Ashburton Guardian Magna est Veritas et Prævalebit. FRIDAY, JANUARY 13, 1928. HIRE-PURCHASE SYSTEM.

Ashburton Guardian, Volume 48, Issue 79, 13 January 1928, Page 4

Ashburton Guardian Magna est Veritas et Prævalebit. FRIDAY, JANUARY 13, 1928. HIRE-PURCHASE SYSTEM.

While the hire-purchase system within limits undoubtedly has its legitimate place in modem business, its tendency is to spread to such an extent as to cause serious misgiving in the minds not only of traders, but also of men who are concerned with financial stability. This - disquietude is existent even to the United States of America, the original home of the system. From America the system spread to Britain, and is now obtaining a hold in Australia, while it is not unknown in the Dominion, where its ramifications, however, are not so extensive as in the other countries mentioned. The harm it isi doing in the Commonwealth was emphasised the other day] by a witness before the Child Endowment Commission in Sydney. A man on the basic wage, he said, could not afford anything beyond necessities, .vet he found himself surrounded by people indulging in luxuries bought on time-pay-ment. The temptation to mortgage the future in such circumstances was very real and constituted an economic danger to he guarded against. Similar opinions were given to a London paper recently, by a well-known City business man who pointed out that the instalment plan made the greatest appeal to the people of small incomes. A man earning a small wage would cheerfully commit himself to instalments totalling hundreds, hut let him become ill or he thrown out of work and where was he? English business, he said, was heading for trouble when it began to give a man credit for something he did not have. To say that the instalment plan had raised the standard of living was nonsense. Its chief effect was to make- people discontented, ; and to lead business men to deal with those whose credit was precarious. American business, he added, was finding out its mistake and was drawing in its horns in regard to the instalment plan, and it was time English business profited by the lesson. These observations apply, of course, to business in regard to every-day articles. The timepayment system in regard to the purchase of a home or a section of land is on an entirely different footing, and has indeed proved of great benefit to many, in fact, one might safely say, to the majority of the people. Generally speaking', the opinion of business men, both in England and America, now seems to he that it should he confined to assets that either improve in value, or whose depreciation is small and gradual, but that in respect of articles in which depreciation begins from the first moment of use its operation should be strictly limited.