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R•983 87 BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM Statement for the Press For release in morning newspapers of Wednesday. May 6, 1942 May 5, 1942 In conformity with the President's Special Message to Congress of April 27 and under authority of Executive Order No. 8843 of August 9, 1941, the Board of Governors of the Federal Reserve System has adopted, effective May 6) 1942, Amendment no. 4 of Regulation W relating to consumer credit. As amended, the Regulation is extended to cover a comprehensive list of durable.and semi-durable goods for civilian oonsmnption, and con~ templates that the volume of outstanding ·consumer credit, already substantially diminished, will be further contracted in keeping with the Government's purpose to prevent the rapid bidding up of prices. The purpose of this revision is to help make effective the last point in the 7-point program which the President set forth in his Special Message to Congress of April 27, 1942, as followsa "To keep the cost of living from spiraling upward, we must dis• courage credit and instalment b~ing, and encourage the paying off of debts, ~•rtgages, and other obligations; for this promotes savings, retards excessive buying and adds to the amount available to the creditors fer the purchase of Wfl.r Bonds.u The principal changes made in the Regulation are: 1. The list of consumers' goods to which the Regulation applies has been brtadened to include automobile batteries and accessories, tires and tubes; bedding; draperies; binoculars; household electric appliances not hitherto listedJ used furniture; jewelry; luggageJ athletic equipment; table and kitchenware; pottery, glassware; yard goods; and non•military clothing and furs_, including shoos, huts and other ht~berdashery. The full list is attached with the additions italioi~ed. 2, The maximum permissible maturity of instalment sales has been reduoed to 12 months, and the required tiown payment for t::.ll listed articles has been increased to 33•1/3 per cent. Exceptions to this rule include instalment sales of automobiles, for whioh the down payment of one•third and the maximum maturity of 15 months are retained, and furniture and pianos, for which the required down payment, formerly 10 per cent. becomes 20 per cent, the maximum maturity being 12 months • • - 2 • R-983 88 3· The scope of the Regulation has been broadened to make it cover, in addition to instalment sales and instalment loans, charge-account sales of listed articles and single-payment consumer loans. The Regulation provides with respect to charge accounts that unless payment is made by the tenth day of the second calendar month following the purchase, no further credit may be extended to purchase any listed article until the items in de~ fault have been paid for in full or have been placed on an instalment basis for payment within 6 months. No down payments are required on purchases in charge accounts. 4. Single•payment loans ot $1500 or less are limited to a maturity of 90 days, and where such a loan ia to purchase a listed article costing $15.00 or more, a down payment is also required. It not paid in 90 days, the loan must be placed on an instalment basis. 5• The reVised Regulation provides that instalment not be leas than 65~00 per month or $1.25 per week, paym~nts shall The exemption from down•payment requirements ot instalment sales maturing within 3 months has been repealed~ Provisions covering seasonal adjustments and so~oalled farmer plans are retained in the Regulation, together with various additional ex• ceptions, suoh as real estate loans; security loans 3ubject to Regulations T and UJ educational, hospital, medical~ dental, and funeral expenseSJ aircrattJ defense housing; credit to dealerB• fire and casualty insurance premi~; agrioultur~l production loans; business loan~; insurance policy loans; and extensions of credit to th0 Fedoral Government, to local govern• ments• or to any hospital, school, college, or other educational or charitable institution. Copies of the Regulation nre being printed ut euch of the Federal Reserve Banks and will be distributed by them throughout th~ country within a few days. Any inquiries with rospoot to the Regulation should bo addressed to the Federal Reserve Bank of tho district in which ~~c inquiry originates. 89 LISTED ARTICLES Group A • One•third down and 12 months' maximum maturitl; 1. 2. 3· 4. 5· 6~ er automobiles ousehold inens and towels 7- 8. 9. *10. 11. 12. 13, 14. 15. 16. 17. 18. 19. 20. **21. 22. 23. 24. an out oard motors esigne or use t erewith, other than boate or motors designed specifically for commercial use Clocks, electric or other, designed tor household or personal u~e Cooking stoves and ranges, designed for household use Dishwashers, electric, designed for household use Electric afpliances, not elsewhere listede designed for household or ersonal use' · · F oor cover ngs (including fabric and linoleum type rugs, carpets, mats, and other floor covering materials, whether or not designed to be affixed to the floor) Furnaces and heating units for :f'urnaoes, household (including oil burners, gas conversion burners, and stokers) Heating sto'lres and space heaters, designed for household use Ironers designed for household use Jewel (includin recious stones and costume jewelrz) amps designed or house o d use Lawn mowers, edgers, and trimmers (whothor or not power~driven) Li htin fixtures desi ned for household uso urse~, han ba s to et cases umbrellas u a e o l.cin picture cameras, pro eotors, and for film gauges less than 35 mm.; still ca~eras, shutters, and enlargers Musical instruments not elsewhere listed Organs, household eleotrie Plumbing and sanitary fixtures designed for Portable l i hts and ortable o:r stationa ment, 29. }0. 31. 32, 33· . :rated capacity 34. for house• 35· ned for house• and 90 36• 37- 38. 39~ 40. 41. Group B •1. 2. (inoludin· footwear, arments or for makin ~ 20 per oent down 12 months' maximum articles of ~aturitl: Furniture, household (inoludine ioe refrigerators, bed springs, and mattresses) Pianos Group C - 12 1. an~ h~- mon~?s' maximum maturity; Materials and s0rvices (other than articles, whether or not designed for household use, which are of kinds elsewhere listed) in connection with repairs, nlterntions, or improvements upon urban, suburban or rural real property in connection with existing structures (other than a structure, or a distinct part thereof, whioh, as so repaired. altered or improved, is designed exclusively for non•rosidenth.l use), provided the deferred bs.lanee does not exceed $1,500 Group D - 33-li3 per o~nt down und 15 r'lonths' mux~mum maturity; 1. Automobiles (passenger ears designed for the purposv of transporting loss thun 10 pt..ssongers, including taxi•cnbs) 2. Motorcycles (two or thrce•\vheel motor vehicles, including motor bicycles) •Used furniture udded cffoctive Ma.y 6, 19m.
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