SOUND BUSINESS

Ellesmere Guardian, Volume XLV, Issue 2952, 19 January 1926, Page 3

SOUND BUSINESS

THE INSTALMENT SYSTEM,

AN INCENTIVE TO "WORK. f \

It is well known that in the United States of America it is a commonplace for the worker to own his own car, and it is likewise'common knowledge that the instalment system in regard to 'the j-purchase of ears has an.■extraordinary vogue in that country. What.is; not generally appreciated 'is' the ' f sie't tHi..t the practice of buying by instalments has been extended to all classes of merchandise, and has, indeed, become an important phase in American commerce. Under the circumstances it is of interest to note the testimony of.independent commercial experts a's to the result of this method of dealing when carried out on a large scale. Thecominission recently sent by the Federation of British Industries' to U.S.A., /to obtain, information on industrial conditions in U.S.A., reported as follows: — During the last two years there has been a spirit; abroad amongst the consuming public which i?s often referred to as the "consumers' strike." This failure to rise is all the more remarkably in view of the enormous extension of the deferred payment system, which now includes not only automobiles, furniture, pianos, etc., but every range of commodities, including * clothes, radio sets, and even paint for the house. The. financial risk is not taken by the producer, but is insured, and special finance corporations have been formed to undertake this class of business, which is widely re-insured. It appears to be the general opinion that the instalment system is sound business, and that its great extension in the United States has contributed1 substantially to the existing- prosperity. The system has certainly acted as an incentive to work, in view of the necessity of keeping up regular payments, and the chief danger in it would ap-

pear to be that in a trade reaction-con-siderable losses would be incurred, a,nd also that, since the requirements of the future would have been so largely anticipated by this system, people would

hold off buying for longer than a norimal period,,and thus accentuate the deipiression. However, there seems little da,nger of this at present and we would suggest that, in view of present conditions in Great Britain, it might'be well worth the while of British business to examine the : possibility of extending this system to England to the \exte ( nt. to which it operates in the United States.