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Business diagnosis Group

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Mahmood Gusev
Mahmood Gusev

Buying On Credit 1920s Canada ##HOT##

Credit Bureaus provide a credit profile of consumers based on their repayment record of outstanding debts. A credit bureau monitors, with constantly updated information provided by credit card and other lenders, not only whether consumers repay loans but whether they do so regularly and on time. Credit bureaus, unlike investigative agencies, do not assemble information on the lifestyle or character of individuals, or determine whether or not an individual is credit worthy; that is decided by lenders. Credit bureaus merely provide information to help lenders make decisions. Many of Canada's early credit bureaus were organized by merchants in the 1920s as a more efficient means of maintaining information on the credit history of individuals than the prevailing practice of contacting each other to conduct a credit check.

buying on credit 1920s canada

At the height of the 1920s, average Americans spent more and more of their disposable income on major durable consumer goods.1 The U.S. consumer economy and stock market was booming throughout the 'Roaring Twenties,' with stocks reaching their highest point in September 1929.2 The advertising industry grew to match. By the end of the 1920s, an increasingly sophisticated advertising industry had integrated new techniques in retail, credit, sales management, and consumer research into the marketing process. Marketing efforts accelerated to match businesses' rapid introduction of new products and services to satisfy consumer markets.3

Many associate the Great Depression with the stock market crash in October 1929, but the economy started contracting in August of that year, beginning an economic downturn that lasted 43 months until March 1933.4 By the end of 1933, production had decreased dramatically and real GDP fell 29%.5 Consumer expenditures decreased from $77.5 billion in 1929 to $45.9 billion in 1933.6 Buying on credit or using installment plans had been normalized in the 1920s, but the market crash in October 1929 resulted in a sharp drop in the number of consumers purchasing on credit by 1930, while households focused on paying off their existing debts.7

The 1920s was a decade of increasing conveniences for the middle class. New products made household chores easier and led to more leisure time. Products previously too expensive became affordable. New forms of financing allowed every family to spend beyond their current means. Advertising capitalized on people's hopes and fears to sell more and more goods.

By the end of the 1920s, household work was revolutionized. A typical work week for a housewife before the twenties involved many tedious chores. All the furniture was moved off the carpets, which were rolled up and dragged outside to beat out the week's dirt and dust. The ice in the icebox was replaced and the waterpan that lay beneath was repeatedly changed. The clothes were scrubbed in a washing tub on a washboard. An iron was heated on the stove to smooth out the wrinkles. Women typically spent the summer months canning food for the long winter. Clothes were made from patterns, and bread was made from scratch. Very few of these practices were necessary by the end of the decade. Vacuum cleaners displaced the carpet beater. Electric refrigerators, washing machines, and irons saved hours of extra work. New methods of canning and freezing made store-bought food cheap and effective enough to eliminate this chore. Off-the-rack clothing became more and more widespread. Even large bakeries were supplying bread to the new supermarkets. The hours saved in household work were countless.

Using a loan to buy something is called buying on credit. A bank offers you money and asks you to pay them back, along with some extra money called interest. Interest is a fee for borrowing money. The problem is that farmers were not the only people buying things on credit. Millions of Americans used credit to buy all sorts of things, like radios, refrigerators, washing machines, and cars. The banks even used credit to buy stocks in the stock market. This meant that everyone used credit, and no one had enough money to pay back all their loans, not even the banks.

In 1929, the New York Stock Market crashed. Everyone had been buying stocks on credit and not using real money. When people and banks started asking for the money they had loaned to be paid, no one had enough money. There were whole countries that went bankrupt when their loans were called in! Now, no one in the stock market had money, which meant none of the banks had money. This meant that people who deposited their savings in banks could not get any of their money back. It was all lost.

One the economy improved during the earlypart of the 1920s, Canada experienced one of the greatest economic booms in itshistory. American companies invested in Canada's natural resources and manufacturingindustries. A seemingly endlesssupply of new products, such as vacuum cleaners, stove and refrigerators becameavailable. Automobiles and radios had the greatest impact on the social andeconomic life of Canadians. The stock market boomed with new investors.

