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1291 Minutes of actions taken by the Board of Governors of the Ile(leral Reserve System on Tuesday, August 17, 1948. The Board met itt ' Oa " - Room at 10:30 a.m. P RESENT: Mr. Mr. Mr. Mr. Mr. Mr. Eccles, Chairman pro tem. Szymczak Draper Evans Vardaman Clayton Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. titt4 14r. at the Carpenter, Secretary Hammond, Assistant Secretary Morrill, Special Adviser Thurston, Assistant to the Board Riefler, Assistant to the Chairman Smead, Director of the Division of Bank Operations Vest, General Counsel Leonard, Director of the Division of Examinations Young, Associate Director of the Division of Research and Statistics Brown, Assistant Director of the Division of Research and Statistics Solomon, Assistant General Counsel 48 ns stated that in accordance with the recommendation theoffthe Board on August 13, 1948, he had conferred %'ith roller the Currency, Mr. Cook of the Federal Deposit C°rPoration in the absence of Chairman Han, and Mr. Duggan, ti:11°1' °f the farm Credit Administration, that he had discussed with Wbk irraligement that had been in effect under the old Regulation 111ell these agencies undertook to enforce compliance with the :: zIttq -Etti°11.1DY the organization under their supervision, and that he sicted, the Board would like to have their full cooperation in f"-)92 8/17/48 -2the enrc)reement of the new Regulation W. Each of them, Mr. Evans 41.11 gelre assurance of full cooperation and it was understood that tile 13°4114's request and their willingness to cooperate would be conrirrilea '113. 821 exchange of letters so that the arrangement would be a taatter of formal record. Mr. Evans added that Mr. Duggan had suge8tM that after the vacation period was over some of his associates ' 11°1114 like to come over to the Board's offices for a conference Oe , c)f the questions that would confront his organization in -41aectiola with enforcement and that arrangements for such a conrel'e 11°111.d be made. Mr. Evans also stated that, in response to the inquiry made 1)11°I.Tirig the meeting of the Board on August 13, 1948, six of the lse'l Reserve Banks favored continuation without change of the the old Regulation w with respect to the enforceabilcoxitracts that two favored making contracts that did not '311'ic)111 to the r egulation unenforceable, and that four favored celltirtilatiori without change of the provision in the old regulation 1(1.th 4/1 Etruiouncement, however, at the time of the publication of : : 111 411 regulation that the Board was considering an amendment t) 111.r°111' 1 make contracts unenforceable which did not conform l'°)/isioris of the regulation. said that he had dist'141 the / natter further with thesta and that it was He af lfgroup so g) 3 -3No11141 elided that the first alternative be adopted. It.press This recommendation was discussed on the basis of the views ed by the Federal Reserve Banks and the possible effectiveenforcement medium of a provision which would render non14 contracts unenforceable and it was the consensus that, 1141e theion should not be written into the new regulation "41 s PUt into effect, the Board should announce at the time f the It'Dr Pliblication of the regulation that it was considering such and would like to have comments with respect to it. Upon motion by Mr. Evans, this Procedure was approved unanimously. Reference was made to the rec°MnIendation at the meeting of the zoard on August 13, 1948, that a sitlilar procedure be followed with espect to provisions which would ake repair and modernization loans '"-"Jject to the regulation and the teMbers of the Board reaffirmed .11eir approval of this recommenda: 1°n, it being understood that the lOrM of such a provision, if aproved at a later date, would be ter fled after consultation with aePresentatives of the Housing and °Ilie Finance Agency. z, • ,4vans then stated that since the meeting of the Board f 411 st tEtt 1948, he had given further consideration, in consul- the staff group, to the question of maturities to be 4(1 111 the regulation and that there was unanimous agreement 8/17/143 -4tth its ecom mendation that the regulation provide that on all credtot exceeding $1,000 the maximum maturity be fixed at lj months 411c1 that on credits above $1,000 the maximum maturity be fixed at 18111°11th3 llot ecept that the monthly payment on amounts over $1,000 be less than $70. Such a provision, he said, would require that Nits between and about $1,250 be paid in instalments at $1,000 leazt as large as the payments on a $1,000 credit. 1/041c1 It' 48.8 Pointed out that this recommendation, if adopted, result in maximum maturities on instalment sales of most pre- ealtotiobiles of 15 months. h There was discussion of the recommendation in comparison Illt-throposal made at the meeting on August 13, 1948, of a rit. c3f 18 months on first-sale automobiles and 15 months on 411 °ther itezs and it stated that Mr. Evans' recommendation '()1•1141 allow 18 months onas purchases of large combinations of kitchen .11t) furniture for a whole household, etc. Consideration was (C"L'vell t° the possible t of the recommendation on the total impac°I.Iltrie of tt instalment credit outstanding if maximum maturities were Icill't 15 t%h months andbeingictive how restrictive such terms would be in rela' to ths terms now allowed by the trade. Qllesti °4 was raised whether the down payments or maturity 11 of the regulation would be most restrictive and various —50.1. terms were discussed. Mr. Evans moved that the down payment requirement on automobiles be fixed at 33-1/3 per cent with 20 per cent on all other items covered by •the regulation, and that on credits not exceeding $1,000 the maximum maturity be fixed at 15 months and on credits in excess of $1,000 the maximum maturity be fixed at 18 months, except that monthly payon credits of more than $1,000 be not less than $70. Mr. Vardaman moved to amend Mr. Evans 'ftion to provide for a down payment of 3-1/3 per cent on all items except furue on which the down payment would be 1 Per cent with a maximum maturity of 5 m°nths on all items. r M.r. t rtas Vardaman stated that his amendment would reinstate the W which were in effect when the regulation 14z d er 011November 1, 1947, and would answer any criticism that 4111ation was being liberalized. he effects of such provisions on the outstanding volume eNlit ana on the attitude toward the regulation were discussed. After this discussion, Mt. Vardaman's Ic)t.ion was put by the Chair and lost, Mesrs. Eccles and'Vardaman voting "aye" and Messrs. Szymczak, Evans, Draper, and Clayton voting "no". Mr. Clayton then moved that Mt. Evans' be amended to provide for a down e:Ynlent °f 33-1/3 per cent on all items ex1.1-Pt furniture on which the down payment 111d be 20 per cent with a maximum maturity 18 months on all items. motion1 4 296 -6ill making this motion Mr. Clayton stated that such terms voialas till be considerably more restrictive than the terms now bei 1117ted- 133r the trade and, therefore, would restrict further of consumer instalment