CONSUMER investment-the expenditures for durable goods and newhome construction-exceeded $360 billion in the decade 1946-55. This is more than 50 per cent greater than business investment in plant and equipment during the same period. In addition, consumers spent large sums for existing homes and used cars. These expenditures have been a significant source of strength throughout the postwar economy. The strong and persistent consumer demand for homes and durables has reflected such well-known factors as the large backlog of needs that accumulated during the depression and war periods and the generally high level of new household formation which resulted from population growth, a high marriage rate, undoubling of families, and net migrations from farm to city and city to suburban areas. Desire and need, however, are not sufficient to create actual demand. It takes purchasing power, particularly for such high-cost items as homes, automobiles, and major household appliances. The rise in after-tax income has been one source of the high postwar demand for consumer investment goods. Disposable income of consumers has risen over 70 per cent in the past decade. Rising income, along with some redistribution in their favor, has resulted in a sharp increase in the number of families in the middle-income brackets. Families with incomes of $3,000 a year and over have more than doubled since 1945, and those with incomes of $5,000 and over have increased more than fourfold. Inasmuch as families in the $3,000 and over income bracket constitute the bulk of the market for new homes, automobiles, and major household appliances, the postwar rise in incomes has greatly broadened the market for these high-cost items. Instalment credit has been another significant force in translating desire for high-cost durables into actual purchases. Credit enables one to spend tomorrow's income today, and consumers have been dipping into tomorrow's income in a big way. Consumer instalment and homemortgage debt have soared to an all-time peak. The combined total exceeded $116 billion at the end of 1955, in contrast to only $21 billion a decade earlier. During 1955 instalment debt increased 24 per cent, and home-mortgage debt 17 per cent (see Table 1). It is not surprising, therefore, that concern has been aroused over both the rate of increase and the debt burden of consumers. The postwar in consumer instalment and home-mortgage debt reflects not only the factors mentioned earlier but also a more widespread use of credit by consumers. The use of instalment credit to buy durables and homes might well be labeled a growth institution. Evidence to this effect is the steadily increasing proportion of new cars bought on credit during the postwar period, which rose from 29 per cent of the total cars purchased in 1947 to 65 per cent in 1955. In the last two decades much progress has been made irn adapting the terms of consumer financing to the needs both of *The author is Financial Economist, Federal Reserve Bank of Philadelphia. The views expressed in this article are those of the author. He is indebted, however, to some of his colleagues for helpful suggestions; to Mrs. Evelyn Allin for preparation of the statistical material; and to Charles Mustoe for typing and editing the manuscript.