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F E D E R A L R E S E R V E BANK
O F NEW YORK
f Circular No. 3 8 9 4 " 1
L September IS, 1952 J

REAL ESTATE CREDIT

Suspension o f Regulation X
To all Persons Engaged in the Business o f Extending Real Estate Credit
in the Second Federal Reserve D istrict:

The Board of Governors of the Federal Reserve System, with the concurrence of the
Housing and Home Finance Administrator, suspended Regulation X, effective September
16, 1952. Following is the text o f the press statement announcing the suspension, released
fo r publication today.
The B oard o f Governors o f the Federal Reserve System today suspended Regulation X —
Real Estate Credit— in connection with its announcement o f a period o f real estate credit control
relaxation prescribed by the 1952 amendments to the Defense Production A ct. The suspension of
Regulation X , effective September 16, 1952, applies to credit terms on both residential and nonresidential properties. Conventional mortgage loans are, o f course, still subject to basic State and
Federal statutes governing real estate loans by financial institutions.
The B oa rd ’s action today relates only to real estate credit not insured or guaranteed by the
Government. A statement on terms that will apply to Government-aided real estate credit is
being issued separately by the H ousing and Home Finance Adm inistrator, Raym ond E . Foley,
who concurred in the B o a rd ’s announcement.
Regulation X was first issued in October 1950, under authority o f the Defense Production
A ct o f 1950 and Executive Order 10161 providin g fo r regulation o f real estate credit terms to
restrain inflation and conserve defense-needed materials. It was suspended in view o f m andatory
provisions in the 1952 amendments to the Defense Production A ct. These amendments required
that a period o f residential credit control relaxation be announced if estimated residential con­
struction starts fo r three consecutive months were below a seasonally adjusted annual rate o f
1,200,000 units. Inform ation lias been received from the Secretary o f Labor that the seasonally
adjusted annual rate o f housing starts, as estimated fo r this purpose, was less than 1,200,000
units in each o f the months o f June, July, and A ugust 1952.

A copy o f the Notice of Suspension o f Regulation X is enclosed; additional copies
o f this circular and of the enclosure will be furnished upon request.




A

llan

S proul,

President.

R E G U L A T IO N X — R E A L E S T A T E C R E D IT
N O T IC E O F SU SPE N SIO N
ISSUED B Y T H E BOARD OP GOVERNORS OF T H E FEDERAL RESERVE SYSTEM
W IT H T H E CONCURRENCE OF T H E HOUSING AND HOME
F IN A N C E ADM INISTRATOR

1. a. The Secretary o f Labor has transmitted to the B oard of
Governors o f the Federal Reserve System the estimates required to be
made by section 607 o f the Defense P roduction A ct o f 1950, as
amended, and section 503 o f Executive Order No. 10161, as amended.
b. The Secretary o f Labor, on the basis o f his estimates o f the
number o f permanent, nonfarm, fam ily dwelling units, the construc­
tion o f which has been started during each o f the three calendar
months June, July, and A ugust 1952, has estimated the annual rate
o f construction starts during each such months, after making reason­
able allowance for seasonal variations in the rate o f construction.
c. The annual rate o f construction starts so estimated by the
Secretary o f Labor fo r each o f the said three months was at a level
below an annual rate o f 1,200,000 starts per year.
2. In view o f the foregoing, as required by section 607 o f the
Defense Production A ct, as amended, and section 503 o f Executive
Order No. 10161, as amended, the B oard o f Governors o f the Federal
Reserve System, with the concurrence o f the H ousing and Home
Finance Adm inistrator, hereby announces the beginning o f a “ period
o f residential credit control relaxation” which period shall begin on
September 16, 1952.
3. a. E ffective September 16, 1952, Regulation X is suspended.
b. The suspension o f Regulation X was adopted by the Board
after consideration o f all relevant matter, including recommendations
received from time to time from industry and trade association
representatives and others. Section 709 o f the Defense Production
A ct o f 1950, as amended, provides that the functions exercised under
such A ct shall be excluded from the operation o f the Adm inistrative
Procedure A ct (60 Stat. 2 37), except as to the requirements o f section
3 thereof.




FR IN TE D

IN

NEW

YORK

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