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FED ERAL R E SER VE BANK
OF NEW YORK
Fiscal A gen t o f the U nited States

r Circular No. 3 7 8 6 1

L November 26, 1951 J

TREASURY FINANCING

To all Banks, and Others Concerned,
in the Second Federal Reserve District:

Acting Secretary o f the Treasury Foley announced today that the
subscription books will open on Monday, December 3, for an ll^ -m o n th
l 7 percent certificate o f indebtedness to be issued in exchange fo r the
/s
2Y4 percent Treasury Bonds o f 1951-53, which were called fo r redemp­
tion December 15, 1951, in the amount o f $1,118,051,100.
The new l 7 percent certificate o f indebtedness will be dated
/s
December 15, 1951, and will mature December 1, 1952.
Copies o f the Treasury Department circular setting forth the terms
o f this offering and official subscription form s will be mailed to reach
you on December 3, 1951.




A

llan

S

proul,

President.

3
SECOND

D IST R IC T

C O M M E R C IA L

-?

B A N K IN G

V O L U N T A R Y C R E D I T R E S T R A I N T C O M M IT T E E
Created pursuant to the Program for Voluntary Credit Restraint
authorized by the Defense Production Act of 1950
33

LIBERTY

STREET

N E W Y O R K 4 5 , N. Y.

November 27, 1951.

To the Chief Executive Officer o f each Commercial Bank
tn the Second Federal Reserve D istrict:

On November 9, 1951, the National Voluntary Credit Restraint Committee released a
digest o f a sampling o f opinions which had been expressed through September 1951 by
the regional committees on typical cases referred to them by individual lending institu­
tions. The National Committee believes that the release o f information on typical cases
will assist cooperating financing institutions in conducting their operations in accord­
ance with the principles o f the Program, and that the publication o f these digests should
also be o f interest to borrowers in planning their operations and to the public at large.
F or your information, a copy o f the digest o f opinions is printed on the following
pages.
Although the digest o f the cases is necessarily brief, we hope that it will be helpful
to you in indicating the general approach o f the regional committees to problems arising
under the Program. It is still necessary, o f course, fo r lenders to consider each proposed
loan or investment on the basis o f the facts o f the particular case. W e believe that you will
want your lending and investment officers to be fully familiar with this material, and we
shall be glad to furnish you with additional copies fo r this purpose upon request.
I f you have any question as to whether a proposed loan or investment conform s with
the principles o f the Program as amplified by the various bulletins which have been sent
you and by the digest of opinions, we shall be glad to review the case and let you know our
views promptly. Please submit your request fo r consideration of a specific loan or invest­
ment on Form CR-CB1. This form should be prepared in triplicate and sent to
G. M o r g a n B r o w n e , Secretary of the Committee, 33 Liberty Street, New York 45, N. Y.,
to whom requests for additional copies of the form should be addressed.
Your continued cooperation in the Program will be greatly appreciated.




G

eorge

W

h it n e y

,

Chairman.

VOLUNTARY CREDIT RESTRAINT PROGRAM
Digest of Opinions Through September 1951

S E A S O N A L A N D IN V E N T O R Y LO A N S
B orrow er and Purpose

Opinion

W holesale seeds.— To buy and clean seeds fo r resale to retailers o f seed for use
by farmers in necessary reseeding operations.

Favorable

R etail dry goods.— F o r normal seasonal inventory acquisition.

Favorable

R etail hardware, lum ber and building supplies.— F o r normal inventory acquisi­
tion to care fo r summer and early fall trade.

Favorable

R etail fu el oil.— To purchase 1 million gallons o f fuel oil (one-tenth o f annual
volum e) fo r storage and sale during the 1951-2 season.

Favorable

P u b lic accountant.— Seasonal loan fo r operating funds.

Favorable

R etail hardware.— To enable borrow er to carry inventory disproportionate to
his normal business operations.

Unfavorable

R etail sewing m achine.— To increase inventory o f imported machines in anticipa­
tion o f future curtailment in domestic manufacture o f sewing machines.

Unfavorable

B U IL D IN G P R O G R A M S
M achine tool com pany.— To build new plant to take care o f present needs. Pres­
ent rental property too small and unsuitable fo r increased volume and
employment.

Favorable

Delicatessen.— T o build a new store building to serve a newly developed resi­
dential area.

Favorable

R etail farm tractor and im plem ent dealer.— To erect sales and service building
in order to retain franchise.

Unfavorable

Grain elevator and feed m ill— Sale o f feeds and seeds to farmers.— To erect a
new building to replace present facilities which are not very convenient
from standpoint o f services to customers.

Unfavorable

M unicipality.— To erect agricultural-live stock exhibition building.

Unfavorable

Nursing hom e fo r aged.— T o b uy existing building which is suitable fo r needed
additional space fo r operations.

Favorable

M ortuary.— To build a new m ortuary in replacement o f present quarters which
are inadequate fo r needs o f community. This is the only mortuary serving
the area.

Favorable

Tourists’ hotel.— To construct 25-room motel in vacation and recreational area.

Unfavorable

E ducational institution.— T o finance partially construction o f a library.

Unfavorable

M unicipality.— F o r construction o f needed school buildings. Committee deferred
its opin ion on financing fo r that part o f program which extended beyond
current fiscal year.

Favorable

Church.— To build a new church in replacement o f present structure which is in
unsafe and hazardous condition.

Favorable

Church.— To build a parish hall and an addition to Sunday School building.

Unfavorable

N E W P L A N T OR E Q U IPM E N T
Publisher o f daily newspaper.— To purchase a printing press in replacement o f
outmoded press which does not take care o f present requirements.

Favorable

Tankship owners.— To purchase oil tanker for charter to an oil company.

