CASH ORDER TRADING.

New Zealand Herald, Volume LXV, Issue 20058, 22 September 1928, Page 14

CASH ORDER TRADING.

COMMISSION OF INQUIRY. GOVERNMENT TAKES ACTION. GROWTH OF THE SYSTEM. [by telegraph.—special reporter] WELLINGTON. Friday. The decision of the Government to appoint a Royal Commission to inquire into the operation of the cash order system in New Zealand was announced by the Prime Minister to-day. Mr. Coates said his attention had recently been drawn to the growth of the system of cash order trading in the Dominion. The general effect of cash order trading was to enable intending purchasers of certain classes of goods to secure them by means of orders issued by firms which undertake to pay the purchase price to the retail supplier, subsequently collecting the amount of the order in instalments from their client. The cash order company in practically all instances charged its clients a premium on the amount of the order, and also secured a relatively substantial discount from the retailer. Certain features of this system were slated to be uneconomic and socially undesirable, and the Government had been urged to take action against the unrestricted development of this method of encouraging credit trading. Strong criticism of the system had been voiced in Australia, where the system had recently shown marked growth. The Prime Minister stated that at the direction of the Hon. A. D. Mc-Leod, Minister of Industries and Commerce, inquiries had already been made both in the Dominion and in Australia. The Government considered the facts already elicited justified close consideration of the system, the extent to which it was at present, or is likely to become prevalent, and the social and economic merits or evils of the system. The Government, therefore, proposed to appoint at an early date a commission under the Commissions of Inquiry Act, 1908, to mako full investigation into the matter and to report as to any legislative or other action that might be considered necessary.