Full text of G.20 Sales Finance Companies : December 14, 1950

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BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
December 14, 1950

OOTOBER 1950

Retail financing.-The volume of retail automotive paper acquired during October by
reporting aBies finance companies was substantially less than the volume acquired during September,
as shown by the table below. The October decline of 13 per cent is the largest of three successive
month-to-month decreases reported for purchases of retail automotive paper. In the automotive segment, only purchases of used commercial car paper, which make up a relatively small part of total
retail automotive purchases, showed an increase over September 19$0.
Outstanding balances of retail automotive paper at the end of October 1950 remained about
the same as at the end of the preceding month.
Purchases of other consumer goods paper were 29 per cent below the September volume. The
very large decline shown by the appliance component, ;; per cent, was the major factor in the overall decrease in the volume of purchases of other consumer goods paper.
Outstanding balances of other consumer goods paper were slightly lower at the end of
October than at the end of September.

Retail Financing by Sales Finance Companies

Class of retail paper
Automotivea

Total retail

Passenger cars:
Commercial cars:

Other consumer goodsa

New
Used
New
Used

=.1!

-13

-4

-1.3

-3
6

+

_,

+

Total

Furniture, radios, musical instruments
Refrigerators and other household appliances
Residential building repair and modernization
){iscellaneous retail

0

-17
-3

4

~
+

-2

6

-55
0

-18

Wholesale financing.-According to reports from the sales finance company sample, October
purchases of wholesale automotive paper were considerably larger than those of September. Outstanding balances at the end of October showed a large .increase over the previous month-end. This
increase probably reflects larger dealer inventories of new cars.
The amount of other wholesale paper acquired during October was substantially less than
the September volume. Outstanding balances were slightly higher.
Ratio of paper acquired to balances outstanding.--The turnover rate of total sales finance
receivables as measured by the ratio of paper acquired during the month to outstanding balances at
the end of the month fell by l point to 25 per cent.

NOTE.-October data, based on returns from 119 s&les finance companies, are compiled
in the same manner as those shown in earlier reports. Aggregates represent only the totals for
the reporting companies and; since the reporting sample is not identical from month to month,
they are not comparable with totals of preceding months.

Page 2
SALES FINANCE COMPANIES

Table I.--Automotive and Diver~ified Financing by Sales Finance Companies
Indexes of Outstanding Balances: December 31, 1939 • 100 ~

Wholesale
automotive

Wholesale
other
than
automotive

Retail
other
consumers'
goods

Industrial,
commercial,
and farm
equipment

100
140
250
40
8
11
38
224
394
454
332

100
129
148
76
30
26

88
151
249

100
169
175
112
40
24
27
90
163
252
216

100
131
147
61
27
26
23
59
89
116
107

232
233
228

237
245
249

294
267
216

371
361
332

195
190
187

110
107

234
234
237
240
250
263
266
274
282
288

252
258
265
274
284
298
314
322
330
331

250
223
·204
186
202
228
163
179
192
240

329
398
485

180
176
172
172
174
179
185
189
192
188

110
109
111
112
117
120
123
124
127
128

End of month
and year

Total
all
sales
financing

1939···· ..............
1940••••••••••••••••••
1941 ..................
1942 ••••••••••••••••••
1943 ••••••••••••••••••
1944 ••••••••••••••••••
1945 ••••••••••••••••••
1946 ••••••••••••••••••
1947 ..................
1948 ..................
1949 ••••••••••••••••••

100
136
152
53
20
18
22
59
119
174
228

100
132
149
37
13
15
18

1949..0Ctober ••••••••••
November •••••••••
December •••••••••
195o-January ••••••••••
February •••••••••
Karch ............
April ••••••••••••
May . . . . . . . . . . . . . .

June .............
July •••••••••••••
August ...........
September ••••••••
October, •••••••••

Retail
automotive

42

531
537
49,9
436
424
422
435

39

10_5
226
232
187

lll

Indexes as of .December 31 for the years of 1939, 1940, and 1941 are based on figures reported by
sales finance companies on a supplementary report form which accompanied the regular monthly report form for January 1942, Succeeding indexes are derived by calc\1lating the percentage
changes of the outstanding belances reported by sales finance companies for each month from
those, reported by the same companies for tl1e preceding month, and by linking these percentages
to the indexes for the preceding month,

Table 2.--Relative Importance of Loaus Made by Sales Finance Companies
During October 1950 and Outstanding Belences at End of Month
Peper acquired
during month
Class of paper

Outstanding balances,
end of month

Amount

Percentage
of total

Amount

Percentage
of total

Total, all classes of paper~ ........

