Evening star., 1932-06-21
Offers Three Suggestions at
Convention of National
Retail Body.
PERSONAL RELATIONS
URGED BY LOCAL MAN
Cheerful Factor Is Seen by Aide to
Commerce Secretary in Low
Losses by Bad Debts.

The appalling costs of slipshod credit
practices during recent years will not
be poured out In vain, DR.. Julius Klein
Assistant Secretary Of Commerce. told
delegates to the National Retail Credit
Associations Convention here today, iii
business emerges with a broader, fiTmer
concept OF the values and responsible
ties of sound credit methods and poll
cies."
This Government economic expert Of
fered the following suggestions for
strengthening the Nations retail credit
structure:
First, let us hope that the zeal for
new business. as the long -looked-for re-
covery comes into sight, does not mini
miZe the insistence upon careful In
vestigation into every customers ability
and willingness to meet his obligations
when due.
Second Principle Urged.
THE second principle I would urge
in retail credit applies to installment
sellers. I would especially stress the
point that the purchaser should make
d large cllOuSl Cdoil Va dO"iA poSAhSAe
so that he feels he is an owner and
not renter.
The third principle is in regard
to the length Of time over which the
deferred payment should be spread. 1t
would seem that the unpaid balance
should at any time during the payment
period exceed the value OF the article.
Regardless OF the durability Of the
article. 1t is the judgment of many that
it should not in any case be longer than
"a months"
Assistant Secretary Klein spoke at
the conventions first business session
at the Mayfower Hotel. The conven-
tion will continue through Friday.
The Commerce Department officials
address followed a talk by DR.. Luther
H. Reichelderfer. president of the Board
of District Commissioners. who well
coined the delegation to Washington.
Other speakers on today's program were
w. w. Everett. vice president Of Wood
ward & Lothrop Department Store;
former Senator Henry j. Allen, repre-
senting the Reconstruction Finance
Corporation, and John D. Reilly. vice
president OF the Federal American Ma
tional Bank g. Trust Co.
T
Mr.. Everett said he wished a system
could be worked out whereby credit
managers could establish personal rela-
tions with each customer, so that when
sickness. death or other misfortunes
came into the patrons family he would
feel perfectly free to write and state
how conditions were and ask for addi-
tional time in order to meet the emer-
gency.
He said the ideal credit manager dur
ing the next few years would have to
be a real diplomat. The speaker said
one Of the worst things credit mana
ger can do Is to force strict observ-
ance Of agreement on some accounts
and allow others to ignore them. There
is nothing more detrimental to the
credit system than to allow accounts
to run in arrears for months and sud
denly call the patron to strict ooserv-
ance of the terms Of the agreement.
Bad Debts Are Low.
DR.. Klein in his talk said one OF the
striking things regarding the vast vol
ume Of retail credit in this country,
which he said amounted to $23, 900 ,O00,-.
900 yearly. Is the fact that in spite OF
the prolonged hardships Of the depres-
sion the losses from DdO utUlS Aafc
been surprisingly low. He estimated
that these debts did not run over 0.S OF
l per cent Of the entire department
store sales on open credit and 2.6 per
cent Of the total sales on the INSTALL
ment plan, which. he said, amounted to
SIS. .O00, ,000, 900 in this country yearly.
Apparently the reputation OF obli-
cations" the speaker said, "is still re-
garded by the mass Of our consumers
as q desperate extremity. This firmly
grounded Nationwide concept is In It
self a gratifying indication Of the pro-
priety of our credit methods backed by
the steadily strengthening appreciation
among our people of the true signif1--
canoe Of sound credit as a symbol OF
good character"
Explain Reconstruction Body.
Former Senator Allen explained In
detail the functioning Of the Recon
struction Finance Corporation. He
pointed out only seven banks failed In