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Minutes of actions taken by the Board of Governors of the Federal Reserve System on Monday, March 10, 1952. PRESENT: Mr. Mr. Mr. Mr. Mr. Mr. Martin, Chairman Szymczak Evans Powell Mills Robertson Mr. Carpenter, Secretary Mr. Sherman, Assistant Secretary Mr. Kenyon, Assistant Secretary Minutes of actions taken by the Board of Governors of the ?sclera]. Reserve System on March 70 1952, were approved unanimously. Letter to Mr. Stetzelberger, Vice President, Federal Reserve }3anic of Cleveland, reading as follows: "In accordance with the request contained in 701ir letter of March 3, 1952, the Board approves the appointment of Leo G. Schneider as an assistant „ examiner for the Federal Reserve Bank of Cleveland. ?lease advise us of the date upon which the appoint— ment becomes effective and also as to salary rate." Approved unanimously. Letter to Mr. Thompson, Vice President, Federal Reserve Bank or rn -4-evelands reading as follows: 1O, 'This will acknowledge your letter of February 262 tc132, and attachments, to Mr. Guy E. Noyes, Director of cf,e Division of Selective Credit Regulation. Among the eitfrespondenee you forwarded is a photostatic letter de' t ad January 282 1952, from Mr. Alexander Mintz, Presi— nts Shaker Savings Association, Shaker Heights, Ohio, 4114 3/10/52 -2- "suggesting that it should be permissible to extend credit in excess of the maximum loan value on a new home for a period of six months through the use of a blanket mortgage to cover both the new home and an existing home which the prospective buyer wishes to sell. You have confirmed your correspondent's first statement which he phrases in question form that such an arrangement is not permitted by Regulation X in Your letter of February 5 except in respect to the exemption afforded by section 5(n). Your corresPondent's second question is concerned with the problem ot 'whether the regulation should not be amended to cover persons moving 'within a municipality or county' instead of 'from one municipality orcounty to another! as provided in section 5(n). , "In issuing Amendment No. 7 which added section 5k11)to Regulation X it was not the Board's intention t,hat the secondary borrowing prohibitions of Regulaaon X should be generally relaxed. The purpose of he amendment as expressed in the press release of November 15, 1951, was to 'assist persons moving from °Ile part of the country to another' in the purchase of a new home when there is a delay in obtaining the Proceeds from the sale of their old home. It had .;3een strongly represented to the Board that the regu.;:ation was unduly restrictive in the case of such emovals inasmuch as many persons during the war Perlod were required to move from one part of the ...°11ntrY to another. The amendment, therefore, was or the purpose of giving recognition to an unnecespar4Y burdensome hardship by providing a means for ; 410Ilitating such transfers. The employment of the .iteria !municipality or county' was for the purpose : t Providing a readily understood geographical limitac'cln, since the phrase 'moving from one part of the n21211tr7 to another' had to be defined in concrete terms. 51Jytously, any more restrictive criteria such as !from ,6'ts to state! would not have served the purpose since .stances of too great an extent would have been involved such a standard. l j 405 3/10/52 -3- "In respect to persons moving short distances within the boundaries of municipalities or counties the same troublesome considerations in respect to transfers do not apply and such persons generally can make suitable arrangements without suffering the inconvenience and manifest difficulties of persons who are required to go long distances. The Board did not think it desirable to relax the secondary borrowing Prohibitions in respect to these latter transactions since there would be very little limitation on secondary credit if that were done, and the administration and e nforcement of the secondary borrowing prohibitions would have been made extraordinarily difficult." Approved unanimously.
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