credit. In the recil4reraent „ discussion of this amendment it was agreed that the 33-1/3 per cent down payment on all items other than 14111.tIlre would make Mr. Clayton's proposal more restrictive than 4(101411payments proposed in Mr. Evans' motion, but that the re1'114 raerlt f .4,L111.41 - a 15-month maturity on credits of less than $1,000 and ore re monthly Payment of at least $70 on larger credits would be 1,4 "rictive than the maturities provided in Mr. Clayton's motion. Following the discussion, Mr. ClaYton's motion was put by the Chair and lost, Mr. Clayton voting "aye" and Messrs. Eccles, Szymczak, Draper, .11.ans, and Vardaman voting "no". tb Mr. Evans' original motion was 11: ;1 11i2It Isli the Chair and carried ly Eva Thereupon, upon motion by Mr. ns, the Board voted unanimously ; 1 o adopt the following revision of "legulation W to become effective on September 20, 1948: "REGULATION W "Effective September 20, 1_948* TCOMUMER INSTALMENT CREDIT 1111s kade 'egulation t elcie the Wre shall apply to extensions of credit .sed or consolidated on or after tr ar a:e -7"SECTION 1. SCOPE AND APPLICATION OF REGULATION tior "This regulation is issued by the Board of Goverties °I) the Federal Reserve System (hereinafter called Act Board') under authority of section 5(b) of the °ctober 6, 1917, as amended, Executive Order AQE, ttv2.:U9-,1, dated August 9, 1941 (hereinafter called the .er'), and Public Law 905, approved Au6t1st 16, 19Zd sola :lbe regulation applies, in general, to any perOf CC) 1-5 engaged in the business of making extensions nstaiment alsco credit in amounts of $5,000 or less, or stich un p. ting or purchasing obligations arising out of ensions of credit. It applies whether the perPers ;41 : bank, loan company, or finance company, or a 1)11sii°1 0 is so engaged in connection with any other such as by making such extensions of credit lqth the -e4ler, retailer, or other person in connection selling of consumers' durable goods. SECTION 2. GENERAL REQUIREMENTS AND REGISTRATION "( ‘.,1) General Requirements.--Each person engaged the tertt -Usiness of making instalment salesl or instalthe ; (11Ins,2 or engaged in the business of lending on tio/18 8-c tY of or discounting or purchasing obliga.NN'redTsilig out of such extensions of credit, is regegi8+-„'° in this regulation as a 'Registrant'; and no stit,.:'411t shall make or receive any payment which con4 or arises directly or indirectly out of any obliR ension of credit made by him or out of any such szco;74-on lent on or discounted or purchased by him, on the following conditions: h(1) Re must have a license, and each Registrant or a%ebY granted such a license, but such license 04 4 . 1, egistrant may be suspended in the manner and grounds stated'in section 8(b); and It . ls to 1, -e noted that 'instalment sale' is defined to Or Only instalment credit arising out of the sale a the Supplement, hereinafter called a both art,article, titled. :Instalment sale' and 'instalment loan' are deexclude credits in a principal amount exceed5,. 000 -8' (2) The extension of credit made, renewed, revised consolidated by him, or giving rise to the obliga''D.n discounted or purchased by him or acquired by him 48 co llateral, must comply with the applicable requires of this regulation. tive a(b)-egistration.--Within 6o days after the effec:, ! te of this regulation, or 6o days after he becomes -' e to section 2(a), whichever is later, each Regist ' traz 13178,11 shall file, with the Federal Reserve Bank or any or thereo-p in the district in which the main office olaa re Registrant is located, a registration statement 1)1.8.11cl:1°11z obtainable from any Federal Reserve Bank or q1. 1.911_statement shall be filed regardless of VIIEth Izeirt er or noi—the Re istiiint had filed such a state1 1, ulation W as in effect prior to November 77„crion. 3 INSTALMENT SALES: GENERAL RULES h, "ExcePt as otherwise permitted by this regulation, ei-4118tlment sale shall comply with the following re- Z erne:"( n -own Pa ent and Maturity.--There shall be a 411.4. i:Jwent not less than that specified for the listed 104-- in the Supplement, such down payment to be ctuls therein ex specified; and the maturity shall no Dleceaeii ' 4.tt .hat specified for the listed article in the Supounts and Intervals of Instalments.--Except bY section 6(a) for seasonal incomes, the tl-keal"tted e 1De (11--ance shall be payable in instalments which shall Z10 2ubstantially equal in amount or so arranged that iristaarh ste.13zent is substantially greater than any preceding eipTit5 (2) payable at approximately equal intervals r4ktil ;',-Tng one month, and (3) not less than $5.00 per clebtedl-Ir (p1.25 Per week On the aggregate instalment in1 -ess of on,- debtor to the same creditor. Na, ko) statement of Transaction.--The instalment sale 1111.41-. , b - vJ-uenced b a written instrument or record r8.11 set forth the information specified in seeti0/1' u (0). "SECTION 4. INSTALMENT LOANS: GENERAL RULES each " xcept as otherwise permitted by this regulation, r11,4 italment loan shall comply with the following re" .`reluents: If tb(a) " Instalment Loans to Purchase Listed Articles.-p]%)e e Begistrant knows or has reason to know that the of an instalment loan are to be used to pin'chase afly listed article: te.., :(9 The principal amount lent (excluding any in,:"8-c or finance charges and the cost of any insurnce) shall not exceed the maximum loan value specfor the article in the Supplement, such loan lUe to be calculated as therein specified; and turi(2) The maturity shall not exceed the maximum ma-"Y specified for the listed article in the Sup131eIllent i EiJailap) Unclassified Instalment Loans.--In the case of the 'aliment loan which is not subject to section 4(a), ' 111 maturity shall not exceed the maximum maturity stlectp,11111 ;LT-Led therefor in the Supplement. Ike-tho,,(c) Lt2 .11.1iits and Intervals of Instalments; Record.-sllbjec--E-To section 4(a) or section 4(b), the inseElsobt , loan, except as permitted by section 6(a) for shall — incomes, shall be payable in instalments which that be (1\ 4 substantially equal in amount or so arranged O -L.-, nstalment is substantially greater in amount than ecittair;c!aing instalment, (2) payable at approximately sn6ervals not exceeding one month, and (3) not less . 111stal Z i °2 Per month or $1.25 per week on the aggregate i;116 indebtedness of one debtor to the same crediNord— shall be evidenced by a written instrument or ”(/41,1ich shall set forth the terms of payment. r1144 n\a) S tatement of the Borrower.--No Registrant shall 111-lies:4 instalment loan subject to section 4(a) or 4(b) Nte- lie shall have accepted in good faith a signed 211ch rit of the Borrower as to the purposes of the loan. eeeci 'Etement shall state whether or not any of the proOl theOf the loan are to be used to make a down payment 1311reha. PlIrchase of a listed article or to be used to °Il thes.T anY listed article, and if any of the proceeds "ItEttetae an are to be used for the latter purpose such shall identify such listed article and shall 1300 8/17/48 -10"stat t_ - e the cash price thereof and the value of any i e.