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Minutes of actions taken by the Board of Governors of the Federal Reserve System on Monday, July 282 1952. PRESENT: Mr. Martin, Chairman Mr. Vardaman Mr. Mills Mr. Carpenter, Secretary Mr. Kenyon, Assistant Secretary Letter to Mr. McConnell, Vice President, Federal Reserve Bank of Minneapolis, reading as follows: "Reference is made to your letter of July 212 19522 enclosing a certified copy of a resolution adopted by the Board of Directors of the Sault Savings Bank, Sault Ste. Marie, Michigan, signifying its intention to withdraw from membership in the Federal Reserve System and requesting waiver of the six months' notice of such withdrawal. It is understood that the bank has applied to the Federal DePosit Insurance Corporation for continuance of insurance of its deposits. "In accordance with the bank's request the Board of Governors waives the requirement of six months' notice of Withdrawal. Accordingly, upon surrender of the Federal Reserve Bank stock issued to the Sault Savings Bank, Sault Ste, Marie, Michigan, you are authorized to cancel such Stock and make appropriate refund thereon. Under the provision of the Board's letter of February 19, 1937 OF.R.L0S. #3548) the bank may accomplish the termination of its membership at any time within four months of the date of this letter. If a longer period is required, the bank Should request an extension of time. Please advise when cancellation is effected and refund is made. "The certificate of membership issued to the bank should be obtained, if possible, and forwarded to the Board. The State banking authorities should be advised of the bank's proposed withdrawal from membership and the date such withdrawal becomes effective." Approved unanimously° 1323 7/28/52 -2Secretary, Letter to Mr. Strathy, Vice President and Federal Reserve Bank of Richmond, reading as follows: 11 17, 1952, "This is in reply to your letter of July . with enclosures, in which you present four sets of facts, each of which presents the question as to defined whether one or two extensions of credit, as s in in Regulation X, are involved. Your letter state part as follows: 'Case 1 involves a situation in which a nonregistrant builder sells new construction which is subject to a present indebtedness secured by a mortgage on the property. The purchaser agrees with the seller to assume the existing indebtedness and agrees to pay the builder-seller an additional amount evidenced by a note secured by a second is mortgage or deed of trust. The seller mortfirst the of r holde the by not released gage from the obligation which the purchaser has assumed. ** * ** ves a transaction in which a invol 2 'Case on nonregistrant builder sells new constructi part or all pay to ing agree with the purchaser of the purchase price at a future date, his , one obligation being evidenced by two notes trust of deed or age mortg secured by a first or and the other secured by a second mortgage deed of trust. * * ruction 'Case 3 involves a loan on new const from notes two ts by a nonregistrant who accep the borrower, the notes being of different age or Priority but secured by the same mortg * * deed of trust. * that 'Case 4 involves the same situation as of are notes two the t set forth in Case 3, excep *1 equal dignity. * * apparent "With particular reference to case 1, it seems indebtthe to ct subje rty that the purchaser takes the prope bringing edness which is secured by the first mortgage, thus 1324 7/28/52 —3— "this portion of the transaction within the express language of section 2(d) of Regulation X. Another extension of credit is of course involved in the additional loan as evidenced by the note secured by the second mortgage. "In each of the other three cases, two separate notes are given representing separate obligations of the purchaser which the lender could enforce individually. The Board concurs in your view that for the Purposes of Regulation X in each of these cases there are two separate extensions of credit." Approved unanimously. Letter to the Honorable James M. McInerney, Assistant Attorney General, Department of Justice, Washington, D.C., in l'egard to Robert E. Anderson, Rogers Loan Company, 140 No. Dearborn Street, Chicago, Illinois, prepared in accordance with the action taken at the meeting of the Board on June 10, 1952, reading as follows: "Pursuant to Section 21 of the Securities Exchange Act of 1934, made applicable to the Board of Governors by Section 604 of the Defense Production Act of 1950, the Board of Governors is transmitting tc.you herewith a report concerning acts and practices 1.1hIch appear to the Board to constitute violations of Its Regulation W by the above. This report is sent to You in order that you may, in your discretion, institute crlminal proceedings." Approved unanimously, together with similar letters to Mr. McInerney relating to the following additional registrants under Regulation 1325 7/28/52 Al Ross Jack Gordon Gordon Car Company 3301W. Belmont Avenue Rosemont Motors 1730 W. Ogden Avenue Chicago, Illinois Alex Berezin Lawndale Auto Brokers 38041W. Ogden Avenue Chicago, Illinois Anthony Stevens South Side Auto Sales, Inc. 5030 South Halsted Street Chicago, Illinois.
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