PERSONAL CREDIT

Evening Post, Volume CXVIII, Issue 31, 6 August 1934, Page 12

PERSONAL CREDIT

AN AMERICAN ANALYSIS

Economic planning aud agricultural adjustment, and unemployment relief, and codes of fair competition, and all similar muss efforts in wliich Government undertakes to control the economic affairs of' citizens, depend for success on ability to adapt administrative methods to wide ranges of individual differences among the people affected. In. much of the current discussion of such matters, observes the Cleveland Trust Company, Ltd., of Cleveland, Ohio, the assumption seems to bo made that once Government has classified people in convenient groups it can deal, •with them as impersonal units in matter of work and reward just as it can when they are units in the Census. Of course, this is not so. _ . An interesting illustration of the exist: once of' group .differences is shown in a diagram prepared by the University -of Illinois.- It illustrates the fundamental principle that the reactions of groups of people to a given set of opportunities and obligations aro conditioned by factors which may prove to be outside the control of rules and regulations. The diagram illustrates .the credit worthiness of people of different occupations. The data were recently gathered by Professor P. D. Converse, of the University of Illinois, from a large number of credit men. The diagram shows that the highest credit worthy class by occupation are office clerks, of which 02 per cent, could be classed as '"'good" from the creditor s point of view; The list goes down to painters and decorators as 38 per cent, good. Other occupations . include school teachers, S6 per cent.'; shop assistants, 83 per cent.; doctors, SO per cent.; nurses, 71 per cent.; farmers, 71 per cent, factory women, 61 per cent.; firemen and police, 5S per cent.; auto salesmen, 47 per cent.; and barbers, 43 per cent. No doubt it is less the man or his calling that is ■ what is called a "bad mark" or a slack payer; The painter, and decorator, with suspension of building work, or the automobile salesman with no car-buying being done; doctors and nurses who cannot get in what is owing to them, will bo unable to meet all their liabilities and so find themselves, among the lower percentages. The original ratings compiled by Professor Converse and his students were rearranged by the National Association or Finance Companies so as to put them on a percentage basis in such a way that 100 would represent the highest possible credit rating. Some 34 occupations are represented in the diagram with credit ranging from a high of 92 to a low of

38' ■ It is clear to the Cleveland Trust Company that a given programme of social control -involving the extension of credit might have one set of results if it.had to deal with the groups represented at the top "of "the. scale, and totally different outcomes if it involved those at the bottom. Probably if its operations were politically controlled by the votes of the credit recipients the results would fall short of being satisfactory.