CASH ORDER COMPANIES.

Hokitika Guardian, 21 September 1928, Page 4

CASH ORDER COMPANIES.

SYSTEM SEVERELY CONDEAINED. AUCKLAND, September 19. 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 Alilnc and Choyce, Ltd., Sir George stated that the system, which was unfortunately growing, was thoroughly pernicious. A customer secured orders on certain firms from a 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. ’Hie usual practice was for the retailer to pay 12J- per cent, as a commission to I the financing company. J

The speaker said that his firm had been approached on several occasions with the request that they should recognise these orders. They had refused, and he had no hesitation in saying that if they attempted to sell their goods at their present prices and gave such discount to the middleman they would pot only lie unable to pay shareholders dividends, but tney would be on the road to liquidation. No firm could do it. It stood to reason that the customer had to pay this 12$ per cent. .Moreover, the person using the system had to pay as interest to the cash order company a much higher rate of interest than ho realised. Nominally 6 to 10 per cent., it would pan out as high as 30 per cent., when every factor was taken into consideration. r