Favorable




N E W P L A N T OR E Q U IP M E N T (Continued)

Opinion

B orrow er and Pur-pose
Excavating contractor.— T o purchase diesel tractor shovel to replace worn and
obsolete equipment now in use.

Favorable

W holesale petroleum .— To buy tractor-tanker units necessary in operations— one
replacement and one additional unit.

Favorable

P u blic utility.— F o r improvements to its gas distribution system.

Favorable

M unicipality.— F or
community.

needed

fire-fighting

equipment

in

rapidly

expanding
Favorable

Laundry.— To purchase new machinery and equipment fo r expansion o f plant.
Deferrable unless program had been started and commitments made p rior to
inauguration o f V C R Program.

U nfavorable

Social club and recreation center.— To purchase bar and equipment together
with furnishings fo r social room. Present facilities not adequate to demand.

U nfavorable

M O D E R N IZ A T IO N
Farmer.— To repair and remodel farm buildings on 176-acre producing farm.

Favorable

Retail variety store.— F or modernization and enlargement o f store building.
A pproval based on facts that architect’s plans drawn and materials con­
tracted for prior to inception o f V C R Program.

Favorable

R etail ladies ready-to-wear.— T o modernize store, add new fron t and increase
floor capacity to maintain competitive position.

Unfavorable

Gasoline service station.— F o r purchase and modernization o f equipment and
facilities o f two existing gas stations.

Unfavorable

W O R K IN G C A P IT A L LO A N S
W oodw orking— M anufacturer o f business fixtures and equipm ent.— F o r neces­
sary and normal w orking capital in connection with contract work in process.

Favorable

Metal stamping plant.— F o r necessary and normal w orking capital. Sixty-five
per cent o f present volume is under defense contract.

Favorable

Shoe manufacturer.— F or necessary and normal working capital.

Favorable

D E B T R E T IR E M E N T A N D R E F IN A N C IN G
R etail autom obile dealer.— T o repay existing bank loans.

Favorable

Manufacturer o f electrical appliances.— F o r reduction o f bank debt.

Favorable

R etail m ilk dealer.— T o refinance existing indebtedness held by form er owner of
business.

Unfavorable

Chain variety stores.— To retire outstanding preferred stock.

Unfavorable

A C Q U IS IT IO N O F E X IS T IN G B U S IN E S S E S
H otel operator.— To purchase building and equipment o f hotel from owner who
is retiring because o f ill health. Failure to effect transfer m ight create hard­
ship fo r community in having hotel closed. A pproval based on assumption
self-financing purchaser cannot be foun d or that seller is unable to accept
a purchase-money mortgage.

Favorable

Trucking.— To purchase motor trucking com pany and equipment fo r expansion
o f present operations. Trucking business to be acquired is currently hauling
foodstuffs but continued operation by present owner is assured until a sale
can be made.

Unfavorable




( over)

A C Q U IS IT IO N O F E X IS T IN G B U S IN E S S E S (Continued)
B orrow er and Purpose

Opinion

Pharmacist.— To purchase business, inventory and fixtures o f an existing drug
store.

Unfavorable

A ccountant.— T o purchase an established accounting business.

Unfavorable

A C Q U IS IT IO N OF S T O C K H O L D E R S ’ OR P A R T N E R S ’ IN T E R E S T S
Individual (officer and principal stockholder— m achine tool m anufacturer).—
To acquire one-third stock interest in com pany from widow o f borrow er’s
form er partner. Proceeds o f this loan, used to purchase the m inority interest
in the com pany, would preserve continuity o f management and avoid the
m inority stock interest’s getting into possibly unfriendly hands.

Favorable

R etail novelty store.— To buy other p artn er’s interest in business to become
sole owner.

Unfavorable

W holesale iron and steel.— T o purchase m inority shareholders’ interest.

Unfavorable

Trucking com pany.— Fam ily group operating com pany wishes to buy back 51 per
cent o f stock now held by outside interests.

Unfavorable

N EW VENTU RES
Retail groccr.— To stock a new store to be opened in a new and expanding com­
m unity now lacking a grocery.

Favorable

R etail grocer.— To stock a new grocery store which facility appears not to be
necessary in the community.

Unfavorable

Dentist.— To purchase furnishings and equipment necessary to operate a dental
office. B orrow er recently graduated from dental school.

Favorable

Retail m en’s clothing.— To open new m en’s clothing store. City has sufficient
retailers to satisfy the demand.

U nfavorable

R etail gasoline distributor.— To equip a new self-service station. Present facilities
in community are adequate.

U nfavorable

Amusem ent park.— F o r erection o f plant and purchase o f equipment necessary
fo r operations. Other amusement and recreational facilities are available
in area.

Unfavorable

L O A N S TO F A R M E R S , E TC .
Rancher.— T o purchase and carry cattle.

Favorable

Farm er.— T o clear 50 additional acres o f land fo r pasturage.

Favorable

Farmer.— To purchase 260-acre farm fo r purpose of putting it into production.

Favorable

Farmer.— T o purchase farm land fo r lease as an investment. Considered specu­
lative in character where the land is already in production and borrower
desires simply to increase his holdings o f real estate.

Unfavorable

D EV E LO PM E N T OF LAN D
Individual.— To purchase acreage fo r housing developments in a defense area.

Favorable

Individual.— T o purchase and develop land fo r sale as building lots.

Unfavorable

M unicipality.— To acquire unim proved land for erection o f parking facilities.

Unfavorable

O T H E R LO A N S
H ousewife.— T o buy single premium life insurance contract.
purchase o f discounted premium life insurance contract.

T o provide fo r
Unfavorable

Individual.— To purchase real estate fo r investment. Property is already financed
on a long-term basis.

Unfavorable

State Government.— F or payment o f bonus to veterans o f W orld W ar II.

