Evening star., 1941-08-23
Insta||ment Buying
Curb Will Affect
Many Necessities
Federal Reserve to Put
Strict Regulations in
Effect September ]
BY the Associated Press.

etISSt SSPtSFUOeI
BY the Associated Press.
Strict Government regulations for
installment buying. distributed to-
day to take effect September 1,
affect not only . wide range Of
luxuries, but many items long con-
sidered in the necessity class.
The new rules promulgated by the
Federal Reserve Board apply to
pleasure cars and % other items
such rs musical instruments, home
repair loans and other credit facil-
tiles. The general idea Is to con-
serve materials for defense and
prevent imitation.
Beginning the first of the month,
merchants, generally speaking, may
not lend money without a down pay
ment. They cannot give term credit
without a down payment or permit
installments to run more than ID
months.
The order, the board said, N
merely start on credit regulations:
changes will be made as necessity
requires.
Restrictions Listed.
The restrictions include:
One-third minimum down pay-
ment and maximum Of 18 months to
pay the balance on new and used
automobiles. airplanes, power driven
boats, outboard motors and motor
cycles.
Twenty per cent minimum down
payment and Is months to pay
balance on mechanical refrigerators
OF less than II cubic feet capacity,
household washing machines, iron
ers, suction cleaners. cooking stoves
and ranges, heating stoves and space
heaters, electric dishwashers. room-
unit air-conditioners, sewing ma
chimes, radios, monographs and
musical instruments composed pr1n-
cipally OF metal.
Fifteen per cent minimum down
payment and 1s months to pay
household furnaces and heating
units for furnaces dncluding install
latlons for oil. gas or coal stokers).
household water heaters, water
pumps, plumbing and sanitary fix
lures, home air conditioning sys-
TENS, and attic ventilating fans.
Ten per cent minimum down pay
ment and Is months to pay-new
household furniture Gncluding Ice
boxes, bed springs and mattresses
but excluding floor coverings, wall
coverings, draperies and bed COW
erings) pianos and household elec-
trio organs.
No down payment but maximum
OF l8 months to pay-materials and
services Except items listed above)
used In making repairs or improve
ments on existing real estate when
amount is less than 81 900; same re-
Striction on cash loans Of less than
$1,000.
The regulations allow for down
payment in cash and in goods ac-
cepted in trade.
The order made a number of ex-
ceptions for special cases where
hardship might be involved.
For instance, the restriction on
small cash loans does not apply TO
students. Likewise, airplanes to be
used In connection with the Civil
Aeronautics Administration program
and equipment for defense housing
are exempted. Also, more liberal
terms are authorized for persons
swearing In writing that they can
not AFFORD to meet the terms and
will suffer undue hardship If de-
MED more liberal credit.
Mortgage loans in connection with
building or buying complete
house-not improvement of an exist
ing dwelling-were exempted.
Neither do the new rules Affect
cash transactions, ordinary charge
accounts, or credit outstanding prior
TO September l Except If renewed
or expanded at a later date.
Licenses to Be Granted.
Enforcement will be through a
licensing system. Initially, general
licenses will be granted to all ven
oors, However, by next January 1
stores, banks and other credit es-
tablishments will have to obtain in
dividual licenses through the Fed
eral Reserve banks. Such licenses
can be suspended for violation OF
the regulations.
Firms selling merchandise on the
"hy-away" plan can figure the max
imum time payment period from the
time the purchased article Is taken
away by the consumer, rather than
when ordered by him.
The board warned the public and
business that yesterdays order ID
just the beginning of credit regula-
tions, and that changes may be ex-
pected from time to time as expert
ence with the regulations is gained
and as changing economic condi-
tions indicate the need therefor"
This meant, at any time, the board
may put additional articles on the
credit restriction list, may change
the down payment or maximum
time OF repayment, or may limit
other forms of consumer credit be-
sides installment credit.
Some exceptions were made for
farmers, particularly needy ones,
and those seeking cash needed for
farming operations or equipment.
Special exception also was made
on cash loans for medical, dental.
hospital and funeral expenses when
necessary to prevent hardship.
Another rule requires that install.
ments must be approximately ANAL