Rock Island daily Argus. (Rock Island, Ill.) 1886-1893, 1889-06-05
BUYING ON MONTHLY PAYMENTS

Purchasers Pay Wen for the Privilege of
Securing Goods on Time.
In a general way the monthly payment
stores afford a good index of the prosperity
of the middle and lower classes Hard times
and lack of employment invariably make
themselves felt in delay or stoppage of pay
ments, and the duration of stringent circum-
stances can readily be measured by the way
the payments are resumed A furniture
dealer was interviewed by reporter:
what course do you take in case of delin-
quency In payments"
'There is only one advisable course, and
that Is to tide over those who can't take up
their monthly notes. The public, think, has
distorted views about the monthly payment
stores. There are, doubtless, some sharks
among us, but most of us aim to do a fair,
legitimate business, charging but 10 per cent
more for our goods that the men who sell for
cash do. Taking back of goods is always
avoided, for there is no money in sale if the
stock has to be taken back and turned over to
the auction stores. IL is only the monthly
payment stores which keep second hand fur
niture that can profit by the utter failure of
their patrons. We have families that we
have carried along a year, and | doubt not
that other monthly payment stores have like
wise To harass patrons would be to work
against our own interest. So far as rates of
profit are concerned, the only element of in
justice In them is one of which the public
rarely thinks IL the account runs a year the
10 per cent. extra we charge is fair, for the
risk, the cost of collection, and the loss of in
terest from having money outstanding is fully
equal TO the additional rate of profit we
charge. Our margin of profit is computed SO
as totnclude years interest on the regular
prices of the goods, but many, possibly the
greatest number, of our accounts are closed
In shorter time-six months, say. Thus on
purchase of $50 or SIS worth of goods, ar
ranged so as to be settled in six months, the
buyer pays 20 per cent. interest on the
amount of the bill for the Who'll, period, while
he actually makes payment of a sixth of the
bill when hegets the goods and similar pay
ment every succeeding month When the ac-
count runs for year the burden is not so
heavy. If people can pay cash they should,
and every honest dealer in our line of bust
ness will tell them So
1T is unquestionabiy true that the form of
payment Is temptation to purchase beyond
the means to pay. We have no trouble in
selling. Our greatest difficulty is to keep the
bill down to what we consider a safe limit
People do not stop to think that they pay for
their privilege of making installments at a
tolerably high rate One reason of this lack
OF judgment Is probably because women do
so much OF the buying at the monthly pay
ment stores. They often fail to estimate
carefully what they can do, and the result is
that they become source of trouble to
themselves and us. Often, too, men who
we're drawing good salaries at the time of the
purchase, get out of work soon after, and
any characterization ON their part makes pay
ment an uphill work. The spread Of the
payment stores has been surprising. Almost
every large city now has q humber Of such
concerns, which seepi to do more than
their ordinary snare of business. In Chi
cago doubt II there are as many
as there were two or three years
ago. The reason of this is not that the scheme
does not work successfully, or that there have
sprung up too many for the population. The
capital required for such business is much
greater than that which is requisite for cash
trade. 1t was common practice for dealers
to realize ON their monthly notes at 2 or per
cent. a month. They were unable to carry
their own paper, or borrow at legal rates, and
the result was that a number Of concerns have
failed during the last year or two think it
is all nonsense to talk of the monthly pay
ment stores cutting into the regular trade
disastrously. We catch q class of patrons
who would not deal at cash store, since they
would not be likely to save up the necessary
money. l believe that monthly payment
stores are an incentive to thrift and economy
second only to the building associations ~
Chicago News.