Unfavorable




N E W Y O R K -N E W J E R S E Y M UTUAL S A V IN G S BANK
V O L U N T A R Y C R E D I T R E S T R A I N T C O M M IT T E E
Created pursuant to the Program for Voluntary Credit Restraint
authorized by the Defense Production Act o f 1950
33

LIB E R TY

STREET

N E W Y O R K 4 5 . N. Y.

November 27, 1951.

To the Chief Executive Officer o f each Mutual Savings Bank
in the States o f New York and New Jersey:

On November 9, 1951, the National Voluntary Credit Restraint Committee released a
digest o f a sampling of opinions which had been expressed through September 1951 by
the regional committees on typical cases referred to them by individual lending institu­
tions. The National Committee believes that the release o f information on typical cases
will assist cooperating financing institutions in conducting their operations in accord­
ance with the principles o f the Program, and that the publication o f these digests should
also be o f interest to borrowers in planning their operations and to the public at large.
F or your information, a copy o f the digest o f opinions is printed on the following
pages.
Although the digest of the cases is necessarily brief, we hope that it will be helpful
to you in indicating the general approach o f the regional committees to problems arising
under the Program. It is still necessary, of course, fo r lenders to consider each proposed
loan or investment on the basis o f the facts o f the particular case. W e believe that you will
want your lending and investment officers to be fully familiar with this material, and we
shall be glad to furnish you with additional copies for this purpose upon request.
I f you have any question as to whether a proposed loan or investment conforms with
the principles o f the Program as amplified by the various bulletins which have been sent
you and by the digest o f opinions, we shall be glad to review the case and let you know our
views promptly. Please submit your request for consideration o f a specific loan or invest­
ment on Form CR-SB1. This form should be prepared in triplicate and sent to
G. M o r g a n B r o w n e , Secretary of the Committee, 33 Liberty Street, New Y ork 45, N. Y.,
to whom requests fo r additional copies o f the form should be addressed.
Your continued cooperation in the Program will be greatly appreciated.




Joseph

A.

K a is e r ,

Chairman.

VOLUNTARY CREDIT RESTRAINT PROGRAM
Digest of Opinions Through September 1951

S E A S O N A L A N D IN V E N T O R Y LO AN S
B orrow er and Purpose

Opinion

W holesale seeds.— T o buy and clean seeds fo r resale to retailers o f seed fo r use
by farmers in necessary reseeding operations.

Favorable

Retail dry goods.— F or normal seasonal inventory acquisition.

Favorable

Retail hardware, lum ber and building supplies.— F o r normal inventory acquisi­
tion to care fo r summer and early fall trade.

Favorable

Retail fu el oil.— To purchase 1 million gallons o f fu el oil (one-tenth o f annual
volum e) fo r storage and sale during the 1951-2 season.

Favorable

P u b lic accountant.— Seasonal loan fo r operating funds.

Favorable

Retail hardware.— T o enable borrower to carry inventory disproportionate to
his normal business operations.

Unfavorable

R etail sewing m achine.— To increase inventory o f im ported machines in anticipa­
tion o f future curtailment in domestic manufacture o f sewing machines.

Unfavorable

B U IL D IN G P R O G R A M S
M achine tool com pany.— To build new plant to take care o f present needs. Pres­
ent rental property too small and unsuitable fo r increased volume and
employment.

Favorable

Delicatessen.— T o build a new store building to serve a newly developed resi­
dential area.

Favorable

R etail farm tractor and im plem ent dealer.— To erect sales and service building
in order to retain franchise.

Unfavorable

Grain elevator and feed m ill— Sale o f feeds and seeds to farmers.— To erect a
new building to replace present facilities which are not very convenient
from standpoint o f services to customers.

Unfavorable

M unicipality.— T o erect agricultural-live stock exhibition building.

Unfavorable

Nursing hom e fo r aged.— T o buy existing building which is suitable for needed
additional space fo r operations.

Favorable

Mortuary.— To build a new m ortuary in replacement o f present quarters which
are inadequate fo r needs o f community. This is the only mortuary serving
the area.

Favorable

Tourists’ hotel.— To construct 25-room motel in vacation and recreational area.

Unfavorable

Educational institution.— To finance partially construction o f a library.

Unfavorable

M unicipality.— F o r construction o f needed school buildings. Committee deferred
its opinion on financing fo r that part o f program which extended beyond
current fiscal year.

Favorable

Church.— T o build a new church in replacement o f present structure which is in
unsafe and hazardous condition.

Favorable

Church.— To build a parish hall and an addition to Sunday School building.

U nfavorable

N E W P L A N T OR E Q U IPM E N T
Publisher o f daily newspaper.— To purchase a printing press in replacement o f
outmoded press which does not take care o f present requirements.

Favorable

Tankship owners.— T o purchase oil tanker for charter to an oil company.

Favorable




N E W P L A N T OR E Q U IP M E N T (Continued)

Opinion

B orrow er and Purpose
Excavating contractor.— To purchase diesel tractor shovel to replace worn and
obsolete equipment now in use.

Favorable

W holesale petroleum .— T o buy tractor-tanker units necessary in operations— one
replacement and one additional unit.

Favorable

P u b lic utility.— F o r improvements to its gas distribution system.

Favorable

M unicipality.— F o r
community.

needed

fire-fighting

equipment

in

rapidly

expanding
Favorable

Laundry.— To purchase new machinery and equipment fo r expansion o f plant.
Deferrable unless program had been started and commitments made prior to
inauguration o f V C R Program.

Unfavorable

Social club and recreation center.— To purchase bar and equipment together
with furnishings fo r social room. Present facilities not adequate to demand.

Unfavorable

M O D E R N IZ A T IO N
Farm er.— To repair and remodel farm buildings on 176-acre producing farm.

