HIRE-PURCHASE SYSTEM

Taranaki Daily News, Volume LVII, Issue 21, 15 June 1914, Page 2

HIRE-PURCHASE SYSTEM

AN INCENTIVE TO FRAUD. By Telegraph—Pres3 Association. Auckland, Friday. The morits and demerits of the hirepurchase system, and the question of the compulsory registration of these agreements, wore again discussed by the council of the Auckland Chamber of Commerce at its meeting to-day. A letter from the Official Assignee in bankruptcy, in reply to a communication from the Chamber was read.

Mr Fisher, in replying to objections that had been raised against the suggested compulsory registration of hirepurchase agreements, said that if the present expense of registration (7s 6d) was considered high, it might be reduced to a nominal sum. As to the objection of registration on the ground of publicity, he said that particulars were published only in tbe Mercantile Gazette, which was read almost exclusively by 'business men. If a measure were necessary for public protection, undue consideration could not be given to the feelings of oversensitive individuals. The only people who had to fear publicity were those whose financial position was so weak that they could not obtain goods upon credit without giving security. It was doubtful whether the hire-purchase system was at all popular except with vendors who by it secured the advantage of being able to give credit without any risk. The latest deTelopment of the system, Mr Fisher said, was in connection with jewellery. "I am informed," he said, "that servant girls and youths in factories are being canvassed to purchase goods on this system." In conclusion, the Official Assignee summed up the objections to the present system as follows: (1) That it 4s an infringement of tbe fundamental law of bankruptcy that at a time that a man become bankrupt the whole of his assets shall be available for equal distribution amongst his creditors; (21 It is an incentive to false trading, in that it tempts men to purchase chattels when their financial position does not warrant their so doing; (3) It provides further facilities for committing fraud; (4) It gives one portion of the trading community, an undue advantage over the ether.

The President (Mr Bart Kent) said the hire-purchase system was a great convenience to many, and instanced the case of pianos, sewing machines, and typewriters. Such articles might be permitted to be purchased on the hirepurchase system without registration. It was agreed to defer consideration of the matter till next meeting. '