Guest Commentary

Irving Gerstein

The Inventor Of Consumer Credit

(Editor’s note: Conservative Senator Irving Gerstein of Toronto, now retired, is the grandson of Frank Gerstein, founder of Peoples Jewelers, the entrepreneur credited with pioneering consumer credit in Canada. In an October 28, 2009 interview with Blacklock’s publisher Holly Doan, Senator Gerstein recalled the man and his era. Following is a transcription of his remarks)

My grandfather was a great salesman. He loved people, though I recall him more fondly today than I did as a boy. Then he seemed a very forceful, dramatic personality who did not suffer fools lightly. He was born in Lithuania, apprenticed as a watchmaker. My grandfather had nothing when he arrived in this country. He knew hard work.

He was a meticulous dresser; he wore silk ties and tailored suits. One day he saw me wearing a pair of jeans; I was 9. He took one look and said, “Don’t ever let me see you wearing jeans again.” I have not put on a pair of jeans since.

He sold Oneida silverware door-to-door. He told a story of what turned out to be his last day on the job, when he returned to the office to proudly announce he’d sold every set of $19.95 silverware in his sample case. This was a lot of money in those days. When the boss asked for the proceeds, my grandfather gave him 50¢ for every set of cutlery he sold. Of course the boss was outraged: “What do you mean by selling silverware for 50¢?” Well, he said, I’m going to collect 50¢ from all my customers next week and 50¢ a week after that till the price is paid.

He was fired on the spot, and went to work for himself.  The National Post later called this one of the “great moments in Canadian capitalism”.

He opened his first Peoples Credit Jewellers store on Queen Street in Toronto in 1919. His slogan was, “We do not sell for cash”. The terms were 10 percent down and 10 percent a month, no service charge. It meant any young man with a job could buy his fiancé a diamond ring. This was revolutionary.

Credit was known only to banks and wholesalers. There was an ethic in the community that if you couldn’t afford to pay full price for something, you didn’t deserve it. My grandfather put curtains on the windows of his first store so customers could shop without shame, the stigma was that great. He trusted his customers; he believed people are basically honest. Credit meant working people could enjoy the finer things in life — dinnerware, a good watch. This was his legacy.

I was 16 when my grandfather passed away. In my eyes then he was a stern businessman, someone to be treated with respect and fear. Of course he was more than this. In later years he donated money to the Ottawa Football Club so they might give free tickets to schoolchildren. He left half his estate to charity.

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