The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
450 Minutes of actions taken by the Board of Governors of the l'ederal Reserve System on Friday, April 14, 19)0. The Board met in the Board Room at 11:15 a.m. PRESENT: Mr. McCabe, Chairman Mr. Szymczak Mr. Draper Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Carpenter, Secretary Sherman, Assistant Secretary Kenyon, Assistant Secretary Morrill, Special Adviser Riefler, Assistant to the Chairman Vest, General Counsel Nelson, Director, Division of Personnel Administration Millard, Director, Division of Examinations Young, Director, Division of Research and Statistics Baumann, Assistant General Counsel Hostrup, Assistant Director, Division of Examinations Chairman McCabe reported that while he was in Boston yesterday (nrice received a telephone call from Senator Roberts on who 'Ie'ted that he was holding a meeting in his office at 3 o'clock this "tekqlloon to which he was inviting representatives of the Office of the ^ ' °t1Dtroller of the Currency and the Federal Deposit Insurance e°11D°ration, Illeetitt and that he wanted to let Chairman McCabe know of the so that someone from the Board's offices could come up for the 1)111'Pose of going over a new tentative draft of bank holding e(111 legislation. Chairman McCabe went on to say that he called 41141t°r Robertson on the telepho ne this morning for the purpose of 4411114g more about the revised bill and that Senator Robertson 451 4/14/50 -2- that it had been prepared with a view to making it short and " 11 11Y understood, that it would be substituted for the bill S 2318 prepared in the Board's offices on which hearings recently held by Senator Robertson's subcommittee, that existing proIlisi°11e of law with respect to holding companies and voting permits 11°4-141 remain unchanged, and that the proposed bill would cover five P°111t8 substantially as follows : (1) A holding company would be ci"illed as one which owned as much as 70 per cent of the stock of b and any other bank in which the holding company owned ot. ( : '' )ck at all would be automatically considered a subsidiary. 4114'. comPany classed as a holding company on some specifi ed date, about the "ilme of enactment of the bill, would continue to be conside red e.e "ell until it ceased to own as much as 2 per cent of the out4g stock of any one bank, and a bank holding company would permitted to own stock or assets of a non-banking company. ()la thority to pass upon questions relating to holding company ities to be regulated under the law would be diffused among the thr -ee Federal bank supervisory agencies. (3) Standards to guide the Orric ee supervi sory agencies in approving or permitting multiple- e banking would be provided. (4) Provisions with respect to (1dIalit istrative procedures and penalties designed to enforce the 4°1 ' 1 included in S. 2318 would be omitted and enforcement would be ler t entirely in the Department of Justice. ()) There would be 4/14/50 -3 Ilritten into the bill a provision that no holding company could e°11trol more than 2') per cent of the banking assets of any Federal ile"rve district. Mr. Szymczak stated that he understood from a conversation Ifith NPuty Comptroller of the Currency Robertson that he had ll'epared the draft of bill after consultation with representatives " holding company groups and Mr. Stonier,Executive Manager tth American Bankers Association, Mr. Young withdrew from the meeting at this point. In the course of the meeting, Chairman McCabe called co Xtroller Delano on the telephone to inquire about the proposals -4,that office was making in connection with the legislation. 14114 comments, Mr. Delano stated that his office did not have a ollt that they were making suggestions, the content of which he rla, v ‘8eribed as virtually the same as the provisions outlined by Seila•tor Robertson. • It was the consensus of the members of the Board who were 1)Itilt that the Board could not be expected to express an opinion The Proposed bill until it had had an opportunity to see the rt ,4-Le the scribed by Senator Robertson. ie It was felt, however, that 4 slation would be more restrictive in some respects than the bil 1 proposed by the Board and undoubtedly would not be PA ved uY the Congress. 