Brake Applied

To the overworked jaw of Leon Henderson, busy trying to talk prices down and a price control bill through Congress, President Roosevelt gave help this week. Invoking the amended Trading with the Enemy Act of 1917 (which previously had served as a basis for freezing Axis funds) the President issued an executive order clamping down hard on consumer credit.

Designed both to curb inflation now and to cushion deflation in the post-war period, the order gave the Federal Reserve Board power to set minimum down payments and maximum repayment periods --for finance companies and retail stores as well as banks, for personal loans as well as for installment sales. Exempted were only business and agricultural loans, time purchases of homes.

FRB Chairman Marriner S. Eccles did not say what goods would be affected first (likely candidates: autos and refrigerators, which account for more than half of all installment sales). But Washington knew he would not be long in acting. Once the No. 1 proponent of spending out of depression, Eccles now considers curtailment of purchasing power the No. 1 economic problem of defense (see p. 27).

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