Question

Debate on installment purchase

Answer 1

The question of whether to offer customers the opportunity to buy on the installment plan especially bewildered department store retailers during the twenties. The Influence of Ten-Payment Plan Upon Prestige of Store (1927) documents the fear among some stores that giving consumers the right to defer payments will tarnish the store's reputation. In addition, stores worried about whether consumers were good credit risks. William Leach reports in Land of Desire (1993) that merchants helped found the National Association of Retail Agencies in 1906 and the Retail Credit Men's Association in 1912 to monitor consumer activities and establish reliable consumer ratings (p. 130). A photograph from the National Photo Company Collection shows President Coolidge posed in 1925 with the "National Association of Creditmen [sic]".

Wilbur Clayton Plummer's three-part, government-sponsored study, the National Retail Credit Survey (1930), profiles retail credit practices for a great range of consumer products, from clothing, fur, dry goods and furniture in Part 1 of the study; to automobiles and their accessories, groceries, radios, jewelry and electrical appliances in Part 2; to hardware, coal and wood, plumbing and heating fixtures, musical instruments, and drugs in Part 3. The findings are based on information garnered in 1927-1927 from questionnaires mailed out to merchants whose names were supplied by the more than 1,000 local bureaus of the National Retail Credit Association. The consumer side of the installment buying picture appears in Plummer's Social and Economic Consequences of Buying on the Instalment [sic] Plan (1927).

Midas Gold. A Study of Family Incomes, "Overselling" and Time-Payments as a Broadener of Markets (1925) is apparently an attempt, on the part of its publisher, the Butterick Publishing Company, which also published household consumer magazines, to play down the problematic aspects of installment buying. (DETAIL NOTE Butterick)

The April 1926 issue of Facts for Workers. A Monthly Review of Business, Industry and General Economic Conditions from the Point of View of Organized Labor, a newsletter compiled by the Labor Bureau, Inc., however, contains an article on installment buying of "unproductive luxury goods" which presciently projects a potentially catastrophic economic scenario -- a depression -- to which easy credit, if unchecked, could lead.

The Coolidge Papers case file Credit - Installment Plan Buying 1926-29 fleshes out this controversial aspect of the 1920s experience of prosperity.