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Minutes of actions taken by the Board of Governors of the Federal Reserve System on Tuesday, April 10, 1951. The Board met in the Board Room at 10:35 a.m. PRESENT: Mr. Mr. Mr. Mr. Mr. Martin, Chairman Szymczak Evans Norton Powell Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Carpenter, Secretary Sherman, Assistant Secretary Murff, Assistant Secretary Kenyon, Assistant Secretary Thurston, Assistant to the Board Riefler, Assistant to the Chairman Thomas, Economic Adviser to the Board Leonard, Director, Division of Bank Operations Mr. Vest, General Counsel Mr. Young, Director, Division of Research and Statistics Mr. Hilkert, Acting Director, Division of Personnel Administration Mr. Allen, Assistant Director, Division of Personnel Administration Mr. Youngdahl, Chief, Government Finance Section, Division of Research and Statistics Mr. Leach, Economist, Division of Research and Statistics Mr. Evans stated that Mr. Townsend, Solicitor, was en route to s an Francisco, California, to confer with counsel for respondent -"Ltng the correction of testimony in the Clayton Act proceeding a441113t Transamerica Corporation, and recommended that while in San ori Mr. Townsend be allowed reimbursement for travel expenses the same basis as on previous trips to the Coast in connection with r" f' et)0 4/10/51 -2- this proceeding, namely, per diem in lieu of subsistence at the rate of $9 and other allowances authorized by the Board's official travel regulations, and reimbursement for the rental of a small modest furapartment or suitable hotel accommodations as shown by receipted bilis. This recommendation was approved unanimously. At this point Mr. Vardaman joined the meeting. Mr. Thomas presented a report on developments in the Government se • . curities market, which was followed by a general discussion. Mr. Carpenter stated that according to tentative plans the ?I ' Elsidents' Conference would meet in Washington, D. C. during the latter ' t of the week of May 14, 1951, and that meetings of the Federal Open 1541 ket Committee and the Board of Trustees of the Retirement System of Federal Reserve Banks also would be held during that period. No Qbieetion was raised to the meetings at that time. In response to an inquiry by Mr. Vardaman as to the status of the 04 "udY being made by the Personnel Committee of the organization and Pell. '4. for the investment of funds of the Retirement System of the Nte_ 'al Reserve Banks, Mr. Norton said that the Committee would complete etudY and present recommendations to the Board before May 16. At this point Messrs. Youngdahl and Leach withdrew. Mr. Norton stated that in his opinion the rate of housing starts g the first three months of this year and related circumstances in 4/10/51 —3— the housing field were such as to indicate that housing starts during 1951 would exceed very substantially the target of 800-850 thousand units for the year 1951 which was set at the time Regulation X) Real Estate Credit) was first adopted. He also said he had requested the staff to prepare detailed information on the situation for presentation to the Board at a meeting next Tuesday. He added that Mr. Foley, Housing and Home Finance Administrator, did not appear to share these views and suggested, therefore, that after receipt by the Board of the staff rePort, it might be desirable to invite Mr. Foley to meet with the B13:.rd for a general discussion of the situation. This suggestion, as well as a suggestion by Mr. Evans that Mr. Wilson, Director of the Office of Defense Mobilization, be invited to meet with the Board to review developments relative to the Boardfs selective credit regulatiallm and the voluntary credit restraint program, was discussed but no conclusion was reached. Mr. Vardaman reiterated the suggestion which he had made at the meeting on April 3, 1951, that in order to afford the members of the Board a complete picture of developments in the credit field there 44111d be presented at the meeting of the Board each Tuesday state441ts with respect to consumer credit, real estate credit, stock 17111*et credit, the guaranteed loan program, and the voluntary credit 1111raint program. After discussion, Chairman Martin suggested that 11*Y- brief reports be made at the meeting of the Board each Tuesday i-my C7, 0 • 4/1o/s1 with the understanding that if there were no significant developments to be reported with respect to the