Evening star., 1945-07-05
u. 5. Acts 10 Put Crimp
In Securities Initiation;
Realty Sales Curb SET

| BY the Associated Press.
The Government today began
an attack against imitation In
the field OF real estate and
securities.
Worried over speculation and ris-
ing prices. the l8-man Economic
Sterilization Board headed by Will
liam H. Davis, Is reported to have
approved unanimously three-point
program.
The first point was TO limit loans
for buying stock exchange secur-
tiles. The Federal Reserve Board
did that by raising the margin re-
quirements from so to rs per cent,
effective today.
Other Points More Difficult.
The other two points will be hard
er to put through. They are:
/. Limiting loans for buying real
estate. This needs an order from
the White House. The Stabiliza-
| ton Board has recommended that
President Truman give the Federal
Reserve Board authority to regulate
mortgages on farms and homes-the
way it now regulates stock market
loans. If the order is issued, the
Reserve Board probably will require
certain down payments in buying
farms and urban real estate.
2. Slapping heavier taxes on those
who buy real estate or stocks and
sell them quickly at a profit. This
needs an act of Congress. The pres
ent law says such profits are exempt
from income taxes II the property
is held six months or more. The
proposal is to extend this to three
years, thus discoursging specula-
tors who might want TO sell in q
shorter time.
Mr.. Davis, director OF economic
sterilization, has made no an
nouncement OF the program. Ap-
parently it is up TO higher au-
thorities TO carry the ball from here
either War Mobilization Director
Vinson or Mr.. Truman himself.
Margin Change Can BE Made.
Raising of the margin require
ments involved no red tape because
Congress long ago gave the Federal
Reserve Board this authority.
A margin OF rs per cent means
that any one buying stock. exchange
securities on credit must put up rs
per cent of the price himself and
can borrow only rs per cent from his
banker or broker
The Reserve Board acted after
consulting with Mr.. Davis. 1t is
represented on the Stabiliza tion
Board. along with several cabinet
members and other Federal officials,
/ plus representatives OF labor and
industry.
There are no direct Government
credit requirements for down pay
ments on real estate at present.
Might Set Down Payments.
Should the Federal Reserve Board
! receive authority to regulate real
estate credit. it probably would re-
ouire down payments on urban real
estate OF about 35 per cent and on
farms between 40 and so per cent.
The exact percentages have not
been determined, but those figures
have been discussed. Regulating
mortgages in this way is opposed
by real estate groups some of which
are particularly anxious to avoid
credit regulation on new construc-
tion. They say it might hold back
the building of homes after the war.
Mariner Eccles. chairman of the
Reserve Board, and others have been
insisting that the whole field of
capital assets-real estate and Sc
curities-is the weak link in the
chain of safeguards against runa-
way imitation that would be disss-
trous to the economy. They point
out that there are price ceilings on
groceries and other goods and on
rentals. but there are no price
! ceilings whatever on capital assets.