Evening star. [volume] (Washington, D.C.) 1854-1972, 1938-03-09

President did not
reveal the con- Da''o Lawrence
tents OF the communication. Nor do
the auto finance companies feel It is
proper for them now to disclose the
content.
There's no special mystery about it,
however. for the leading auto finance
companies merely have restated the
position they have always adopted. It
seems strange that the question of
mstallment financing should be up
Tor discussion at the White House
these days, unless it is a recognition
OF the fact that sales of autos have
slowed down and something or some
body Is sponsible-certainly not the
people who make or sell cars.
Good Risk or Bad.
1nstallment terms have a great deal
to do with the movement of automo-
biles from dealer to purchasers, and
1t would be mistake for the Presi-
dent to interfere lest he defeat his own
obJect-the increase in sales. After
all. buyer of an auto is either a good
or bad credit risk. Some people do
not deserve to have an automobile
even on any credit plan. for their in
come will not permit the fulfllment
Of the payment obligations, while
others can meet every payment pune
tually whether they have six months
or "a months in which to buy a car.
There is no rule of thumb by which
1nstallment financing can be pre-
scribed. Each case usually stands on
Its own merits. Mr.. Roosevelt, for
some reason still unexplained, inter-
jected his advice into the situation at
. time when the auto finance COM
panies had for several months begun
to tighten up on credit terms. They
had tried to persuade dealers not to
make credit arrangements for "a
months. but instead for periods not
to exceed 10 months. Here again,
however, they were careful not to
make any hard and fast rule, leaving
1t to dealers to determine by their own
examination whether credit risks in
individual cases were or were not
worth long terms.
President Puts Oar In.
The President seems to have fixed
on maximum of 10 months. When
he did this, the dealers generally had
for a long time been told by the
nnance companies that their notes
would find better market if con-
fined to periods of 10 months or less,
80 it is somewhat puzzling just what
the White House purpose really was
IN entering the picture at all, unless.
hereafter. the public is to be advised
by the White House from time to
time what car or cannot be bought
on credit.
There Is some relationship between
1nstallment terms and the quantity of
automobiles sold. At present, for in
stance. anybody with confidence
enough in the stability of his own in
come to want to buy an automobile
Is likely to prove better risk than
In periods of boom. So if anything,
terms ought to be eased nowadays
rather than frightened This would
have the effect of stimulating sales of
cars and thus allow many hundreds of
thousands OF workmen to get back
their jobs, Mr.. Roosevelt permitting.
In other words, the Presidents
action would appear to be deflationary.
though doubtless he did not intend
1t as such. The question really re-
mains: What business is it of the
President or anybody else in Govern
ment whether citizen wants to buy
an automobile on credit terms? It's
his own wages that are involved and
he ought to be free to use his pay for
whatever he pleases.
A Family Affair.
Thus. many people would rather
have an automobile than buy new
furniture for bedroom, or possibly
they might prefer to buy lot of furni-
ture on the installment plan and not
buy a car. Whatever the individual
thinks will give him and his family
maximum satisfaction is certainly his
own affair, unless it be reasoned that,
under the New Deal, the President and
the Federal Government may exercise
= paternalistic guardianship which
considers the citizen q ward incapable
OF deciding what to do with his own
: income.
So far as installment selling is con-
eerned. the Federal Government has,
good deal to explain It permits
loans on houses to run 20 years and
with q down payment of only 10 per
cent. 1t sells electric appliances to
rural folks for periods of S and 10
years. and certainly agricultural in
come Is far from stable.
= Clearly the Government has had
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