various matters a statement to that effect would suffice. This suggestion was approved unanimously. Mr. Szymczak commented on recent developments in the stock ziarket, and said that he and the staff were studying the situation Closely with representatives of the Securities and Exchange Commission to determine whether it might be desirable to recommend the amendment of the withdrawal and substitution privilege or any other action, and that, if so, suitable recommendations would be presented to the Board. Before this meeting there were distributed to the members of the 441'd copies of a memorandum from the Personnel Committee dated April 9, 1951j stating that officerst salaries at the Federal Reserve Banks of 14141 York and Chicago for the year beginning April 1, 1951, and at the ecteral Reserve Bank of Boston for the year beginning May 1, 1951, were ' 44idered at a meeting of the Personnel Committee on April 6, and that Vr "as the recommendation of the Committee that proposed salaries as .11.bmitted by the Reserve Banks be approved, except in the cases of those mldents and First Vice Presidents for whom increases were recommended the Reserve Banks and others specifically commented upon in attached '911da from the Division of Personnel Administration. The memorandum the Division of Personnel Administration relating to the Federal 'H!) . fk. f) 4/3.0/51. Ilsserve Bank of Boston called attention to the fact that the First Vice President of that Bank, Alfred C. Neal, was appointed to that Position effective March 1, 1951, that at the time of his appointment the directors of the Bank recommended that the maximum salary for the First Vice President of that Bank be raised from $18,000 to 20,000 per annum and that Mr. Neal be paid the latter salary, but that for reasons then discussed, the Board of Governors approved a salary of 16,000 with the understanding that it would consider a further increase at an approPilate time. The memorandum also stated that if recommended salaries 811h/flitted by the Boston Dank for two of its Vice Presidents were ap131"oved they would be higher than that of Mr. Neal, and that in the interest of good salary administration it was the judgment of the Diviion of Personnel Administration that Mr. Nealls salary should be fixed at $18,000. Mr. Norton stated that the Personnel Committee, having been "sed by Counsel for the Board that there appeared to be no objection Iltder the current wage stabilization regulations to increasing Mr. a salary from $16,000 to $18,000 per annum, recommended that the latte r salary be approved for the reasons set forth in the memorandum Nm the Division of Personnel Administration. In a discussion of the proposed salaries it was stated that 41Ahn-ugh neither the Personnel Committee nor the Division of Personnel inistration had undertaken to appraise the ability of the individual 7:30 4/10/51 -6- officers at the Federal Reserve Banks in question, the duties performed by these officers had been reviewed to insure that the proposed salaries were not out of line with those paid to officers carrying similar resPonsibilities at other Reserve Banks. Mr. Vardaman said that while he had no doubt as to the efficiency of the officers concerned he would vote against the recommendation of the Personnel Committee because he felt that officers' salaries at the Reserve Banks should not be higher than those paid in the field offices or Government agencies operating under appropriated funds and because he felt that the level of Reserve Bank Officers' salaries could be re4, 1ed without any serious impairment of the quality of services rendered. suggested that a special meeting of the Board be called to review the Whole question of Reserve Bank salaries. After discussion it was under- stood that a meeting for this purpose would be held at some appropriate time. Thereupon, upon motion by Mr. Norton, letters as follows were approved, Mr. Vardaman voting "no"; Letter to Mr. Hodgkinson, Chairman, Federal Reserve Bank c't Boston: "The Board of Governors approves the payment of salary to Mr. Joseph A. Erickson as President at the rate of $25,000 Per annum and to Mr. Alfred C. Neal as First Vice President at the rate of $18,000 per annum for the period May 1, 1951, through April 30, 1952, provided these rates are fixed by the board of directors. The Board's Counsel is of the opinion 76i —7_ 4/10/51 "that in the light of recent interpretations of regulations issued