Evening star., 1926-12-05
CHRISTMAS SAVINGS MOVEMENT
HASSPREAD IN BANKING CIRCLES
Nearly All Institutions Have Adopted
Plan-Dangers of Installment Buying
Foreseen-Corporation Reorganiized.

vent OF the finance companies. a
dealer was permitted to get cara
only against the production of the
bill of lading. which was attached %
the draft he was first required to
pay. In other words, the manufac-
turer did spot cash business and
the burden of distribution was passed
on to the dealer. usually some ona
OF limited capital. Each community,
therefore. had to he taken care ce
by the banks. Money was advanced
to the dealer to get the cars un-
AIDED. and then. when the cars we're
sold on credit. the purchaser had to
be financed.
Volume Too Great.
There Is no present cause fce
alarm over the financing of automc-
bile purchases on credit terms.
There is reason, however, because nt
the great volume of credit variously
estimated by tie finance compa nies
themselves. TO exercise the greatest
care to prevent excesses and there
should be no deviation from the plans
In use. which are regarded as safe
There is a sincere disposition IN
the part of many of the finance COM
panies TO have the recognized evils
obliterated. In recent address
made by Alfred Reeves. general man
ager of the National Automobile
Chamber of Commerce. the state
ment was made that 80 per cent OF
installment buying in the autorrfO-
bile industry is sound economically
and We will gladly join with others
in helping to eliminate the 70 per
cent that is unsound.'
That Is a pretty large percentages
OF questionable paper. I shCu'i not
like to think that out of a million
dollars Of paper representing loans
made by our bank we could hav"
as much as 100000 dollars ot quoe-
tiOnable paper
I'm the same address to which
have referred as having been made hy
Mr. Reeves. he states that More than
20 per cent of motor cars are sold ON
installments.. In a circular letter
sent out a few days ago by Hare &
Chase. II Is stated that on survev
made by Dodge Brothers, it was a-
Certained that $40 per cent Of cars
were sold on credit. Somebody hl-
got to get a bit closer to the facts ar
figures on this business. Hare
Chase also say that absolutely moth
ing in our direct experience has eyer
justified the commonly accepted 80
per cent ratio of automobile tiuI'
payments, and while. of course. therN
are wide variations in the proportiou
of time business, between the diffe'
ent communities. different dealer
and different ella sseS of cars. TN"
Dodge Brothers average of $40 per
cent time buyers would. in our opirl-
ion. be close approximation for all
the popular lines in the Dodge
pr0t 0r;c ola 7. ~
higher among lower priced cars and
much lower among higher priced
cars. But if it may he accepted as
an average for cars at the thousand
to twelvehundred dollar average
price level-and all the facts in sight
at present point that way-the aver
age for the entire industry will not
exceed 60 per cent in units or prof..
ably so per cent in the cash value
of it's output.
II am giving these references by
way of aCcentuatinC the point that
there is danger of excesses becoming
known perhaps after it is too late.
After the War.
while it may he that there were
Christmas savings clubs in tho Ia nks
prior tn the war. | have no instances
savings clubs becaume very popular.
and their advantages have been
stressed by speakers during Thrift
week and by bank advertising. the
uses pointed out being that they We're
intended to bring good cheer at
Christmas time through the payment
of doctors bills. dentist S bills, interest
on mortgage, etc.
Now comes along our automobile
manufacturer, who. in a synopsis of
his plan. tells his agents that while
they have been successful in the sale
of cars. there is "a field that has not
even been scratched. He called at
tentiOp to the Christmas savings a,.-
counts which the banks had built
through their preaching of economy
to people who usually did not have
any other kind of a. relationship with
the banks. and said they should apply
the Christmas savings idea to the sale
of his cars.
1.-The people shauld he told he
argued. that they should save for ::
definite object instead of putting The
money weekly in a Christmas savings
account and spending it at Christmas
time for things of no CONSEQUENCE,
They should accumulate by weekly
deposits the down payment for one or
his cars. after which the car would he
delivered and he available for the COM
fort of the family.
Little consideration did he give to
the fact that this field of which hn
spoke embraced a class who were al.
most wholly unable to maintain "A car.
He also had the temerity to suggest
that the hanks would receive tho
weekly payments. and their reward
for doing so would be the probability
,In
slant contact with the people
Only few banks permitted their
facilities to he used for this purpose.
and those few banks within a very
short time ceased TO handle the busi-
ness.
IF stimulation of production calls
for this kind Of salesmanship, then
the responsibility of granting credit
becomes a real job If We are to con-
tinue In business"