State Control Urged of Cash-Order System

Sun (Auckland), Volume III, Issue 731, 2 August 1929, Page 6

State Control Urged of Cash-Order System

COMMISSION’S FINDING REPORT TO BE DISCUSSED (THE SU2PS Parliamentary Reporter) PARLIAMENT BLDGS., Thurs. The need for confining the activities of the cash order system of trading within such limits as will be of most benefit to the general ' public was stressed in a report on an investigation of the system presented in the House of Representatives today by the Hon. J. G. Cobbe, Minister of Industries and Commerce. The report stated that control by the State was necessary, and that proper control could only be made fully effective by law. The commission of inquiry, which consisted of the Minister and the Secretary of the Department of Industries and Commerce, Mr. J. W. Collins, heard evidence in the four centres from representatives of trade organisations, principals of cash order trading companies, retailers and householders. The report of the commission stated that the system had been in operation in New Zealand for at least 33 years* but except for the last two years had not shown any marked tendency to increase. The system had grown most rapidly in certain States of Australia, and while it was not so deep-rooted and far-reaching in New Zealand, it was undoubted that in Auckland the system had shown big strides during the past year. Dealing with the present position of companies and individuals engaged in the business of granting credit by cash orders, the report stated that in New Zealand there were ten companies established, five of which were located in Auckland, and about 20 proprietary concerns. Some of the latter, especially in Dunedin and Wellington, did quite a substantial business. As to turnover, it was difficult to obtain definite figures, but approximately the value of the orders in 1928 issued in Auckland totalled £140,000, Wellington £120,000, Christchurch £15,000. and Dunedin £14,000, a total of £289,000. FOR AND AGAINST Tlio report stated, further, that the commission confessed that it was faced with considerable difficulty in making recommendations because the mass of evidence tendered by witnesses .was either strongly in favour of the system or on the other hand was just as strongly against it. Therefore, to arrive at definite recommendations the commission asked the following questions, answers to which embodied 'its views: “Is the system so general in New Zealand as to constitute an undesirable form of credit? —It has not yet reached such a stage, but in Auckland, if it remains unchecked, it is likely to reach such dimensions as to raise the cost of living generally. There is a danger also of the system spreading in other centres and towns unless some control is exercised. “Is the system of benefit to the working classes?”—To a limited extent, yes. This form of credit is no doubt of assistance to workers in casual employment and not in receipt of regular wages. We are definitely of opinion, however, that the beneficial scope for this class of credit is ; limited, and that it is probably one of the most expensive forms of credit of which the worker could avail himself. “Is the system conducted on a basis that is fair* to clients and retailers? As conducted by a few firms in its present limited application, particularly in the South Island, it imposes no great hardship on clients or on traders’” “Does the system act disadvantageto the genuine cash buyer? Generally yes. Very little recognition is given by traders to those tendering cash. The evidence stresses most markedly that those in possession of cash orders receive on the whole equal treatment to those paying actual money. DISCRIMINATING BUYERS “If the system became more general, would it increase the cost of living? Emphatically yes. “Does the system encourage extravagant buying? The system certainly has that tendency, but the weight of evidence shows that those in possession of orders were discriminating buyers. In cases, however, where the full order was not expended, the balance of the money was frequently wasted on goods other than necessities. “Is it desirable that tlie system should be controlled by legislation? We believe control by the State is necessary and are further of opinion that in tlie public interest legislation is necessary, and that proper control can only be made fully effective by law. Unfortunately the system has burst the narrow limits where little or no harm could have been done to the general public, and it is now necessary to discipline it in such a way as to put it on a fair basis. “With this end in view, we have to recommend that the Government favourably consider tlie following proposals:—• “(1) That tlie charge to clients should not exceed sixpence in the £ sterling. “(2) That trade and cash discounts allowed by retailers accepting orders should not exceed 10 per cent. “(3) That canvassing for orders should be prohibited. “(4) That no mail order propaganda be allowed. “(5) That cash orders be open to any firm willing to accept them, and not limited to one firm or individual. “(6) That all orders should be issueable from the registered office only. “(7) That no orders shall be issued to persons under- the age of 21, or to married women, without the consent in writing of their husbands. “(8) That no order be issued to any person who has not completed the payment of any previous order.” In reply to a question in the House, Sir Joseph Ward said the report would be discussed after tlie financial debate.