by the Wage Stabilization Board it is permissible to increase Mr. Neal's salary to $18,000 at this time. "The Board of Governors also approves the payment of salary to the following officers at the rates indicated which, according to Mr. Erickson's letter of March 1, 1951, are the rates which were fixed by the directors, for the period May 1, 1951, through April 30, 1952, except where specifically indicated: Annual Salary Name Title $13,000* John J. Fogg Vice President 14,000 Harvey Cashier Robert B. Vice President & 16,000** Ellis G. Hult Vice President 15,000 Earle O. Latham Vice President 17,000 Carl B. Pitman Vice President Vice President se General Counsel 17,000 Oscar A. Schlaikjer 13,000 Roy- F. Van Amringe Vice President 11,500 Ansgar R. Berge Secretary & Assistant Counsel 8,500 David L. Strong Auditor 10,000 Edward A. Davis, Jr. Assistant Vice President 9,500 Dana D. Sawyer Assistant Vice President 9,500 Louis A. Zehner Assistant Vice President 8,250 Assistant Cashier Elliot S. Boardman 9,000 Frank C. Gilbody Assistant Cashier 8,500 Edward W. O'Neill Assistant Cashier 8,250 John J. Rock Assistant Cashier *For the period May 1, 1951, through March 31, 1952 **For the period May 1, 1951, through November 30, 1951 "It is understood that Vice Presidents Fogg and Hult are to retire before April 30, 1952, and the payment of their salaries is accordingly approved only until the respective dates of retirement." Letter to Mr. Stevens, Chairman, Federal Reserve Bank of Reef York: "The Board of Governors approves the payment of salary to the following officers at the rates indicated for the Period April 1, 1951, through March 31, 1952. The rates approved by the Board are the same as those which, according to Your letter of February 21 1951, have been fixed by the board Of directors. V.12 4/1o/51 "Name Harold A. Bilby Herbert H. Kimball Arthur Phelan Harold V. Roelse William F. Treiber Valentine Willis Reginald B. Wiltse Todd G. Tiebout Rufus J. Trimble James J. Carroll Howard D. Crosse Felix T. Davis Norman P. Davis Marcus A. Harris Silas A. Miller Horace L. Sanford Otto W. TenEyck Charles N. Van Houten John H. Wurts Wm, F. Abrahams Harry M. Boyd Wesley W. Burt Paul R. Fitchen William A. Heinl Peter P. Lang Angus A. MacInnes, Jr. Spencer S. Marsh, Jr. Michael J. McLaughlin O. Ernest Moore Herbert A. Muether Arthur H. Noa Gustav Osterhus Franklin E. Peterson Walter H. Rozell, Jr. Ralph W. Scheffer A. Chester Walton Walter C. Warner Roy E. Wendell Harold M. Wessell John J. Clarke Harding Cowan Edward G. Guy Curtis R. Bowman -8Title Annual Salary Vice President 0.17,500 Vice President 19,000 Vice President 22,500 Vice President 20,000 Vice President 20,000 Vice President 21,000 Vice President 17,500 Assistant General Counsel 19,000 Assistant General Counsel 16,000 Assistant Vice President 14,000 Assistant Vice President 12,000 Assistant Vice President 16,000 Assistant Vice President 14,500 Assistant Vice President 14,000 Assistant Vice President 17,000 Assistant Vice President 16,500 Assistant Vice President 13,000 13,000 Assistant Vice President Assistant Vice President 17,000 Manager 10,000 Manager 10,000 Manager 11,500 Manager 11,500 Manager 10,000 Manager 12,500 Manager 10,000 Manager 11,500 Manager 9,500 Manager 11,500 Manager 11,000 Manager 9,500 Manager 10,500 Manager 10,500 Manager 12,500 Manager 11,000 Manager 8,500 Manager 11,000 Manager 11,500 Manager 11,000 Secretary and Assistant Counsel 14,000 Assistant Counsel 11,000 Assistant Counsel and Assistant Secretary 10,000 General Auditor 14,000 -9— "Name Insley B. Donald J. George J. Gerald H. M. Monroe Smith Cameron Doll Greene Myers Title Buffalo Branch General Manager Acting Assistant Manager Cashier Assistant Cashier Assistant Cashier Annual Salary $162500 12,000 10,000 7,000 7,700 "It is understood that Assistant Vice President TenEyck will attain retirement age on May 112 19512 and will retire at the end of that month. Accordingly, the payment of his salary is approved only until that date. "The proposed salaries for Messrs. Knoke, Logan, and Rouse are either equal to or above salaries presently being paid to Presidents of ten of the Federal Reserve Banks. In the interest of maintaining a proper salary relationship, not only within the Bank but also with other Federal Reserve Banks, the Board feels the salaries which were recommended should not be approved at this time. In taking this action the Board did not question the