Evening star., 1937-12-03

been made pubic,
for instance, about the extraordinary
drive that has been instituted by the
administration against the biggest au-
tomobile manufacturers in the coun-
trv which if not abandoned will mere
ly add to the unemployment in Ameri-
cas- largest industry, forcing lay-offs
of workmen in production plants far
and wide.
Nor has much been disclosed either
about the methods-amountlng in
some respects to blackmail-Whlch
have been practiced by Federal Off
cials in their efforts to get evidence
with which to compel automobile
manufacturers to agree to plan
sponsored by the Government with
respect to the relations of automobile
dealers, finance companies and auto
manufacturers.
Not only has there been plain
threat to obtain criminal indictments
against the principal automobile per-
sonalities of the business world-the
names most familiar to the public
but there has been tacit understand
ing that if these companies would sign
a consent decree amounting to con-
fession of guilt they would 60 scot
free.
Jackson's Trip Hardly Idle.
Just who in the administration is
responsible for this latest raid on
American business is not clear but it
is fact that Robert H. Jackson,
Assistant Attorney General, who is
with President Roosevelt on his fish,
ing trip, is in charge of the prosecu-
tions and Investigations and that
grand jury has been in session in Mil
waukee for some time concurrently
with the efforts to force consent
decree here in Washington between the
auto men, the finance companies and
the Government.
For time it looked as if some of
the finance companies would sign the
consent decree that was drafted for
them here to refrain from certain
practices, but the more they studied it
the more they felt that the stand of
the General Motor Acceptance Corp.
decree would imply a confession of
guilt and that no practices had been
resorted to which could be regarded
as violations of law.
The consent decree would have af-
fected every automobile dealer In the
country because it would have put
under the jurisdiction of the Federal
y4e iy, ta fer
ton of how the auto dealers should
conduct their credit relations.
The draft of the consent decree
sets forth that the finance companies
agree to refrain from coercing their
dealers to use a particular finance
company plan. The companies deny
they ever have done so, but they re-
serve the right to recommend plan
which they think is financially sound
for the purchaser, but the dealer can
use any finance company plan he
likes.
Reserves Under Attack.
Next, the decree would prevent the
setting up of reserve fund to take
care of losses through repossession of
cars on which defaults occur. This,
the auto companies indicate, would
paralyze the whole system Of selling
cars and preventing gluts on the
markets. Another section of the de-
cree would prohibit rebates or pack
ing but here, too, the larger auto
companies say they have maintained
affiliations with certain finance COM
panies so as to protect the purchaser
against being charged unnecessary
fees, commonly known as packing"
The auto manufacturers and their
related finance companies declare they
are vehemently opposed to such things
themselves and that to sign consent
decree is to concede they have been
condoning these practices.
What is most comprehensive about
the whole matter is that the big three
in the finance company fleld-Uni-
versal Credit Co.. which handles Ford
financing; the Commercial Credit Co.
of Baltimore, which finances Chrysler
cars, and the General Motors Accept
ance Corp, which handles the INSTALL
ment payment plan for the purchasers
of General Motors cars-actually have
been facing stiff competition from
independent finance companies for the
last few years. The figures submitted
to the Government show that the in
dependents have been increasing their
volume of installment payment con-
tracts while the three major finance
companies mentioned above have been
getting diminished share of the
total volume of cars purchased on the
time payment plan in America.
Some Competition Legitimate.
Thus competition has been In
vigorous operation. There have been
moreover, various State laws passed
to prevent chiseling of finance charges
by local finance companies and the
larger companies which are free from
such imputations really may have 9
grievance against some of the smaller
independents who, they insist, are TAX
ing business away from them to som,
extent by illegitimate methods.
The public is, of course, interested
In this subject Of time payments fol
automobiles because If the proposed
consent decree were adopted, it woule
demoralize the whole financing Of in.
stallment sales and open the way fol
the purchaser to be "gypped" aplent.
by unscrupulous dealers here ant
there. In fact, the proposals. insteas
Of protecting the consumer, put OBJ
stacles in the way Of financing, which
will tend not only to increase tn,
cost Of cars, but would doubtless Leaf
70 decentralization of the production
schedule Of the manufacturers.
Take, for instance, the presen
method by which the larger finance
companies insist that the repossessiol
OF cars on which time payments ar,
defaulted shall be regulated 80 a
to prevent a.breakdown Of the dealers
nj IL II.