Evening star., 1942-05-06
Government Tightens
Credit Extensions
On Household Goods
Reserve Bourd Order,
Aimed at Price Spiral,
Excepts Food, Drugs
(List of Articles Covered by Credit
Restrictions on Page B-10.)

RESTRICTIONS on rage 6-IO.J
BY the Associated Press.
The Government today put
teeth in President RooSevelt's
advice that people ought to pay
their bills and keep out Of debt.
With only a few hours notice, the
Federal Reserve Board put into
effect last midnight rules governing
the credit purchase of nearly every
household item except food, drugs
and cosmetics.
Intended specifically to give force
| to the suggestion made by the PreSl-
dent last week about getting out OF
debt, the rules were designed to
keep people from using their credit
to bid up prices that enter into the
cost of living and also to put more
money into circulation for War
bonds.
46 Items Covered.
They provided specifically now
and when credit customers shall
pay for everything from kitchen
pans to clothing-46 items In all
whether bought on regular charge
accounts or on the installment plan.
It was the first time that ordinary
charge accounts were touched by
board regulations. If an item on
the restricted list is charged, it must
be paid for by the 10th day OF the
second month after the purchase.
or the customers credit must be shut
off on all listed articles. The penalty
may be avoided, however, If the
merchant and customer are willing
to sign an agreement to clean up
the debt in fixed installments during
the following six months.
AS to installment credit, the new
requirements are for larger down
payments and shorter time to pay
the balance. On most items, the
rule is one-third down and year
to pay, except that the monthly
payment must be at least SIS even if
that shortens the payment time.
Many Added to List.
Both the new charge account and
installment credit rules apply to a
wider list of articles than ever was
covered by previous regulations for
installment credit alone. Added to
the list of restricted items were such
categories as all military cloth
ing, luggage, sports and game equip
ment, all table and kitchen ware,
automobile accessories, bedding,
linens, all household electrical ap-
pliances, yard goods and used furni-
ture. These items were added to
former lists which already included
new furniture, clocks, radios, refrig-
orators, vacuum cleaners, stoves.
musical instruments, silverware and
plumbing fixtures
Cash loans under 81 500 from
banks or other lenders also were held
down to maximum of IL months to
pay, and in some cases 80 days.
Former rules applied only to cash
loans to be repaid on the installment
plan, but the new regulation also
applies to loans to be repaid in lump
sums.
Rule on Standing Accounts.
In applying the new rule on
charge accounts, the board, in ef-
feet, treated past purchases of listed
items as having been made today.
Unpaid accounts involving listed
articles now on store books must be
cleaned up-or installment terms ar
ranged-by July 10.
The charge account rule allows
between 40 and 10 days for pay
ment. For instance, articles bought
on June l, June Is or June 80 all
become due on August 10-"the
tenth day of the second month after
the month in which the purchase
was made
Usual exceptions or extensions
were granted for special cases, in
cluding student loans, emergency
hospital expense loans, credit to
farmers and others with seasonal
income, and impoverished persons.