• This is a study by the National Bureau of Economic Research and has been approved for publication by its board of directors. It will be reprinted in the National Bureau's series of “Occasional Papers.”

    Prepared for presentation at the annual meetings of the American Finance Association, December 28, 1961, this paper is part of a broad consumer finance research project at the National Bureau of Economic Research under the general direction of Robert P. Shay. The other aspects of consumer credit covered in the project include finance rates, state legislation, sources of funds, and the consumer use of credit.

    I am particularly indebted to John M. Chapman, of Columbia University, and to Geoffrey H. Moore and Robert P. Shay, of the National Bureau, for their help and counsel. Other members of the National Bureau staff who reviewed earlier drafts and made thoughtful suggestions are Reuben Kessel, Anna J. Schwartz, and F. Thomas Juster. Robert W. Johnson, of Michigan State University, contributed helpful comments.

    Members of the Advisory Committee of the Consumer Credit Study who assisted in the planning and revision of earlier drafts of this report are Paul W. McCracken (chairman), Dorothy S. Brady, John M. Chapman, George Dimmler, Mona Dingle, Bertrand Fox, Raymond W. Goldsmith, Robert E. Lewis, Roger F. Murray, George W. Omacht, Roland L Robinson, Sidney E. Rolfe, Herbert Stein, Van Buren Thorne, Jr., Leroy A. Weller, and William L. Wilson.

    Special acknowledgment is due the financial institutions which contributed data to the study. Particular mention should be made of the help given by William S. Germer and H. F. Wright, Jr., of the First Pennsylvania Bank and Trust Company; Ernst A. Dauer, of Household Finance Corporation; M. R. Neifeld and Charles A. Loeffier, of Beneficial Management Corporation; R. F. Murphy, of General Motors Acceptance Corporation; and George F. Dimmler, of C.I.T. Financial Corporation. Roland M. Gardner and other staff members of the Bureau of Federal Credit Unions advised on the use of the credit-union data.

    Statistical and accounting assistance was capably given by Florence Liang, of the National Bureau, and V. N. Vora, of the University of Pennsylvania. Christine Culbert, of the National Bureau editorial staff, provided editorial assistance.

    This report is part of a broad study of consumer credit being conducted by the National Bureau of Economic Research, made possible by research grants from four finance companies: Associates Investment Company, C.I.T. Financial Corporation, General Motors Acceptance Corporation, and Pacific Finance Corporation. In addition, the author is indebted to the Wharton School of Finance and Commerce of the University of Pennsylvania for permission to use part of the time and facilities made available through a chair in consumer credit given to the University by the Family Finance Corporation. These institutions are, of course, not to be held responsible for any of the statements made or views expressed herein.