CASH ORDER SYSTEM.

Auckland Star, Volume LIX, Issue 222, 19 September 1928, Page 8

CASH ORDER SYSTEM.

OPERATIONS CRITICISED. SIR GEORGE ELLIOT'S VIEWS. The system whereby certain retail firms recognise orders given by financial concerns known as cash order companies was severely condemned to-day by Sir George Elliot.

Speaking to shareholders of Milne and Cbpyce, Ltd., Sir George stated that the system, which was unfortunately growing, was thoroughly pernicious. The customer secured orders on certain firms from the cash order company, and was then able to obtain immediate possession of the goods, having first paid a small deposit to the financial company and signed an undertaking to pay the balance in regular instalments. The usual practice was for the retailer to pay 12£ per cent as a commission to the financing company. His firm (Milne and Choyce) had b.een approached on several occasions with a request that they should recognise these orders. They had refused, and be had no hesitation in saying that if they attempted to sell their goods at their present prices and gave such a diecount to a middleman they would not only be unable to pay shareholders' dividend's but they would be on the rOad to liquidation. No firm could do it. It stood to reason that the customer had to pay. this 12J per cent. Moreover, the person using the* By stem had to pay as interest to the cash order company a much higher rate of interest than he realised. Nominally β-to 10 per per cent, it would pan out as high as 30 per cent when every factor was taken into consideration. ,