individual performance of any of the three men involved and, therefore, this action Should not be a reflection upon their capabilities or performance. "The Board of Governors does approve the payment of salary to Mr. Knoke at the rate of $23,500 per annum; to Mr. Logan at the rate of $251000 per annum; and to Mr. Rouse at the rate of $27,500 per annum for the period April 12 1951, through March 311 1952, provided these rates are fixed by the directors. "The Board of Governors also approves the payment of salary to Mr. John H. Williams as Economic Adviser for the Period April 12 19512 through March 312 1952, at the rate Of $221000 per annum when he is engaged in the work of the Bank on a full-time basis; and when he is not engaged in the work of the Bank on a f1111 -time basis, at the rate of $84.62 Per day for each day on which he spends any time, on behalf of the Bank, at the Bank or at a Federal Reserve or related meeting elsewhere, plus his reasonable travel, lodging and subsistence expenses." Letter to Mr. Lunding, Chairman, Federal Reserve Bank of atlicago: "The Board of Governors approves the paymen of salary to Mr. C. S. Young as President at the rate of $35,000 per annum and to Mr. E. C. Harris as First Vice President at the rate of $25,000 per annum for the period April 1, 1951, 964 4/10/51 -10- "through March 31, 1952, provided these rates are fixed by your board of directors. "The Board also approves the payment of salary to the following officers at the rates indicated for the period April 1, 1951, through March 31, 1952, which, according to Mr. Dawes's letters of January 12, 1951, and February 21 19511 are the rates which were fixed by the board of directors: Name Title Annual Salary Neil B. Dawes Vice President 8c Secretary $161000 Allan M. Black Vice President 14,500 W. R. Diercks Vice President 15,500 W. A. Hopkins Vice President 12,000 A. L. Olson Vice President 17,500 Iff. a. Turner Vice President 15,000 H. J. Chalfont Vice President (Detroit Branch) 141000 L. H. Jones Cashier 11,000 M. A. Lies Assistant Vice President 12,000 L. G. Meyer Assistant Vice President 12/000 F. L. Purrington Assistant Vice President 10,500 C. T. Laibly Assistant Cashier 10,000 H. J. Newman Assistant Cashier 10,000 C. P. VanZante Chief Examiner 10,000 Paul C. Hodge General Counsel 14,000 John J. Endres Auditor 15,000 "The Board does not approve the increased salaries recommended for Vice President Sihler and Assistant Vice President Lindsten because it feels there are certain salary relationships that should be maintained not only within a given Federal Reserve Bank but also among Reserve Banks. The Board does recognize the capabilities and the fine performance records of Messrs. Sihler and Lindsten. In its judgment, however, the salary proposed for Mr. Sihler would create a number of inequitable situations under present salary scales which should be avoided. In the case of Mr. Lindsten, it is the Board's °Pinion that the proposed salary for his present assignments nd responsibilities is disproportionately high in consideran of salaries paid for positions of like responsibility 34 the other Federal Reserve Banks. "The Board of Governors does approve the payment of salary Mr. Sihler at the rate of $18,000 per annum and to Mr. "ndsten at the rate of $11,500 per annum for the period 4Pri1 1, 1951, through March 31, 1952, provided these rates ar0 fixed by the directors." 4/2_0/51 -11At this point Messrs. Noyes, Director, Division of Selective Credit Regulation, and Horbett, Assistant Director, Division of Bank CPerations, joined the meeting. Reference was made to a memorandum from Mr. Young dated April 9, 1951, copies of which were distributed to the members of the Board before the meeting, providing background material for consideration of the question of raising reserve requirements on demand deposits at central reserve city banks in New York and Chicago by the remaining IWO Percentage points permissible under existing authorit y. The memoset forth the arguments for and against such action. Mr. Young stated that although the memorandum contained no recommendation he felt that the weight of the arguments was against 4NV increase in reserve requirements of central reserve city banks 4.t this time. There ensued a discussion during which Mr. Powell stated that the Past two weeks' figures on loans of selected New York and Chicago bellks, broken dawn by purpose classification, indicated that although 