Over 20% of annual user expenditures will, by 1990, be utilized for VAN services handling over four billion electronic interchange transactions.


User (retailer) expenditures for check verification/guarantee services, will nearly triple, approaching $850 million annually over the forecast period (see Exhibit 111-10).

The market will greatly benefit from installation of point-of-sale (POS) and electronic cash register (ECR) terminals that can handle check guarantee as well as credit authorization services. This portion of the market will grow from just over 25% in 1985 to approach 50% by 1990.

Total check dollar volume, verified and/or guaranteed, will exceed $55 billion, still well under 10% of the total retail check volume forecast for 1990, a growth rate approaching 30% annually. Price competition and economies of scale will hold the growth of total user expenditure for verification/guarantee services to 23% annually.



Credit card authorization systems for retail establishments are illustrated in Exhibit lll-l I.

The most basic form of credit card authorization service is voice services. The retail establishment dials a local number or more usually into WATS.


User (retailer) expenditures for credit card authorization services will, as shown in Exhibit III-9, more than double over the forecast period, exceeding $800 million annually by 1990. Totally electronic delivery (POS, ECR, and computer-to-computer) will, by 1990, become the dominant method of delivering processing services.

Approximately 80% of over four billion authorization transactions will be processed by totally electronic means. User expenditures for credit card authorization services will experience the greatest growth in point-of-sale (POS) and electronic cash register (ECR), rising from 20-30% of total processing services expenditures over the five-year forecast period.

Growth will result from a concerted effort by market participants to more than double the authorized portion of total credit card transactions to greatly reduce fraud and other losses.


Expenditures for check verification/guarantee will nearly triple over the forecast period, becoming the major (57%) delivery mode. Check verification/guarantee will, in all likelihood, remain less than 10% of total retail check dollar volume.

Check verification/guarantee services will benefit from the rapidly increasingly base of credit card authorization terminals which can also handle check transactions. Price competition and attendant economies of scale will limit expenditure growth to 23% annually over the forecast period.

VAN vendors will process a combination of over four billion direct authorization and indirect interchange transactions. Unless telecommunication costs (AT&T) sharply rise, economies of scale will limit expenditure growth to 20% annually over the forecast period.

There is one very essential thought we must make the people of this country conscious of. It is that if this United States goes into bankruptcy, as it must if it keeps on its present course, that is the point at which all their so-called life of security is destroyed and along with it shall disappear every vestige of their freedom to think and act. Because when that day comes, as come it will unless all of us do a far greater job than we are now doing to get the facts to the people far beyond our own circle, there will be complete regimentation with a police state controlling all thinking and acting as well as the social and economic structure of the nation. Then it will be too late. It is well that we keep in mind that the difference, if any, between the terms “communism” and “socialism” is one of degree — only a variance in the extent of the persecution tactics and police power used to enforce the controls which are basic to the working of the communist-socialist state. The Russians call themselves socialists. The name of their country is the Union of Soviet Socialist Republics.


We are deeply concerned, and properly so, over the partial extinction of the American opportunity system. Meanwhile the majority of our federal executives and members of Congress are busy denying that any such, thing has happened. Regardless of contrary propaganda, our nation is already socialized in part with the possibility of complete socialization not too far away. The essential means of production and distribution in this country are already controlled directly or indirectly by ownership, by laws, or otherwise by the Federal Government. Anyone who does not believe that we are close to a pattern of disaster is either refusing to examine the facts and think about them or is just plain naive. He or she is the victim of the greatest amount of fraudulent propaganda to which any peoples have ever been subjected, including the Germans and the Italians prior to and during the last World War. Remember how we used to wonder just how they could believe any of it?


The highly important Report of the Hoover Commission reveals that the Federal Government owns or is financially interested in approximately 100 important business enterprises including the production, the distribution, and the sale of electric power ($823,000,000 invested in the Tennessee Valley Authority alone), fertilizers, and telephones; in the operation of railways and steamship companies; in the smelting of metals; in the buying of and sometimes in the selling of farm products; and in many other business activities all involving a direct investment at present of $20 billion with about $14 billion more on the way in the form of definite commitments. At present, there are 40 government agencies engaged in lending, guaranteeing, and insuring with already existing investments and definite commitments of about $22 billion. Loans of all kinds to every type of enterprise are made including the manufacture of automobiles and prefabricated housing. Thus, a total of over $55 billion of the taxpayers’ moneys is in business run by the Federal Government in competition with private enterprise. And by the way, who is it that is talking about monopolies? On the point of competition of direct interest to ourselves, private financial institutions in this country have $77 billion of the savings of the public while the Federal Government through savings bonds, postal savings, pension and trust funds has over $96 billion of the thrift of this country — a 2,000% increase in 20 years, while the increase of sayings held by our own savings associations over the same period was 75%. It is utterly stupid for banking and financial institutions in this country to indulge in competitive bickering while the Federal Government moves ahead with giant and ever-increasing strides to garner control of the savings of the people of this country, just as it has done and proposes to do more of on the lending side of the business and in the erection of political dwellings.

