Ron Proul operates Chaffee's, the largest women's, children's goods and accessories specialty store in the heart of downtown Everett, Wash. Chaffee's has been a fixture in Everett since the early 1920s. In a discussion with Washington Post staff writer Haynes Johnson, Proul describes how the recession forced him to file for a Chapter 11 bankruptcy proceeding last July and his struggle to remain in business.

"We live in a sale economy. If you run a sale, they come in. If you don't, they won't. It's a day-to-day existence. You've got to make it work or you're out. You live on your cash flow. If the cash flow isn't there, you're through.

"For instance, this is payroll week. So you need Thursday, Friday, Saturday sales to meet the payroll. If that isn't enough, then you have to throw your own check away. In fact, I went over to the bank this morning and said what I'd like to do is have a three-month extension on my house loan in case I can't pay myself in that time.

"I'm looking at this as a personal ruin as well as a business ruin. The first thing that happens to you is the survival thing -- you want to cut and run to escape the danger.

"But then you say, what would you do? Be a hermit in Montana? Next your pride comes in. 'Well, this is the situation but I couldn't possibly admit it to anyone.' But I think basically I'm a survivor type of person. Regardless what you have to do, you're going to try to make it work.

"Then the decision is you have to go public with this. You blame yourself first, and then you blame some other things. You wake up every morning at 3:35 like the alarm went off thinking about the next day, about the creditors' meeting or how you're going to get through it.

"I have three kids and I sat them down and told them, 'Look, kids, it's a little tough, so here's what we are going to do. You're probably going to hear about it from your friends, and we're going to handle it like it's a problem and we're going to solve the problem, and that's all there is to it.'

"So my middle one, who is in the eighth grade, said, 'Oh, I don't know if I'll ever be able to face my friends.' So I said, 'Well, I guess if you can't, you can't. You'll just have to get yourself a new set of friends.'

"She found her friends more concerned than anything else. With friends, that's the way it usually is.

"But I'll tell you what it does to people. Everybody is on edge. Every time you sell an item to them they inspect it very, very carefully, and then if there's the tiniest need for complaint you get it back. They're very short . . . .

"That's not the normal course of the American consumer . . . . I don't think it's a healthy state of mind, and it's caused primarily from worrying about themselves . . . .

"I've changed myself. I think I've become a lot more callous. Basically, I'm an optimist, but one of the things I find in dealing with people, whether it's at the bank or the attorneys or employes in the store, is that I've lost a certain amount of trust.

"Everybody's scrambling right now. If you say you're going to do this, they don't have the confidence you're going to do it. So you say, 'Why didn't you believe in me?' And they say, 'We didn't think you could do it.'

" . . . My dad used to say the steel that goes through the fire comes out stronger. So maybe we'll come out stronger. I told our local congressman I didn't need the trickle-down effect. I needed the deluge effect.

"People here have always been conservative financially. They're not going to spend themselves into debt. So now they're reacting by hanging on to their money and spending it more carefully. If everybody's doing this, the economy is not going to be recovering very fast . . . .

"The future has kind of flattened out. I just feel it's going to be an existence, that's all."