AMERICA’S DEFENCE

Wairarapa Times-Age, 24 October 1941, Page 7

AMERICA’S DEFENCE

COST OF HUGE PROGRAMME 1 NOW BEING FELT. INSTALMENT BUYING CURBED. J America's 130,000,000 consumers are ' just beginning to feel the pinch of the ’ mounting defence programme and’are ‘ going to feel it more severely in the future, writes Roscoe Drummond in the , "Christian Science Monitor.” _ 1 The immediate and clearest evi- 1 dence that the nation’s industries can- 1 not produce 40,000,000,000 dollars of ; war supplies on top of normal con- - sumer manufacture and produce them J fast enough is the sweeping curtail- - ment of instalment buying ordered by 1 the Federal Reserve Board to become ■ effective on September 1. These new ’ restrictions give effect to an executive ■ order of the President, issued on Aug- ■ ust 11. ! These restrictions accomplish two purposes. They reduce the danger of inflation by reducing the purchase of consumer goods for which prices would be forced up through the shortages of supply and consequent increases in demand. They tend to cut dowp consumer buying which will relieve industry for defence production. Other signs of the impact of the de- 1 fence programme upon the consumer 1 were evident in the difficulty which contractors are having in obtaining < needed building supplies, efforts of the < Office of Price Administration and Civ- J ilian Supply to cut down the variety of sizes and styles in consumer goods, 1 and new measures to be taken by the Office of Production Management to find employment for workers due to i be laid off becuse of the compulsory : decrease in automobile manufacture. BRAKE UPON CREDIT. The effect of the new Government ; rules governing instalment buying is to - discourage the use of short-term credits for the purchase of 24 speci- - fically named types of articles ranging j from automobiles to oil burners and saxophones to suction cleaners. To ■ achieve this end, the Government 1 makes it harder to buy on credit by i increasing the instalment and descreas- I ing the period over which they can be > paid. The new rules set 18 months as the . maximum period for which instalment , credit can be extended. They require down payments from one-third on auto- , mobiles to 20 per cent on household , appliances and 15 pei’ cent on heavy household equipment, such as heaters, furniture and pianos. The Reserve Board also requires that any busines or banking firm that is engaged in extending instalment credit must obtain a licence to do business by December 31. Cash transactions and transactions completed before September 1, unless they are renewed or expanded later, are exempt. Following are the articles listed by the Reserve Board, the scale of down payments required, and the maximum length of the instalment contract allowed. INSTALMENT RESRICTIONS. One-third minmum down payment and maximum of 18 months to pay balance—new and used automobiles, aeroplanes, power-driven boats, outboard motors, and motor-cycles. Twenty per cent minimum down payment, and 18 months to pay balance —mechanical refrigerators of less than 12 cubic feet capacity, household washing machines, ironers, suction cleaners, cooking stoves and ranges, heating stoves and space heaters, electric dishwashers, room-unit air conditioners, sewing machines, radios,, phonographs, and musical instruments composed principally of metal. Fifteen pei’ cent minimum down payment and 18 months to pay household furnaces and heating units for furnaces (including installations for oil, gas, or coal stokers), household water heaters, water pumps, plumbing, and -sanitary fixtures, home air conditioning systems, and attic ventilating fans. Ten per cent minimum down payment and 18 months to pay new household furniture (including iceboxes, bedsprings and mattresses, but excluding floor coverings, wall coverings, draperies, and bed coverings), pianos, and household electric organs. No down payment, but maximum of 18 months to pay—materials and services (except items listed above) used in making repairs or improvements on existing real estate when amount is less than 1000 dollars; same restriction on cash loans of less than 1000 dollars. Because of the shortages of raw materials which go into a wide variety 1 of consumer goods, such as refrigerators, washing machines, rayons, and I other items, the Consumer Division of the Office of Price Administration and Civilian Supply, headed, by Miss Harriet Elliott, is conductiong a series of ■ conversations with manufacturers and purchasing agents in an effort to reduce the diversity of types and styles of various commodities and achieve greater standardisation without reducing quality. These conferences are in the process of assimilating technical information, and are concerned with these main questions: — 1. Size, type, grade, and usefulness of the consumer goods under discussion. 2. What sizes, if any, should be eliminated, and which retained. 3. Differences in manufacturing processes and assembly between “de luxe,” “standard,” and “economy” re- ’ frigerators. i 4. Difference, includng materials I and labour, between expensive and f low-priced washing machines of the - same kind. j LESS FOR CONSUMER. i It all adds up to the fact that the ; consumer is going to have fewer goods } available to buy and fewer choices of • style among the goods available. r Private home buildings also appeal’ to be experiencing the pinch of priorities. Contractors who have been canvassing the market for builders’ hardware, copper gutters, piping, etc., are pressing the Government and their own trade associations for assistance. Government housing authorities 'also report shortages and difficulty in getting supplies, even for army camps. ’ The Government agencies are working out new allocation programmes. As an immediate by-product of the 5 decision to cut production of 1941 autot mobiles immediately by 25 per cent 5 and ultimately by more, 'the Office of ” Production Management is faced with r the problem of finding employment for - fully 100,000 workers who will be out 3 of jobs. These men ultimately will be needed in defence industries, but some r short-term unemployment seems ini evitable. 1 .. 1 11