453 Following the discussion, it was understood that Chairman McCabe and Mr. Vest would attend the meeting in Senator Robertson's office this afternoon following which they would report to the Board developments at the meeting. Messrs. Baumann and Hostrup withdrew from the meeting at this Point. There were presented telegrams to the Federal Reserve Banks or NA ' 14 York, Chicago, St. Louis, Minneapolis, Kansas City, Dallas, arldQ 'all Francisco stating that the Board approves the establis hment Vithowt. -' change by the Federal Reserve Bank of San Francisco on 4111 1, -4-L, and by the Federal Reserve Banks of New York, Chicago, St. Lo Ills, Minneapolis, Kansas City, and Dallas on April 13, 19)0, or *1, e rates of discount and purchase in their existing schedule s. Approved unanimously. There was presented a telegram to Mr. Blair, Secretary of the, -"ederal Reserve Bank of Cleveland, reading as follows: "Betel April 13, Board approves effective April 17 ,L) 19)0, on purchases of Government securities °er resale agreement minimum rate of 1/8 per cent b. lie average issuing rate on most recent issue of atted States Treasury bills, as authorized by deral Open Market Committee March 1, 19)0. Otherwise Board approves establishment by your 1,'Ink, without change, of rates of discount and -Lchase in Bank's existing schedule, advice of A eh was contained in your telegram dated r V X -Pril Approved unanimously. 454 4/14/50 Mr. Szymczak referred to the discussion at the meeting on 14arch 10, 1950, of proposed salaries for officers of the Federal Reserve Bank of Chicago and to the letter written to Chairman L141c11-ne under date of March 28, 1950, concerning the action of the directors of that bank in submitting the proposed salaries for the al4)1'oval of the Board. He stated that the personnel committee cliseUssed the matter further with President Young of the Chicago heri he was in Washington on Wednesday of this week and with 44irman Lunding and Deputy Chairman Coleman of the Chicago Bank by telePhone yesterday. As a result of these discussions, Mr. SzYtezak sai d, the Chicago Bank had reduced the number of increases i'lic1)08ed for officers and the personnel committee recommended that the salaries now proposed by the directors of the Chicago Bank be 41)1'°17ecl by the Board. Mr. Szymczak also stated that, while Mr. 4clee lias leaving Washington this noon to keep a speaking engage41e4t, he had read a proposed letter to Chairman Lunding and approved the salaries as established by the Chicago directors with the changes cli8e1188ed by telephone yesterday. Thereupon, upon motion by Mr. Szymczak, the following letter to Chairman Lunding was approved unanimously. "Reference is made to President Young's letter of e 19, ry 0, 50, and subsequent communications with ' leePect to the salaries of the officers at the Federal serve Bank of Chicago and to your telephone conversa' -04 on April 13 with Governor Szymczak. l j 4, 4/14/50 -6- "The Board of Governors approves the payment of salary to Mr. C. S. Young as President at the rate of $1),000 per annum and to Mr. E. C. Harris as First Vice President at the rate of $2),000 per annum, Provided these rates are formally fixed by the Board of Directors, for the period April 1, 19)0, through February 28, 19) . 1, the date their statutory' terms of office will expire. "The Board of Governors also approves the pay tent of salaries to the following officers at the rates indicated, provided these rates are formally fixed by the Board of Directors, for the period April 1 19)0, through March 31, 19)1. Name Title Annual Salary N. B. Dawes $1),000 Vice President and Secretary W. R. 14,3o0 Vice President Diercks J. K. 13,)00 President Langum Vice O. J. 17,000 Netterstrom Vice President A. L. 16,)oo Olson Vice President A. T. 18,000 Sihler Vice President W. W. 14,000 Vice President Turner A. M. l3,)00 Black Cashier P. C. 13,000 Hodge General Counsel W. A. 11,000 Assistant Vice Hopkins President L. H. Jones 10,000 Assistant Vice President 14, A. Lies 11,)00 Assistant Vice President F. A. ii,00 Assistant Vice Lindsten President L. G. Meyer 11,000 Assistant Vice President G. Petersen 10,000 Assistant Vice President F. L. l0000 Assistant Vice Purrington President H. P. 9,000 Assistant Vice Wilson President *G. W. 9,000 Senior Economist J. J. Mitchell 14,000 Auditor Endres A, M. 9,000 Assistant Auditor O. C. Gustayson 9,000 Assistant Counsel Barton C. P. 10,000 Chief Examiner Van Zante 4/14/50 -7,,,v--a , ... D. Bristow P. C. Carroll E. H. Conklin E. A. Heath C. R. C. E. T. J. M. F. B. L. R. A.. Laibly Newman Saltnes Shirey Smyth Swaney #B. J. Chalfont li. ”. Li Bloomfield R. L. Diehl Assistant Cashier $7,000 Assistant Cashier 9,000 Assistant Cashier 8,600 Assistant Cashier and 9,)00 Assistant Secretary Assistant Cashier 10,000 Assistant Cashier 10,000 Assistant Cashier 9,000 Assistant Cashier 7,500 Assistant Cashier 7,)00 Assistant Cashier 8,)00 Detroit Branch Vice President 14,000 Assistant Vice 10,000 President Cashier 9,)o0 . J. Wiegandt Assistant Cashier 8,)00 ranted leave of absence to accept appointment in „!abinet of Governor Stevenson of Illinois. fillice President Head Office assigned to Detroit Branch. "It is understood that Mr. O. J. Netterstrom 14111 reach retirement age during 190 and payment 0f his salary is accordingly approved only until the date of retirement." 