The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
BOARD OF GOVERNORS or THE FEDERAL RESERVE SYSTEM Office C o r r e s p o n d e n c e Chairman Eocles Date May 19, Subject: ffrnm Mr. Thurston After a long talk this morning with Spike Evans, George Vest and Parry, I am satisfied that the management and enforcement of real estate regulation will not be as difficult as I had thought. The number of transactions that would be affected annually probably would not exceed 1,000,000; that is, in 19144, 300,000 farms were sold, about half of them for cash. It is estimated that urban transactions of all kinds probably were in the neighborhood of 1,000,000, many of them for cash. This compares with from J>0 to i|.O million transactions regulated annually by Regulation W. About some 15 to 20 thousand institutions are engaged in real estate mortgage lending. The bulk of this business is done by savings and loan, commercial banks, insurance companies, and mutual savings banks. Roughly, there would be about 1250 such institutions per Federal Reserve district. The Executive Order and by inference the Regulation under it, would have behind it the terrific club that transactions which did not comply with the Regulation would be unenforceable. The lawyers do not want to rely on this as it might be too frightening, but it is always in the background. They would rely on the presence of penal provisions, as in W. Parry has done a great deal of thinking about this. We have, as you know, a draft of a Regulation. I think he can head it up with assistance; one being Ed Johnson, whom we should borrow from Farm Credit, who has done a great deal of work in this field. I know him and think very highly of him. The problem as to farms is relatively simple because of the way that Farm Credit, the A M , etc., blanket the whole agricultural field right down to every county. Another possibility is Miles Colean, who has had a tremendously broad experience as an architect in construction companies, as a Government adviser and official, etc. He directed the 20th Century Fundfs Housing Survey in 19U0We might get Dembitz back from FEA, and borrow from the Philadelphia Bank James Vergari, 11*10 appears to have had some exceptional experience in this whole fields Would it not be worthwhile for you to have a firm understanding with Vinson and Davis that if you want to get any man f roia other agencies or out of the War and Navy Departments, they are to help you get him to cariy out this task. (Colonel White, possibly, for example.) Chairman Eccles - (2) One reason we had this put in our laps, I suspect, is because of the judicial, fair way in which W has been administered. That experience is invaluable • Another "town meeting" could well be held with representatives of the trade — there are quite a number of real estate organizations, the toughest of them being the National Association of Real Estate Boards — which, together with the banking agencies, Federal Housing, Farm Credit, and representatives of the lenders, i.e., savings and loan, insurance companies, etc., could be brought together with representatives of each of the Federal Reserve Banks• As tentatively drawn, the Regulation would cover all farms and residential property as defined to exclude hotels, factories, etc. It would be vital, of course, to see that this is sold to the public with the backing of influential groups as a protection to the returning veteran. Ihile you are familiar with most of the foregoing no doubt, I thought it might be useful to line up these general boundaries of the matter.
@FedFRASER