The Pittsburgh Press (August 23, 1941)
CURBS ORDERED FOR SEPT. 1 ON INSTALLMENT PURCHASES
18-month limit established for payment on 24 items in action by Federal Reserve Board; loans also restricted by price control move.
Washington, Aug. 23 (UP) –
The era when $1 down and $1 a week could buy a radio or washing machine neared an end today as the Federal Reserve Board ordered sharp curbs on installment buying beginning Sept. 1.
About $7 billion are spent annually on installment buying. The new regulations are designed to reduce this sum drastically to conserve materials needed in national defense and prevent an inflationary spiral in consumer goods prices.
The Federal Reserve, acting under authority of a Presidential executive order, issued regulations covering almost every type of business which uses installment credit.
After Sept. 1, no credit for purchases of 24 selected articles may be extended for longer than 18 months.
The articles and the required down payments are:
Autos, airplanes, gliders, power-driven boats and their motors, outboard boat motors, motorcycles and motor bicycles.
Mechanical refrigerators, washing machines, household ironers, vacuum cleaners, cooking stoves and ranges of less than seven burners, household heating stoves and space heaters, household electric dishwashers, room-unit air conditioners, sewing machines, radio receivers, phonographs or radio-phonograph combinations and musical instruments made principally of metals.
Household furnaces and their heating units for furnaces, oil burners, gas conversion burners, stokers, water heaters, water pumps, plumbing and sanitary fixtures for household use, home air conditioning systems and attic ventilating fans.
New household furniture, including ice refrigerators, bed springs, mattresses, pianos, household electric organs.
Credit extended for less than $1,000 om home repairs, alterations and improvements was limited to a maximum maturity of 18 months, no limitation on the down payment. An 18-month limit was also placed on installment loans of $1,000 or less, effective Oct. 1.
After Jan. 1, 1942, the regulations require that all payments on installment credits must not be less than $5 a month.
The Federal Reserve Board included a long list of exceptions to the credit regulations. Among them were loans to students, advances for medical or funeral expenses and agricultural loans with the approval of the Farm Security Administrator.