-11 " •L If a Registrant relies in good faith on it bac-cs set out by the obligor in such Statement, thes ; a11 be deemed to be correct for the purposes of —"egistrant. Re, 4 trant (e) 1...J2.211 to Make Down Payments Prohibited.--A . bnall not make any instalment loan if he 4kulcvQ ceed" or has reason to know that any part of the prothe!thereof is to be used to make a down payment on PlIrchase price of any listed article. Z "SECTIM 5. RENEWALS, REVISIONS AND ADDITIONS "(a) general Re uirements.--In the case of an insta me Sale or instalment loan which results from a 14:41 or revision of any such credit already outstandolltatlwhich results from the combination of any such sta4'iidg credit with an additional extension of inobliz-1+.1t credit, the renewed, revised or consolidated creati°11 shall (regardless of when the outstanding this °riginated) comply with all the requirements of 'egulation as if it were a new extension of credit ePt that: It 1) The requirements as to Statement of Borrower riot -(4111 Payment or maximum loan value, if any, shall the rPlY to the outstanding credit already held by n'istrant; and ) The renewed, revised or consolidated obligation'' rechi -iillaY5 in so fax as the maturity and instalment aements are concerned, be treated as if it were rroel4 credit with the maximum maturity calculated the date of the renewal, revision or consolidaThe payments on such renewed, revised, or cons toxit-b'ated obligation shall not be less than $5.00 per 11*;,cir $1.25 per week on the aggregate instalment "edness of one debtor to the same creditor. a k°) St atement of Chan ed Conditions.--Notwithstandtra4t4Y other provision of this regulation, if a Regisaco in good faith a Statement of Chan_ged Conas Provided in the following paragraph, an exstezdA ' c)f instalment credit that refinances any out : h,held Is obligation such not (whether or - tz)" the Registrant or is itself payable in instalay have a maturity not exceeding that specified 1301 Bh7/48 -11t St t,,,he -uPplement for refinancing pursuant to such olas l:cTents, but such maturity shall be applicable cr4.14/ the credit refinanced. The payments on the tacli-,6 refinanced need not be as large as $5.00 per ' 4- or eIDI 4.- 25 per week. The "-Lne requirements of a Statement of Changed Conwill be complied with only if the Registrant in good faith a written statement signed by th es;'ullgor that the contemplated refinancing is nec : go1.82, in order to avoid undue hardship upon the obliInTer,— his dependents resulting from contingencies that ori-lInforeseen by him at the time of obtaining the 111E11 e xtension of credit or which were beyond his Drilaro°1, which statement also sets forth briefly the the Pal facts and circumstances (1) with respect to to ;,:riginal extension of credit and (2) with respect ditiTeh contingencies, and specifically states in adslIa2tn4that the contemplated refinancing is not puror : el 4) a Preconceived plan or an intention to evade 41.t utlavent the requirements of this regulation. Bona Fide Collection Effort; Servicemen's --Nothing in this regulation shall rerle rued to prevent any Registrant from making any 4".14-9.-1- or revision or taking any action that he shall essarY in good faith (1) for the Registrant's °Irn. - ction in connection with any obligation which is in! tioexault and is the subject of bona fide colleceavorort by the Registrant, or (2) with respect to . 1 pigation of 4rtlea any member or former member of the hi i,*frces of the United States incurred prior to ''''411ction into such service. 4 'SECTION 6. CERTAIN TECHNICAL PROVISIONS "( SPecial Payment Schedules for Seasonal Inthe-L income received by an obligor from the snrces of his income customarily fluctuates mafrom month to month or from season to season, 41e eabr,l'aent schedule may be adapted, within the api!liecr , ITftlUm maturity to such customary flow of irL °141; Provided the obligation complies with one or °ftL°1-' the following requirements: (1) at least half - credit is to be repaid within the first half of -1211 ea„ --PP-Licable maximum maturity; or (2) payments are Iseerced or omitted in not more than 4 months of any ladllr Year but are otherwise in equal monthly 4111] culat i 8. In all such cases, a statement of the facts ecl. upon shall be preserved in the Registrant's ' s for the life of the obligation. calenti(3) Calculating Maximum Maturity_21:211.t.--In Or i;-"ning the maximum maturity of an instalment sale eAy-a-s'sament loan, a Registrant may, at his option, use dEtte-a:te not more than 15 days subsequent to the actual 21 ; sale or loan. recora \c) Record of Instalment Sale.--The instrument or tiori-.3te1dencing an instalment sale pursuant to secilarn,f\c) shall set forth (in any order) the following --Lutation: % brief description identifying the article 'chased; TI, , 2) The cash price of the article; c\3) The amount of the purchaser's down payment (i) 'Itili71, ; 1 asb and (ii) in goods accepted in trade, together st;,'El brief description identifying such goods and —411g the monetary value assigned thereto in good raith; "(4) The e1 of any insurance premium for which tere!is extended and of any finance charges or inWay of discount included in the principal 1.1 ( ! 1 x of the obligation, or the sum of these amounts; is The time balance owed by the purchaser, which hel sum of items (2) and (4) minus item (3); and The 4‘6) The terms of payment. OP - the --ent or record need not include a description . 1.1Z2k n Etrticle if it is purchased by means of a coupon th similar medium of instalment credit upon which ,eat made a cash down payment at least as -LEttion— the Lhe highest down payment required by this regus.4'1141e,°11 anY article sold by the Registrant. The incEtllerl- or record need not include the information or by items (2) and (4) if the Registrant is ticle ° quotes to the public a time price for the arich proinstrument includes the finance charge if any, (11 rec, e sets forth such time price in such payment ' l 141.ch: rd-, and provided he obtains a cash down 13ereell s at least as large as would be required if th ' l ere a e'ge specified for the article in the Supplement PPlicable to the time price. n f303 -13case "(d) 1.ctension of Credit for Mixed Purposes.--In eec,..aa extension of credit is partly subject to one otlIV.0/1 of this regulation and partly subject to anof r section, the amount and terms of such extension wereredit Shall be such as would result if the credit : +divided into two or more parts and each part were tre cre cl. as if it stood alone. In case an extension of riot Partly subject to this regulation and partly such'thoject to the regulation, the amount and terms of it ens0 of credit shall be such as would result realae credit were divided and the part subject to the 'ileioation were treated according to the applicable prore ns °f the regulation; the part not subject to the n eXist. °- may be treated as if the regulation did not Plans.