HIRE PURCHASE SYSTEM

Gisborne Times, Volume LXXI, Issue 11326, 2 October 1930, Page 3

HIRE PURCHASE SYSTEM

ITS EFFECT’ ON TRADE.

A CRITIC AL SURVEY

la view of the recent discussion on the hire purchase system at the annual meeting of the Mar ton Chamber of Commerce, the following article from the “Scotsman” provides excellent reading:— “During last year no fewer than 263 persons were placed in prisons in Scotland-for debt as the instance of hire-purchase firms. During the first quarter of the present year the number was 25 which gives a miich smaller proportion, so that it would seem that people are learning their lesson. One of these unfortunates in 1929 was kept in prison for no fewer than 1.19 days; the longest period. of imprisonment during the present, year has been 24 days. “There are two applications of the hire-purchase idea which are sound. The man who buys., his House on m- ; stalments is putting his money into a durable asset, axil he will derive both pleasure and satisfaction from the sense of ownership, even though, on a narrow computation of profit and loss, it may not be a paying proposition to own one’s house.

“Similarly, the man who buys a life insurance policy by paying annual premiums is making a good investment. If lie cannot keep up the annual payments lie lias still a marketable asset, for the insurance company will always give him the surrender value of his policy. But when wo get into the region of perishable commodities, the ethics - of hire-pur-chase become a little more involved.

“It has been represented that hirepurchase is thrift. It is, of course, nothing of the hind. Thrift represents deferred cujoyrnenh; hire-pur-chase is . immediate enjoyment. Hirepurchase is not 1 thrift, and it is spending on the basis of an income that has not ben earned, and may never bo earned. In times of industrial and commercial prosperity, tbe risk in hire-purchase may not be obtrusive.

“When prices and wages are rising, the man who buys on the instalment system wins. When, on the other hand, wages and prices are falling, he loses; and if.as the result of industrial depression, he is thrown out of work, "he . may he unable to meet .his instalments when they! fall .due, and so forfeit the goods 'which have never been actually." -liis, but have remained the property of /the hire-purchasing firm,' -. • ' • “He may even he involved in financial disaster in an-effort to fulfil a contract into which lie had entered' on the faith of his financial condition ; remaining the same as at the date of* the contract. >"■ ■ . "