Evening star., 1950-12-06
Car Dealers Contend
Law Was Ignored in
Imposition Of Curbs

Automobile dealers charged to-
day that the Government ignored
the new defense law in failing to
give them a hearing before i'm
posing tight controls on the in
stallment buying of cars.
And the pleas of the dealers
who claim the credit curbs are
seriously affecting their business
fell on sympathetic ears in Con-
greSS.
The case Of the car dealers
was heard today by the special
Senate House Committee on
Economic Controls which opened
hearings on the working of the
Defense Production Act, headed
by Senator Maybank, Democrat.
of South Carolina.
Tells of Denial of Hearing.
William L. Mallon, Newark,
N. j., representing the National
Automobile Dealers Association,
said the Federal Reserve Board
imposed the restrictions on in
stallment buying without con-
sulting the industry as provided
in the Defense Act. He said that
repeated efforts of his organiza-
ton to get a hearing from the
board both before and after the
curbs were invoked were unavail-
ing.
Representative Patman, Demo-
crat. of Texas. declared that
authority to administer credit
curbs should be removed from the
Reserve Board and given to an
agency charged with more re-
sponsibility to the people" He said
the board now views itself as sep
arate and apart from our Gov
ernment."
Mr.. Patman suggested that the
change be made when the Defense
Act, which provides for controls
on imitation, expire next June 80.
Law Provides Consultation.
Mr.. Mallon pointed out that the
law provides that economic con-
trolls should not be invoked with
out prior consultation with the
industry affected.
Current restrictions on car buy
ing provide for a minimum down
payment of one-third of the pur-
chase price with maximum of Is
months in which to pay the re-
mainder. Testimony was heard
that the limitation had reduced
the business Of dealers as much as
so per cent.
Mr.. Mallon said he hesitated to
complain about the regulation be-
cause of the serious turn in the
Korean wa. but that he believed
unless credit is eased the curbs
will seriously affect defense trans
portation.
Robertson Defends Board.
Senator Robertson, Democrat,
of Virginia deefnded actions OF
the Reserve Board. He said that
it was theo My Federal agency
which haG taken any action to
curb the very serious initiation
facing IT,"
Chairman Maybank and other
committee members assured the
auto dealers that they would ar
range hearing for them with the
bank board. Federal Reserve Off
cials are scheduled to tell their
side Of the story tomorrow.
Harold DeWolfe, representing
New York taxi owners, said the
credit regulations had made it
almost impossible for the small in
dependent cab driver to buy an
automobile. He spoke after Mr..
Mallon had described the efforts
of his association to get a hearing
from the Reserve Board.
Capehart Mentions Freezing"
Senator Capehart, Republican,
of Indiana said earlier the ad-
ministration should seriously con-
slider freezing" all prices and
wages at present levels.
And Senator Maybank insisted
that the Government 'get at this
imitation right away and stop it
in order to preserve the economy
of the United States" The meth
cd Senator Maybank said. should
be left to stabilization officials.
He said that although the Gov
ernment may not act until April
l, 1851, he is convinced controls
are on. the way.