$50 Billion I.O.U.

"Since V-J day, the American public has gone into debt more rapidly than in any period in our history," the Federal Reserve Board Bulletin reported last week.

U.S. consumers owe a record $46 billion. The Federal Reserve Board predicted that the figure would reach $50 billion before the end of the year.

Sunk in Bath Salts. The biggest part of the debt ($32 billion) is in home mortgages. The rest has been run up by U.S. citizens in acquiring the goods and services which they consider essential to their health and happiness--automobiles, clothes, refrigerators, washing machines, television sets. The trend which the FRB Bulletin noted most anxiously was the increase in installment buying, which is up some $2.3 billion over last year, to a total of $7,190,000,000.

Some U.S. installment buyers were having the usual unhappy experiences. Kansas City and Detroit noted an increase in the number of attachments and garnishments. A typical example was a Kansas City housewife who was sued by a downtown department store after she had bought three dozen pairs of stockings, five pairs of expensive shoes, several pieces of fancy lingerie, several pints of perfume and a quantity of bath salts--all on installment. When her husband, a railroad man, began to lose his overtime pay, she had to default and the law moved in.

The Swollen Stream. Controls authorized by the special session of Congress, to go into effect Sept. 20, would put only a small damper on time-buying. The new regulation on auto purchases, for instance, calls for one-third down, the rest of the payment in 15-18 months. On household appliances, the down payment is only 20%, the rest in 15-18 months.

Said the Bulletin: "The increase in installment credit this year is of special significance because it is taking place notwithstanding the fact that the output of consumers' durable goods is no longer growing. Further expansion [of installment credit] . . . can only add more purchasing power to the already swollen spending stream and reinforce inflationary pressures."

Those inflationary pressures had sent the cost of living to a new high, the Bureau of Labor Statistics reported last week. By mid-July (latest recorded figures), the consumers' price index was up 9.7% over last year, up 76.2% over 1939. Food prices were up 12.3% over last year, up 131.9% over 1939.

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