1041, for defense purposes were continuing to increase, loans for °4101, Purposes had fallen off, so that on balance there was no increase 111 1 — Volume. He expressed the opinion that any action to increase requirements of central reserve city banks to the maximum per- ktted by statute should have been taken during the past winter when there Ifes a heavy demand for loans, that loans did not appear to be r1.11(7 * 4/10/51 -12- expanding at present although some seasonal increase might be expected, and that since the proposed action had not been taken earlier when loans were expanding, it should be postponed pending a further increase loan activity. Other members of the Board present expressed similar views although there was some sentiment that in view of current economic conditions there might be justification for increasing reserve requirements to the maximum to indicate that the Board was using all the powers available to it to resist inflationary pressures. Chairman Martin then suggested that the question be considered allain at the meeting on Tuesday, April 17. This suggestion was approved unanimously. Mr. Vest stated that the attention of the staff had been called t° the desirability of relaxing the terms of Regulation X, Real Estate Credit, in cases where a borrower wished to finance the purchase or e°nstruction of a structure similar to one which had been taken from tht. --ough eminent domain or condemnation proceedings, for example, areas where military installations were in process. Following a discussion, upon motion by Mr. Szymczak, unanimous approval was given to Amendment No. 4 to Regulation X, Real Estate Credit, as follows, to become effective April 16, 1951, if Mr. Foley, Administrator of the Housing and Home Finance Agency, concurred in the amendment and the proposed effective date: 71;7 4/10/51 -13- "In subsection (e) of section 5, strike out the period at the end of the section and add the following: 'or solely to finance the purchase or construction of a residence, multi-unit residence or nonresidential structure to be used in substitution for a similar structure of which the borrower has been deprived through or by reason of eminent domain or condemnation proceedings.'" Secretary's Note: A letter was received from Mr. Foley, dated April 11, 1951, stating that he concurred in the amendment and the effective date. Unanimous approval was also given to the following telegram to the Presidents of all Federal Reserve Banks and the Managing Officers of all Federal Reserve Bank Branches: "This wire to all Federal Reserve Banks is also being sent to all Federal Reserve Bank Branches for their information. Effective April 16, 1951, the Board has adopted amendment No. 4 to Regulation X. The press statement which the Board is issuing for release in the morning papers of Monday, April 16, 1951, will be telegraphed to you as soon as Possible. The amendment follows: ........The Board has been informed of certain cases where persons have been deprived of their properties through condemnation proceedings where the equity of the owner is less than the downpayment needed to acquire a similar property under Regulation X. To avoid hardship in such instances, and 3-s0 generally to allow persons deprived of their propertles through condemnation to obtain a similar replacement thereof, the amendment permits the financing on more liberal terms than those provided by Regulation X of properties acquired in lieu of those taken through condemnation Proceedings, eNe CD 1 1W/ . 4/10/51 -14— "Since the amendment is of limited general interest, and in view of the expectation that another amendment may be issued shortly with respect to leasing arrangements, there will be no objection to deferring mailing of amendment No. 4 until it can be combined with another communication being sent to registrants." Unanimous approval was also given to the following statement for publication in the Federal Register: "(a) The above amendment is issued by the Board of Governors of the Federal Reserve System with the concurrence of the Housing and Home Finance Administrator, under authority of the 'Defense Production Act of 195010 approved September 82 1950, and Executive Order No. 10161, dated September 9, 1950. "The purpose of this amendment is to exempt from the regulation extensions of credit to finance the purchase or construction of a structure to be used in substitution for a similar structure of which