Favorable

R etail variety store.— F o r modernization and enlargement o f store building.
A pp roval based on facts that architect’s plans drawn and materials con­
tracted for p rior to inception o f V C R Program.

Favorable

R etail ladies ready-to-wear.— To modernize store, add new fron t and increase
floor capacity to maintain competitive position.

Unfavorable

Gasoline service station.— F o r purchase and modernization o f equipment and
facilities o f two existing gas stations.

Unfavorable

W O R K IN G C A P IT A L LO AN S
W oodw orking— Manufacturer o f business fixtures and equipm ent.— F o r neces­
sary and normal working capital in connection with contract work in process.

Favorable

Metal stamping plant.— F or necessary and normal working capital.
per cent o f present volume is under defense contract.

Favorable

Sixty-five

Shoe manufacturer.— F or necessary and normal working capital.

Favorable

D E B T R E T IR E M E N T A N D R E F IN A N C IN G
Retail autom obile dealer.— To repay existing bank loans.

Favorable

Manufacturer o f electrical appliances.— F o r reduction o f bank debt.

Favorable

Retail m ilk dealer.— T o refinance existing indebtedness held by form er owner of
business.

Unfavorable

Chain variety stores.— T o retire outstanding preferred stock.

Unfavorable

A C Q U IS IT IO N O F E X IS T IN G B U S IN E S S E S
H otel operator.— To purchase building and equipment o f hotel from owner who
is retiring because o f ill health. Failure to effect transfer might create hard­
ship fo r com munity in having hotel closed. A pproval based on assumption
self-financing purchaser cannot be foun d or that seller is unable to accept
a purchase-money mortgage.

Favorable

Trucking.— To purchase motor trucking com pany and equipment fo r expansion
o f present operations. Trucking business to be acquired is currently hauling
foodstuffs but continued operation by present owner is assured until a sale
can be made.

Unfavorable




(over)

ACQUISITION OF E X IST IN G BUSINESSES (Continued)
B orrow er and Purpose

Opinion

Pharmacist.— To purchase b siness, inventory and f x u e of a l existing drug
u
itrs
i
soe
tr.
Accountant.— To purchase an established accounting bu i e s
sns.

Unfavorable
Unfavorable

ACQUISITION OF S TOCKH O L D E R S ’ OR PART N E R S ’ INTERESTS
Individual ( f i e and principal stockholder— machine t o manufacturer).—
ofcr
ol
To acquire one-third stock i t r s in company from widow of borrower’
neet
s
former partner. Proceeds of t i l a , used t purchase the minority i t r s
hs on
o
neet
in the company, would preserve continuity of management and avoid the
minority stock interest’ getting i to possibly unfriendly hands.
s
n
Retail novelty s o e — To buy other partner’ i t re t in business to become
tr.
s ne s
s l owner.
oe
Wholesale iron and s e l — To purchase minority shareholders’i t r s .
te.
neet
Trucking company.— Family group operating company wishes t buy back 51 per
o
cent of stock now held by outside i t r s s
neet.

Favorable
Unfavorable
Unfavorable
Unfavorable

N E W VENTURES
Retail grocer.— To stock a new s o e t be opened in a new and expanding com­
tr o
munity now lacking a grocery.
Retail grocer.— To stock a new grocery store which f c l t appears not t be
aiiy
o
necessary in the community.
Dentist.— To purchase furnishings and equipment necessary t operate a dental
o
o f c . Borrower recently graduated from dental s h o .
fie
col
Retail men’ clothing.— To open new men’ clothing s o e City has s f i i n
s
s
tr.
ufcet
r t i e s to sat sf the demand.
ealr
i y
Retail gasoline di t b t r — To equip a new s l - e v c s a i n Present f c l t e
s ri u o .
efsrie tto.
aiiis
in community are adequate.
Amusement park.— For erection of plant and purchase of equipment necessary
for operations. Other amusement and recreational f c l t e are available
aiiis
in a e .
ra

Favorable
Unfavorable
Favorable
Unfavorable
Unfavorable

Unfavorable

LOANS TO FARMERS, ETC.
Rancher.— To purchase and carry c t l .
ate
Farmer.— To c e r 50 additional acres of land for pasturage.
la
Farmer.— To purchase 260-acre farm for purpose of putting i i to production.
t n
Farmer.— To purchase farm land for l a e as an investment. Considered specu­
es
l t v in character where the land i already in production and borrower
aie
s
desi es simply t increase h holdings of r a e t t .
r
o
is
e l sae

Favorable
Favorable
Favorable
Unfavorable

D E V E L O P M E N T OF LAN D
Individual.— To purchase acreage for housing developments in a defense a e .
ra
Individual.— To purchase and develop land for s l as building l t .
ae
os
Municipality.— To acquire unimproved land for erection of parking f c l t e .
aiiis

Favorable
Unfavorable
Unfavorable

O T H E R LOANS
Housewife.— To buy s n le premium l f insurance c ntract. To provide for
ig
ie
o
purchase of discounted premium l f insurance c n r c .
ie
otat
Individual.— To purchase r a e t t for investment. Property i already financed
el sae
s
on a long-term b s s
ai.
State Government.— For payment of bonus t veterans of World War I .
o
I




Unfavorable
Unfavorable
Unfavorable

E A S T E R N IN S U R A N C E
V O L U N T A R Y C R E D I T R E S T R A I N T C O M M IT T E E
Created pursuant t t e Program f r Voluntary C e i R s r i t
o h
o
rdt etan
a t o z d by t e Defense Production Act o 1950
u h ri e
h
f
33

LIB E R TY

STREET

N E W Y O R K 4 5 . N. Y.

N ovem ber 27, 1951.

