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Minutes of actions taken by the Board of Governors of the
/1ecier
Reserve System on Thursday, June 12, 1952.
PRESENT:
MT.
Mr.
Mr.
Mr.
Szymczak, Chairman pro tem.
Evans
Vardaman
Mills
Mr. Carpenter, Secretary
Mr. Eherman, Assistant Secretary
Mr. Kenyon, Assistant Secretary
Minutes of actions taken by the Board of Governors of the
approved unanimously.
.` Re serve System on June 11, 1952, were
Letter to Mr. Strathy, Vice President, Federal Reserve Bank of
Rickaoll
'
1, reading as follows:
u_. "There is enclosed a copy of a letter submitted by
Milton A. Barlow, Secretary-Treasurer of Twin Bridges,
Kansas
Ave*, an affiliate of Hot Shoppes, located at 4115
that
note
will
th 1,1e/ N. W., Washington 11, D. C. You
of
consisting
construction,
a
-Letter describes proposed
ard a
building, multi-unit residential buildings,
County,
ne service station, to be located in Arlington
71.
expresslon from
14rginia. Mr. Barlow desires to obtain an
sis to the effect of Regulation Y on the financing of the
letter.
°Ject, the facts of which he sets forth in hls
at that
and
us
timhad Previously discussed the project with
the appl e we informed him that the determination as to
Federal
the
cs-bility of Regulation 7 would be made by
Ral
se
reply to his
lpt!ve Bank of Richmond and that you would
- tier.
we have
eiv,_"10 assist you in your analysis of the
in
Barlow
problem'
Consideration to the facts presented by Mr.
directly
obtqined
1,4 letter and other information we have
value should
be tba him- It seems to us that the maximum loan
the propcomprise
et),ed Upon the kind of structures which
as
purposes,
an extension of credit for mixed
be
in
proper
thin riefl in section 6(h) or Regulation 7, would
maximum
the
that
;ease. On this basis, we have concluded
lot
" value of the seven multi-unit residential structures
g
712/52
('
-2-
Should be based upon the appraised value of these structures plus the value of the land area necessary for their
.onstruction and operation. In determining the maximum
1°an applicable to this portion of the property, the terms
of the multi-unit residential schedule should be employed.
"The maximum loan value of the two nonresidential structure e) ka)
t
main building and (b) gasoline service station,
t
snould be based upon an appraisal of the nonresidential strucures plus the land on which they are situated and such addi,
ional land as is necessary to their proper operation. In
°I-etermining the maximum loans, the terms of the nonresidential
e.hedule should be employed. The appraiser can, in our beef,readily allocate the necessary land, areas to each of
buildings to the e:Aerit that the entire seven-acre Plot
4,8_ Properly allocated to the respective buildings. He could
. 1811. apportion his appraisal among the various types ofstruc-unit
:"to be used. It is our understanding that the multi
8idential structures are so located that they could reasonably
,! sold separately, and this consideration is one of the bases
our conclusion that the loan can be deemed a credit for
ralxed purposes.
If you concur in our conclusions in respect to the proBed credit, we would appreciate it if you will reply to
"Is Barlow's letter, and we would be glad to have a copy of
Y°Ur' reply.fl
l
j
C
Approved unanimously.
Letter to Mr. Vergari, Counsel, Federal Reserve Bank of Philadelphia,
reaqi,
4IC aS
follows:
and
pro_,"Reference
nce '
is made to your letter of May 28, 19)2
PhilaInc.,
aelv louB correspondence regarding A.B.C. Credit,
Ph!-al Pennsylvania.
It appears from the information submitted, that A. B. C.
Itm
'
e e a number of loans for the purchase of listed articles in
.0,! s of the maximum permitted by the regulation, lendin,2;
e5
entire price of the article in many instances. The loan
fictitious
401.138-117 papers usually showed compliance by listing a
article.
in Payment and inflating the price of the
a report
.
)_ you b'ubmitted
or a With your letter of March14, 19r2
for
order
an
Preliminarr investigation and suggested that
4
iow
6/12/52
-3-
formal investigation be issued. Later it was thought
that some of the necessary evidence might be obtained by
customer interviews and the formal proceeding used for
the remainder. In view of the Board's telegram of May e,
1952 stating that no further investigations would be made,
You forwarded a report in partially completed form.