--With respect to any extenor '0'tc)f credit involving a bona fide 'lay-away' plan, or similar plan by which a purchaser makes one 1, 170f,PaYments on an article before receiving delivery the Registrant may, for the purposes of this beeli ni°11, treat the extension of credit as not having to' th e.de until the date of the delivery of the article (.1, 1Irchaser. cleeta kl) Mail Orders.--An instalment sale shall not be letite-rto be in violation of the down payment requirej o a Lrction 3(a) if the sale is made upon the receipt cisks; --L-L order for one or more articles and the cash to e, ;_t_ received with the order fails by less than $1.00 re 1'441 the sum of the down payments required by this ”1-?11 for all of the articles included in the order. Ili ca kg) Deliver in Anticipation of Instalment Sale.-or 4487 a listed article is delivered in anticipation tiole;11stalment sale of that article or a similar ar4s a (;slich as a delivery 'on approval', 'on trial', or orbe ; t emc nstrator'), the Registrant shall require, at the cil-c)re the time of such delivery, a deposit equal to w402wIl Payment that would be required on such an in-4Le „11 (t sale. Inlethf2h) Sets and Groups of Articles.--In determining article is a 'listed article', the word aras b shall be deemed to include any set, group or . i ' t Y commonly considered, sold or used as a single '1-17ere.jthe component parts thereof are sold or de' at substantially the same time. 1 1304 -14creal"(i) Evasive Side AgEeements.--No extension of tis.;'t complies with the requirements of this regulasa:'if at the time it is made there is any agreement, t:Znpment, or understanding (1) by which the obligai)e'Is to be renewed or revised on terms which would pelit final payment to be deferred beyond the date illitted 4 this regulation for such credit at its ableipt4.°11) or (2) by which the obligor is to be enalved to make repayment on conditions inconsistent in or per respect with those required by this regulation, tionJ) bY which there is to be any evasion or circumven°r anY concealment of any evasion or circumvenf,anY of this regulation. shall kJ) Siderequirement Loan to Make Down Payment.--A Registrant • 113t make an extension of instalment credit to fihas „the Purchase of any listed article if he knows or be ' - as°n to know that there is, or that there is to Other extension of credit of any kind in conVot11-6.-" with the purchase of the listed article which riiig the total amount of credit extended in conwith such purchase beyond the amount of instalRe Credit Permitted by this regulation; but, if the siellea'rant accepts in good faith a written statement exist by the obligor that no such other extension tobes or is to be made, such statement shall be deemed 4°rrect for the purposes of the Registrant. Atirthir) PUrchase of Article in Lieu of Trade-in.__ which the seller of a listed article buys, gee to have bought, from the purchaser at or • 17e time of the purchase of the listed article e d as a trade-in for the purposes of 'this 411L= ij • n "(1) , Misuse of Coupon Plans.--No coupon, ticket eteatj liermeditughether paid for in inistraleirtits or otherwise, shall be accepted by any Reg4114oiPaYment, in whole or in part, for any listed : f such acceptance, in effect, would permit the (11qr„- to be sold on terms not complying with the re-went of this regulation. Or "SECTION 7. EXEMPT CREDITS 10 "This regulation shall not apply to any of the folg: -15for tu(a) Business or Agricultural Loans.--Any loan ror siness Purposes to a business enterprise or ipaziaciagr it iu cr ultur e al purposes oses to a person engaged in Provided the loan is not for the pure or purchasing a listed article. Aty "(ID) Credit to Dealers and Certain Salesmen.-to re ixtension of credit to a wholesaler or retailer nce the purchase of any article for resale, or firl:"NY extension of credit which is made to a bona sale Plarehas sinan of automobiles in order to finance the eipau ire °±' a new automobile to be used by him prina demonstrator. //ist.i.ke) Credit -to Governmental Agencies eligious Pede, 1-11 ,ti°ns etc.—Any extension of credit to the Go ci vernment, any State government, any politilisbz siThd sion, or any department, agency or estabsazitellt thereof, or to any church, hospital, clinic, cati e'riuni, school, college, or other religious, educ311„,) charitable or eleemosynary institution. kci) ee-cliustn, Credits Under Government Rehabilitation and raade b -ent Programs.--Any extension of credit 1 Peder .Y1 the Land Bank Commissioner on behalf of the a.1111 Mortgage Corporation or by any Federal Istcl b t E and found, pursuant to regulations issued tiaore'°11Inlissioner, to be necessary to maintain or Inociiti ' e se Production of essential agricultural comAdtalzie , ' i_e (2) made or insured by the Farmers' Home lEttion-:'ration, (3) made in accordance with the regu1101410 -r ; °r the Secretary of the Interior for the ecottitide eveloPment or rehabilitation of Indians, (4) 141der 11El/ice section 4-(a)(4-') of the Reconstruction Fi(4. oth orPoration Act, as amended, because of floods stlreci el- cat astrophes, or (5) made, guaranteed or inwhole or in part by the Administrator of 0-f-14. et -Affairs pursuant to the provisions of Title 'Ile Servicemen's Readjustment Act of 194.4, or t104. 411Y State agency pursuant to similar State legisla1,(0 Loans to Pay Fire and Casualty Insurance ays.--AnY loan to finance a premium in excess of 1,1e F-e----°I1 a fire or casualty insurance policy, if r' lo lleh prerals fully secured by the unearned portion of -16t (f) Credit for Purchasing Securities.--Any exreinil un of credit which is subject to the Board's 19iVttiGn5 under the Securities Exchange Act of cha or which is otherwise for the purpose of pur1et1-ng or carrying stocks, bonds, or other invests7curities. Atly kg) Real Estate and Home Improvement Loans.-of credit which is for the purpose of 13111, 1C111g or refinancing (1) the construction or ehtiT17se of an entire residential building or other Prov-rn e„bstructure or (2) repairs, alterations, or ime nts upon urban, suburban or rural real property : 0 0!tion with existing structures, except to the that such repairs, alterations, or improvements l'Por?te any listed article. '(h) Loans to Meet Medical Expenses, etc.--Any Et Irri” to which the Registrant accepts in good faith that :Len statement signed by the borrower certifying ticzn.;dhe Proceeds are to be used for bona fide educaor Q Illedical, hospital, dental, or funeral expenses, such Pay debts incurred for such expenses, and that tor Proceeds (unless they are to be used exclusively , stleci;111".tional expenses) are to be paid over in amount, ss' e ed in such statement to persons whose names, ad(andc' occupations are stated therein. firlat., • 1). ster Credits.--Any extension of credit to 01, 101 the repair or replacement of property damaged as a result of a flood or other similar disaster the e Federal Reserve Bank of the district in which l'ectill:,slIster occurred finds has created an emergency afric; / a substantial number of the inhabitants of the e e dg il ' 9 1 l ea, Provided such extension is made prior to the sixth calendar month following the month hIl iph ' 11(i the - the disaster occurred and a statement descri damage or loss is preserved in the Registrant's °N 8. MISCELLANEOUS PROVISIONS; DEFINITIONS e (a)- -re p gi2t, servation of Records;,Inspection.