The Waterbury Democrat., 1937-05-05

total number Of families in the city, are earning less than two thousand dollars per year or $40.00 per week. Among the remaining eleven thou sand families, there are three thou sand families that are earning be- tween two thousand and twenty five hundred dollars per year; fifty five hundred families that have and income between twenty-five hun- dred and five thousand dollars and about twenty-five hundred families who have an income of over five thousand dollars.
 "Let us consider for moment the needs of the wage earner,s family. We are told that the Am- erican standard of living is suppos- ed to include food, shelter and fuel, clothing, medical care, safety and security, education and recrea- tion. In order to maintain this standard of living the wage-earner must received a fair wage from industry and his consumer dollar must be matched with fair prices in the open market. If the prices of food and clothing rise through imitation and rent increases as a result of taxation, it is evident his dollar is going to buy less and his standard of living will lower. The ability of this wage-earner to sup port his family under circumstances approximately the American stan- dard of living depends upon his ability to purchase the necessities of life at fair prices and his chance of improving his conditions depends upon circumstances that will in crease his buying power either through increased dollars or lower prices.
 "At this point I wish to condemn the philosophy which is implied in frequent high pressure sales cam- paigns which are accompanied by inStallments inducements based on the share the = existing market theory. They are like the depres- sion born schemes of share the . wealth, shorten the working week or tax the rich-they do not add to income-they merely subdivide what there is.
 T have always contended that the financial crash in 1930 and the subsequent freezing of credit with its accompanying paralysis of in- dustry and wholesale unemployment, was in part brought about by the extension of credit to consumers far beyond their ability to pay. Sales of securities, real estate, automo- piles, furniture, frigidaires, washing machines, vacuum cleaners radios and what-not were made by a reck- less extension of credit and when the time came when the consun. er could not stretch his dollar far enough to meet his payments some- thing had to happen.
 "Now we are not yet fully out of the depression, when the First Na- tional Bank of Boston and the Fed eral Reserve Bank of New York warns us that we are threatening oud economic system by mortgaging the future incomes of consumers through lower standards on time sales. In other words, we have learned nothing from our recent ex- periences and we are heading right back into another storm.
 "This reminds me that congress set up machinery to control bank credit and stock market credit. Why didn't they do something about con- sumer credit on an installment basis?
 Consumer credit is rising rapidly to an all time peak, credit terms are lower and payments are smaller. Why this extension of the install- ment credit market; why the weak ening of credit terms; why the | scramble to thrust goods into the hands of the consumer on ris prom ise to pay?
 There is only one answer, as far as l can see-to capture a wider market by tapping lower levels O. income. In other words, the theory of increasing business through tn- stallment selling implies there is competition for a representative share of the consumer dollar. This we have already shown to be false position and one that will bring only grief to all concerned in the long run.
 What the country needs is larger flow of dollars especially through the lower consumptive channels. Wider distribution of in- come, will not only offer larger mar kets, but it will preserve us from losses due to contraction in pur- chasing power during the down swing of economic cycles.
 Tt seems to me that an intelli- gent credit granting job would avoid most of the costly mistakes that we made in 1928 and 1929 However, the granter of credit must be equipped to advise, to budget, to program and above all, keep a re- straining hand on the enthusiastic salesman by withholding credit If he does that, the consumer will not contract for goods beyond his abil- ity to pay and credit imitation as far as the wage-earner is con- cerned will be avoided.
 "The American people want se- curity and to have security, they must have stability in their govern ment. Security of jobs, social se- curity, old-age assistance or pen- sions. security of home. security of