TIME-PAYMENT SYSTEM

Taranaki Daily News, 23 December 1930, Page 9

TIME-PAYMENT SYSTEM

SOUND CREDIT SYSTEM.

ENCOURAGEMENT OF THRIFT ,

“If we consider that the vast' expansion in the, time-payment system during the last decade has taken place -simultaneously with a great increase in the ■bank deposits and insurance policies /held/.,by the. people, we must realise that the bulk of. the adverse criticism' 'comes, from people who speak with little’knowledge of the system,”- said Mr. R. A. Laidlaw in the course of a luncheon address to members of the Auckland Rotary Club. Mr. Laidlaw said the .time-payment system was being hailed in England as a sound one, and was being adopted by many of the leading, business houses in that country as the sanest method of , extending the principle of credit. /■< / The speaker said that, although the . system was one of the latest developments of modern selling, it was . said to have originated oyer 100 years ago. As early as 1828 reapers and binders had been sold in the United States on a' system of time-payment; and. in 1898 the Times had advertised the ninth edition of the Encyclopaedia Britannica for sale on terms. Another example of the system was to be found in the principle of amor tisation, under which most property sales ' took . place. The manufacturers and the wholesale and retail merchants all relied on the use of credit to carry on their business,' and the extension of the system to the consumer by means of the time-pay-ment system was the completing link in the chain of credit. A case of misapprehension arose when the cash trader came to look upon the time-payment firm as his enemy because it took money out of circulation which should have been circulating among the traders. This was • fallacious, for the firm had to advance money in cash on the strength of its securities for wages and material to all sorts of interests concerned, in the production of an article, * and, then had to sit back and wait possibly for two years for the money to come back. This money was put - into direct circulation among many employees arid’ others, who spent a considerable portion of it in the shops of the cash trader. ■ .... ■ ’ . •■. . ' ■

Among objections raised to the timepayinent system' it’ was sometimes said that it.offered every inducement to the seller to persuade a person to. buy something which he could ill afford. On the contrary, there was every inducement to see that the purchaser was likely o pay for his purchase. Far from;leading to extravagance, the system enco..raged the putting-by of a small sum of money each week, and was really conducive to saving. ’

Air. Laidlaw said that although he had attended several meetings of creditors he had never been to one where time-payments had been in any way responsible for the bankrupt’s position. There was a movement in some quarters to have time-payment agreements subject to registration, but the speaker considered this was very unfair. “Why,” he said, “should a salaried man whose wife buys a sewing machine for 3s 6d a week be required to notify his debt publicly while his employer’s wife may purchase the same machine on credit and not pay for it for possibly six months?” Open credit was really much more dangerous than ' time-payment, said. Mr. Laidlaw, for the person to whom credit was giveq would often buy whatever the seller would let him have, while the time payment purchaser, for whom each purchase represented an increase in his weekly levy, had to watch his . expenditure very closely. If the public could be persuaded to save money in times of prosperity instead of spending it- so freely, and in times of depression to spend, freely instead of saving so rigidly, a great deal would be done to smooth out the bumps and hollows in the trade cycle. .