To the C h ief E xecu tive Officcr o f the
L i f e Insurance Company A d d ressed :

On N ovem ber 9, 1951, the N ational V olu n tary Credit R estraint Committee released a
digest o f a sam pling o f opinions which had been expressed through Septem ber 1951 by
the regional comm ittees on typical cases referred to them by individual lending institu­
tions. The N ational Committee believes that the release o f inform ation on typical cases
w ill assist cooperating financing institutions in conducting their operations in accord­
ance with the principles o f the P rogram , and that the publication o f these digests should
also be o f interest to borrow ers in planning their operations and to the public at large.
F o r you r inform ation, a cop y o f the digest o f opinions is printed on the follow in g
pages.
A lthough the digest o f the cases is necessarily brief, we hope that it w ill be helpful
to you in indicating the general approach o f the regional comm ittees to problem s arising
under the P rogram . It is still necessary, o f course, fo r lenders to consider each proposed
loan or investment on the basis o f the facts o f the particular case. W e believe that you will
want you r lending and investment officers to be fu lly fam iliar with this material, and wo
shall be glad to furnish you with additional copies fo r this purpose upon request.
I f you have any question as to whether a proposed loan or investm ent conform s with
the principles o f the P rogram as amplified b y the various bulletins which have been sent
y ou and by the digest o f opinions, we shall be glad to review the case and let you know our
views prom ptly. P lease submit you r request fo r consideration o f a specific loan or invest­
ment on the special fo rm devised fo r that purpose (F orm C R -IC 1 ). This form should be
prepared in triplicate and sent to G M o r g a n B r o w n e , S ecretary o f the Committee,
r.
33 L iberty Street, New Y ork 45, N. Y., to w hom requests fo r additional copies o f the form
should be addressed.




F razar

B.

W il d e ,

Chairm an.

VOLUNTARY CREDIT RESTRAINT PROGRAM
Digest of Opinions Through September 1951

SEASONAL A N D INVENTORY LOANS
B orrow er and Purpose

Wholesale s e s — To buy and clean seeds for r s l t r t i e s of seed for use
ed.
eae o ealr
by farmers in necessary reseeding operations.
Retail dry goods.— For normal seasonal inventory a q i i i n
custo.
Retail hardware, lumber and building s
upplies.— For normal inventory acquisi­
tion to care for summer and early f l t a e
al r d .
Retail fuel o l — To purchase 1 million gallons of f el o l ( n - e t i of annual
i.
u i oetnl
volume) for storage and s l during the 1951-2 s a o .
ae
esn
Public accountant.— Seasonal loan for operating funds.
Retail hardware.— To enable borrower to carry inventory disproportionate t
o
h normal business operations.
is
Retail sewing machine.— To increase inventory of imported machines in anticipa­
tion of future curtailment in domestic manufacture of sewing machines.

Opinion

Favorable
Favorable
Favorable
Favorable
Favorable
Unfavorable
Unfavorable

BUILDING PROGRAMS
Machine tool company.— To build new plant t take care of present needs. Pres­
o
ent rental property too small and unsuitable for increased volume and
employment.
Delicatessen.— To build a new store building t serve a newly developed r s ­
o
ei
dential a e .
ra
Retail farm tractor and implement deal . To erect s l s and ser c building
er —
ae
vi e
in order t retain fra ch s
o
n i e.
Grain elevator and feed mill— Sale of feeds and seeds to farmers.— To e
rect a
new building t replace present f c l t e which are not very convenient
o
aiiis
from standpoint of s r
e vices t customers.
o
Municipality.— To erect a r cu t a -l v stock exhibition building.
g i l ur l i e
Nursing home for aged.— To buy existing building which i s i
s u table for needed
additional space for operations.
Mortuary.— To build a new mortuary in replacement of present quarters which
are inadequate for needs of community. This i the only mortuary serving
s
the a e .
ra
Tourists’h e .— To construct 25-room motel in vacation and recreational a e .
ot l
ra
Educational i s i u i n — To finance partially construction of a l b a y
nttto.
irr.
Municipality.— For construction of needed school buildings. Committee deferred
i s opinion on financing for that part of program which extended beyond
t
current f s a year.
icl
Church.— To build a new church in replacement of present structure which i i
s n
unsafe and hazardous condition.
Church.— To build a parish h l and an addition t Sunday School building.
al
o

Favorable
Favorable
Unfavorable
Unfavorable
Unfavorable
Favorable
Favorable
Unfavorable
Unfavorable
Favorable
Favorable
Unfavorable

N E W PLANT OR EQUIPMENT
Publisher of daily newspaper.— To purchase a printing press in replacement o
f
outmoded press which does not take care of present requirements.
Tankship owners.— To purchase o l tanker for charter t an o l company.
i
o
i



Favorable
Favorable

N EW PLANT OR EQUIPMENT (Continued)
Borrower and Purpose

Excavating contractor.— To purchase d e e tractor shovel t replace worn and
isl
o
o solete equipment now in u e
b
s.
Wholesale petroleum.— To buy tractor-tanker units necessary in operations— one
replacement and one additional u i .
nt
Public u i i y — For improvements t i s gas distribution system.
tlt.
o t
Municipality.— For needed f r - i h i g equipment in rapidly expanding
iefgtn
community.
Laundry.— To purchase new machinery and equipment for expansion of pl n
a t.
Deferrable unless program had been started and commitments made prior t
o
inauguration of V C R Program.
Social club and recreation cen er — To purchase bar and equipment together
t .
with furnishings for s c a room. Present f c l t e not adequate t demand.
oil
aiiis
o

