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• 145 BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON S-580 ADDRESS OF"F"ICIAL CORRESPONDENCE TO THE BOARD November 4, 1942 • • • • • Dear Sir: The Board has received several inquiries regarding the retention by Registrants of records and papers relating to credits within the scope of the Executive Order of August 9, 194l,and Regulation -·W. These inquiries concern the records and papers which should be preserved and the date when they may be destroyed, and bring into question what action the Board expects to take under sections l2(h) and 12(i) of the Hegu.lation and the sufficiency of those sections in their present form. In studying this matter, consideration was given to the preparation of a letter to all Federal Reserve Banks setting forth a general rule sufficiently flexible to cover all of the many classes of businesses affected, since it was deemed inadvisable to attGmpt to specify in detail all of the records and papers that should be preserved. However, the disposition of this problem and the security of the enforcement progrrun in general made it appear desirable th<1t sections l2(h) nnd l2(i) be runended. Accordingly, there is c;nclosed herewith n. proposed Amendment No. 10 to the Regulation on which the Board would like your views and comments. Your promptnt::ss in forwa:cding replies will be much appreciated • • • • Briefly, you will not0 that the proposed section l2(h) prescribes a general rule requiring every Registro.nt to preserve, for a period of two yeB.rs after the dette of the last pnyment received on :1n;y credit within the scope of the Executive Order, such records and papers as are relevant to estabUshing whether or not the credit was in conformity with the Regul:;.tion. The two-year period, vvhich is new, conforms with ,'l sim.il;cr re-luirc;ment in the sm<J.ll lo:ln l.'lws of m::my States and would seem to be adequatE: for an effective enforeement progr:un. Otherwise, such general rule merely clarifies whnt m:J.y be reg:1rded n.s the substnnce, in this connection, of present sections l?(h) 'lnd 12(i). The proposed section l2(i) retnins the prov~s~on now in section l2(h) for such st.:ctistic:J.l reports as tho Board mn.y cetll .. S-580 1.46 -2- ' for. In addition, however, such proposal spells out in mOI.'e detail than present sectton l~~(i) the R.eg-i:~trant 1 s obligation to perr.d_t :Lncpecti.ons of his business operations, including his i~ecords and paper~, by representatives of the Board or the Federal Resr;;rve Banks, :1nd the Board 1 s authority to require testimon;;- and the production of i'ecords and papecs in determining whether or- not a Regisl:.rant he.s complied with the provisions cf the Regulation. Very truly yours, "~----· • ~ .....----· .. ~~ .• A • - · - --·· .. / / 'I'" h'¥/4( .. L. P. Bothea, Assj_st:'l.nt .Secretary. • Enclosure • TO THE PRESIDENTS OF ALL F'EDEHAL RESEHVE BANKS • • .. • I 147 PEOPOSED AMENDMENT NO. 10 TO REGULATION W. Regulation W is hereby amended, effective - - - - - - - - - - - • by striking out subsections (h) and (i) of section 12 and substituting the following: "(h) Preservati_on of Records. - Every Registrant shall pr(~-- serve, for a period of two years after the date of the last pa.vment received on any extension of credit v:ithin the scop~: of the Executive Order, such books, accounts, r·ecords, and other papers (including any .. statements required by or obtained pursuant to this Regulation) as are relevant to establishing whether· or not such extension of cr·cdit was in conformity v:ith the requirements of this Regulation, except that the Hegistrant may pr·eserve photographic reproductions in lieu of such books, accounts, recordG, or papers. "(i) Reports, Inspections and. Production o:f Records.- Every Registrant shall make such reports as the Board may' f.:-om ti:no to tima require as necessary or appropriate for enabling it to perform its function3 undel' the Executive Order. Every Registrant shall permit the Board or any Federal Reserve Bank, by its duly authorized representatives, to make inspections of the H.eg:Lstrant 1 s business operations, in- .. eluding inspections of the books, ac:counts, records, and other papers described in section l2(h), for the purpose of detcrrnining whether or not the Hegistrant has complied with the requirements of thi::::; Regula- • tion; and, when ordered to do so by the Board, every Registrant shall furnish such information, under oath or othervri.se, including the pro- .. duction of the books, accounts, records, and other papers described in section 12(h), as the Board may deern necessary or c.tppropriate for such • for FRASER Digitized purpose, 11
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