--Every ,,nt shall preserve, for the life of the obligati ' 4 1.41i-ETdl. ,t/let ; -) "they relate such books of account, records, _ o apers or `43'illea% (including any statements required by ' 4 11rsuant to this regulation) as are relevant to in co cht.44 17It 1thestablishing whether or not an extension of credit th it e scope of this regulation was in conformity ;"* the requirements thereof, provided, however, that itiliegistrant may preserve photographic reproductions titil ( ) 1,f411:ch books of account, records or papers. pap Purpose of determining whether or not .thise has been compliance with the requirements of Boar-aregulation, every Registrant shall permit the anY Federal Reserve Bank by its duly author• -ePre sentatives, to make such inspections of his Ike" operations as the Board or Federal Reserve specjaY deem necessary or appropriate, including inotherl°ns of books of account, contracts, letters or Pose,evant papers wherever located, and, for such • shall furnish such reports as the Board or he to d ederal Reserve Bank may require. When ordered • 5° by the Board, every Registrant shall furnish, as/v c)ath or otherwise, such information relative to seransaction within the scope of the authority cited Priaj tion 1 as the Board may deem necessary or approbooks- for such purpose, including the production of °f account, contracts, letters or other papers cUst(3,A, - Y or control of such person. liegist(b/ Suspension of License.3--The license of any tor h,l'ant-30 Z— T-Te-T—Teasonable notice and opportunity or cts-l'ing, be suspended by the Board, in its entirety Particular activities or particular offices or gezvt 131,8c1fied periods, because of any willful or negli4t;i01141111re to comply with any provision of this regu3 -Qr. anY requirement of the Board pursuant thereto. 1/1 ad,i. the authority cited in section 1 authorizes he %k °ard to institute court proceedings to restrain vloor °f, and to compel compliance with, the regulation then ; Y Order of the Board made in pursuance thereof. Furany Registrant who willfully violates or knowingly Pates in a violation of this regulation is subject to oetce Penalties prescribed in section 5(b) of the Act o Iclis.er, 1917, as amended, which reads in part as folOr t;ii wnoever willfully violates any of the provisions Ntes subdivision or of any license, order, rule, orbe leallti°n issued thereunder, shall, upon conviction, be i; 11-Qt more than $10,000, or, if a natural person, may Eilv.;,t1;isoned for not more than ten years, or both; an director, or agent of any corporation who by alnglY Participates in such violation may be punished like fine, imprisonment, or both.' an8 -18oci "A license which is suspended for a specified perisu 11 111 , 11 again become effective upon the expiration of } ,°c1-• A license which is suspended indefinitely Bo""restored by the Board, in its discretion, if the toar .pa is satisfied that its restoration would not lead be '11r,,_ther violations of this regulation and would not 7rw ,ise incompatible with the public interest. subs kc) Enforceability of Contracts.--Except as may thisequelltlY be otherwise provided, all provisions of 2(a) regulation are designated, pursuant to section ' the Executive Order, as being 'for administra'Live °I vhiceurPoses' within the meaning of said section 2(d), the ), Provides that noncompliance with provisions of to 'egillation so designated shall not affect the right ,c;rce contracts. this kci) Errors.--Any failure to comply with csao regulation resulting from a mistake in determining, not , ating, or recording any price, down payment, or eltteii, of credit, or other similar matter, shall liegi:1 : strued to be a violation of this regulation if the establishes that such failure to comply was rs'esUlt of excusable error and was not occasioned by 1,1-ar course of dealing. 1Crlowl, l ,... Non-Compliance Due to Facts Outside Registrant's (e) .--The prohibitions of this regulation shall not DIY ii71° , a Registrant with respect to any failure to cora" this regulation in connection with (1) an extenhe aid. — credit made by him if, at the time he made it, Borl 11, ( : , )t know or have reason to know any fact by rea°hligat/:11lich such extension failed to comply; (2) an Ii -14(3n Purchased, discounted or acquired as collateral ' when he purchased or discounted the obligation aeo j-f it'llf ired it as collateral, the obligation did not show ka•ct b sv.-ace any failure to comply and he did not know any tu reason of which the extension of credit giving lig4t1° the obligation failed to comply; or (3) an obit+4 wed, revised, or consolidated by him if, , he when he renewed, revised or consolidated rettsoll 'id not know or have reason to know any fact 1?ywhich such renewal, revision or consolidation With respect to any loan on the secuC°111131Y. ° n-414Z L of -torea an obligation which arises out of an extension ' 41t subject to this regulation, the prohibitions 1309 8/17/48 -19"cif th. -ls regulation shall be deemed to apply only to Nrtents arising out of the obligation rather than to e!3,..ts arising out of the loan. illth.(f) Transactions Outside United States.--Nothing regUlation shall apply with respect to any exor 8.4'°n of credit made in Alaska, the Panama Canal Zone, or possession outside the continental 'kit " ed terr Stats iet7 "(g) Bight of Registrant to Impose Stricter Require'1-u-Y refuse to extend el*edit or Registrant has the right to to extend less credit than the amount permitte Zade :,,t 3 : 4 11.is regulation, or to require that repayment be b3 7"hin a shorter period than the maximum permitted this re gulation. tio/1 P211Ditions.--For the purposes of this regula11 ,/ the context otherwise requires: aseI(1) 'Person' means an individual, partnership, ation, or corporation. (2) tiiq "Li :=2E.LLLIt' has the meaning given it in seccal 2(a) ?,ci it3) ;( I/tension of Credit' has the meaning given /1 the Executive Order.4-The D'"4-.inent toll part of the Executive Order reads as Diort-"s: 'Extension of credit' means any loan or coll,Mr; any instalment purchase contract, any ot sT-onal sales contract, or any sale or contract Eibi e under which part or all of the price is paytracttsubsequent to the making of such sale or confor-; allY rental-purchase contract, or any contract the ,71e bailment or leasing of property under which the uailee or lessee either has the option of becoming 1.1 4_11er thereof or obligates himself to pay as com: 'Delis cess—i°n a sum substantially equivalent to or in exlien °f the value thereof; any contract creating any the - °r similar claim or property to be discharged by Etoq inent of money; any purchase, discount, or other e(4;T:'ion of, or any extension of credit upon the 411y 0;' : .3 obligation or claim arising out of or t; Lhe foregoing; and any transaction or series 'arleactions having a similar purpose or effect. • 1: -20"(4) 'Instalment Credit' means an extension of creds'.1aldch -the obligor undertakes to repay in two or more tc,.eduled Payments or as to which the obligor undertakes make two or more scheduled payments or deposits usable to liquidate the credit, or which has a similar P111.0se or effect. 