Victor Mataja, Zur neuesten Litteratur über das Abzahlungsgeschäft (1891)

Victor Mataja’s review article surveys four recent contributions to the economic and legal debate over instalment selling: works by Arthur Cohen, Wilhelm Hausmann, Heck, and R. van der Borght. Its opening assessments establish their different strengths before turning to legislative reform, the review’s principal concern. Cohen combines empirical investigation with economic theory; Hausmann supplies incisive legal analysis and documentary materials, although Mataja disputes several conclusions; Heck offers a substantial legislative proposal; and van der Borght contributes discriminating criticism rather than new evidence. Their collective achievement makes intervention appear necessary, but leaves its scope and instruments contested.

Mataja organizes the problem around two distinct sources of harm:

Beim Ratengeschäfte dürfte eine doppelte Quelle der Uebelstände zu unterscheiden sein.

English translation: In instalment transactions, a twofold source of abuses should probably be distinguished.

The first is the encouragement of economically imprudent purchases through readily available credit and deferred payments. The second is the inequitable contractual relationship produced by complicated legal arrangements, especially when buyers lack experience or act under pressure. This distinction prevents reform from becoming merely a technical correction of contractual clauses. It also grounds Mataja’s disagreement with Hausmann’s claim that German instalment purchases arise predominantly from necessity, whereas Austrian purchases more often reflect recklessness. Mataja acknowledges that motives cannot be measured precisely, but regards the dismissal of imprudence in Germany as inconsistent with testimony and ordinary psychological considerations. For luxury purchases, saving before buying generally seems wiser than assuming obligations that may become burdensome.

The proposals addressing inducement range from Cohen’s closer supervision of travelling salesmen and agents to Heck’s right of withdrawal, subject to compensation, and restrictions on door-to-door selling of goods unrelated to productive activity or household needs. Mataja particularly approves measures making luxury purchases harder to solicit. His position nevertheless distinguishes unnecessary consumption from useful credit: machinery and equipment for small producers remain important cases in which instalment finance can serve legitimate economic purposes.

Contractual reform begins with the forfeiture clause, under which repossession cancels the contract while leaving all payments already made with the seller. The reviewed authors favour its abolition, although Hausmann would condition protection on the buyer’s freedom from fault. Mataja supports reform without exaggerating its practical effects. Repossession is relatively uncommon and sometimes commercially unattractive; moreover, compensation for use and depreciation could still absorb much of the buyer’s payments. His example of goods sold above their real value exposes a further difficulty: depreciation calculated against the contractual price need not equal depreciation calculated against actual value. Discouraging repossession could nevertheless prevent an economic loss, since used goods often lose more value for a new possessor than for their existing user.

Ownership reservation raises the deeper question of how sellers can secure credit without depriving buyers of ownership. Hausmann defends it partly because it shields goods from the buyer’s other creditors. Cohen treats it more cautiously as a makeshift necessitated by rules requiring possession to pass when movable property is pledged. Mataja welcomes Cohen’s suggestion, developed legislatively by Heck, of a publicly marked pledge that could secure the seller while limiting ownership reservation. He rejects the assumption that any deterrent effect on purchases necessarily counts against reform:

Das Abzahlungsgeschäft ist keine so edle Pflanze, so daß jedwede Beeinträchtigung von ihm fern zu halten ist.

English translation: Instalment selling is not so noble a plant that every impediment must be kept away from it.

The issue is which transactions deserve encouragement, not the unrestricted expansion of instalment trade. Mataja likewise rejects Hausmann’s classification of furniture-hire arrangements as genuine leases when the stipulated payments ultimately transfer ownership. Their substance includes payment for the thing itself, whatever terminology the contract employs.

The review then turns from contractual classification to enforcement. Dealers’ ability to evade responsibility for their agents and collectors reveals, for Mataja, a serious defect in civil liability. Clauses sending litigation to distant courts similarly weaken buyers’ practical ability to defend themselves. Against Hausmann’s confidence in legal aid, Mataja emphasizes distance, costs, and small disputed sums: formally available remedies may not be usable remedies. He also supports applying usury law to exploitation of credit need through goods transactions, while resisting the inference that excessive prices in ordinary cash sales belong to the same category.

The concluding argument explains why isolated civil-law prohibitions cannot suffice:

Harte drückende Klauseln selbst bei einem vortrefflichen Civilrecht herauszufinden und sie einem fast widerstandslosen Kreditnehmer gegenüber zur Anwendung zu bringen, ist kein besonderes Kunststück.

English translation: Finding harsh, oppressive clauses even under an excellent system of civil law and applying them against an almost defenceless borrower is no particular feat.

Experienced sellers can replace a prohibited device with another while preserving substantially the same pressure on buyers. Reform must therefore address unequal bargaining power and contractual adaptability, not simply outlaw existing abuses. Mataja identifies two routes: prescribing permissible contractual contents in advance, as Heck proposes, or empowering supervisory authorities to counter new oppressive arrangements as they emerge. He prefers the latter’s flexibility across different kinds of goods, while praising Heck’s differentiated treatment of instalment transactions generally, commercial instalment sales, and instalment bazaars. The review ends by leaving implementation partly to experience and returning to Cohen’s proposals for cooperative provision of machinery to small tradespeople. Its governing distinction is between productive access to credit and exploitation of dependence—a distinction requiring economic judgment, workable remedies, and adaptable oversight together.