CREDIT AND PURCHASE.

Gisborne Times, Volume IX, Issue 918, 17 June 1903, Page 1

CREDIT A ND PURCHASE.

In local affairs, England and Wales—more especially the former—aro being governed (remarks a writer in tho Fortnightly Review) “ largely on the hire-pur-chase system. This method of acquiring what ono cannot or will not pay for at once is becoming engrained in the British character. It is adopted in these days by young peoplo to obtain bicycles, cameras, and other tilings they cannot afford, by the housewife to get a sewing-machine, cutlery, or jewellery, by the city man who wants a motor-car, by the studious man who desires books, from an atlas or a dictionary to ponderous volumes of a work of reference, while the young man with no capital is able by its aid to form a home for his bride. A largo section of tho peoplo of this island exist on the hire-purchase system, forgetful of the old proverb, 1 Live upon trust, pay double you must.’ Some proverbs contain a kernel of truth, and this is one of them. The example set by the National Government in this matter of loan-raising in time of great emergency, in particular war, has spread through the local authorities to the homes of the middle and working classes, and tho movement has been accompanied by an increase in the credit system, half-brother to that of hire-purchase, as is 3hown by the number of debtors in the County Courts, tho claims against whom in 1900 amounted to no less than £3,377.085. Hand-in-hand credit and biro purchase—the children of oxtravagauco hamper increasingly the freedom of exchange and barter, overshadow tho happiness of countless homes, lead local authorities into oxtravagauce, and rob Chancellors of Exchequer of their peace of mind. . . . Local authorities pay for nothing ‘on tbo nail ’ if by any possibility a loan can be obtained, and the local debt of the anxiety, and there is pvima facie evidence that this anxiety is not the child of municipal trading, and before Parliament takes any stops to give local authorities longer torrns for repayment of the vast sums they are borrowing with such light hearts, knowing that not they, but their successors, must pay the 11 bill, it would do well to await the report 0 of the Joint Select Committee which has a boen appointed on the suggestion of the Prime Minister to inquire into the ques- [ tion of municipal trading. Throughout o the country the growth in local rates and d indebtedness is causing great anxiety, and there is prima facie evidence that this anxiety is not without cause. The situation is this: By means of loans, local authorities raised in 1899-1900 nearly 23£ millions sterling, out of which thoy paid back to their creditors over 151- millions for in- b terest, and, to a small extent, in repay- 0 ment of capital. To the balance of about £ eight millions thoy were able to add just * over 121 millions, received from that fuiry godmother, the Imperial Government, and about a third of a million tho net profits of reproductive undertakings. By these means they obtained a matter of just undor 21 millions clear of debt charges, and having done so well, they went to the ratepayers aud asked them for 40iJ millions. Every year the debt charges increase, and every year the debt is increased also, and so the game is played. In face of these facts, and tho doubtful ] value of mauy of the securities on which these loans are raised, is it surprising that the money market is looking unkindly on local loaus ? The time has come for checkthis ruinous ' hire-purchase ’ policy.”