Madison County Democrat. (London, Ohio) 19??-1958, 1950-09-15
Curb On Credit
Buying Goes In
Effect Sept. 10

generally frightened, the regula-
ton is in much the same form as
the regulation which expired June
20, 1949. -s
The limitations initially estab-
lished are:
Down payments of at least one
third, and maximum maturities of
81 months for automobiles.
Down payments of at least
Is per cent, and maximum
maturities of Is months for
appliances: refrigerators,
food freezers, radio or tele-
vision sets, monographs,
cooking stoves, ranges, dish
washers, ironers, washing ma
chimes, clothes driers, sew
ing machines, suction clean.
ers, air conditioners and de-
humidifiers.
Down payments of at least 10
per cent, and Is months maxin-
um maturity for furniture and
rugs.
Down payment of at least 10
per cent, and 80 months maximum
maturity for home repairs. alter
ations or Improvements.
Maturities Limited
Following the past policy of
placing fewer restrictions on small
credits, the new regulation does
not contain payment, require
ments for articles costing less
than 500 although, unlike the
former regulations, maturities are
limited.
Instalment loans for the pur-
chase of any listed article carry
the same limitations that apply to
the instalment- sale of the article;
other instalment loans are limited
to a maximum maturity of Is
months.
In establishing the initial terms
the Board took into account the
prevailing practices and terms in
the trades affected. There has
been a material relaxation of in
stalment credit terms during the
past year or more, and the re-
quirements of the regulation are
substantially tighter than the
terms now widely offered.
In the automobile field IT,.
great majority of recent in
stalment sales of new cars and
late model used cars are report
ed as having been financed on
substantially easier terms, either
as to down payments or maturi-
ties or both than permitted by
the new regulation.
Similarly, many in;ta'ment
sales of appliances and furniture
are reported as having been made
with down payments of 20 per
cent or less; in many cases OILY
token or no down payments have
been required. Maturities of "a
months on instalment sales of such
articles have been reported as
widely prevalent with longer ma
turtles offered in some cases.
Consumer credit has undergone
an unprecedented expansion, par
ticularly in recent months. Un.
der present conditions continued
excessive growth Of consumer in
stalment credit adds materially to
inflationary pressures:
The regulation of consumer credit
is one of the fiscal, monetary and
credit measures designed to re-
strain the inflationary pressures
that result in higher prices and to
facilitate diversion of critical ma
terial and manpower to product
ion of defense needs as such di-
version is required.
To Combat Initiation
AS the Board has frequently
emphasized, the regulation is a
useful supplementary instrument
to combat initiation. 1t applies to
an important part, but only to one
part, of the credit structure and
therefore cannot by itself effect
lively control inflationary forces.
The regulation is being publish
ed in Federal Register and copies
of the regulation will be made
available through all Federal re-
serve banks and branches as soon
as possible. The regulation will
be administered in the field by
the IL Federal reserve banks and
their "a branches located conven-
iently throughout the county. In
quiries should be addressed to the
nearest Federal reserve bank or
branch.
Regulation w was first put into
effect under Executive Order
September I, 1941. It expired
November /, 1947. 1t was rein
stated September 20, 1948 under
statutory authority which ex-
pired June 80, 1949. The business
lCoatinued on Page Twol