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Charles Elliott 'Avgast
7 3 4 B NORTH MERIDIAN
INDIANAPOLIS 4 4 , IND.

January 27, 1949

Hon. Marriner Eooles
Member of the Board of Governors
Federal Reserve System
Washington, D.C.
Dear Sir:
I would like to take a few moments of your time in
regards to current discussions abroad on the matter of "Regulation
W" of credit restrictions now enforced or under consideration
by your group,
I am an employee-member of a local wholesale electrical
jobbing house. We job electrical wiring and related materials,
as well as fixtures. We stock only limited appliances, such as
clocks, irons, toasters; and in very limited quantities. I mention
this latter because "Regulation H" does not affect us. This fact
simply because we do not do business on long term credit basis.
I do not mean to criticize this method of business; merely to
make it quite clear that I wish to state my opinion here on a
matter not directly affecting me, or the company for whom I work,
and an opinion that is personal rather than representing our
company.
The reason that I have for taking your time is prompted
by the enclosed memo issued to our company by the National
Electrical Wholesalers Association, commonly referred to as
NEWA. Its contents are satisfactorily presented, I concur
with the general purpose of contacting such bodies as your1s
regarding such common issues as it presents. However, I must
personally disagree with the "proof" it prescribes to present
to you and the members of your board. And for this reason I
urge you to consider my opinion as one acquainted with some of
the facts of sales and purchasing in the electrical and appliance
field.
In this city, electrical wholesale and retail stores
are flooded with a complete price range of radios, of all makes
and kinds. We have ample supply of television equiptment here,
but at this date no adequate reception of television from
Chicago or Cincinnati. In almost every other kind of electrical
appliance there is a sufficient and adequate supply, if not
actual overstock. Business or purchases by customers in all
these lines was extremely poor or slow during the Christmas
holidays. This can be attributed to satisfaction of the postwar demand in these items which was finally reached last year.
In some travels throughout parts of Indiana I have found that
trade has definetely slackened in these commodities; that many
stores have several models of radios, television sets (reception
is considered as good in the state away from this city), and
iceboxes, stoves, and general appliances with not tremendous
demands.



Charles Elliott Acgast
7 3 4 E NORTH MERIDIAN
INDIANAPOLIS

4 4 , INO.

-2Hon. Marriner Eccles

Jan. 27, 1949

NEWA urges the member jobbers, particularly those
jobbers with "appliance divisions," to urge your board J$o
extend credit restrictions in the purchases of appliances.
They desire that you decrease the amount required as downpayments and extend the period for payment of the balance
owed. As I understand it the present restrictions demand
one-third (l/3) down payment and final payment in twelve
months. NEWA perhaps would prefer twenty-five (25) or ten (10)
percent down payment and two (2) years to pay the balance.
I am opposed to such extension; nor can I find reasons for
any extensions at all,

c

NEWA wired your board (copy enclosed on memo)
that such extensions (though they named no specific kind)
would be for the "greater comfort, convenience and financial
benefit" of consumers. The argument of NEWA is based upon
the premise that radios, television sets, electrical appliances,
stoves, iceboxes are necessities without which naumal citizens
cannot exist, I disagree with such implied contentions. Such
consumer-items are luxuries and nothing more. If a person
cannot afford to pay a substantial down-payment on a restricted
basis of terms as now in force then he is risking not only
his investment but his security in so buying, I REFER TO
SIMPLE MEMORY OP THE CREDIT BUST OF THE 1920* s WHEN ABUSE OF
CREDIT WAS CONSIDERED "SOUND BUSINESS". I plead the case
of credit controls that a reasonable man should accept as
just; controls that protect the economy of the nation by
placing a watchdog at the purse strings of consumer America
whose heart always will yearn for treasures beyond its means.
NEiTA represents a splendid section of the electrical
appliance outlet for this particular phase of the electrical
industry. It is no doubt true that the radio and television
industries as well as industries producing other appliances
have reached production levels that cannot be maintained at
the present selling levels.. As was true after World War I,
these industries produced beyond the demands. Demands require
new sales approach; not 1946-1948 "allocations" and "order
taking". Demand will not be honest on pauper-credit level.
It is not my honest belief that NEWASs suggestion
is sound. I urge you to stand by whatever credit controls
you think reasonable and best for the common good, not certain
industries or their outlets.
Thank you for your time.
Very truly yours,

O



OLJL

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National Bee triea/ Wholesalers Assocfatwn
5 0 0

