Installment plan
what was it?:Since many goods were too expensive, people could use installment plans to fix the situation. At the time, they had a bad reputation, so no one was really willing to use them. Companies decided to use advertisement to change public perception. By the 1920's almost everyone was using installment plans.
The installment plan enabled people to buy goods over an extended period of time, without having to put down very much money at the time of purchase. With this plan people could purchase automobile, household appliances, homes, furniture, and other items. |
who supported it and who didn't:
what it allowed:Essentially, installment plans allowed people to buy things that they could not necessarly pay for. The company would give the buyer the product first, and then every month they would have to pay a certian amount of money until the item was payed off.
For example, if somone wanted to buy a car that cost $200, they would recieve the car first. Every month they would have to pay $20 or so until the car was completely paid off. |
"Have you an automobile yet?"
"No, i talked with John and he felt that we could not afford one."
"Mr. Budge who lives in your town has one and they are not as well off as you are."
"Yes, i know. Their second installment came due, and they had no money to pay it."
"What did they do? Lose the car?"
"No, they got the money and paid the installment."
"How did they get the money?"
"They sold the cook stove."
"How could they get along without a cook stove?"
"They didn't. They bought another on the installment plan."
-a business owner quoted in In The Time of Silent Cal
This conversation demonstrates that if people didn't have money in the 1920's, they would use installment plans to fix the issue. The people in the conversation are talking about how the family cannot afford a car, so the man tells her a story about a man would traded in his cook stove in order to get a new one. They got a new buy using the installment plans. If she was to do this, she could very easily afford an autombile which her and her husband could once not afford.
"No, i talked with John and he felt that we could not afford one."
"Mr. Budge who lives in your town has one and they are not as well off as you are."
"Yes, i know. Their second installment came due, and they had no money to pay it."
"What did they do? Lose the car?"
"No, they got the money and paid the installment."
"How did they get the money?"
"They sold the cook stove."
"How could they get along without a cook stove?"
"They didn't. They bought another on the installment plan."
-a business owner quoted in In The Time of Silent Cal
This conversation demonstrates that if people didn't have money in the 1920's, they would use installment plans to fix the issue. The people in the conversation are talking about how the family cannot afford a car, so the man tells her a story about a man would traded in his cook stove in order to get a new one. They got a new buy using the installment plans. If she was to do this, she could very easily afford an autombile which her and her husband could once not afford.
Problems to come:
Little did they now, they would face several issues with the installment plans in 1929. The markets crashed resulting in many people losing their jobs. After this, they didn't have the money to continue to pay for the items they recieved. This caused the companies to lose their money, and suffer severly from it. "America only began to share the pain long felt in the countryside late in 1929, when the stock market crash suddenly caused billions of dollars in assets to evaporate." -said a college student writing about the depression.