest., The terms 2/10/30 generally apply also to shelf hardware, except that on these goods some whole salers quote terms of 2/15/30. Where, moreover, the retailer lives at a considerable distance from the sup ply house, it is not unusual for the latter to permit the cash discount to be reckoned from the arrival of the goods—which in some cases and under certain cir cumstances may mean an interval of one month or more from date of invoice.
The class of hardware supplies described as "auto accessories," is sold largely to proprietors of garages and repair shops. The usual credit terms are quoted on these goods, but since not a few of the persons en gaged in the business are financially irresponsible, and since the business itself is unstable, certain precautions are often taken. Thus, it is frequently deemed ex pedient to demand an advance payment of as high as seventy-five per cent of the amount of invoice. This, however, is a matter of local or individual conditions rather than one affecting credit terms in normal trans actions.