F I F T H

A V E N U E

^rTruTT^

N E W

Y O R K

(90S

January 20,
TO MEMBERS OF THE
APPLIANCE DIVISION
*
IS REGULATION W HAMPERING SALES?
Gentlemen: Except for the automobile industry, who have registered stiff complaints,
other fields have offered only scattered dissents against Regulation W f s credit
restrictions. So says a Federal Reserve Board's spokesman, according to a report
on page 1 of January lUth's RETAILING DAILY.
That spokesman is quoted in that report also, as follows:
"We expect that we'll "be getting some protests now
from the household furnishingstrades, and when we
do, these will be given fair hearings at the Board."
In consideration of developments in the radio, television, and major
electrical appliance fields during the past two months, a telephone poll of your
N.E.W.A. Executive Committee was taken this week. Opinion was unanimous that
Regulation W as it now restricts installment selling, is severely hampering these
two industries. Reductions in down payments and an extension in terms of payment
are vitally needed, in the light of present conditions. Regulation W requires
prompt amendment in both these respects in order to keep increasing production
moving steadily into consumer hands, and to maintain employment at the highest
possible levels.
These views, on behalf of the Executive Committee of N.E.W.A., have been
relayed officially to the Federal Reserve Board at Washington.
But - that is by no means enough, if any relief is to be forthcoming.
Every member should take direct, personal action. He should telegraph his views,
and include his specific recommendations for changes in Regulation W, to a member
of the Federal Reserve Board at Washington, D.C. If every member will do that
much, then the Board will have concrete protests, in numbers, which as its spokesman has stated - "will be given fair hearings at the Board." That Board needs
overwhelming proof that a change is imperative* Just a handful of protests will
mean nothing.
Below is a list of the members of the Federal Reserve Board. Send your
telegram to one of this group - either the Chairman or one of the others whom you
may happen to know.
Members of the Board of Governors of the Federal Reserve System
Thomas B. McCabe, Chairman
Marriner Eccles
R. M. Evans
M. S. Szymczak
James K. Vardaman, Jr,
Ernest G. Draper
Lawrence Clayton




c

- 2N.E.W.A. alone can't do this job for you. The Association has alreadygone as far as it can in your interest - the rest is up to you personally, now.
If you want some action taken at Washington - - send your telegram today!
Very sincerely yours.,

CGP/al

Managing Director
P.S. For your information, I am quoting below- the telegram sent to
the Chairman of the Board of Governors of the Federal Reserve
System, on behalf of the Executive Committee: "MR. THOMAS B. McCABE, CHAIRMAN
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
WASHINGTON, D. C.

c

"IT IS THE CONSIDERED OPINION OF THE EXECUTIVE COMMITTEE OF NATIONAL
ELECTRICAL WHOLESALERS ASSOCIATION, AN ORGANIZATION OF MORE THAN kO
YEARS CONSECUTIVE SERVICE TO THE MUTUAL WELFARE OF ELECTRICAL WHOLESALING AND APPLIANCE DISTRIBUTING INDUSTRY AND CONSUMING PUBLIC, AND
NUMBERING NEARLY 900 HOUSES IN ITS MEMBERSHIP, COAST TO COAST, THAT
CHANGES IN THE PROVISIONS OF REGULATION W ARE NOW VITALLY NEEDED SO
FAR AS RADIO, TELEVISION AND ELECTRICAL APPLIANCES ARE CONCERNED.
SPECIFICALLY, REDUCTION IN THE AMOUNT OF DOWN-PAYMENTS AND EXTENSION
OF PAYMENT TERMS ABE RECOMMENDED.
"UNIT PRODUCTION RATES IN THESE TWO FIELDS ARE STEADILY MOUNTING, TO
THE POINT WHERE SUPPLY IS NOW AMFLY ADEQUATE TO CONSUMER REQUIREMENTS.
MODERN RADIO, TELEVISION AND APPLIANCES PROVIDE CONSUMERS NEW AND MORE
ADVANTAGES. PRESENT REGULATION W PROVISIONS DETER CONSUMERS FROM
REPLACING WORN AND OBSOLETE UNITS TO THE DETRIMENT OF THEIR GREATER
COMFORT, CONVENIENCE AND FINANCIAL BENEFIT.
"ADOPTION OF RECOMMENDED CHANGES WOULD ALLEVIATE THIS CONDITION. THE
INDUSTRY WOULD, THEREBY, BE AIDED IN MAINTAINING HIGH-LEVEL EMPLOYMEM1;
AND THE PUBLIC IN GREATER NUMBERS COULD AVAIL THEMSELVES OF THE
ENJOYMENT AND THE MORE HEALTHFUL, COMFORTABLE LIVING THESE MODERN
ELECTRICAL CONVENIENCES SO ECONOMICALLY PROVIDE.
"YOUR EARLY FAVORABLE CONSIDERATION OF THESE RECOMMENDATIONS, IN THE
PUBLIC'S INTEREST, IS MOST EARNESTLY AND RESPECTFULLY URGED."




C.G.P.

February 1, 1949*

Mr. Charles £* Argast,
7345 Sorta Meridian,
Indianapolis 44, Indiana*
Dear I4r« Argast:
lour thoughtful letter of January 27 is very saeh
appreciated* I have taken the liberty of passing it on to
Governor Stains as the member of the Board to whoa Regulation ¥
aatters are assigned and also to the other Board members.
lour cosment is especially impressive because of your
experience and knowledge of the appliance business* Under the
Regulation as it stands the present terms specified call for
down payments of 20 per cent and paying off the balance in
15 months if the unpaid balance is $1,000 or less* If it is
$1,500 or sore it say be paid off in IB months* Indebtedness
between these two figures is taken care of by provision that
in any case the aonthly payments shall not be less than $75*
I mention the foregoing as your letter assumes that the terms
are even more restrictive*
Let me thank you again for taking the time and trouble
to cQjamanicate with us* It Is especially refreshing to have
expressions of opinion like yours which are based, it
to ae, on broad sound considerations*




Sincerely yours,

H« S« Secies