Evening star., 1950-10-14
Retail Dealers
Protest Tighter
.Curbs on Credit
Regulation Effective
Monday Might Cause
Recession, They Soy
By Froncis P. Douglas

"A SPOKESMAN IOI CIlc NdIlOA 0
retailers today protested the
tighter curbS on installment buy
ing announced by the Federal Re-
serve Board.
The new rules were announced
last night. They took merchants
by surprise. They call for higher
down payments, except in the
case of automobiles, and cut the
periods for completing payments
to uniform Is months. Down
payments for television sets and
appliances in general are raised
to 25 per cent and for household
furnishings to Is per cent.
Maury L. Nee, chairman of the
Secretary of Commences Retail
Advisory Committee. warned that
the Reserve Boards action might
"precipitate a recession" Mr.. Nee
is head of the P. j. Nee Co., Wash
ington furniture concern.
1--WE feel that if this would make
a contribution toward heading of
imitation it would be all right"
Mr.. Nee said. But prices have
been leveling off and there is fall
ing demand. At the same time.
supplies are more ample at the
retail level than at any other time
in history. and orders by retailers
are at an all-time high"
Order Effective Monday.
The new order making Regula-
ton w more stringent is effective
at 1901 am. Monday. Regula-
ton w is the Reserve Boards reg
ulation affecting installment buy
ing, which also was used in World
War II and afterwards.
While the initial credit curbs
under the regulation, effective
September 18, applied only to ar
ticles costing 500 or more, the
new order cuts the minimum
to $50.
The new terms for installment
buying of automobiles are as stiff
as those applied during World
War II. The down payment re-
mains at one-third the purchase
price. the same as in the first
order, but the full price must be
paid off in Is months instead Of
81. Automobile men said this
would raise monthly payments
on a loW-priced car by about $25.
Used Cars Affected.
The new rule affects used cars
as well as new ones.
| Trucks are not involved at all
in Regulation w.
| On television sets. radios and
other appliances the required
dowp payment is increased from
Is to 25 per cent. Instead of the
buyer having 18 months to COM
plete the payments he will have
only Is.
This rule also applies to re-
! frigerators. stoves. washing ma
chimes, dishwashers. ironers. vacu-
um cleaners and food freezers.
In the case of furniture and
rugs the initial payment is raised
from 10 to Is per cent and the
time is cut from 18 months to IS.
If a purchaser arranges a loan
so as to pay cash for his automo-
bile or household appliance. the
reserve board directs that if the
loan is to be paid off in INSTALL
ments, it must be paid at the rate
required for installment pur-
chases of the goods he buys.
Further Tightening Hinted.
Merchants pointed out that the
new order of the reserve board
gave them only one days warn
ing. The To-day advance notice
when the regulations were first
invoked last month set off a wave
of buying to get ahead of the
controls.
In announcing the new order.
Thomas B. McCabe. Reserve Board
chairman, said it would help
maintain the purchasing power of
the dollar.
He said the board had received
reports from Federal Reserve
Banks and other sources in all
parts of the country indicating
continued upward pressures on
prices since the credit controls
were first established on Septem-
ber 18.
Bank Credit Grows.
while the intensities of these
pressures on the market varies
somewhat from time to time" he
said, "the fact remains that the
(See CONTROLS, Page A-3)