'Instalment Sale' means an instalment credit ' a a Principal amount of $5,000 or less which is made o PrinciPal, agent or broker, by any seller of any cs durable good listed in the Supplement to thj5 re alla ation (herein called a 'listed article') pcn, which arises out of a sale of such listed article. or- this purpose, 'sale' includes a lease, bailment, eff°'Jler transaction which is similar in purpose or b-t, to a sale. 1(61 oth , Instalment Loan' means an instalment credit, than an instalment sale, in the form of a loan thl ec;-48 in a principal amount of $5,000 or less; but cilri'efinition does not include any loan upon the seOf any obligation which arises out of any inSale or instalment loan. pri a) 'Cash Price' means the bona fide cash purchase char . , of Tiii.W.T .TTCTJ, including the bona fide cash pur, Price of any accessories, any bona fide delivery, 1 'air7 filaallation and service charges (other than interest, t.po ce or insurance charges), and any applicable sales ' oNt .E111.11pal Amount' in the case of an instalment ) salp,")) TI. gati the-f&T;TY-TI.M7 t to be paid under the obli411 i°4 minus the finance charge, and in the case of ilatel. lstalment loan means the amount lent exclusive of est acii,anco(whether or not such interest is deducted in J. "SUPPLEMENT TO REGULATION W "Effective September 20, 1948 Etrt 1. Listed Articles Down Payments, Loan Values.-er PurPosesof Regulation W, the following articles, * 011q Ilew or used are 'listed articles', and the fo DrezlIgequired down payments and maximum loan values are .1alaet4'ed (such down payments and loan values to be cal.i. as specified uklt in Parts 4 and 5 of this Supplement, zhall-1,article having a cash price of less than $50.00 'e considered a listed article: c)I't 8/17/48 -21"Gr°uP A-- .3..z1/3 Per cent minimum down Eyment )66-2/3 u,. maximum loan value: -L Au tomobiles passenger cars designed for the purPose of transportingr less than 10 passenge s, 'Group B including taxicabs). 80 per cent --" er centrwnent iini trialin '4 loan value: uooking stoves and ranges, designed for household Use, Dis hwashers, mechanical, designed for household use, "3. "4. Ircners designed for household use. Refrigerators, mechanical, of less than 12 cubic feet rated storage capacity (including food f reezers). ( 1„ 4"hing machines designed for household use. ' 43r6bination its incorporating any listed article tI7 in the foregoing classifications of this Group B Air co nditioners, room unit. 8.Rationza=sion receiving sets, phonographs, or "9. "10 Sewing machines designed for household use. 11 .11cti0n cleaners designed for household use. "Urnit-ure, household, (including ice refrigerators, bed springs, mattresses and lamps); and floor np co verings, soft surface. istecfsa-Ist -turi-ties.--The maximum maturity for all 41-ticles and for unclassified instalment loans is 4-5 toliti, 18 in case the extension of credit is in a prine441 ' tellseril i callit of $1,000 or less and 18 months in case the 1)000-°11 Of credit is in a principal amount of more than , $1 e nxcePt that when such principal amount is more t'lla/i1()er month,ltieirlstalment payments shall not be less N C(41cliOt 3. Refin cing Pursuant to Statement of Changed r lis •--The maximum maturity of any refinancing pur. 1141/1t -C: -Q1 seeja Statement of Changed Conditions as specified t iolc)n 5(b) shall be 20 months. he t 4. Calculation of Down Payments for Automobiles.-; -" . 11111m. loan value of any automobile shall be the spectde ;ercentage of the cash price or of the lauraisal 4 e4:taillet y whichever is lower, and the required down sha11 be the difference between the cash price 1312 -22azd the maximum loan value as so calculated. Such requir obt.e ,(1" cl°wil payment in the case of an automobile may be 'lied in the form of cash, trade-in, or both. retio,:‘'Appraisal guide value' means the estimated average re" 1 value as stated in the current edition of any BoaTaarlY published automobile appraisal guide that the torv.'i designates for this purpose for use in the terri,-`11 which such automobile is sold, plus any applica' ble ales taxes. Information as to the guide or guides desi: Eijav. rated for any given territory may be obtained from xederal Reserve Bank or branch. "Part Calculation of Down Pajrments for Articles 1, .--If any article is traded in by the purchaser raerit- exticle listed in Group B, the required down payi_a the maximum loan value shall be the specified Percee'll itig ''age of the net price of the article after deduct°14 the cash price the amount allowed for the trade14; ar, -- (1 e•dclit -7` such down payment shall be obtained in cash in 1011 to the trade-in.,, II Unanimous approval was also given t L ° (1) the following release to be ,landed. to the press on the afternoon Of August 19 for publication in the ( 11111111g Papers of August 20, 1948, and " p --4. ) the following statements for publi-Et ' inn in the Federal Register with ret s1D .ect to (a) the reasons why the regula1°11 -was being issued without notice and t cIP°rtunity for a hearing and (b) notice B at consideration would be given by the , ,oard- to two proposed amendments to the "gulation: Press Statement tella tc1,44.11e Board of Governors of the FederalInstalment Reserve Sysissued Regulation W on 'Consumer signed 0/1 Ail under Public Law 905 which the President ef l' etiT-12-t 16, 1948. The regulation, which becomes r'e Se ptember 20, 1948, is being published in the Peae8.1 er. Register, and copies will be distributed by the 8'1 leserve Banks as promptly as possible. 8117/48 -231,1114 i"The regulation is in much the same form as that 811 te rminated on November 1, 1947. It covers inSales of and loans for 12 kinds of consumers' It 41.1e goods, providing the cost is more than $50. : S1 4-s° covers instalment loans for most other consubeire,P2rposes. Instalment credits up to $5,000 are to the regulation. "The Etre goods for which down payments are prescribed a8 r011ows Article Down Payment Automobiles 33-1/3% 2. Cooking 20% stoves 3. D 20% 4. ishwashers Ironers 20% 5. R 20% efrigerators 6, Washing machines 20% 7. C ombination units incorporating 20% 8, Airany item in 2 - 6 20% unit conditioners, room 9. Radio and television sets, 20% phonographs 10 Sewing 20% machines 11. 20% 12 Suction cleaners Furniture and soft-surface floor coverings 20% "Mat • the re urities on all instalment credits subject to 411:1c11,114ti°n, whether to finance the purchase of these - or not, must come within the following require1. Credit Maximum maturity Not exceeding $1,000 15 months Above $1,000, 18 months except that monthly payment on amounts over $1,000 must "not be less than $70.00 e1 e November 1, 1947, when the old regulation Nit lerms ' offered by merchants and lenders extending the ;,...17e been relaxed considerably. The requirements se ,;-14 re restrictive than , )aovee-, lastgulation are somewhat less requirement than terms November but considerably tighter 31,8.plo i7rallY in effect. The down payment --1111ces are lowered from one-third to one-fifth. to --e care of late-model automobiles and certain 2. .