Opinion

Favorable
Favorable
Favorable
Favorable
Unfavorable
Unfavorable

MODERNIZATION
Farmer.— To repair and remodel farm buildings on 176-acre producing farm.
Retail variety s o e — For modernization and enlargement of s or building.
tr.
t e
Approval based on fa s that architect’ plans drawn and materials con­
ct
s
tracted for prior t inception of V C R Program.
o
Retail l i s ready-to-wear.— To modernize s o e add new front and increase
ad e
tr,
f o r capacity t maintain competitive p s t o .
lo
o
oiin
Gasoline serv c s a i n — For purchase and modernization of equipment and
ie tto.
f c l t e of two existing gas s a i n .
aiiis
ttos

Favorable
Favorable
Unfavorable
Unfavorable

W O R K I N G CAPITAL LOANS
Woodworking— Manufacturer of business f x u e and equipment.— For neces­
itrs
sary and normal working capital in connection with contract work in p o e s
rcs.
Metal stamping p n .— For necessary and normal working c p t l S x y f v
la t
aia. it-ie
per cent of present volume i under defense co t c .
s
n ra t
Shoe manufacturer.— For necessary and normal working c p t l
aia.

Favorable
Favorable
Favorable

DEBT RETIREMENT A N D REFINANCING
Retail automobile d a e . To repay existing bank l a s
elr—
on.
Manufacturer of e e t i a appliances.— For reduction of bank d b .
lcrcl
et
Retail milk deale . To refinance existing indebtedness held by former owner o
r—
f
bsns.
uies
Chain variety s o e . To r t r outstanding preferred s o k
trs—
eie
tc.

Favorable
Favorable
Unfavorable
Unfavorable

ACQUISITION OF EXISTING BUSINESSES
Hotel operator.— To purchase building and equipment of hotel from owner who
i retiring because of ilhea h Failure t e f c transfer might create hard­
s
l lt .
o fet
ship for community in having hotel c o e . Approval based on assumption
lsd
s
elf-financing purchaser cannot be found or that s l e i unable to accept
elr s
a purchase-money mortgage.
Trucking.— To purchase motor trucking company and equipment for expansion
of present operations. Trucking business t be acquired i currently hauling
o
s
foodstuffs but continued operation by present owner i assured until a s l
s
ae
can be made.



Favorable

Unfavorable
(over)

ACQUISITION OF E X IST IN G BUSINESSES (Continued)
Borrower and Purpose

Opinion

Pharmacist.— To purchase business, inventory and f x u e of an existing drug
itrs
soe
tr.
Accountant.— To purchase an established accounting b i es .
us n s

Unfavorable
Unfavorable

ACQUISITION OF S TOCK HOLD ERS’ OR PAR T N E R S ’ INTERESTS
Individual ( f i e and principal stockholder— machine to manufacturer).—
ofcr
ol
To acquire one-third stock i t r s in company from widow of borrower’
neet
s
former partner. Proceeds of t i l a , used t purchase the minority i t r s
hs on
o
neet
in the company, would preserve continuity of management and avoid the
minority stock interest’ getting i to possibly unfriendly hands.
s
n
Retail novelty s o e — To buy other partner’ in e
tr.
s t rest in business t become
o
s l owner.
oe
Wholesale iron and s e l — To purchase minority shareholders’i t r s .
te.
neet
Trucking company.— Family group operating company wishes t buy back 51 per
o
cent of stock now held by outside i t r s s
neet.

Favorable
Unfavorable
Unfavorable
Unfavorable

N E W VENTURES
Retail grocer.— To stock a new s o e t be opened i a new and expanding com­
tr o
n
munity now lacking a grocery.
Retail grocer.— To stock a new grocery s o which f c l t appears not t be
t re
aiiy
o
necessary in the community.
D ntist.— To purchase furnishings and equipment necessary t operate a dental
e
o
o f c . Borrower recently graduated from dental s h o .
fie
col
Retail men’ clothing.— To open new men’ clothing s o e City has s f i i n
s
s
tr.
ufcet
r t i e s t s i f the demand.
e a l r o at s y
Retail gasoline d s r b t r — To equip a new s l - e v c s a i n Present f c l t e
itiuo.
efsrie tto.
aiiis
in community are adequate.
Amusement park.— For erection of plant and purchase of equipment necessary
for operations. Other amusement and recreational f c l t e are available
aiiis
in a e .
ra

Favorable
Unfavorable
F avorable
Unfavorable
Unfavorable
Unfavorable

LOANS TO FARMERS, ETC.
Rancher.— To purchase and carry c t l .
ate
Farmer.— To clear 50 additional acres of land for pasturage.
Farmer.— To purchase 260-acre farm for purpose of putting i in production.
t to
Farmer.— To purchase farm land for le s a an investment. Considered specu­
ae s
l t v in character where the land i already in production and borrower
aie
s
des re simply t increase hi holdings of re e t t .
i s
o
s
al s a e

Favorable
Favorable
Favorable
Unfavorable

D E V E L O P M E N T OF LAN D
Individual.— To purchase acreage for housing developments in a defense a e .
ra
Individual.— To purchase and develop land for s l as building l t .
ae
os
Municipality.— To acquire unimproved land for erection of parking f c l t e .
aiiis

F avorable
Unfavorable
Unfavorable

O T H E R LOANS
Housewife.— To buy s n le premium l f insurance c ntract. To provide for
ig
ie
o
purchase of discounted premium l f insurance c n r c .
ie
otat
Individual.— To purchase r a e t t for investment. Property i already financed
el sae
s
on a long-term b s s
ai.
Slate Government.— For payment of bonus t veterans of World War I .
o
I



Unfavorable
Unfavorable
Unfavorable

E A S T E R N I N V E S T M E N T B A N K IN G
V O L U N T A R Y C R E D I T R E S T R A I N T C O M M IT T E E
Created pursuant t t e Program f r Voluntary C e i R s r i t
o h
o
rdt etan
a t o z d by t e Defense Production Act of 1950
u h ri e
h
33

LIB E R TY

STREET

N E W Y O R K 4 5 . N. Y.

