Full text of G.20 Sales Finance Companies : September 15, 1950

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BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM -~-:-September 15, 1950
SALES FINANCE COMPANIES

JULY 1950
Retail financing.--Total automotive retail instalment paper acquired by sales finance
companies reporting on their operations for July was slightly higher than in June. The 3 per cent
rise in the total figure was not noticeably influenced by the marked rise in the volume of new
commercial car paper acquired, since the latter type of financing represents only a relatively
small part of sales finance company operations.
A 9 per cent increase was reported in the financing of other consumer goods. Hovrever,
as is shovrn in the table below, the rise in the total is entirely accounted for by the 17 per cent
increase in the financing of refrigerators and other household appliances, which more than offset
the decreases in the other classes of paper in this category.
Outstanding balances of both classes of retail instalment paper were somewhat higher at
the end of July than on June 30.
Retail Financing by Sales Finance Canpanies

Class of retail instalment paper
Automotive:

Total retail

Number
of cars

Percentag_e chang_e June 19 0 to July 1950
Volume of paper
Outstanding balances,
acquired during month
end of month

-0

:..1

:!:.2

...

Passenger cars:

New
Used

- 1
+ 1

+ 1
+

Canmercial cars:

New
Used

+16
- 1

+15
0

Other consumer goods:

Total

Furniture, radios, musical instruments
Refrigerators and other household appliances
Residential building repair and modernization
Miscellaneous retail

s

::..2
-4
+17

- 3
- 3

...
...
...

:..1

...
...
...
...

Wholesale financing.--The volume of wholesale automotive paper purchased by sales finance companies declined moderately in July, while a large decrease in outstanding balances of such
paper was reported.
Other wholesale paper acquired by sales finance companies showed a moderate increase
during the month, but outstanding balances were substantially lower at the end of July.
Ratio of paper acquired to balances outstanding.--The turnover rate of receivables as
measured by the ratio of paper purchased during the month to outstanding balances at the end of
the month fell by 2 percentage points to 30 in July.
NOTE. July data, based on returns from 121 sales 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 Diversified Financing by Sales Finance Companies
Indexes of Outstanding Balances: December 31, 1939 • 100 ~

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

Retail
automotive

Wholesale
automotive

Wholesale
other
than
automotive

Retail
other
consumers•
goods

Industrial,
commercial,
and farm
equipment

100
129
148
76
30
26

39

100
131
147
61
27
26
23

105
226
232
187

89
116
107

100
169
175
112
40
24
27

119
174
228

100
132
149
37
13
15
18
42
88
151
249

163
252
216

100
140
250
40
8
11
38
224
394
454
332

1949 -July •.••.••••••
August •.•••••••
September ••••••
October ••••••••
November •••••••
December •••••••

203
214
225
232
233
228

206
219
228
237
245
249

227
242
279
294
267
216

430
417
400
371
361
332

203
202
199
195
190
187

111
111
110
111
110
107

1950 -January ••••••••
February •••••••
March ••••••••••
April •••••••.••
May ••••••••••••
June •••••••••••
July •••••••••••

234
234
237
240
250
263
266

252
258
265
274
284
r298
314

250
223
204
186
202
228
163

329
398
485
537
537
499
436

180
176
172
172
174
rl79
185

110
109
111
112
117
120
123

59

90

59

r -Revised.
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 calculating the percentage
changes of the outstanding balances reported by sales finance companies for each month from
those reported by the same companies for t!1e 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
July 1950
and Outstanding Balances at End of Month
Outstanding balances,
end of month

Paper acquired
during month
Class of paper
Amount

Percentage
of total

Amount

Percentage
of total

Total, all classes of paper~····· •••

$990,129,572

100

:!P3,259,066,929

100

Total loans .........................
Small (personal) loans •••.....••••
Business loans •••.•••••.••••••••••

46,885l966
10,320,455
36,565,511

5
1
4

154l252l538
66,262,386
87,990,152

2
3

Total sales financing~· •••••••••• ,

943,243,606

95

3,104,814,391

95

5

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

Page 3
SALES FIIWI<Z COMPANIES

Table 3.-~utomoti~ and Diversified Financing by Sales Finance Compan1e•
Paper Acquired During July 1950
and Balances Outstanding at End of Month
Volume of paper acquired
during July 1950
Class of pllper

By companies
reporting

By all
companies
reporting

Outstanding
balances
July 31,

1950

outstandi~J

y

Ratio paper
acquired to
outstandiii
balances b

balances a

Total retail automotive ••••••••••••••••••• $372,522,562
524,559,270
Total wholesale automotive,, •••••.••••••••
19,020,352
Total wholesale- other than automotive,,,
Total retail- other consumers• goods •••••
36,251,437
Industrial, commercial, and fare equipment
7,090,407

$370,821,564
523,960,616
18,977,127
35,912,349
7,074,330

$2,502,151,557
254,915,284
32,795,207
285,634,182
92,050,557

15
2o6
58
13
8

$959,4411,028

$956,745,986

$3,167,546,787

30

Total sales financing •••••••••••

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

of Cars Financed and Volume of Paper Acquired
by Sales Finance Companies During July 1950

4.--~umber

Number of cera
Class of paper
Number

Paper

Percentage
of total

Dollar
volume

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

294!911

100

$323l909l036

New passenger cars •. ...............••
}lew commercial cars., •••• ,., •••• , ••••
Used passenger cars ••••••••••••••••••
Used comu~rcial oars •••••••••••••••••

112,224
19,977
149,662
1.3,048

.38
7
51
4

171,708,930
25,889,978
117,545,025
8,765,103

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

318!951

100

$489l58.3l211

!lew cars ( paseenger and commercial) ••
Used cars (passenger and commercial).

299,894
19,057

94
6

470,204,881
19,378,330

!(

acquired
Percentage
of total

y

100
53
8
36
3

y

100
96
4

Data are based on reports from sales finance compllnies providing a breakdown of their retail and
wholesale automotive financing. These amounts are less then 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 July 1950

Clus of paper
Retail - other consumers• goode:
Furniture, radios, pianos, and other musical instruments.,
Refrigerators and other household appliances ••••••••••••••
Residential building repairs end modernization, •••••••••••
Miscellaneous retail,,, .... ,,,,.,.,.,,,,,.,,,, ..••....... ,

of

Dollar volU!Il8
paper acquired

$ 2,526,779

4

22,190,211
3,331,853
7,346,134

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

$35,394,977
19,020,352
7,090,407

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

$61,505,736

Total retail- other consumers• goods •••••••••••••••••••••• ,,,

Percentage
of total

36

6

12

y

58
31
11
100

Data ere based on reports from 6ales finance companies providing a breakdown of their retail
of other consumers' goods. This amount is less than that reported in table 3 due to the
excl~sion of some data for which breakdowns were not available.
finencin~