SPEEDED BUYING

Evening Star, Issue 19666, 20 September 1927, Page 4

SPEEDED BUYING

CREDIT DEVICES THE CASH ORDER SYSTEM ' “ Cash orders and time payments discouraged thrift and increased the cost of Jiving; they were detrimental to the best interests of tlie community. The genii of borrowing appeared to bo in tiro blood of the Australian people. The cash order system stimulated the crane for borrowing, and was destroying the moral fibre of tho nation.”" The above is pare of the reported remarks of a member of tho Victorian Legislative Assembly, Mr Gray, in supporting a recent demand by traders’ associations for the suppression of tho cash order system in Victoria. A public discussion in Melbourne of tho. question*-has revealed various views. It is contended by some that the system of borrowing in order to pay (cash order) and the system of deferred paying (time payment) arc equally bad, and equally result in the extra cost being paid by the buyer. Others, again" contend that the cash order, but not time-payment, is bad. DOES TRADER PASS IT ON ? There is in some cases doubt as to whether tho charge made by the cash order company is always passed on to the buyer. At tho meeting addressed by Dir Gray a statement was made by Mr H. Gower, a member of tho Master Drapers’ Association, to the effect that business firms which accepted cash orders were forced to pay from 12.| per cent, to 15 per cent, commission totho cash order companies, and the more business they did in this way the more money they lost. It had been reported that in Sydney the system was demoralising the whole of tho retail •trade, and that it had on the community a grip stronger than gambling. People did not seem to realise that, they were mortgaging their future by borrowing on that system of. false credit. Tho majority of traders were in favor of tho abolition of cash orders, and that was proof that- there was something wrong with the system.

Mr W. M'Cabo (Elsternwick) said that ho had been shocked when he had learned of the largo number of court orders issued against persons using the cash order system. in New Zealand the Government quickly realised how detrimental tho cash order system was generally, and had suppressed it within three months of its introduction. Dir Gower; Distress warrants issued out of the courts aro causing the disruption of many homes. In many cases tho husbands do not know that their wives are dealing with cash order firms. . „

Mr Jiickson; One hnmlrorl and lorlynino policemen arc employed serving summonses and distress warrants taken out by moneylenders and cash-order firms against their clients. Mr A. H. fj erst man (South Caulfield) said that ho was not so much opposed to tho cash-order system as to the tactics employed _by the cash-order companies in obtaining business, and iu seizing the possessions of their customer to satisfy claims for payments in arrears. There did not seem to be much difference between tho cash order and tho time-payment system. Mr W. Miles (Carnegie): Both systems are bad from an economic point of view, but the cash-order system is the greater curse. It is time that we, as citizens and business men, set ourselves firmly to have those evils abolished. Mr Jackson, a member of the Victorian Legislative Assembly, who lias a Bill directed against the cash-order system, said that cash-order companies sent their travellers into the homes of tho people to induce them to buy tilings which they did not need and' could not afford, with the result that they eventually got into debt.

HOW IT IS WORKED. A

Following on tho meeting came a Press controversy, in _ the course of which a Melbourne business man wrote: “Having had occasion to go into one of the buildings where tho offices of a cash-order company arc situated, I. was surprised to see the largo number of people waiting to make applications. I spoke to one individual, and inquired to what extent this cash-order company lent money, and was given to understand that amounts Irom £L to £lO were lent on a bill of sale over the property or effects of tho borrower. The" interest charged on £1 or £lO was at tho rate of 5 per cent., but on pursuing this matter further I found that 17i per cent, was really tho rate of interest. The borrower is allowed to choose the firm with which to cash his order.- Ho docs not know that when ho presents tho order to tho firm 121 per cent, will bo added to the prmes of tho articles purchased. This detestable practice should receive the opposition of all genuine traders, especially those who have high rents to pay, anil whose clients arc gradually being Jed away, under tho pretence that they are getting something cheaply.” IN DEFENCE. '

Among tho contributions there was also, of course, a defence by tho secretary of tho Victorian Cash Order Association, Mr Howard K. Ingham, who contended that “ an outcry by certain suburban drapers can surely not bo regarded as the feeling of tho public, and more particularly of the working classes, who as a majority are distinctly in favor of cash orders as an equitable means of credit, and who would undoubtedly ask what right anyone has to interfere with tho best system yet devised. Cash orders are used almost entirely for the purchase of necessities, such as clothing and boots. To abolish them would mean a return to the time-payment system, with greater charges on tho purchaser of goods. . . . Mr H. Gower, of the Master Drapers’ Association, assured the meeting that master drapers were entirely in accord with the proposal to abolish cash orders. How is it that the largest emporiums in Melbourne conduet their own cash-order departments, or accept cash orders from leading and reputable cash-order firms , J The Victorian Cash Order Association lias been formed to protect the interests of all connected with cash-order trading. Any user of cash orders who may have grievances is at liberty to approach us, and we are prepared to sec that anv matters which appear to lie unfair to him are immediately righted. “ While admitting that borrowing in any shape or form is not a sound economic policy,. I think it is a case of 'when in Romo, do as Rome does.’ Tho Government sets a fair example, vendors of motor cars follow suit, and there is instalment buying of playerpianos and high-priced luxuries which are non-essential,- but which carry a much heavier charge, either direct or indirect, to the purchaser than do cash' orders. Statements which infer that cash order trading is not honest and legitimate are far from true.”