N ovem ber 27, 1951.

To the A d d ressee:

On N ovem ber 9, 1951, the N ational V olu n tary C redit R estraint Committee released a
digest o f a sam pling o f opinions which had been expressed through Septem ber 1951 by
the regional com mittees on typical cases referred to them b y individual lending institu­
tions. The N ational Committee believes that the release o f inform ation on typical cases
will assist cooperating financing institutions in conducting their operations in accord­
ance with the principles o f the P rogram , and that the publication o f these digests should
also be o f interest to b orrow ers in planning their operations and to the public at large.
F o r you r inform ation, a cop y o f the digest o f opinions is printed on the follow in g
pages.
A lthough the digest o f the cases is necessarily brief, we hope that it w ill be helpful
to you in indicating the general approach o f the regional comm ittees to problem s arising
under the P rogram . It is still necessary, o f course, fo r lenders to consider each proposed
loan or investment on the basis o f the facts o f the particular case. W e believe that you w ill
want you r lending and investm ent officers to be fu lly fam iliar w ith this material, and wo
shall be glad to furnish you with additional copies fo r this purpose upon request.
I f you have any question as to whether a prop osed loan or investment conform s with
the principles o f the P rogram as amplified b y the various bulletins which have been sent
you and by the digest o f opinions, we shall be glad to review the case and let you know our
view s prom ptly. Please submit you r request fo r consideration o f a specific loan or invest­
ment on the appropriate form devised fo r this purpose. T his form should be prepared in
triplicate and sent to G M o r g a n B r o w n e , S ecreta ry o f the Committee, 3 3 L iberty Street,
r.
New Y ork 45, N. Y., to whom requests fo r additional copies o f the form should be addressed.
Y ou r continued cooperation in the P rog ra m w ill be greatly appreciated.




P

ercy

M.

S

tew art,

Chairman.

VOLUNTARY CREDIT RESTRAINT PROGRAM
Digest o f Opinions Through September 1951

SEASONAL A N D INVENTORY LOANS
Borrower and Purpose
Wholesale s e s — To buy and clean seeds for r s l t r t i e s of seed for use
ed.
eae o ealr
by farmers in necessary reseeding operations.
Retail dry goods.— For normal seasonal inventory a q i i i n
custo.
Retail hardware, lumber and building s pplies.— For normal inventory acquisi­
u
tion t care for summer and early f l t a e
o
al r d .
Retail fuel o l — To purchase 1 million gallons of fuel o l (one-tenth of annual
i.
i
volume) for storage and s l during the 1951-2 s s n
ae
ea o .
Public accountant.— Seasonal loan for operating funds.
Retail hardware.— To enable borrower to carry inventory disproportionate t
o
h s normal business operations.
i
Retail sewing machine.— To increase inventory of imported machines in anticipa­
tion of future curtailment in domestic manufacture of sewing machines.

Opinion

Favorable
Favorable
Favorable
Favorable
Favorable
Unfavorable
Unfavorable

BUILDING PROGR AMS
Machine t ol company.— To build new plant t take care of present needs. Pres­
o
o
ent rental property too small and unsuitable for increased volume and
employment.
Delicatessen.— To build a new store building t serve a newly developed r s ­
o
ei
dential a e .
ra
Retail farm tractor and implement deal r To erect s l s and ser i building
e .—
ae
v ce
in order t retain fra ch s
o
n i e.
Grain elevator and feed mill— Sale of feeds and seeds to farmers.— To e c a
re t
new building t replace present f c l t e which are not very convenient
o
aiiis
from standpoint of s r c s to customers.
e vi e
Municipality.— To erect a r c t ra - v stock exhibition building.
g i ul u l li e
Nursing home for aged.— To buy existing building which i su table for needed
s i
additional space for operations.
Mortuary.— To build a new mortuary in replacement of present quarters which
are inadequate for needs of community. This i the only mortuary serving
s
the a e .
ra
Tourists’ h t l — To construct 25-room motel i vacation and recreational a e .
oe.
n
ra
Educational i s i u i n — To finance partially construction of a l b a y
nttto.
irr.
Municipality.— For construction of needed school buildings. Committee deferred
i s opinion on financing for that part of program which extended beyond
t
current f s a year.
icl
Church.— To build a new church in replacement of present structure which i i
s n
unsafe and hazardous condition.
Church.— To build a parish h l and an addition to Sunday School building.
al

Favorable
Favorable
Unfavorable
Unfavorable
Unfavorable
Favorable
Favorable
Unfavorable
Unfavorable
Favorable
Favorable
Unfavorable

N E W PLANT OR EQUIPMENT
Publisher of daily newspaper.— To purchase a printing press in replacement of
outmoded press which does not take care of present requirements.
Tankship owners.— To purchase o l tanker for charter t an o l company.
i
o
i



Favorable
Favorable

N E W PLAN T OR EQUIPMENT (Continued)
Borrower and Purpose

Excavating contractor.— To purchase d e e tractor shovel t replace worn and
isl
o
o solete equipment now in u e
b
s.
Wholesale petroleum.— To buy tractor-tanker units necessary in operations— one
replacement and one additional u i .
nt
Public u i i y — For improvements t i s gas distribution system.
tlt.
o t
Municipality.— For needed f r - i h i g equipment in rapidly expanding
iefgtn
community.
Laundry.— To purchase new machinery and equipment for expansion of pl n
a t.
Deferrable unless program had been started and commitments made prior t
o
inauguration of V C R Program.
Social club and recreation cen er — To purchase bar and equipment together
t .
with furnishings for s c a room. Present f c l t e not adequate t demand.
oil
aiiis
o