New Jersey Savings and Loan League

A council for home protection was organized early to lead the fight to defeat the proposition, including the accompanying $100,000,000 bond issue. The groups determined not to let the matter go by default were the New Jersey Savings and Loan League, under the splendid leadership of Emil Gallman, the New Jersey Lumbermen’s Association, the New Jersey Association of Real Estate Boards, the New Jersey Mortgage Bankers, the New Jersey Home Builders Association, the New Jersey little Association, and the New Jersey Apartment Owners Association. You will notice the absence of the New Jersey Bankers Association and the Savings Banks Association of New Jerseydirect payday lenders with 1 hour approval service. The latter two organizations were asked to participate but contented themselves with the usual generalities aimed against encroaching socialism but failed to take a specific stand on the matter. Funds to finance our resistance were raised, about half of what was really needed, and a well-known and able man with wide experience in political public relations work and in civic and tax campaigns was engaged. Because of a very limited budget, radio time was out of the question, and very little newspaper advertising was used. Four separate pamphlets were prepared that were concise in subject matter. These were widely distributed in quantities ranging from a quarter to a half million for each pamphlet. A number of speakers were used throughout the campaign at all types of meetings. A good coverage was secured from newspaper releases. Although certain accompanying circumstances may have contributed to the extent of the victory, the people spoke their answer in no uncertain terms. The result, which certainly exceeded our greatest expectation, does tend to prove strongly that the current “isms” can be beaten if we get to the people with a clear understanding of what is involved.


And why must we convince ourselves of the necessity of spending the time and money essential to showing the citizens of this country what is happening to them. Let us set out a few facts that may tell the story. The Census Bureau as of July, 1949, revealed that there were 5,418,000 government employees — ^federal, state, and local. On of every 11 employed people in this nation was on a government payroll, the total of which is equal to $8.00 a month for every man, woman, and child in the United States.

For the calendar year 1948, the tax revenue collected by the federal, state, and local governments was equivalent to the total wages and salaries of 40% of the total number employed in non government occupations in this country. The 1948 receipts of the Federal Government alone amounted to an average of $1,073 for every family in the United States. The range was from $583 per family in the West South Central States to $1,555 per family in the Middle Atlantic States.

American opportunity system

A week ago last Tuesday, there happened an event which should be encouraging to those of us believing in the American opportunity system. The story is worth the telling in some detail for the lesson it points up that the schemes to advance socialism still further in this country can be stopped if we will only free ourselves of the feeling of defeatism; release our minds from the belief that it is inevitable that this great country of ours shall fall prey to a small minority bent on committing it as they have successfully done in one way or another to almost every nation in the world. The citizens of New Jersey, voting in a general election on November 8, 1949, soundly defeated a state political housing bill, 621,462 to 375,566. The legislation as passed by the Legislature, subject to approval at the November election, was, as is usual, represented as a slum clearance plan, as an aid for those not eligible for federal political housing, and as a self-liquidating program. In accordance with the customary pattern, the proposed program was actually none of those things and was riddled with the typical deception and double talk. As to the matter of aid to those not eligible for federal high-cost political housing, it should be noted that the area of possible subsidy contemplated by the proponents would have included 90% of the population of New Jersey. The proposition was a part of the legislative program of the incumbent governor, who was himself standing for re-election and who succeeded in his efforts by a relatively small majority. Of course, the scheme was supported by the officials of the State Housing Authority, Most of the veteran organizations were behind it as were the CIO, the League of Women Voters, the New Jersey Council of Churches as well as other welfare organizations. As incredible as it may seem, it was a part of the platform of the Republican Party in the election. If a task ever looked hopeless, certainly the possibility of defeating this proposal did.


A conceptual look at variable interest rates. Where next?

It would be less than frank if one were not to convey to you that in my travels throughout the country this year, one of the major concerns of our folks seemed to center about competitive dividend returns that are apparently unjustified by net earnings and reserve positions but are based, for the most part, it would seem, on a desire for growth or on the theory that being mutual institutions, it is not so essential that we build our reserves against asset loss.