CASH ORDER TRADING.

New Zealand Herald, Volume LXVI, Issue 20323, 2 August 1929, Page 14

CASH ORDER TRADING.

CONTROL BY THE STATE.

LEGISLATION RECOMMENDED SOME DISCIPLINE NECESSARY. COMMITTEE PRESENTS REPORT. ■» [liY TELEGRAPH.—SPECIAL REPORTER.] WELLINGTON, Thursday. The beliol that, tho cash order system of trading should be subject, to control by the Slate is expressed in the report of a committeo of inquiry laid on the table of tho House of Representatives by tho Minister of Industries and Commorce, tho Hon. J. G. Cobhe this afternoon. Tho committee comprised the Minister and Mr. J. W. Collins, secretary of tho department The findings of tho committee were based on evidence hoard in the four chief centres last March and reports of similar investigations made in Aus--1 rnlia.

"Wo arc of opinion that, in the public interest, legislation is necessary and that proper control can only bo made fully effective by law," states the report. "Unfortunately the system has burst tho narrow limits where little or no harm could have been done to tho general public, and it is now necessary to discipline it in such a way as to put it on a fair basis. With this end in view wo have to recoinr mend the Government favourably to consider tho following proposals:— Limiting Charge to Clients.

"(1) That the charge to clients should not exceed 6d in the pound. " (2) That the trade cash discounts allowed by retailers accepting tho orders should not exceed 10 per cent. " (3) That canvassing for orders should be prohibited. " (4) That no mail order propaganda be allowed.

" (5) That, tho cash orders bo open to any firm willing to accept them, and not limited to 0110 firm or individual. (6) That all orders should bo issuable from a registered office only. " (7) That rio orders shall bo issued to persons under the ape of 21 years, or to married women, without tho consent in writing of their husbands. " (8) That no order bo issued to any person who has not completed payment of any previous order. "It is suggested that three months' notico be given to the cash ordei companies and individuals to express their willingness or otherwise to conform to tho preceding proposals If acquiescence is shown it should be stated that the Government will not proceed with legislation. Such notifications should be made to the Department of Industries and Commerce within three months of the" publication of this report. Failuro to send notification will be taken as an indication of refusal to comply It is further suggested that the secretary of tho department should report I lie result to the Government during this session of Parliament." Great Strides in Auckland.

.An interesting comment on the growth of the system in New Zealand is made in ono part of the report, which states:— "Tho system has' been in operation' in New Zealand for at least 33 years, but, except for the last two years, has not shown any marked tendency to increase. While not so deep-rooted and far-reach-ing in New Zealand as in Australia, it is undoubted that in Auckland the system has shown great strides during the past year, but the steady resistance of an influential section of tho retailors in Wellington, Christchurch and Dunedin has checked its development. Considerable concern, however, has been expressed by many retailers at tho proposal to establish companies conducted on tho same 'incs as those in Australia, with a view to spreading tho system in New Zeaiand.

"Dealing with tho present position of companies and individuals engaged in the business of granting credit by cash orders, we find that in New Zealand there are 10 companies established, five of which are located in Auckland, and about 20 proprietary concerns. Some of those latter, especially in Dunedin and Wellington, do quite a substantial business. It was difficult to obtain definite figures, but approximately the value of orders, in 1928, issued in Auckland, totalled £140.000: in Wellington, £120.000: Christ - church, .C15.0C0; and in Dunedin, £14,000; a total of C 239.000. Danger If Left Unchecked.

"Considerable difficulty was experienced in making recommendations, because the. mass of evidence was either strongly in favour of the system or just as strongly against it. For the purpose of arriving at definite recommendations (he following questions were submitted, the answers embracing the views of the committee: — "Is the system so general in New Zenland as to constitute an undesirable form of credit V—lt has not yet reached such a stage, hut in Auckland, if it remains unchecked, it is likely to reach such dimensions as to raise the cost of living generally. There is a danger also of the system spreading in other centres and towns unless some control is exercised. "Is the system of benefit to the working classes ?—To a limited extent, yes. This form of credit is no doubt of assistance to workers in casual employment and i"i| in receipt of regular wages. We are definitely of the opinion, however, that the beneficial scope for this class of credit is limited, and that, it is probably one of the most expensive forms of credit of which the worker could avail himself. ''ls the system conducted on a basis that is fair to clients and to retailers?— As conducted by a few firms in its presentlimited application, particularly in the South Island, it imposes no great hardship on clients or on traders. "Does the system act disadvantageonsly to the genuine cash buyer?— Generally, yes Very little recognition, wo regret io say, is given by traders to those ten doing cash The evidence stresses most markedly that those possessing cash orders receive, on Iho whole, equal treatment to those paying actual money. Menace to Cost of Living.

"If tho system became more general would it increase the cost of living ? Emphatically yes. The consensus of thoughtful opinion supported this view, and traders who warmly support tho system were of the opinion tiiat if over 5 per cent, or 10 per cent, of the turnover were done in cash orders, prices would need to he revised.

"Are the methods of securing business by casli order traders open to question?— In spite of the conflict of evidence on this point we are of opinion that the method.' practised by the majoritv of those issuing cash orders are most, undesirable, particularly in the collection of instalments at people's homes, at, the doors of factories and olliccs, and the securing of custom by canvassing and the signing of the orders by housewives surreptitiously. Another undesirable feature is the issue of booklets or pamphlets, often cleverly illustrated and worded so as to appeal to the flioro ignorant and careless sections of the community. Reliable evidence was given that in several cases where there was delay in payment of instalments housewives were threatened by tlie collectors that the transactions would be divulged to their husbands "Does the system oncouracjo extravagant buying?— The system certainlv has that tendency, but the weight of evidence shows that those possessing the orders were discriminating buyers. In cases, however, where the full order wis not expended, the balance of the money was frequently wasted on goods other than necessities."

Answering an inouirv bv (he Leader of tho Opposition. Right, lion. J. fl. Conies, the Prime Minister, £ir Joseph Ward, said discussion on the report would probably not be taken until after the Budget debate, so that members would have several weeks in which to familiarise themselves with the contents.