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F E D E R A L R E S E R V E BANK
O F NEW YORK
r C ir c u la r N o . 3 6 9 5 "1
L
A p r i l 2 7 , 1951
J

R E G U L A T IO N X

REAL ESTATE CREDIT
To all Persons Engaged in the Business of Extending Real Estate Credit
and Others Concerned in the Second Federal Reserve District:

Amendment No. 4 to Regulation X
The Board of Governors of the Federal Reserve System l a adopted Amendment No. 4
is
to Regulation X, effective April 1 , 1951, so as to exempt any extension of real estate credit
6
from the regulation as to which the Registrant accepts in good faith a signed Statement of
the Borrower certifying that the proceeds thereof are to be used solely to finance the purchase
or construction of a residence, multi-unit residence, or nonresidential structure to be used
in substitution for a similar structure of which the borrower has been deprived through or by
reason of eminent domain or condemnation proceedings. To allow persons deprived of their
properties through condemnation to obtain a similar replacement thereof, the amendment
permits the financing on more liberal terms than those provided by Regulation X of properties
acquired in lieu of those taken through condemnation proceedings.
A printed copy of Amendment No. 4 i enclosed.
s
Loan to purchase a participating share in a cooperative development
Following i the text of a ruling issued by the Board of Governors:
s
Inquiries have been received asking whether borrowing by a prospective tenant i a cooperative
n
development i subject t Regulation X i the loan i f the purpose o purchasing a part c a in
s
o
f
s or
f
i ip t g
share in the cooperative development which w l e t t e the owner thereof t acquire or use a family
il nil
o
unit i the cooperative development.
n
Cooperative developments ordinarily are b i t and operated by a nonprofit corporation organized
ul
for that s e i i purpose. Credit secured by a blanket mortgage covering t e development i extended
pcfc
h
s
t the c p ration. The corporation’ equity or c p t l investment i r i e by the s l o shares o
o
or o
s
aia
s asd
ae f
f
ca i a stock t the individual c op
ptl
o
o erators. Ownership o a share c r i s with i t e r g t t acquire
f
are
t h ih o
a long-term l a e upon a family unit i the cooperative development.
es
n
I i the opinion of the Board t at borrowing i subject t Regulation X when i i for the purpose
ts
h
s
o
ts
of purchasing a share i a cooperative development. The t t l amounts borrowed by the corpo­
n
oa
ration and the individual shareholders may not exceed th maximum loan value o th cooperative
e
f e
development.
Additional copies of this circular and of the enclosed amendment will be furnished upon
request.




A

llan

S proul,

P resident.

REAL ESTATE CREDIT

A M E N D M E N T NO. 4 TO REGULATION X
ISSUED B Y TH E BOARD OF GOVERNORS OF T H E FEDERAL RESERVE SYSTEM
W IT H T H E CONCURRENCE OF T H E HOUSING AND HOM E
F IN A N C E ADM INISTRATOR

Regulation X i hereby amended in the following r s e t , e f c
s
epcs fe­
t v April 1 , 1951:
ie
6
In subsection ( of section 5 s r k out the period at the
e)
, tie
end of the section and add the following: “or s l l t finance the
oey o
purchase or construction of a r
esidence, multi-unit residence, or
nonresidential structure t be used in substitution for a similar
o
structure of which the borrower has been deprived through or by
reason of eminent domain or condemnation proceedings.”




PR IN T E D I N

NEW YORK

4.
E A STE R N IN SU 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 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.

A pril 27, 1951.
To the Chief Executive Officer o f the
L ife Insurance Company Addressed:

The national Voluntary Credit Restraint Committee, created pursuant to the Program
for Voluntary Credit Restraint authorized by the Defense Production Act o f 1950, has
appointed twenty regional committees to which inquiries by financial institutions may be
addressed regarding financing activities under the Program — four committees for the life
insurance companies, four fo r the investment banking houses, and twelve for the commercial
banks. The insurance committees have their respective headquarters in New York, Chicago,
Dallas and San Francisco.
The Eastern Insurance Voluntary Credit Restraint Committee is the regional committee
designated to handle inquiries from life insurance companies located in the following states:

Maine, Vermont, New Hampshire, Massachusetts, Connecticut, Rhode Island, New York, New Jersey,
Pennsylvania, Delaware, Maryland, Virginia, West Virginia, Kentucky, Tennessee, North Carolina,
South Carolina, Georgia, Florida, Alabama, Mississippi
The members o f the Committee are as follow s:

Chairman
President, Connecticut General Life Insurance Company, Hartford, Connecticut

F r a z a r B . W ild e ,

J u lia n

D. A n t h o n y , President, Columbian National Life Insurance Company, Boston, Massachusetts

W. W. B o d i n e , Chairman of the Board, Penn Mutual Life Insurance Company, Philadelphia,
Pennsylvania
E. A. C a m p , J . Vice President and Treasurer, Liberty National Life Insurance Company, Birmingham,
r,
Alabama
W. E c k e r , Executive Vice President, Metropolitan Life Insurance Company, New York,
New York

F r e d e r ic k

R obert
W illia m

E.

