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Published Articles by David Balovich

Title: Some Things Never Change
Published in: Creditworhty News
Date: 4/27/01

I recently had the pleasure of being asked to speak before my fellow members of NACM Texas in San Antonio at our annual membership meeting. The topic of my speech was loosely titled “the role of the credit manager and their impact on the organization in the future”.

During the meeting one of the members showed me an article I would like to share.

“Inquiries are being constantly received from manufacturers, wholesalers and factory reps as to the future of cash discounts. Many who have heretofore given cash discounts contend that with the existing low interest rates, discounts are no longer justifiable. Discounts of this character, however, were never wholly controlled by interest rates. Their original purpose was to increase the turnover of merchandise and money. In some instances they also were employed as a competitive weapon.

No industry can, as such, take concerted action with respect to the establishment of a uniform cash discount rate or adopt a policy of its abandonment. To act unitedly in either direction would be a violation of law. Individually any company can adopt any policy it deserves within the law. The common pattern on discounts has resulted from a practice adopted to meet competition. Undoubtedly in the years ahead the same forces will determine discount policies. It is also reasonable to assume that cash discount in the future may be less attractive though they will remain substantially higher than any interest saving.

The competition ahead in business, and the readjustments that must be made, indicates some reduction in the high-rate of business activity. It is not likely that this will be for a prolonged period of time; the demand for goods is too extensive and worldwide in character. Customers will check their buying when the quality, style or price of the products they need is, in their opinion, unattractive. Such sporadic buying will not, however, satisfy their continuing needs. Until these needs are supplied, the business atmosphere should remain healthy.”

Does this sound vaguely familiar? If so, who is the author? Alan Greenspan, Henry Heimann, Paul Simon?

If you guessed Henry Heimann, and for the majority of us it would have been a guess, then you are correct. And just who is Henry Heimann? Henry was the executive manager of the National Association of Credit Men and this excerpt appeared in the February issue of Monthly Business Review in 1947, over 53 years ago.

I wish you well.

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