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407 A meeting of the Board of Governors of the Federal Reserve System was held in Washington on Saturday, July 11, 1942, at 11:00 a.m. PRESENT: Mr. Ransom, Vice Chairman Mr. Szymczak Mr. Carpenter, Assistant Secretary Mr. Clayton, Assistant to the Chairman The action stated with respect to each of the matters hereinafter referred to was taken by the Board: Letter to Honorable Carl Hayden, United States Senate, reading as follows: "This will acknowledge receipt of your letter of July 2, 1942 and its enclosures with regard to the desire of Mr. W. E. Jacob of Tucson, Arizona to obtain a loan guaranteed under the provisions of Executive Order No. 9112. "The Federal Reserve Bank of Dallas has advised the Board that early in May of this year, the Reserve Bank received an inquiry from Mr. Jacob with reference to obtaining such a loan and that he had been furnished with the text of the Executive Order and a copy of the Board's Regulation V and advised that an application for a guaranteed loan should be submitted through the applicant's bank of account. "Apparently Mr. Jacob took the matter up with the Val.eY National Bank, Tucson, Arizona, but that institution declined to participate in a loan to him on any basis. Subsequently, Mr. Jacob forwarded to the Federal Reserve Bank an ePPlication for a loan which he had apparently prepared and submitted to the Valley National Bank for execution. The application, however, had not been signed. In accordance with the advice contained in the telegram dated July 1, sent You by President Gilbert of the Federal Reserve Bank Of Dallas, the unsigned application referred to was forwarded to the Board here in Washington. "Upon receipt of your letter, the case was taken up inf°rmally with Major Richard C. Croft, Acting Chief, Advance PaYment and Loan Section, War Department, and we have been advised that the Tar Department can take no action in the Matter because, in effect, no application exists from any financial institution. "In the circumstances, I am sure you will appreciate that there is no basis for further action in the matter by this office." Approved unanimously. 1408 7/11/42 -2Telegram to Mr. Hays, Vice President of the Federal Reserve Bank of Cleveland, reading as follows: "Tour letter July 3. Automobile of 1941 model which has been used as a 'demonstrator' and is now sold for the first time is a 'used automobile' under Regulation W." Approved unanimously. Telepram to Mr. Hale, Secretary of the Federal Reserve Bank of San Francisco, reading as follows: "Your letter July 7 re credit sales of listed articles by a subcontractor to prime contractor on Government Projects. On basis of information contained in your letter it would appear that such credit would be exempt under section 8(f) Regulation W. If you have any Question as to aPPlicability of section 8(f) please wire your views for our further consideration." Approved unanimously. Letter to Mr. Hale, Vice President of the Federal Reserve Bank or sap. Francisco, reading as follows: "This refers to your letter of Tune 25 regarding a transfer of equity in a listed article under Regulation W. 'You refer to W-72 which says that a transfer of equity 18 permissible if the original purchaser remains liable on the contract land there is no change in the contract except the addition of the signature of the new purchaser'. You point out that the Department of Motor Vehicles in California will not recognize an assumption of a chattel mortgage, and that it is therefore necessary to execute a new chattel mortgage in such cases. However, it is your view that if all the other conditions of W-72 are met, including the condition that the original obligor remain liable on the debt, the Mere fact that a new chattel mortgage Is executed would not Prevent the transfer from being made. "The Board has previously stated that the mechanics by which the transfer of equity is accomplished are not impornt Provided the other conditions of W-72 are vet, and 6nerefore the opinion which you express is correct." I Approved unanimously. 1409 7/11/42 -3Thereupon the meeting adjourned.
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