TRADING ON CREDIT.

Otago Witness, Issue 3889, 25 September 1928, Page 34

TRADING ON CREDIT.

THE CASH ORDER SYSTEM. ROYAL COMMISSION ANNOUNCED. WELLINGTON. September 21. 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' that his attention had recently been drawn to the growth of the system of cash order trading in the Do minion. The .general effect of cash order trading was to enable . intending pur chasers o>f certain classes of goods to secure them by means of orders issued by fii-ms which undertook (o pay the purchase price to the retail supplier, subsequently collecting the amount, of the order in instalments from their clients. 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 alleged 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 trad ing Strong criticism-of the system had been voiced in the Commonwealth of Australia, where it had recently shown a marked growth. The Prime Minister stated that at the direction of the Minister of Industries and Commerce (Mr A. D. M’Leod) some in quiries had already been made both in the Dominion and in Australia. The Government considered that the facts already elicited justified a close con sideration of the system—the extent to which it was at present or is likely to become prevalent, and its social and economic merits or evils. The Government therefore proposed to appoint at an early date a commission under the Commissions of Inquiry Act, 1908, to make a full investigation into the matter and to report as to any legislative or other action which might lie considered necessary.