CASH-ORDER TRADING.

Otago Daily Times, Issue 20786, 3 August 1929, Page 14

CASH-ORDER TRADING.

The report of the Minister of Industries and Commerce and the Secretary of his Department upon what is known as the cash-order trading system goes fairly far to justify the complaints ■against the system in response to which an inquiry was instituted. It is considered that the system as now in operation in New Zealand should be modified in such a way as to put it on a fair basis. The opinion is expressed that the system is not so general in the Dominion as to constitute an undesirable form of credit, but that if it becomes more extensively used it will undoubtedly increase the cost of living. It is only to a limited extent that it is of benefit to the working classes, but it is characterised at the same time by the committee as “ one of the most expensive forms of credit of which a worker could avail himself/’ Under the system a person secures from firms or individuals carrying on this form of business an order which enables him to obtain from a retailer the goods which he requires. Generally the customer is charged a commission on the value of the accommodation afforded and pays back in instalments the amount represented in the order, while the firm issuing the order receives a discount from the retailer. The borrowers, it is pointed out in the report of the Committee of Inquiry, contribute less than the retailers to the profit of the cash-order companies. The view is expressed by the committee that the system operates to the disadvantage of the genuine cash buyers, those who tender cash - receiving “very little consideration” from the traders. The business methods practised by tha majority of those

issuing cash orders are unfavourably reviewed, principally on the score of the way in which instalments are collected, and the committee seems to have adopted the suggestion that the effect of the system' is to encourage extravagant buying. If the indictment of the cash-order trading system embodied in this report does not brand it as exactly the u pernicious ” thing which it has been represented to be in some quarters, it is on the whole sufficiently condemnatory—and, as we are disposed to believe, justly so. A number of recommendations are framed for the modification of the system, but it is here that the whole finding reaches a lame and impotent conclusion. Cash-order companies and individuals conducting the system are to be given an opportunity of conforming to these recommendations on the understanding that if they express their willingness to do this the Government will not proceed to legislation in the matter. It is scarcely to be supposed,' however, that persons who pursue methods of trading that arc generally considered upon investigation to be undesirable will not be able to devise means by which they may evade the effect of the recommendations or stipulations of the committee. If the recommendations framed by the Minister and the Secretary of his Department are worthy of adoption in the interests of the public and the business community as a whole, they should be adopted and enforced. The manner, however, in which it is suggested that effect may be given to them, involving, as it does, reliance on the good faith of the cash-order traders, stamps the report with futility.