-!Ic 314 • 8/17/48 -2417 C ler items where the expenditure must necessarily be is'ge, the maximum maturity for credits above $1,000 At et at more than 15 months, running up to 18 months. ellea"! same time, the scope of the regulation is broad11 " ) include all credits up to $5,000 whereas $2,000 been the limit under the previous regulation. 3..ted"nstalment credit for home improvements was elimim Regulation W after the close of the war, and Present not covered in the regulation. Because le c"e current inflationary situation, however, the Board , st/ch°11, 1 !iclering the advisability of an amendment to bring ert -,edit under the regulation. Before deciding whethteZdo this, the Board wishes to give all who are in;:eci. l.„811 oPportunity to express their views. Accord114a: ' 4e Board will publish in the Federal Register Orl tre.itati°11 to interested persons to submit comments 8:4„: qUestion whether such an amendment would be de, , Board is also giving consideration to an amendEtaly would have the effect of making unenforceable contract olltract which does not conform to the provisions of the r 1kriZulation on down payments or maturities. A simi-;;ceaure for receiving comment will be followed. mm the 1;":gUlation W will be administered in the field by cated ,xederal Reserve Banks and their 24 branches lostiould-11veniently throughout the country. Inquiries r tTed to the nearest Federal Reserve orl:I ItzZ Federal Register of Reasons for Issuance Notice and Opportunity for a Hearing. crecit lne DurPose of the Part is to prescribe appropi in connection with consumer instalment , appropriate supporting rules, in order to protie the -' Nation's monetary, banking, and credit strucas,n1 interstate and foreign commerce, against 1n/1flationary pressures. e,..1J) The notice and public procedure described e(11-kr'' 'i°ns 4(a) and 4(b) of the Administrative Prot he e prescri_ lA ,ct are impracticable, unnecessary and contrary 1 the interest in connection with e'r th s ls Part for the following reasons and good 4.11se found: le t ' -25(1) Because of present inflationary pressures, thr, ue .light of which Public Law 905 providing aub,fitY for the Part until June 30, 1949, was enacted ecial session of Congress, and in order to prePart from being inoperative during a subOf the temporary period during which ilIcart is authorized, it is desirable in the public th el'est that the Part become effective more promptly an ;:loUld be Possible if such procedure were followed. 1101,s A similar regulation of the Board of Govertio,ve °I the Federal Reserve System was in effect until ner 1, 1947 52 CFE 222, Supp. 19467 and that regulatitab ex as then in effect was the result not only of broad -nce extending over a period of more than six years by ti;'s° of extensive consultation with persons affected satie regulation. The new Part is substantially the Such Previous regulation, except for an increase - size of credits covered by the regulation and cerelaxations from the previous regulation. Rules (3) For the reasons stated in section 2(c) of the 'Procedure of the Board of Governors of the Federa). OI Reserve System D72 CE 262.2(e), Suppe, 19467 a Proc,AAPart or the subject matter is not adapted to such n Notice of Proposed Changes SYste Eoard of Governors of the Federal Reserve eraa: -!,'s adopted, and has had published in the Fedkeat CgIster, Part 222 (relating to Consumer InstalCredit) to becomP. effective September 20, 1948. : ,61 rt is also called Regulation W. The Board has 640pti-c3n61deration, with a view to possible future 111.e e (311, certain proposed amendments to the Part. rendments may be described in general ternas parsTorIL 1. u riodernization and Repair Credits. - AmendMents which would bring under this Part s°-called modernization and repair credits, that is, credit for repairs, alterations or improvements upon real property in connection with existing structures. Such amendments would involve several changes in the provisions of this Part. One such change might be the elimination of the exemption of these credits which is 40w contained in clause (2) of section 222.7(g) of this Part. Another necessary change might be to add to section 222.9 of this Part a provision subject- ) 8117/48 -26"in such credits to such down payment (and maximum loan value) requirements, maximum maturities, or both, as the Board might prescribe. 2. Enforceability of Contracts. - Amendments to this Part which would have the effect of making unenforceable contracts (and related liens) which violate this Part, or which violate certain provisions thereof, such as those relating to down payments and maximum maturities. Such amendments would involve the deletion or amendment of section 222.8(c) of this Part, and might also involve changes in other provisions of this Part, including section 222.8(e) relating to noncompliance due to facts outside the Registrant's " knowledge. the A,!his notice is published pursuant to section 4 of Ruie'44inistrative Procedure Act and section 2 of the egFfsell:Zedure of the Board of Governors of the FedSystem (12 CFE 1946 Supp. 262.2). The proOf octeanges are authorized by section 5(h) of the Act Exec -"er 6, 1917 as amended (4o Stat. 415; 12 USC 95a), utive Order No: dated August 9, 1941, and Public 95, approved August 8843,16, 1948. telits Inte iwithrested persons may submit data, views or argusliotac respect to these matters; and any such material Nue 41)e in writing. Although submittals or maY be sent directly to the Board, it is prefble the ,; Lhat they be sent to the Federal Reserve Bank of litin which the interested person resides or - his business, which will forward them to the -43e.rde'111,,, 40t1. 1:° all material must be received later thanconsidered, September 20, 1948." t to Unanimous approval was also given the following wire to be sent to the : s cleral Reserve Banks with the under01,:anding that the second and last para1Phs of the telegram to San Francisco 17°111d read "printer's proofs" instead of 'Photo offset negatives". rectiv "33°8 'rcl has adopted new Regulation W to become efNlee.se SePtember 20, 1948. The regulation will be f°r morning papers of Friday, August 20, and ueforshould be made by the Federal Reserve Banks "at time. We will wire you copy of press state"144-or to its release. '11 A %Plan to airmail photo offset negatives to you 11112' 19th, in order for you to print and distribute 8117/48 -27the egulation to interested persons in your district. our .The comments of the Reserve Banks in response to ttDifires were very helpful in preparing the new regulaand Board appreciates the careful consideration irater,u" theY reflected. You will recognize that it was taili ! - sible to adopt all suggestions, partly because there aleellY were differences of opinion among the replies for 41e0 Partly because of the limited time available the, w°rking out some of the points and fitting them into - regulation. tive "It is essential that a System-wide firm and effecvi_e enforcement program be pursued, and you will be adCinfUrther in that regard. Dhot, or Your information pending your receipt of the sibi- offset negatives, we will wire you as soon as pose textual changes in the new regulation from the as revised effective December 1, 1946." At thi, Point the members of the staff, with the exception c)rltr. °41.13enter, left the meeting. At th,,, - request of Mr. Draper, Mr. Carpenter read a memoran194 'tciressecl to the Board by Mr. Draper under date of August 12, 8' 1.411ch read in part as follows: aft„'TAt n, the meeting of the Personnel Committee this Ilbseh—°11 Chairman McCabe, because of his intended Naol from the city, requested me to report the .1Alig .nformation to the Board: the result of a personal talk with Mr. Smead 11114n McCabe, it was learned by the Chairman 1 -; Smead desires to retire on or about January , tbe9p 11 view of this information, it was decided ) 1y, iola0Z-jeortnel Committee to recommend to the Board t ,Tg changes: q th' el:,, That Robert F. Leonard be appointed Director Ntire -u-ivision of Bank Operations, effective upon , 111ent of Mr. Smead, and that, in order that he of °Ille familiar with the work of the Division 441 e; ' ° erations, he be transferred to that Division, S 18 8/1.7A8 —28— "as the s°on as his work can conveniently be arranged, with teraporaTy r title of Associate Director. Mr. Leonard's bg,ltial duties in the Division of Bank Operations would in connection with consumer credit under Regulation W. H2. That Mr. Millard be appointed Director of the si°11 of Examinations, such appointment to become efrecti cl! :,'„ as of the date upon which Mr. Leonard assumes ons sta is Bat-op, 8Ita Associate Director of the Division of i That the appointment of a successor to Mr. tlian l in the Division of Examinations be left open this 'hairman McCabe's return. Chairman McCabe made solitleispecific request to other members of the Per°Iiinittee, and both Governor Vardaman and I were to accede to his request. Nto,„ That the salary of Mr. Horbett, Assistant Ditroz of the Division of Bank Operations, be increa.„beg °,330 to $11,000 per annum, effective as of the (late ,111g 1 of the first pay roll period following the 'Pc)11 which the increase is approved by the Board." hm. Mr' traper stated that the changes proposed in the memoran1)eell discussed with Messrs. Smead and Leonard and were enable to them but that the proposed appointment of ard had not been discussed with him personally. t. BY unanimous vote, the recommendaa ns of the Personnel Committee were 4,,Pr°ved, with the understanding that -e.aPPointment of Mr. Leonard as Ass°clat? Director of the Division of Bank : a' l tions and of Mr. Millard as Directo : b of the Division of Examinations would ti,'Come effective on September 1, 1948, Di'n the appointment of Mr. Leonard as t.T'ector of the Division of Bank Operawould become effective January 1, 9) and that announcement of the 'Aanges would be made immediately. -29Mr• Eccles stated that two or three weeks ago Mr. Reno p resident of the Puget Sound National Bank of Tacoma and 4,erriber to ay of the Federal Advisory Council, called on the telephone that clelited Catioli his bank had filed an application for a branch which bY the Comptroller of the Currency and that an appli- a bank oldid by Transamerica Corporation to establish a bratich in the same trade area had been granted. Mr. Odlin wanted t° kll°11* '141'• Eccles said, whether the Board favored the granting (It allthority for additional branches to banks in the Transamerica : 7 1 1113' bece'llse it seemed to him to be entirely inconsistent for N'33°Eircl to have brought an action under the Clayton Act against 1441:14.11'erice* Corporation and at the same time to favor the estabstit of ad ditional branches by the group. Mr. Eccles added tliath. told Mr. Odlin that he did not know that additional branches '4eN bein.g approved by the Comptroller of the Currency, that the th„oar „ n vqh issuing a complaint against Transamerica (Itv4ration had been interpreted as a personal feud between him tccieo and A. P. Giannini and therefore he did not want to tottra. in the matter any more than he now was, and that since assigned the subject of bank holding companies to kl'ICI°11 for „ior 111 consideration Mr. Odlin should take the mat- elerzt...0 8/17/48 -30Mr. Eccles went on to say that from all the information 4741141)1e to the Board it appeared that the Comptroller of the elll'rerleY had been authorizing the Bank of America National Trust &S411illgs As to establish additional de novo branches, that that was entirely incompatible with the position that the to4rd. Ncier the IlkItaken in issuing its complaint against Transamerica the ClaYton Act, and that it would be his suggestion that address a letter to the Comptroller of the Currency 41g att entioa to the matter. It was agreed unanimously that Mr. Clayton would prepare a draft of 18211e1c .a letter for consideration at a -c111.' of the Board on Friday, August 20) 19.48. Mintitep Rese - of actions taken by the Board of Governors of the rye System on August 16, 1948, were approved unanimously. eni°rallcitim dated August 13, 1948, from Mr. Young, Associate biNet : tIlEit the °f the Division of Research and Statistics, recommending resignation of Walter F. Stettner, an economist in that 1)1\11sivill '/3e accepted to be effective, in accordance with his re114.t) 4t tile Close of business August 22, 1948, with the underNIa"lag th4t a lump sum payment would be made for annual leave 'ILIEt14 lig to his credit as of that date. Approved unanimously. 4r, Up , -3113Ettiz Telegram to Mr. Knoke, Vice President of the Federal Reserve °:r New York, reading as follows: or a ' llYour wire August 13. Board approves the making dei:5,, )an on gold by your Bank to the Banque Nationale 04 4: 41ePublique Federative Populaire de Yougoslavle Naows:e ' Ilerms t and conditions specified in your wire as tr17,000A,0)00The amount to be advanced not to exceed and to be 90 to 98 per cent (as deterOf Z il lpy You depending on the type of gold pledged) 34).teriliate t lTecLhe gold held in your vaults as coldfit,„ .JB T ) Such loan to mature three months from the thereof. : 1(0) subject to agreepol)12. twe Renewal of any loan to be ell Banque Nationale de la Republique Federative e1re de Zslit 1, Yougoslavie and yourselves with no commit;3 (rT,31rou for renewal; is imaa v") Such loan to bear interest from the date it Until paid at the discount rate of your Bank in • c;T°11 the date on which such loan is made. be ote ' t is understood that the usual participation will ,f:ea to the other Federal Reserve Banks. theBa;"e Board notes that your Bank expects to advise • tjqtle Nationale of your understanding that in grant1°an you would not be facilitating sales of gold • pr e Prices and that you would refer in this conQ0 the joint statement of July 18, 1947, of the arr Of the Treasury and the Board of Governors, slIch equested all banks to refrain from facilitating sales.7, 4 Approved unanimous Sec Chairman pro tem. ar •
@FedFRASER