Daily capital journal. (Salem, Oregon) 1903-1919, 1918-03-16
Banker Talks Credit
TO Automobile Dealers

bins, of Detroit, assistant director {
sales of the Maxwell Motor Sales Co.
poration, presided, went home with tw
important facts emphasized in thei
minds.
One was that there is going to be
shortage in passenger automobiles.
The other was that the manufactur
of motor trucks will increase to a
enormous extent, and that AUTOMOBILE
distributors and dealers, as a matte
both of patriotism and good business
should begin now to develop stronl
truck selling organizations.
One of the enlightening addresses o.
the day was made by r. w. Schmeer
cashier of the United States NatiOna
bank of Portland, who discussed the at
titude of the banks toward the automo
bile business at this time. He prefacet
his remarks by saying that las banI
has 500 900 worth of automobile paper
on hand, and that it has never lost one
dollar on paper of this kind.
Banker Tells How Banks Stand.
Mr.. Schmeer made it very plain that
the banks will not discourage the auto
mobile business by refusing financial
backing to dealers, but they will insist
that every sale be made according To
sound business principles. In particular
he emphasized that cash payments
should be required wherever possible.
and that in no case should automobiles
be sold for less than one third cash and
the balance in not more than nine
months. He said:
"Sell trucks, light delivery cars;there
is almost an unlimited field for this
branch of the auto industry. Put forth
your best efforts and develop to the
fullest extent this department Of your
business.
''Bankers look with a great deal
more favor upon sales contract repre-
senting a truck or delivery car sold than
one representing the sale of a a for
pleasure only. One is a necessity, a time
and money saver; the other not only
an unnecessary expense but a time and
money spender as weIl,
s'Do not understand me as taking the
position that no one should purchase
cars for pleasure only. There are many
who can and should and who at the
same Jluue can uO IHSll LUZ P"ViA"'N'
duty to their country. But the class of
5lness which is sure to shrink and
which, to my mind, should be discour-
aged, is the purchaser who is a man
upon a moderate salary, who buys his
car for as small a cash payment as pos
sible and whose monthly payments are
derived from his salary.
'eTo me this class of business is not
only undesirable but dangerous as well.
''In the scramble for business many
dealers have been so anxious to make
sales that you could buy a car almost
on your own terms. l could cite in
stances where sales contracts have been
offered to the bank which | have the
honor to represent for rediscount, call
ing for 20 per cent cash. Balance from
II to "a equal monthly payments. 1t is
needless to say that this class of paper
is turned down and as a result it IS SOLD
to brokers at a discount of from 2 to 3
per cent.
There. is no reason why notes repre-
auto sales on the proper terms
should not be worth 100 cents on the
dollar, and if you are making sales on
terms that your banker will not accept
are discrediting one of the greatest
industries we have ever had.
Proper Terms Explained.
Anticipating your question as to
what l consider proper terms upon
which sales should be made, | will make
classifications:
'fFirst-Trucks and light deliveries,
lot less than one-third cash. Balance IN
equal monthly payments not to exceed
l.. months. Interest on deferred pay
nents at the rate Of 9 per cent per dI'
Second: Pleasure cars sold for bust
less purposes. not less than one-thisd
ash. Balance in equal monthly pay
not TO exceed nine months. Inter
st on Ge1erIed payments at the rate OF
per cent per annum.
Third: Cars sold for pleasure only.
,ell only to those whose financial res
cnsibillty and earning capacity are
uch that the purchase and payment fol
pleasure car will not make it lmpos-
ible for them to do their full patriot
. duty to their country. Sell for cash
{ possible; if not, under no condition
or less than 80 per cent cash, and
alanee in equal monthly payments not
D exceed six months, interest at the
ate of 8 per cent on deferred payments.
''If YOU sell ON these terms your pa
er should meet the requirements of
our banker, Who win, / am sure, handle
Dr. you as hbral a line as your balances
nd responsibility warrant.
At the last session of the legislature
bill was introduced providing that all
Expenditures by the state far board
iould be audited by the secretary of
office the same as are the ex-
anditures of all other departments OF
he state government. The bill passed
le house, but the governor and his lit
e circle of politicians got busy and
lied ii in the senate.
But the consolidation committee s re-
ort did not mention anything about
lis.
1t may be that the committee as a
hole Will not approve of the sub-eom-
s report. 1t might be even that
lie whole committee, when IL prepares
S final report, win have some recon-
lxpayer to again take hopeetaoinshrdl
endations that viii encourage the tax
aver to again take hope that some
worth while in this line is going
!, be done.
~ raaasssors hro,,ght cha lee alOSaf