$910.455.512

100

$3.520.507,968

100

Tots 1 loans ••.••••••••••••••••••••• ,
Small (personal) loans, ••••.••.•••
Business loans •••.•••••••••••.••••

22,281,286
9,145,151
46,142,135

6
1

5

162,222,222
68,600,756
93,929,166

2
3

Total sales finllllcing ~ ............

855,168,226

94

3,357,978,046

95

~

~

Included in this classification are only those firms which, in addition to their seles financing
operations, reported loan activities,

SAlES FINANCE COIIPANIBS

Table 3.-~utamoti~ and Di~rsified Financin~ by Sales Finance Campaniea
Paper Acquired During October 19$0 and Balances Outstanding at End of llonth
Volume of rcrar a,uired
during c ober 950
Clan of pt<per

By all
compani..
reporting

reporting
outatandi!J
balances a

!I

10
146

1,190,102

$2,622,134,025
373,258,805
32,631,631
288,973,495
96,304,651

$864,519,232

$3,413,302,607

25

$274,781,834
545,515,624
13,628,346
22,803,326

$866,821,121

Total sales financing •••••••••••

balances
October 31 1

1950

1275,896,091
546,263,634
13,670,926
Total wholesale - other than automotive.,,
23,194,636
Total retail- other consumers• goods •••••
Industrial, commercial, and fare equipment
7,795,834

Total retail automotive •.•••••••••••••••••
Total wholesale automotive ••••••••••••••••

Ratio paper
ecquired to
out standi;,
balance& b

Outstandin~

By companies

42

8
8

!(

Data are based on figures from sales finance companies able to report both their paper acquired and
their outstanding balances,
~ Ratios obtained by dividing paper acquired (column 2) by out~tanding balances {column 3),
Table

of Cars Financed and Volume of Paper Acquired
by Salee Finance Companies During October 1950

4.--~uzber

Number ot cars
Clase of paper
Number

Paper

acquired

Dollar
volume

Percentage
of total

Percentage
of total

Total retail automotive •••••••• ~ •••••••

264,155

100

$270, 761,S6s!/

100

New passenger oars •••••••••••••••••••
l~ew commercial cars •• . , •. , ...•••.••• ,

39

52
4

143,258,637
17,862,413
101,574,315
8,066,200

53
7

Ueed passenger cars ••••••••••••••••••
Used commercial ears •••••••••••••••••

102,122
13,081
136,827
12,125

Total wholesale automotive •••••••••••••

346 1 945

100

$541 1 652 1 36~

100

!lew cars (paseenger and COimllercial) ••
Used cars (passenger and commercial),

329,736
17 ;209

95

524,272,207
17,380,162

97
3

!(

s

s

31
3

Data are based on reports from sales finance companies providing a breakdown of their retail and
wholesale automotive financing. These amounts are less than those reported in table 3 due to the
exclusion of some data for which breakdowns were not available,

Table 5.--Volume of Diversified Sales Financing During October 19$0

Class of paper
Retail - o·l:her consumers' goods:
Furniture, radios, pianos, and other mueical instruments,,
Refrigerators and other household appliances ••••••••••••••
Residential building repairs and modernization ••••••••••••
:Miscellaneous retail,, •..••••• , .•. , •.•• , •.. , .••.••.•..•..•

of

Dollar volume
paper acquired

$ 6,210,665
6,653,391
3,407,308
6,157,075

Total wholesale- other than automotive •••••••••••••••••••••••
Industrial, commercial, and farm equipment,,,, ••••••••••••••••

$22,428,439
13,670,926
7. 795,834

Total diversified financing •••••••••••••••••••

$43,895,199

Total retail - other consumers' goods ••••••••••.••••.•••••••••

~

Percentage
of total

14
15
8
14

!I

51
31
18
100

Data are based on reports from sales finance companies providing a breakdown of their retail
financing of other consumers' goods. This amount is less than that reported in table 3 due to the
exclusion of some data for which breakdowns were not available,