the borrower has been deprived through or by reason of eminent domain or condemnation proceedings. "(b) Section 709 of the Defense Production Act of 1950 provides that the functions exercised under such Act shall be excluded from the operations of the Administrative Procedure Act (60 Stat. 237) except as to the requirements of section 3 thereof. "Special circumstances have rendered impracticable consultation with industry representatives, including trade association representatives, in the formulation of the above amendments; and, therefore, as authorized by the aforesaid section 709, the amendments have been issued Without such consultation." There was presented a memorandum dated April 102 1951, from Chase, Assistant Solicitor, stating that the Federal Reserve Bank 4/10/51 -15- of St. Louis had reported that Sam Kay, doing business as Arkansas Rome Building and Repairing, Little Rock, Arkansas, had violated Regulation W, Consumer Credit, by failing to register, by failing to obtain the required down payment, and by not maintaining records Which correctly reflected the transactions; and recommending that in accordance with the suggestion of the Reserve Bank the Board authorize the issuance of an order for investigation as follows: "UNITED STATES OF AMERICA BEFORE THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM At a meeting of the Board of Governors of the Federal Reserve System held at its offices in the City of Washington, D. C., on the 10th day of April, A. D., 1951. In the Matter of SAM KAY (doing business as Arkansas }!orie Building and Repairing) ORDER DIRECTING INVESTIGATION AND DESIGNATING OFFICERS TO TAKE TESTIMONY , Members of the staff of the Federal Reserve Bank of St. ,c)1.118 have reported information to that Bank, which that Bank "as transmitted to the Board, which tends to show that: Arkansas Home Building and Repairing has made instalment sales of home improvements subject to Regulation W: 1. Without filing a registration statement as required by Regulation Ai; 2. Without obtaining the down payment required by Regulation W; 3. Without maintaining and preserving such books of account, records and other papers as are relevant to establishing whether or not credit extended by it is in conformity with the requirements of said Regulation. 770 4/10/51 -16- II "The Board having considered the aforesaid report by members of the staff of the Federal Reserve Bank of St. Louis, and for the purpose of (1) determining whether Arkansas Home Building and Repairing has violated the provisions of Regulation K and (2) aiding in the enforcement of said Regulation, deems it necessary and appropriate that an investigation be made to determine whether Arkansas Home Building and Repairing has engaged in the acts and practices set forth in paragraph I hereof, or any acts and practices of similar purport or object. III "IT IS ORDERED, pursuant to Section 604 of the Defense Production Act of 1950 that an investigation be made to determine the matters set forth in paragraph II hereof. "IT IS FURTHER ORDERED, pursuant to the provisions of Section 604 of the Defense Production Act of 1950 that for the purpose of such investigation G. Howland Chase and Harold B. Kline, and each of them, is hereby designated an officer of the Board and empowered to administer oaths and affirmations, subpoena witnesses, compel their attendance, take evidence, and require the production of any books, papers, correspondence, memoranda, or other records deemed relevant or material to the inquiry, and to perform all other duties In connection therewith as authorized by law. "By the Board. (signed) S. R. Carpenter, Secretary." Approved unanimously. At this point all of the members of the staff with the exception (1114essrs. Carpenter, Sherman, Murff, and Kenyon withdrew, and the action 84t 111- with respect to each of the matters hereinafter referred to was talce„ ki,57- the Board: Minutes of actions taken by the Board of Governors of the ?Ike Reserve System on April 9, 1951, were approved unanimously. 