Evening star., 1949-03-03

On |nsta||ment Buying
Goes in Effect Monday
Easier controls on installment
buying on a list Of products rang
ing from cook stoves to automo-
biles will become effective Mon
day.
The Federal Reserve Board an
nounced last night relaxation Of
controls after it had reported that
installment credit outstanding
dropped In January for the first
time in three years.
The boards move extended to
81 months the time allowed for
paying the balance after q down
payment on q purchase. The time
limit in force now Is 18 months,
where the credit amount is more
than $1,000. and IS months when
it is less than $1,000.
The down payment on all con-
trolled items, except automobiles.
was reduced from 20 to is per cent.
The down payment on automo-
biles will remain one-third OF the
total purchase price.
Move Widely Praised.
Anti-inflation control items af-
fected by the boards order are
cook stoves, dishwashers. ironers.
refrigerators, washing machines.
automobiles, air conditioners, radio
and television sets. monographs,
sewing machines, vacuum cleaners,
furniture and rugs.
The move was widely praised as
a boost to tagging sales, especially
of automobiles. although some exA
pressed the opinion the buying
controls should have been eased
still more.
Edgar Kaiser, general manager
of the Kaiser Frazer Corp, said
the action lis not enough" and
similar opinion was expressed by
Representative Patman, Demo-
crat, of Texas. Both have been
urging for extensive easing Of
controls on credit buying.
Senator OMahoney, Democrat,
of Wyoming, chairman Of the
Senate House Economic Commit
tee, hailed the boards action as
"a clear illustration Of the wise
exercise of Government controls
and "a step that will tend to pro-
mote the distribution of inven-
tories"
Chairman Maybank Of the Senate
Banking Committee said he was
pleased" at the new order and
added:
This will give veterans and
others an opportunity to buy
things. 1t will give production o
chance to go ahead"
The boards action followed O
few hours after 1t was reported
that installment credit outstand-
ing in January dropped $145. .000.-
900 and 1t was acknowledged that
the figure was larger than could be
attributed to the post Christmas
seasonal slackening of business.
The drop occurred despite q
$14 100000 credit gain on install
ment sales of automobiles. Total
consumer credit on January 81
amounted to $8.051 100000.
Based on Long Study.
The 21-month allowance on in
stallment purchases was midway
between the present limit Of 1S
months and the time payment
proposal advocated by Repre-
sentative Patman and others. 1t
applies on controlled items costing
more than $50.
The board said its modification
order Is based on continuous
study Of the operations Of the
regulation since it was reinstated
last September, and on the ex-
perience of Federal Reserve Banks
and their branches in admins
tration in the field"
In extending the time payment
limit to 81 months, the board
dropped the provision that month
ly payments be at least $40 where
credit balances are more than
$1,000.
Board lawyers pointed out that
the extra three months for INSTALL
ments would have been meaning
less in many cases had the $40
minimum remained in effect.
The boards action was taken
under limited authority due to
expire June 80. The administra-
ton is seeking congressional
authorization for continuing such
controls.
One Of the principal advocates
of relaxed controls has been retail
automobile dealers and manufac-
turers. One automobile manufac-
turer, Kaiser-Fr recently cut
back its production and explained
that it did so because the stricter
installment requirements were
slowing up sales.
Weather Report
District of Columbia - Partly
cloudy with some sunshine and