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Hokitika Guardian, 26 November 1927, Page 2

Of late there lias been much discussion of the practice of purchasing articles on the instalment system. The practice Inis grown tremendously in America, ami evidently it is increasing rapidly in liritidi countries. It might be ml ■■rod from the maimer in which the submit is dealt will) occasionally that the system is comparatively new. 1 hr. oenur e, is not the. ease, as witness tiie prat lice of purchasing houses through building societies. That is a practice of very long standing, and in tho course of years the building societies have grown tremendously, but the movement has ever been adversely criticised. It is considered by a good many that the growth of the habit of buying on the instalment plan constitutes a possible danger. As to this, a distinction, of course, must be made lie tween the purchases in this way of necessaries, such as bouses, anil the purchase of luxuries, such as motor-ears. Ihe system has been most, fully developed in America, especially since the war, and there the movement has been scrutinized by economists with great interest, if not anxiety. A number of experts, among them Dr Wilbur Plummer. of Pennsylvania University, have collected information regarding the approximate dimensions of the system. It is tolerably safe, according to Dr Plumer to put the total instalment debt outstanding at a given time (excluding houses, life insurance. ami stocks and bonds) at the equivalent of £550,000.000 and the total in the course of a year at about £1.200.000.000. These figures may look staggering, but their importance) can be exaggerated. Evidently instalment buying in America is not the prevalent form ol retail purchase, liecause the latter of the two figures given above is only 15 per cent, of the estimated annual total of £8.000,000,000 spent by llie citizens of the United Stales of America on retail transactions. AVhen the figures are compared with the total credit of all kinds outstanding in America at any moment they are still less significant. A recent estimate by the Statistician of the New York Federal Reserve Bank places the total volume of credit outstanding in the United Slates at from ;C2-I,00'l.(l0().00:) to £20,000,000,000, exclusive of actual credit extended by manufacturers, dealers, etc, to their clients of which in) record exists. To thoi-.c figures the total instalment figures stand in the ratio of about 21 per cent. It would seem that instalment selling in America has made most headway, not ill respect of pure luxuries, hut of articles which effect a saving in hand labour; in other words, of goods bought not for consumption, hut such as are expected to last for at least a period of years. Tt is well known that the automobile industry has been a pioneer in the business.