David Kinley

Credit Instruments in Retail Trade

THE data on which this paper is based consist of replies received from 2465 national banks to questions suggested by myself and sent out by the Comptroller of the Currency. The blanks sent out called for the amounts deposited in the banks, on the settling day nearest to the thirtieth of June, by retail grocers, butchers, clothiers, furniture dealers and fuel dealers. The banks were requested to specify the amount of each of the different kinds of money and the amount of checks and other instruments of credit in each deposit. Information was asked for also as to the usual period of credit in retail trade, the extent to which wages are paid by checks and the extent to which employees get their pay-checks cashed by merchants. The primary purpose of the investigation was to secure some data respecting the percentage of credit instruments used in retail payments. Previous investigations into the use of credit instruments included all transactions, and it has been pretty generally agreed that the large percentage of instruments of credit shown by these investigations was mainly due to the magnitude of wholesale trade. For both practical and theoretical reasons it is desirable to have some data on the use of such instruments by the great mass of the people in their ordinary purchases. The five classes of retail dealers selected were chosen because their businesses are the ones the purchase of whose products represents the principal parts of the expenses of living of the people at large. The Commissioner of Labor in his reports for i890 and i89i on the cost of production of certain commodities, gives comparative data respecting the cost of living. According to his figures, the expenditure for food, clothing, furniture and fuel is ordinarily about 67 per cent., or two-thirds of the total expenditure of each individual for all classes of incomes. It is nearer 70 per cent. of that of those with incomes below