11/10/51 -17Memorandum dated April 6, 1951, from Mr. Betheal Director Of the Division of Administrative Services, recommending an increase in the basic salary of Wayne A. Pollard, Assistant Chief, Fiscal Section, in that Division, from $5,800 to $6,000 per annum, effective APril 151 1951. Approved unanimously. Memorandum dated April 4, 1951, from Mr. Sloan, Assistant Ibirector of the Division of Examinations, recommending that, effective 48 of the date upon which he enters upon the performance of his duties after having passed the usual physical examination and subject to the ectPletion of a satisfactory employment investigation, Theodore L. Iltenburg be appointed as an Assistant Federal Reserve Examiner, on 4temP0rary indefinite basis, with salary at the rate of $4,600 per atir111413 and with official headquarters at Baltimore, Maryland. By unanimous vote, Mr. Theodore L. Ronnenburg was appointed an Examiner to examine Federal Reserve Banks, member banks of the Federal Reserve System, and corporations operating under the provisions of Sections 25 and 25 (a) of the Federal Reserve Act, for all purposes of the Federal Reserve Act and of all other Acts of Congress pertaining to examinations made by, for, or under the direction of the Board of Governors of the Federal Reserve System, and was designated as an Assistant Federal Reserve Examiner, with official headquarters at Baltimore, Maryland, and with basic salary at the rate of $4,600 per annum, all effective as of the date -18- 11/10/51 upon which he enters upon the performance of his duties after having passed the usual physical examination and subject to the completion of a satisfactory employment investigation. Memorandum dated April 4, 1951, from Mr. Sloan, Assistant Director of the Division of Examinations, recommending that, effective as of the date upon which he enters upon the performance of his duties after having passed the usual physical examination and subject to the completion of a satisfactory employment investigation, Robert 11. Russell be appointed as an Assistant Federal Reserve Examiner, on a temporary indefinite basis, with salary at the rate of atrium, and with official headquarters at Dallas, Texas. By unanimous vote, Mr. Robert R. Russell was appointed an Examiner to examine Federal Reserve Banks, member banks of the Federal Reserve System, and corporations operating under the provisions of Sections 25 and 25 (a) of the Federal Reserve Act, for all purposes of the Federal Reserve Act and of all other Acts of Congress pertaining to examinations made by, for, or under the direction of the Board of Governors of the Federal Reserve System, and was designated as an Assistant Federal Reserve Examiner, with official headquarters at Dallas, Texas, and with basic salary at the rate of $3,450 per annum, all effective as of the date upon which he enters upon the performance of his duties after having passed the usual physical examination and subject to the completion of a satisfactory employment investigation. $3,450 per 773 -19Letter to Mr. Latham, Vice President of the Federal Reserve Bank of Boston, reading as follows: "Reference is made to your letter of March 26, 1951, submitting the request of the Norfolk County Trust Company, Brookline, Massachusetts, for permission to establish branches in Medfield, Westwood, Sharon and East Milton, all in Norfolk County, Massachusetts. "In view of your recommendation, the Board of Governors approves the establishment and operation of a branch in each of the towns of Medfield, Westwood and Sharon, Massachusetts, and a branch in East Milton, Massachusetts, by the Norfolk County Trust Company, Brookline, Massachusetts, provided the prior approval of the appropriate State authorities is obtained and each of the four branches is established within six months of the date of this letter. "It is understood that Counsel for the Reserve Bank Will review and satisfy himself as to the legality of all steps taken to establish each of the branches." Approved unanimously. Letter to Mr. DeMoss, Vice President of the Federal Reserve 13411k of Dallas, reading as follows: "Reference is made to your letter of March 28, 1951, submitting the request of the Security State Bank and Trust Company of Beaumont, Beaumont, Texas, for approval under Section 24A of the Federal Reserve Act of an additional investment in bank premises of approximately $68,000, which will increase the carrying value to an. amount not to exceed $375,000. "It is understood that the additional expenditure is necessary for completion of a store space on the myund floor of the new building, which is to be leased. In view of your recommendation, the Board approves the investment as proposed." Approved unanimously. Letter to the Presidents of all Federal Reserve Banks reading rcalows: 4/10/51 -20- "At a meeting held on April 4 with representatives