H e n le y ,

President, Life Insurance Company of Virginia, Richmond, Virginia

F. T r e i b e r , Vice President, Federal Reserve Bank of New York, New York, New York

The Program for Voluntary Credit Restraint was sent to you under date o f March 9, 1951
by the Chairman o f the Board o f Governors o f the Federal Reserve System. W e expect to
furnish you with additional material from time to time. The basic purpose o f the Program
is to provide credit necessary to sustain essential production and services, and at the same
time to restrain financing which will add to inflationary pressures.
A s the Program is entirely voluntary, the primary function o f this Committee will be to
serve the life insurance companies within its area in an advisory capacity to aid them in their




(over)

efforts to observe the principles set forth in the Program governing the extension o f credit.
To facilitate the work o f the Committee, please submit your request fo r consideration o f a
specific loan or investment in accordance with the form which is enclosed. Form s should be
prepared in triplicate and sent to G.

M organ B ro w n e ,

Secretary o f the Committee,

33

Liberty

Street, New Y ork 45, N. Y. Additional copies o f the form and o f the Program will be furnished
by the Secretary upon request.
The country’s financial institutions have been given an opportunity to band together
under legal sanction to strengthen the nation’s defenses and to restrain the course o f inflation.
I f we can make this voluntary effort work, we can avoid mandatory controls. The Committee
is confident that all life insurance companies will cooperate in the Program to the fullest extent.




F razar

B.

W ild e ,

Chairman.

C R -IC I

(Please Submit in Triplicate)

To

E a stern
C r e d it R

In su ra n ce V o lu n ta r y
e s t r a in t

...........................................................................................

C o m m it t e e ,

33 Liberty Street, New York 45, N. Y.
G entlem en :

The following information refers to a proposed loan or investment which we are considering. This
information is submitted to you in confidence but with the understanding that you may forw ard it to the
national Voluntary Credit Restraint Committee. In your opinion, will the proposed loan or investment be
in harmony with the principles o f the Voluntary Credit Restraint Program ?
V ery truly yours,

B y.........................................................., ........................
(Title)

INFORMATION REGARDING LOAN OK INVESTMENT'
(D o not give name o f person or company involved)

Industry or other general classification:

Nature of business: (Describe briefly)

Relationship o f person or company to the Defense Program or other essential production or services

Amount $.....................................................

Maturity.....................................

Purpose: (Check and describe)
To augment working capital................. To refinance debt................. To acquire or retire equity.
To finance purchase o f real estate................... To acquire other fixed assets.................... Other...

Plan o f repayment:

*I a p
f articipation, information given should cover entire loan or investment.



( ovkr)

W e are informed that our rejection o f the proposed loan or investment would have the following result in
respect o f the person or company involved:

I f the proposed loan or investment is not made, the Defense Program or the essential needs o f agriculture,
industry or commerce would, in our opinion, be affected as follow s:

Other pertinent comments:

(T h e spaces b e lo w fo r C om m ittee use on ly )

The loan or investment appears to be in harmony with the principles of the Voluntary Credit Restraint
P r o g r a m .............................................................................................................................................................................. |
The loan or investment does not appear to be in harmony with the principles o f the Voluntary Credit
Restraint Program ......................................................................................................................................................... Q]
Additional Committee comments:

E
...................................................

V

oluntary

astern

I

C r e d it R

n su ran ce
e s t r a in t

C o m m it t e e

(D a te )




By
S ecreta ry

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 t R s r i t
o h
o
r di e t a n
a t o i e by t e Defense Production Act o 1950
uhrzd
h
f
33

LIBERTY

STREET

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

May 1, 1951.

