CASH ORDER TRADING.

Auckland Star, Volume LX, Issue 181, 2 August 1929, Page 10

CASH ORDER TRADING.

AUCKLAND OPINION.

BUSINESS FIRMS DIVIDED.

GOVERNMENT INTERFERENCE

MENTIONED,

Seen to-day regarding the findings of the commission on the cash order trading, leading business men seemed somewhat divided on the subject, and more details of the proposals . are being awaited.

The principal of one of the leading drapery firms said that the putting into operation of the proposed legislation would lead inevitably to the crushing, of the cash order system and would force people who wanted extended credit to resort to the time-payment system, which, as far as the public was concerned, was far more costly. It was to be deplored that tlie commisfc.on, in making inquiry into the cash orcrer system had not been empowered to make a comparison with the time payment system. His firm had found the cash order system easv and business-like in operation, and it did not afford facilities for extravagance as encouraged by the time payment system, because the average purchaser under the cash order system was not granted credit in excess of £5. The greatest indignation was felt at the Government interference without similar action being directed to other credit systems. Although the N.Z. Drapers' Federation had petitioned the last Parliament to set up an inquiry, Auckland drapers were by no means unanimous in favour of the proposal, and had considered it would be unfair to single out this system as against any other form of granting credit. In his opinion the cash order system has not increased retail prices and was no doubt of great benefit to working people employed on weekly wages. By this means the system placed the worker on the same footing as the man in settled employment who got time-payment. It was pointed out that the credit given in issuing cash orders was safeguarded by inquiries as to the ability of the purchaser of the order to pay once the order was issued. Other Channels To Benefit. A business man closely associated with both the hire-purchase and cash-order systems of trading said it was rather difficult to form a definite impression of the commission's findings without having the full text of its report. "The extract published I cannot conceive, to be a correct representation of the full report," he said. "The first proposal limiting the discount and charges would make it impossible for the cash-order firms to carry on. If that is the intention of the commission their best, policy would have been to make a direct recommendation rather than attack the profit in the manner suggested. Beyond that, one of the most notable features is tha there is apparently no suggestion that the restrictions should apply to the systems with which C.O. trading is competing. If the commission's ideas are put into force, it would simply mean that the business done by cash-order traders would immediately be diverted into other chanels, as, for instance, that controlled by the time-payment hawker. No one who understands the position would suggest that such a development is anything else than most undesirable. The great benefit of the cash-order system, on the other hand, is that holders deal with reputable (inns for their requirements. It was most astonishing that this point had, escaped the commission." The attitude of the cash-order firms in the city is disinclination to make further comment or take action until the full details are available. Proposals Too Drastic. "I read the report of the commission with a good deal of surprise," observed the director of a leading Auckland merchandise firm which does not deal in this cash order credit business. "I did not think the commission would be so drastic in its proposals. It would have seemed reasonable to have allowed a plus charge of 5 per cent, or 1/ in the £, for accommodation in respect of the first clause. Even if this had been allowed the other conditions are so drastic that it is doubtful whether any cash order company could conduct a profitable business. The prohibition of canvassing from house to house to" sell cash orders to people seems reasonable, as this is, in fact, going round inducing folk to borrow money. It does seem unreasonable that ordinary cash order literature should not be allowed to go through the mail, as the personal influence of the canvasser is eliminated in mail matter, and one can hardly see the difference between newspaper advertising, which will be allowed, and advertising per the mail, which is to be prohibited. Condition 5, that anyone willing to allow a 10 per cent discount should be allowed to handle any* cash order, seems reasonable and not against the interests of cash order companies. The seventh conditfon, that a married woman cannot borrow on a cash order without the consent of her husband in writing, will create considerable difficulty for cash order companies. "Under the heading of 'If the system became more general, would it increase the cost of living?' the commission emphatically says 'Yes,' but this is a very doubtful point. For instance, if those accepting cash orders to a considerable extent because of the 10 per cent given to the cash order company had to increase their prices to the public, the public would cease to buy,- so it would obviously work its own remedy. Advertising of prices, and competition are so keen that no retailer can sell at a substantially higher price than competitors and survive. I am of opinion that most of these systems sort themselves out if left alone, without Government interference." .