Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-08-05
CALLSINSTALLMENT
BUYING INDICATED
Arthur Morris Says Plan Has
Weathered Acid Test in
Present Depression.
Dispatch to The Star.

Special DiSpatcn 10 Inc Stdr.
CHARLOTTESVILLE, Va. August s.
-Installment financing, having success
fully weathered the "acid test" Of the
recent business depression and conse-
quent unemployment, has definitely
established itself as sound and vital
factor in the American industrial pat
tern, the Institute of Public Affairs
was told today by Arthur j. Morris,
president of the Industrial Finance
Corporation and founder of the MOTIFS
Plan, who opened the Institutes round
table discussion today on Consumer
Credit"
Bankers. manufacturers and distribu-
tors from throughout the country are
here for the credit discussions. In
answer to critics of the installment
system of merchandising who had fore
cast dire results for the country in the
event of depression, Mr.. Morris pointed
TO the present soundness of the large
installment financing organizations. cit
ing the large annual operations OF MS
own companies as an example.
The increase in delinquent coilec.
lions from people who have bought
products on the deferred payment plan
has been much less than our organlza-
ton had expected in the event OF so
much unemployment" he said.
LAS matter OF fact, industrial bank.
ing Is teaching the masses financial
MANAGEMENT and the value OF personal
credit. The absence Of serious Com"
munistic tendencies m American labor
circles is admittedly due to the sense
Of ownership which has come to Amer
lean workers by the possession OF
homes, automobiles, radios and other
productive articles - yet installment
credit has made this mass possession
possible.
Abundant Cheap Money Needed.
Had money remained ample for the
proper financing Of consumer credit,
national. consumption would not nave
declined, production would not have
fallen off and employment would not
have followed The present business
recession is due to the failure OF our
banking machinery to make a contin-
uous supply of cheap money available
for business uses.
For the past two years, legitimate
business has had to compete with wall
Street gamblers for Nancy and the
gamblers were willing to pay exorbi"
tant prices while the speculative mania
persisted. The answer lies with the
Federal Reserve system. To make
continuous supply Of reasonable money
available Cfle fe0cTdI rtcScA VIC 1ASb oAANuAu
be amended so as to make consumer
credit or installment paper eligible for
rediscount, or so that bankers holding
such paper could sput it into action
through the Federal Reserve instead OF
having to hold 1t in portfolio, as necessi-
tated at present. This would insure an
adequate volume of banking credit to
sustain manufacturing and distribution:
regardless of the stock market demand
for call loans.
Sees Plan Expanding.
Cheap money now prevailing will
inevitably restart the wheels of COM
merce, but we will inevitably have
recurrence of the present recession UNI
less our banking machinery Is ration
allied"
Mr.. Morris concluded with the pre-
diction that the next 10 years would
witness an expansion in the volume OF
consumer credit, or installment financ-
ing, fully comparable to the expansion
that has occurred during the past
decade, pointing out that 1t is estimated
at present that consumer credit now
totals So. 600, 000, 900 annually, or 12% OF
the Nations total retail sales.