Ir/eed

Dun & Brndstreet lssues

Comprehensive SiudY, "The Foilure Record Through 1961"

Dun & Bradstreet, Inc., has issue'd a study of comrnercial failures, "The Failure Record Through 1961," which shows that failure liabilities for the first time in the history of our economy p'assed the b'illion dollar mark in 1961. The total number of failures for last year, 17,075, was the highest since the depression Year 1933.

The figures show a strong 'climb in--net losses fr.om $241 million in 1960 in retailing to $333 rnillion last year, and from $107 m'illion in 1960 to $158 million in 1961 in whole,saling.

The s,tudy also shows s'ome shifting failure p,atterns in rnajor American cities' In both New York an'd Chicago, the number of failures was higher in 1961 than in the two previous years. This was also true i'n Philadelphia, Detroit, Cleveland, and Bal,timore. In Los Angeles, however, the number of failures dectrined as it has for several years. In Houston the total number of f'ailures was ofi sharply, but in Cincinnati the number of failures was more than double the average number recorded over several previous years.

Among the states, Oregon continued to be the s,tate w,ith ,the highest failure rate per 10,000 listed concerns. A high fa,ilure rate doe.s not necessanily indicate an unhealthy economic con.dition; i,t can merely ind'icate unusual economic activity. California had the second h,ighest failure rate, and Florida and New York came in third ancl fourth, respectrively. By lar the lowest failure rate in the nation was recorded by Wyoming' with South Dakota second lowest, although its failure rate doubled from the previous year, T,he broad reasons for business failures change little from year to year, or from boom to recession. The predominant cause is management weakness, whether in aptitude or experience. However, the ways in which this weakness is reflecte'd change w,ith 'the economic state of the na'tion. Probably the single n-ros,t significant shift was the sharp increase in the proportion o{ businesses that f.ailed because they could not handle their receivables.

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