(Addressed to members of eastern investment banking firms)

The national Voluntary Credit Restraint Committee, created pursuant to the Program
for Voluntary Credit Restraint authorized by the Defense Production A ct of 1950, has
appointed twenty regional committees to which inquiries by financial institutions may be
addressed regarding financing activities under the Program — four committees for the invest­
ment banking houses, four for the insurance companies, and twelve for the commercial banks.
The investment banking committees have their respective headquarters in New York, Chicago,
Dallas and San Francisco.
The Eastern Investment Banking Voluntary Credit Restraint Committee is the regional
committee designated to handle inquiries from investment banking houses located in the fol­
lowing states and the District o f Columbia:

Maine, Vermont, New Hampshire, Massachusetts, Connecticut, Rhode Island, New York, New Jersey,
Pennsylvania, Ohio, Delaware, Maryland, Virginia, West Virginia, Tennessee, North Carolina, South
Carolina, Georgia, Florida, Alabama.
The members o f the Committee are as follow s:

M. S t e w a r t , Chairman
Kuhn, Loeb & C . 52 William S r e , New York, N. Y.
o,
tet
T. J e r r o l d B r y c e , Clark Dodge & C . 61 Wall S r e , New York, N. Y.
o,
tet

P ercy

Vice President, Federal Reserve Bank of New York, New York, N. Y.
E. U n t e r b e r g , C . E. Unterberg & Company, 61 Broadway, New York, N. Y.

A r t h u r P h e la n ,
C la r e n c e
F ran k

A.

W illa r d ,

Reynolds & Company, 120 Broadway, New York, N. Y.

The Program fo r Voluntary Credit Restraint was sent to your firm under date o f March 9,
1951 by the Chairman o f the Board o f Governors o f the Federal Reserve System. W e expect to
furnish you with additional material from time to time. The basic purpose o f the Program
is to provide credit necessary to sustain essential production and services, and at the same
time to restrain financing which will add to inflationary pressures.
A s the Program is entirely voluntary, the primary function of this Committee will be to
serve the investment banking houses within its area in an advisory capacity to aid them in their




( over)

efforts to observe the principles set forth in the Program governing the underwriting and dis­
tribution o f securities. To facilitate the work of the Committee, in case you are not fully
satisfied as to the appropriateness of a proposed transaction, please use the enclosed form in
submitting your request fo r our consideration of the transaction. Form s should be prepared
in triplicate and sent to

G. M organ B row n e,

Secretary o f the Committee,

33

Liberty Street,

New Y ork 45, N. Y. Additional copies o f the form and o f the Program will be furnished by the
Secretary upon request.
The country’s financial institutions have been given an opportunity to band together
under legal sanction to strengthen the nation’s defenses and to restrain the course o f inflation.
I f we can make this voluntary effort work, we can avoid mandatory controls. The Committee
is confident that all investment banking houses will cooperate in the Program to the fullest
extent.




P

ercy

M. S

tew art,

Chairman.

C R -IB 1

(Please Submit in Triplicate)

To

E a stern
V

In v e s tm e n t B a n k in g

oluntary

C r e d it R

e s t r a in t

..............................................................................................

C o m m it t e e ,

<Date)

33 Liberty Street, New Y ork 45, N. Y.
G entlem en :

The following information refers to a proposed security transaction which we are considering. This
information is submitted to you in confidence but with the understanding that you may forw ard it to the
national Voluntary Credit Restraint Committee. In your opinion, will the proposed transaction be in
harmony with the principles o f the Voluntary Credit Restraint Program ?
V ery truly yours,

B y.........................................................., ........................
(Title)

INFORMATION REGARDING ISSUER
(D o not give name)

Industry or other general classification:

Nature of business: (Describe briefly)

Relationship o f issuer to the Defense Program or other essential production or services:

INFORMATION REGARDING PROPOSED TRANSACTION
Total dollar amount or number of shares:......................................................
P urpose: (Check and describe)
To augment working capital................. To refinance debt................. To acquire or retire equity....
To finance purchase o f real estate................... To acquire other fixed assets.................... Other.....

I f the transaction involves debt securities, give details as to maturity, sinking fund, conversion rights, etc.;
if stock issue, give details as to class o f stock, conversion rights, etc.




(OVER)

W e are informed that rejection or postponement o f the proposed issue would have the following result in
respect o f the issuer:

I f the proposed issue is rejected or postponed, the Defense Program or the essential needs of agriculture,
industry or commerce would, in our opinion, be affected as follow s:

Other pertinent comments: (Please furnish additional necessary information to enable the Committee to give
this application prompt consideration)

(T h e spaces below for Committee use only)

The proposed transaction appears to be in harmony with the principles of the Voluntary Credit Restraint
P r o g r a m .............................................................................................................................................................................. Q
The proposed transaction does not appear to be in harmony with the principles o f the Voluntary Credit
Restraint Program .......................................................................................................................................................... |
Additional Committee comments:

E
.....................................................
(Date)




V

astern

oluntary

I

n vestm ent

C r e d it R

B

a n k in g

e s t r a in t

C o m m it t e e

By .............................................................................
Secretary

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