The Union County journal. [volume] (Marysville, Ohio) 1875-1951, 1950-09-18
THE UNION COUNTY JOURNAL. MARYsvILLE. OHIO
natl or Pittsburgs.

The limitations initially es-
tablished by the reinstituted Re-
gulation w are:
Down payments of at least one
third, and maximum maturities
of q months for automobiles.
Down payments of at least Is
percent, and maximum matur-
tiles of 18 months for appliances:
refrigerators, food freezers, radio
or television sets, monographs,
cooking stoves, ranges, dishwash-
ers, ironers, washing machines,
clothes driers, sewing machines,
suction cleaners, air conditioners
and de-humidifiers.
Down payments of at least 10
percent, and Is months maximum
maturity for furniture and rugs.
Down payments of at least 10
percent, and 80 months maxi
mum maturity for home repairs,
alterations or improvements.
None on Small Credits
Following the past policy Of
placing fewer restrictions on
small credits, the new regulation
does not contain down payment
requirements for articles costing
less than S100 although, unlike
the former regulation, 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 ar
ticle; other instalment loans are
limited to a maximum maturity
of l8 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.
Automobile Field
In the automobile field the
great majority of recent install
ment sales of new cars and late
model used cars are reported as
having been financed on sub
stantially easier terms, either as
to down payments or maturities
or both, than permitted by the
new regulation.
Similarly, many instalment
sales of appliances and furniture
are reported as having been made
with down payments of 10 per-
cent or less; in many cases only
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
maturitieS offered in some cases.
Consumer credit has undergone
an unprecedented nsion,
particularly in recent months.
Under present conditions contin-
ued excessive growth of consum-
er instalment credit adds mater
tally to inflationary pressures.
Restrain Initiation
The regulation of consumer
credit is one of the fiscal, none
tary and credit measures design
ed to restrain the inflationary
presSures that result in higher
prices and to facilitate diversion
of critical material and manpower
to production of defense needs
as such diversion is required.
AS the Board has frequently
emphasized, the regulation is a.
useful supplement instrument to
combat initiation. 1t applies to an
important part, but only to one
part, of the credit structure and
therefore cannot by itself effec-
lively control inflationary forces.
Regulation w was first put in
to effect under executive order
Sept. l, 1941. 1t expired Nov. l,
1947. 1t was reinstated Sept. 20,
1948 under statutory authority
which expired June 80, l949. The
business community and the buy
ing public, the Board and the
Federal Reserve Banks have thus
had extensive experience with
this type of credit regulation.