International ExpansionAs word spread of Snap-on, orders began to come in from around the world. In the 1920s, international orders were filled through a New York City export office and through various trade shows. With Canadian demand for Snap-on tools surging, the first branch was opened in Montreal in 1927. Snap-on Tools of Canada Ltd. was incorporated and became the first international subsidiary on July 29, 1931.

The early 1940s were marked by World War II and the military experienced severe tool shortages as a result. As a preferred supplier to the government, Snap-on was called into action, producing tools that kept air and ground equipment operating. Wartime demands also led to product innovations. To increase durability of hand tools, the military upgraded the Snap-on material specifications and authorized buying nickel alloy steel, which ultimately became a Snap-on standard. To meet specific demands, hand tools for aviation and large sockets and wrenches for heavy military equipment were also developed.

Women undoubtedly gained much in the 1920s. There was a profound and keenly felt cultural shift that, for many women, meant increased opportunity to work outside the home. The number of professional women, for example, significantly rose in the decade. But limits still existed, even for professional women. Occupations such as law and medicine remained overwhelmingly male: most female professionals were in feminized professions such as teaching and nursing. And even within these fields, it was difficult for women to rise to leadership positions.

The Klan dwindled in the face of scandal and diminished energy over the last years of the 1920s. By 1930, the Klan only had about thirty thousand members and it was largely spent as a national force, only to appear again as a much diminished force during the civil rights movement in the 1950s and 1960s.

Steven: Technology has revolutionized how bankers and consumers handle money in amounts ranging from the single penny to billions of dollars. Early banks, including those that would become part of JPMorgan Chase, added up dollars and cents by hand, a time consuming task that left a lot of room for error. Over the years, JPMorgan Chase and its predecessors pioneered technologies that saved money and dramatically increased the speed at which bank work could be accomplished. Around the turn of the 20th century, even simple advances improved the employee and customer experience. The hand cranked adding machine of the 1890s did the work of two people. The direct dial phone eliminated the need for a switchboard, while the electric coin counting machine tallied with accuracy and was up to five times faster than counting by hand. In the 1920s, check processing, the backbone of personal banking, was greatly improved with the Recordak. Bank employees used the machine to process large volumes of checks entering the bank by photographing them, saving hours of work a day, and guarding against forgery. But it was the introduction of the electronic computer in the 1950s that revolutionized banking, propelling the industry forward at an unprecedented pace. Computers quickly became a staple in back offices across the country, and many of our predecessor banks built entire data processing centers devoted to the new technology. In 1959, Chase Manhattan Bank installed an IBM 650 computer, which enabled the staff to process transactions at lightning speed. A few years later, Chase Manhattan opened its New York Automated Check Processing Center, one of the largest in the world. Relying on new computer technology, employees processed checks using a high speed sorter that could read magnetic ink characters. Within the first year, it was processing over a million checks per day. As computerization spread across the country, so too did the bank credit card, which transformed America's shopping habits. Now, instead of opening individual charge accounts with each store, bank clients could use one card for their purchases at any store. In 1969, Chemical Bank unveiled its cash machine, the precursor to the ATM. The ATM, the Automated Teller Machine, made banking on the go possible with the swipe of a card. ATMs appeared in malls, airports and overseas, making it possible to get cash and perform transactions 24 hours a day. The trend for banking whenever, wherever and however you'd like continued. With Bank One's Channel 2000, an early home computer banking program launched in 1980, customers could bank without ever leaving the house. The internet brought banking at home into the 21st century, allowing customers to complete transactions securely online through personal computers, while mobile apps like Chase Pay meant banking could be done with the swipe of a finger on a phone, tablet or watch from anywhere in the world. JPMorgan Chase has come a long way, from bankers computing numbers by hand to a global team of technologists working hard to keep us ahead of the curve. Behind the scenes, the firm is developing new technologies, deploying artificial intelligence and working in the cloud to advance the financial landscape. This culture of innovation is helping employees work smarter, and customers bank better, every day. 041b061a72


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