Opinion

Favorable
Favorable
Favorable
Favorable
Unfavorable
Unfavorable

MODERNIZATION
Fanner.— To repair and remodel farm buildings on 176-acre producing farm.
Retail variety s o e — For modernization and enlargement of s r building.
tr.
to e
Approval based on facts that architect’ plans drawn and materials con­
s
tracted for prior t inception of V C R Program.
o
Retail l di s ready-to-wear.— To modernize s o e add new front and increase
a e
tr,
f o r capacity t maintain competitive p s t o .
lo
o
oiin
Gasoline service s a i n — For purchase and modernization of equipment and
tto.
f c l t e of two existing gas s a i n .
aiiis
ttos

Favorable

Favorable
Unfavorable
Unfavorable

W O R K I N G CAPITAL LOANS
Woodworking— Manufacturer of business f x u e and equipment.— For neces­
itrs
sary and normal working cap a in connection with contract work in p o e s
it l
rcs.
Metal stamping pl n — For necessary and normal working c p t l S x y f v
a t.
aia. it-ie
per cent of present volume i under defense c n a t.
s
o tr c
Shoe manufacturer.— For necessary and normal working c p t l
aia.

Favorable
Favorable
Favorable

DE B T RETIREMENT A N D REFINANCING
Retail automobile deale . To repay existing bank l a s
r—
on.
Manufacturer of e e t i a appliances.— For reduction of bank d b .
lcrcl
et
Retail milk dea r — To refinance existing indebtedness held by former owner o
le .
f
bsns.
uies
Chain variety s o e . To r t r outstanding preferred s o k
trs—
eie
tc.

Favorable
Favorable
Unfavorable
Unfavorable

ACQUISITION OF EXISTING BUSINESSES
Hotel operator.— To purchase building and equipment of hotel from owner who
i r tiring because of ilheal . Failure t e f c transfer might create hard­
s e
l
th
o fet
ship for community in having hotel c o e . Approval based on assumption
lsd
s lf-financing purchaser cannot be found or that s l e i unable to accept
e
elr s
a purchase-money mortgage.
Trucking.— To purchase motor trucking company and equipment for expansion
of present operations. Trucking business t be acquired i currently hauling
o
s
f
oodstuffs but continued operation by present owner i assured until a s l
s
ae
can be made.



Favorable

Unfavorable
(over)

ACQUISITION OF E X ISTIN G BUSINESSES (Continued)
Borrower and Purpose

Opinion

Pharmacist.— To purchase business, inventory and f x u e of an existing drug
itrs
soe
tr.
Accountant.— To purchase an established accounting bu i e s
sns.

Unfavorable
Unfavorable

ACQUISITION OF S TOCKH O L D E R S ’ OR P A R T N E R S ’ INTERESTS
Individual ( f i e and principal stockholder— machine t manufacturer).—
ofcr
ool
To acquire one-third stock i t r s in company from widow of borrower’
neet
s
former partner. Proceeds of t i l a , used t purchase the minority i t r s
hs on
o
neet
in the company, would preserve continuity of management and avoid the
minority stock interest’ getting into possibly unfriendly hands.
s
Retail novelty s o e — To buy other partner’ i t
tr.
s n erest in business to become
s l owner.
oe
Wholesale iron and s e l — To purchase minority shareholders’i t r s .
te.
neet
Trucking company.— Family group operating company wishes t buy back 51 per
o
cent of stock now held by outside i t r s s
neet.

Favorable
Unfavorable
Unfavorable
Unfavorable

N E W VENTURES
Retail groce . To stock a new store t be opened in a new and expanding com­
r—
o
munity now lacking a grocery.
Retail grocer.— To stock a new grocery s r which f c l t appears not t be
to e
aiiy
o
necessary in the community.
Dentist.— To purchase furnishings and equipment necessary t operate a dental
o
of c . Borrower recently graduated from dental s h o .
fie
col
Retail men’ clothing.— To open new men’ clothing s o e City has s f i i n
s
s
tr.
ufcet
r t i e s to sat f the demand.
ealr
is y
Retail gasoline d s i u o . To equip a new s l - e v c s a i n Present f c l t e
i tr b t r —
efsrie tto.
aiiis
in community are adequate.
Amusement park.— For erection of plant and purchase of equipment necessary
for operations. Other amusement and recreational f c l t e are available
aiiis
in a e .
ra

Favorable
Unfavorable
Favorable
Unfavorable
Unfavorable

Unfavorable

LOANS TO FARMERS, ETC.
Rancher.— To purchase and carry c t l .
ate
Farmer.— To c e 50 additional acres of land for pasturage.
l ar
Farmer.— To purchase 260-acre farm for purpose of putting i into production.
t
Farmer.— To purchase farm land for l s a an investment. Considered specu­
ea e s
l t v in character where the land i already in production and borrower
aie
s
desi es simply t increase h holdings of r al e t t .
r
o
is
e sae

Favorable
Favorable
Favorable
Unfavorable

D E V E L O P M E N T OF LAN D
Individual.— To purchase acreage for housing developments in a defense a e .
ra
Individual.— To purchase and develop land for s l as building l t .
ae
os
Municipality.— To acquire unimproved land for erection of parking f c l t e .
aiiis

Favorable
Unfavorable
Unfavorable

O T H E R LOANS
Housewife.— To buy s n le premium l f insurance c ntract. To provide for
ig
ie
o
purchase of discounted premium l f insurance c n r c .
ie
otat
Individual.— To purchase r a e t t for investment. Property i already financed
el sae
s
on a long-term b s s
ai.
State Government.— For payment of bonus t veterans of World War I .
o
I




Unfavorable
Unfavorable
Unfavorable


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102