CQ Researcher - Installment Buying, 1920–1930 (2024)

In an address three years ago before the National Business Conference, Roger W. Babson said: “A distinct recession in business and possibly a panic within two or three years would not be surprising.…It will be the result of overextension of the instalment business, which today is eating into the vitals of business like cancer.”1 At the time this statement was made it was estimated that the volume of goods bought on instalments would reach $6,000,000,000 in 1926, and instalment sales were believed to be increasing at a rate of $1,000,000,000 or more a year.

Many critics of the instalment system asserted in 1925–26 that the rapid spread of this method of merchandising was producing an over-expansion of credit and giving an unhealthy stimulus to trade, ...