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286 BOARD OF GOVERNORS OF" THE FEDERAL RESERVE SYSTEM WASHINGTON S-259 ADDREBB OF"F"ICIAL CORRESPONDENCE TO THE BOARD April 18, 1941 Dear Sir: • 4 t • For your information there is attached a copy of a letter from Mr. William s. Knudsen, Director General of the Office of Production Management, to Governor Draper, and of the Board's reply thereto, with respect to reimbursement of the Federal Reserve Banks for expenses incurred in the offices of the District Coordinators subsequent to March 1, 1941 • It is suggested that requests for reimbursement, begin~ ning with the month of March 1941, be submitted to Defense Contract Service of the Office of Production Management on Standard Form 1034, which it is understood is used in obtaining reimbursement for fiscal agency expenses. All expenses cormected with the offices of the District Coordinators should be reported in fiscal agency unit 17g on page 22-B of Form E. This unit should be headed "National Defense District Coordinator" and the title of the National Defense.frmction on page 10 should be changed to "National Defense - Defense Contract Officer" • Very truly yours, • Enclosures 2 • Chester Morrill, Secretary • (Memo enelosed with Mr. Knudsen's letter sent to Presidents only) . TO THE PRESIDENTS OF ALL FEDERAL RESERVE BANKS • 3-259-a · OFFICE OF PRODYCTION MANAGEMENT Office of the Directqr General Washington, D.t C. April 16, 1941 Governor Ernest G. Draper Board of Governors of the Federal Reserve System Washington, D. C. Dear Governor Draper: • • • • :. We have cleared with the Bureau of the Budget the matter of establishment and maintenance, through utili~ation of the services of the Federal Reserve System, of local field offices of the Defense Contract Service Section of the Office of Production Management, and the ailocat.ion of funds for and method of reimbursement for such services, along the lines agreed to between this office and the Board of Governors effective March 1, 1941. Accordingly, the purpose of this letter is to confirm that agreement and to make formal request to the Board of Governors of the Federal Reserve System that it render such service to and on behalf of the Office of Production Management, subject to reimbursement within the limits hereinafter noted. As to the nature of the service requested, I enclose a cop,y of a memorandum setting forth the projected organization and functions of the Defense Contract Service Section with which you are acquainted., In this connection, we are concerned only with the organization and functions of the field offices of the Section in the various Federal Reserve Banks and Branches, which will operate subject to the direction of the District Coordinators who are appointed and paid directly by the Office of Production Management. This does not refer to the service which the Defense Contract Officers of the Banks are now rendering and will continue to render on behalf of the Defense Contract Service Section, subject to the immediate direction of the presidents of the Banks and of the Board of Governors. The service which you have been asked to undertake comprehends the establishment, maintenance and payment of all expenses, including salaries of staff, of the offices of the District Coordinators, and appropriate per diem and travelling expenses, but not salaries, of the District Coordinators. Per diem in lieu of subsistence for persons eerving on a dollar-a-1ear basis or without compensation, will not exceed $10 per day and for other persons w11l not exceed $5 per day, while away from their headquarters on official business. The offices of the District Coordinators will notify S-259-a -2- the Office of Production Management when it is proposed to utiliz~ the services of persons on a dollar-a-year or without compensation, basis. • Our understanding with the Bureau of the Budget is that a lump sum sufficient for the purpose may be allocated from funds available to the Office of Production Management to reimburse the Federal Reserve Banks for the expenses of the service they render in this matter from March 1, 1941 to June 30, 1941. Based on our tentative estimates, it is believed that $200,000 will suffice for this purpose and, upon notification from you that this letter clearly sets forth our understanding, this amount will be earmarked therefor. It is understood that the Banks will not be reimbursed for the use of space, if available, in the Federal Reserve Bank and Branch buildings, nor for the use of Federal Reserve office equipment loaned temporarily to the offices of Coordinators, but that they will be reimbursed for rent paid for outside office space and for office equipment purchased for the account of the Office of Production Management, for the use of such offices. Reimbursement under this agreement with respect to rent after June .30, 1941, for outside office space will be subject to review and approval by the Office of Production Management. The procedure for reimbursement will follow the usual practice, and reimbursement will be made monthly on Standard Form 1034 vouchers. It is further understood that this whole arrangement withyou will be subject to review before July 1, 1941, in the event that changes may be deemed necessary in view of organizational and budgetary considerations affecting the Office of Production Management. Would you be good enough to transmit this letter to the Board of Governors? We would appreciate confirmation that this letter clearly sets forth our understanding and that the Federal Reserve Banks are prepared to continue the service requested subject to reimbursement as above outlined, • Very truly yours, (Signed) w. s. Knudsen William S. Knudsen • Enclosure • 288 289 S-259-b April 18, 1941 Mr. William S. Knudsen, Director General, Office of Production Management, Social Security Building, Washington, D. C. Dear Mr. Knudsen: Your letter of April 16, 1941 to Governor Draper with respect to the establishment ru1d maintenance of local field offices of the Defense Contract Service of the Office of Production Management at the Federal Reserve Banks has . been presented to the Board of Governors. The Board has authorized me to advise you that the Federal Ref>erve Banks are prepared to continue the services requested, subject to reimbursement as outlined in your letter, and it wishes to take this opportunit,y of assuring you that it is anxious " to be of all possible assistance in this important work. Very truly yours, • '• • (Signed) Chester Morrill Chester Morrill, Secr\:ltary.
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