"In order to fix the guilt in cases of this kind, it
s necessary to determine who was responsible for the inIlation of the price. If the dealer or the customer was
.,
1 7sPonsible„ and the loan company is innocent, no case can
inade out. The eleven customers who were interviewon
'ndlcated that they had not had anything to do with this,
a.ria other information which you obtained indicated that
some cases it may have been the salesman and in some
stances the seller. However, you also Obtained infermatiLion which created a strong suspicion that the manager of
fIe loan company not only knew that the prices were inated in many cases but that he himself had been respon;Ile for inflating them. It was for this reason that you
'
es.red to complete the investigation.
the investigat, "However, for the reasons stated tovel
l)
lign vas not completed, and it is apuarent that there is
n°w suffic4ent evidence to support a crfminal case.
Ice°Paingly, the Board is closing its file."
'
8
I
j
Approved unanimously.
Letter to the Presidents of all Federal Reserve Banks, reading as
f011ows:
separate
co
"There have been forwarded to you today under
forms,
e ver the indicated nuMber of copies of the following
member
State
c°PY of each of which is attached, for use of
uanks and thelr affiliates in submitting reports as of the
r4r, call date:
utiber of
i
Form F. R. 105 (Call No. 124), Report of condition
of State member banks.
Form F. R. 105e (Revised May 1948), Publisher's coy
of report of condition of State member banks.
ILW441
112/52
-14.-
"Form F. R. 105e-1 (Revised May 1948), Publisher's copy
of report of condition of State member banks.
Form F. R. 220 (Revised March 1952), Report of affiliate
or holding company affiliate.
Form F. R. 220a (Revised March 1952), Publisher's copy
of report of affiliate or holding company affiliate.
"All of the forms are the same as those used on March 31,
1952 with the exception of a minor change in the wording of the
110/1narketable bond item in Schedule B of form F. R. 105.
"Continuing the program for collecting branch statistics,
i
it
. -13 requested that reports of deposits by counties be obtained
nratn those State member banks that have out-of-county branches.
fhis information will be used to tabulate data to be published
the pamphlet, Distribution of Bank Deposits la Counties and
.N vandard Metropolitan Areas, which was last published as of
)
!
_!cember 30, 1950. It is anticipated that branch statistics
be collected biennially hereafter at mid-year call dates.
letter
data were obtained in response to the Board's
Of December 15, 1950.
"These reports should be as cf the same date as the call
for
reports of condition and should include the following:
(1) Demand deposits of indi/idualc, partnerships,
and corporations. (Total should agree with
item 13 of the report of condition.)
(2) Time deposits of individuals, partnerships,
and corporations. (Total should correspond
to item 14 of the report of condition.)
(3) Other deposits. (Total should correspond to
Items 15, 16, 17, and 18 of the report of
condition.)
"The Banks should estimate data for counties In which they
:re branches that accept deposits but do not maintain separate
by
eords. Figures for each branch may be furnished, arranged
Uaties, in lieu of county totals.
should be
"The reports received from the respondent banks
:eked for reasonableness and to assure that the totals by
items on the
rellaties are in agreement with the corresponding
the Board.
D„P°rts of condition, and should then be forwarded to
banks
member
the
granted
be
'Zasonable extensions of time may
Prepare these reports.
b.b. "Similar reports are being collected from national banks
the Comptroller of the Currency and from nonn..mber banks by
Z
6/12/52
-5-
the Federal Deposit Insurance Corporation. The Bureau of the
Budget has approved collection of these data under Budget Bureau No.
5)-R182'"
Approved unanimously, with the
understanding that the letters wcwid
be mailed when the forms have been
printed.
Memorandum dated June 10, 1952 from Mr. Hboff, Assistant
recommending that there be published in addition to the
1.eriEa previously submitted for publication in the "rilw Department
''
"he Jute issue of the Federal Reserve Bulletin, Amendment No. 10
tel*Jaation 7, Real Estate Credit, together with an introductory
'eAatexerit in the form attached to the memorandum.
Approved unanimously.
@FedFRASER