“HIGHER PURCHASE”

Sun (Auckland), Volume II, Issue 410, 19 July 1928, Page 12

“HIGHER PURCHASE”

TIME PAYMENT DEFENDED AND CONDEMNED DO WE PAY FOR TALK? A fervid denunciation of the hire - purchase system was made by Mr. A. D. Stewart in a lecture given last evening to the Auckland Branch of the New Zealand Society of Accountants. At the same moment, Dr. Belshaw, Professor of Economics at Auckland University College, was reviewing the merits of the system before the Economic Society of Australia and New Zealand. Tn his address to accountants, Mr. Stewart said the system should bo called “higher purchase.” ‘lt may be of assistance to some,” he said, “but in many it breeds extravagance. “It does not encourage thrift and is merely a premium for the* impecunious to live up to a standard their means do not justify. “Fancy,” he said, “people securing a piano by paying instalments that are no more than the price of a weekly tram ticket to Freeman’s Bay.” PLEA FOR FAIRNESS

Dr. Belshaw, in his paper before the Economic Society, made it clear at the outset that he had never investigated the instalment -selling system so far as it affected this Dominion, and in the absence of research he could not formulate a definite idea upon tendencies. His plea, however, was for a discouragement of suspicion and prejudice which had been erected mainly upon unsound opinions of the time-payment method of purchase.

By figures he showed that one family in two in the United States purchased one new article every year on this system, although in that country from 11 per cent, to 16 per cent, of the retail deals were effected under this method. The point of saving must not be overlooked, he added, and the merits of instilment dealing must be viewed in the light of the balance of advantages and disadvantages.

One of the chief arguments against i. was its tendency toward expenditure on luxuries, but he pointed out i that many domestic necessities were covered by its operations. And again, the luxuries of one generation were usually found to bo the necessities_ of the next. Ho could find nothing inherently unsound in time-payment if wisely administered, but it did not follow that it was always the best for society—particularly if it increased the intensity of trades cycles with booms, or reflected in a curtailment of production. DOWNWARD PRICES Prices had not risen in the States, but tended to fall. This was not necessarily a result, of the system, but was a negative indication of its effect upon rising prices. Some mistakes were inevitable in the commencement of a system of this nature, but this did not justify the attitude of superior and critical condemnation. It must be regarded as an integral part of our commercial system and capable of extending the range of human enjoyment. Members of the society expressed their views very freely as to their opinions upon the soundness and otherwise of the system, and many questions were fired at the professor by those who believed that timepayment was pernicious and an encouragement to extravagance. Others believed that its effect upon essential trade was detrimental and toward the fostering of overseas goods. One member, indeed, pointed out that New Zealand possessed the same number of cows as it did in 1923. but there were infinitely more milking machines. He knew of cases, he said, wherein machines had been purchased for use on a herd of ten cows. “It is the talk you buy—not the goods,” he added.