Evening star. [volume] (Washington, D.C.) 1854-1972, 1926-12-30
PROFESSIONALLY
IS NEW TRADE IDEA
Protection of InstaIIment
Sales Aim of New Firm
Formed in Maryland.

Special Dispatch to The Star.
NEW YORK. December 80. - The
keeping of profits as well as the max
ing of profits is certain to be major
factor in the American business sit
uation of 1927 This was clearly in
Dictated today by the formation of the
American Rediscount Corporation with
a capital of S31 500 900, which will aid
in financing concerns engaged in in
stallment selling, and the alliance pro
posed between the United Cigar Store
and Schultz Stores through stock
ownership in the Union and United
Tobacco Corporation, a $120,0O0,OO
holding concern.
The formation of the American Re-
discount Corporation followed ac-
acknowledgement of the fact that Install
ment selling has taken a firm and
perman ent place in American business
life. This policy of sales distribution
has had many opponents who have
repeatedly pointed out the dangers
which it contains. Removal of some
of those perils and sterilization of OPP
erations represent the main objects of
the new concern.
Practice Is Spreading.
Installment selling has spread into
q rapidly broadening list of commodi-
ties, including clothing, furs, jeWeiry,
paints and scores of other necessities
and luXurieS The volume of Install
ment sales is variously estimated be-
tween $6,000,000, 600 and $4,000 000.-
900 for the last year. Many merchants
have been asking anXiously what
would happen should there come a
slight slump in employment and a
consequent diminution of buying
power.
Advocates of the plan declare, on
the other hand, that since there is an
average cash payment of 26.6 per cent
made on each purchase, with further
payments monthly, at no time during
"a year is there more than 4212 per
cent of the sales outstanding.
See Practice Advisable.
The interests behind the American
RediScount Corporation declare they
are convinced that installment selling
lis advisable and necessary, but thai
in it's operations their corporation will
endeavor to limit abuses which might
result in losses to the public, banks
and credit finance corporations. The
corporation will rediscount paper for
mlrllIuel nnance corporations and act
in a measure along the lines pursued
by the Federal Reserve system.
The cigarette and cigar manufac-
turing companies have had a splen-
did year. Consumption of cigarettes
has gained about II per cent as
compared with 1925. The cigar and
smoking tobacco lines have not ad-
vanced so rapidly, but are in better
case than a year ago. There is every
indication that growth of sales of
tobacco products will continue in 1927.
although at a lower rate than II per
cent. But distributors say the mar
gin of profit is not extensive and
that price wars or. uneconomic man.
agement are likely to wipe out the
profit balance at a moments notice.
Economy i'm Sales.
The impression which prevails to
q widespread degree in scores of lines
of endeavor also exists in the tobacco
business, namely, that it is safer and
more profitable to stabilize prices at
q reasonable level and cut costs to
assure profits than to advance prices
to high levels and perhaps discourage
consumptive buying.
Costs today are probably under bet
ter control than ever before. The
range of commodity prices has been
slightly downward as compared with