WELLINGTON NEWS

Hokitika Guardian, 29 March 1927, Page 4

WELLINGTON NEWS

INSTA LMEXT BU VINC.. (Special to " Guardian.”) WELLINGTON, .March 25. Buying on the instalment plan lias been known in New Zealand lor many years, and there is many a housewife who has become possessed of a piano, or a gramophone, or sewing machine or mangle on the instalment plan. During the past five or six years purchases by deferred payment has'developed to a remarkable extent in the United •States, and this is being watched with interest, not unmixed with anxiety. In America practically everything is sold on tins plan, and exclusive-of bouses, life insurance and stocks and bonds ah' of which are sold on instalments on an extensive scale, it is estimated that approximately six thousand million dollars’ worth is now sold at retail annually on the instalment plan in the United States. This represents about 15 per cent of all retail sales, which are estimated at forty thousand million dollars annually. The amount of the instalment debt at any given time is estimated at 2750 million dollars. It is estimated that 75 per cent of the automobiles are sold on tin's instalment plan, and these account for about 1500 million dollars of the instalment debt at tin- present time. In the United States it is possible to buy almost anything on the instai'ment plan. The idea has extended to Australia where a good many things are now sold on the deferred payment system. One of the effects of instalment buying, it is stated, lias been the bringing into the present system of production of a new middleman in the form of the finance company. An almost entirely new field of business lias been 'created, which has grown to an immense size in the United States in a lew years. The estimates of the number of companies now operating range, from 800 j to 1700. Some of the companies arc largo organisations doing business on a national scale, while others are very small and coniine their activities to a single city. One concern starting in 1912 with a capital of 300,000 dollars now has 07 million dollars in assets. Some of the companies specialise in financing automobiles in general' or a particular make; others specialise in financing furniture and machinery, while others deal in paper arising from the sale of any or all kinds of goods. Some of the finance companies discount their instalment notes in the regular way with banks located in the territory where the notes originate. The finance companies are an intensified part of the American commercial’ banking system. There are several such finance companies in Australia nun there are two or three in New Zealand. A further development in America is the re-discount- company to discount the paper of the finance companies. DA HIT PRODUCE. The trend of the butter market since the Dairy Hoard abandoned price fixing is decidedly interesting, for it indicates clearly enough that all the talk about speculators depressing the market for their own purpose is all very stupid. When the Board altered its policy it placed upon the London Agency a tormidnble task, and the fact that the sales had to be forced to clear tlireo times the average weekly quantity »t.‘ in itself a reason for the sharp decline in values. As everyone knows the price of butter fell from l!Ws to 1 Uis m the course of a few days and the first week’s sales exceeded the quantity fixed by-the Board for clearance.. However, the butter sold, and the fa- t that the Board was willing to sell immediately created an interest in New j Zealand dairy produce and the demand widened. Now we find that this demand has increased beyond the supplies that can be. marketed this week owing to the excess sales of the previous week and there is accordingly a. sharp advance, butter making 154 s per. owl, and cheese 78s. These improvc-

meats occurred under free marketing and afford a strong argument for the policy that lias made the wool market: such a buoyant one. It will perhaps take some time to convince some people that trade is not war, and that fluctuations in prices are necessary to indicate where production may lie increased or curtailed. Free marketing is the only sound policy, and it is to be hoped that Pari'iament will see its way to review the position during the approaching session. The tune has ar-| rived when special attention must be paid to increasing production and re-J ducing tlie costs of production. >