of the guaranteeing agencies regarding the administration of the V-loan program, one of the principal topics discussed was the length of time required to process applications for guarantees which has been a matter of concern to the Board, the Federal Reserve Banks and the Department of Defense. "It was suggested that it would be a great help to the Technical Bureaus and Services of the Armed Forces in determining the essentiality of defense contracts and subcontracts if the Federal Reserve Banks would impress upon lending institutions the importance of correctly listing the numbers of all prime contracts to be financed. The purchase order numbers of all subcontracts, the name of the prime contractors and the prime contract numbers under which the borrower is a subcontractor should also be listed. Also, it was suggested that it would be very helpful to indicate the names of the contracting officers signing the contracts on behalf of the Government and their stations. "At the present time when an application for an Air Force guarantee is received by a Federal Reserve Bank, two copies of the application are forwarded immediately to the Board. We send both copies to Air Force Headquarters in the Pentagon Building where one copy is retained and the second copy forwarded to Headquarters, Air Material Command, Wright-Patterson Air Force Base, The Air Force recommends that, in order to save time, the Federal Reserve Banks adopt the following procedure when forwarding Air Force applications: 1. One copy of all applications listing only prime contracts or those listing both prime and subcontracts should be forwarded by the Federal Reserve Bank directly to the Procurement Division, MCPPX04, Headquarters, Air Material Command, Wright-Patterson Air Force Base, Dayton, Ohio. The second copy should be forwarded to the Board to be transmitted to Air Force Headquarters in the Pentagon. 2. One copy of all applications listing subcontracts only should be forwarded to the Air Force Procurement Field Office serving the area in which the Federal Reserve Bank is located. The second copy should be forwarded to the Board to be transmitted to Air Force Headquarters in the Pentagon. 5 4/10/51 -21- "The latter cases will be very few in number. "This system should result in a material reduction in transmission time and, in addition, air mail should be utilized where appropriate to do so. "The third copy of the application and the Federal Reserve Bank's financial report and recommendations should be forwarded to the Board as at present." Approved unanimously. Letter to the Presidents of all Federal Reserve Banks, reading as follows: "An inquiry has been received concerning the application of Regulation W to the 'Stroll-O-Chair', which is the manufacturer's trade name for a children& combination or group unit, sold only through authorized 'Stroll0-Chair' distributors. A complete 'Stroll-O-Chair' comprises not only a child's chair, table, high chair, and crib, but, with the addition of certain accessories, also a stroller, bassinet, or auto seat. Nhile the 'Stroll-0Chair' normally is sold as an entire unit, it is understood that the component parts may be purchased separately, if desired. "The Board is of the view that for the purposes of Regulation W the 'Stroll-O-Chair' includes pieces of furniture, such as the chair, table, or crib. When sold or delivered at substantially the same time, two or more Of these pieces constitute a single listed article under section 6(g). The cash purchase of one or more of these Pieces of furniture would, of course, include any of the accessories, such as the wheel assembly, that may be sold Or financed in connection with the sale or financing of any of the other component pieces of furniture included in the group." Approved unanimously. Telegram to the Presidents of all Federal Reserve Banks, read48 follows: "For Voluntary Credit Restraint Program use, please ilire amount of loans of country member banks in places with 776 4/10/51 -22- "population under 15,000, included in loans of nonweekly reporting country member banks as shown in last column of monthly reports, Form F. R. 635, submitted as of December 27, 1950, January 31, 1951, and February 28, 1951. Please show similar information in future F. R. 635 reports until further notice. Population basis should be same as used in reporting deposits by States in semi-monthly report Form F. R. 413." Approved unanimously. 1
@FedFRASER