4 Mr. Szymczak then stated that the Federal Reserve Bank f4Rich1fl0nd submitted a list of salaries proposed for officers of tilat Ballk for the year beginning June 1, 19)0, and he reviewed the list as Yesterday. 111%rmally discussed at a meeting of the rersonnel committee It was understood that Chairman McCormick would be advised that if the directors fixed the salaries in rclellee with the list submitted, the Board would give favorable %4B1cleration to them. Pecierel Reference was made to the letter to Chairman Neely of the Reserve Bank of Atlanta dated April 6, 19O, with respect 11/14/50 -8- to publ,c Participation by Mr. Joel B. Fort, Jr., Vice President ill charge of the Nashville Branch of the Federal Reserve Bank of Atlanta, in a partisan political campaign, and to a letter dated 4111 12, 1930, received this morning from President McLarin .416118Mitt1- ng a copy of a letter he had written to Mr. Fort with l'esPect to the incident. Mr. Morrill stated that a number of telephone calls had been l ived by the Chairman's office from the offices of Senators and C°41'essmen with respect to Mr. Fort's action and raised the question 4°118110h inquiries should be answered. Mr. Morrill also stated th" he had mentioned the matter to Mr. Thurston over the telephone 1111°rfling and that Mr. Thurston stated he contemplated stopping (lirsl' ill Nashville on his way back from Dallas, where he has been %11Cling a meeting of the public relations committee of the Presi411tel Conference, with a view to calling upon Mr. Evans, the 1)11131isher of the Nashville Tennessean who initially brought Mr. actions to the Board's attention. Following a discussion, it was agreed unanimously that Messrs. Morrill and Carpenter would prepare for consideration by the Board a draft of letter which could be used in answering inquiries from members of the Congress. At this point all of the members of the staff with the s) ePtion Na of Messrs. Carpenter, Sherman, and Kenyon withdrew, and etton stated with respect to each of the matters hereinafter 45R 4/14/J0 -9- N'erred to was taken by the Board: Memorandum dated April 10, 19J0, from Mr. Millard, Director of the Division of Examinations, recommending an increase in the 11481C salary of Jay W. Williams, Assistant Federal Reserve Examiner illthat Divisi on, from $3,3)0 to $3,450 per annum, effective April 16, 1950. Approved unanimously. Memorandum dated April 13, 19)0, from Mr. Carpenter, Secr.4. ' 6arY of the Board, recommending increases in the basic a141118.1 salaries of the following employees in the Office of the Secre4 effective April 16, 1950: Salary Increase Title To From El liabeth Jones Supervisor ')O $3,8 ) 0,72 "-°1-trie R. Beeson 3,27) Records Clerk 3,19) Approved unanimously. Letter to Mr. Powell, First Vice President of the Federal 46erve Bunk of Minneapolis, reading as follows: "Reference is made to your letters of March 23 : 14 April 4, 1970, submitting for approval a new larY structure for the Head Office and Helena Branch the Federal Reserve Bank of Minneapolis under the VA) Classification and Salary Administrati on Plan. t°11 state that the propos ed structure has been Proved by the Discount Committee. The Board approves, effective April 1, 19)0, the 014ing minimum and maximum salaries for the respective , k ; 5 at the Head Office and Helena Branch " --11 : Minimum Maxinum Grade Salary Salary 1 $1260 $1..6& 2 1380 1860 4 459 4/14/50 -10- .3 14. 6 7 8 9 lo 11 12 13 14 15 16 $1)60 1800 2040 2280 2580 2880 3240 3600 4000 4400 4900 )400 Com 6600 $2100 2400 2760 3120 3480 3900 4400 4900 )400 6000 6600 730o 8000 8800 "The Board approves the payment of salaries to the employees, other than officers, within the limits specified for the grades in which the positions of the respective employees are classified. It is ssumed that all employees whose salaries are below ! he minimum of their grades as a result of the structure increase will be brought within the IIPPropriate range as soon as practicable and not later than June 30, 1950." Approved unanimously. Telegram to Mr. Knoke, Vice President of the Federal Reserve Of New York, reading as follows: "Board approves an extension of the expiration (la+-e to October 31, 19)0 of the existing credit angement by your Bank with the Commonwealth Bank °r Australia under the same terms and condition s Itlined in our wire to you of October 7, 1949. is understood that the amount is not to exceed ; i.3,000,000 in the aggregate at any one time outagainst gold held under earmark in your 1 41°Lk. It is further understood that if any such .14-_°all or loans be made, the usual participation !ill be offered to the other Federal Reserve Banks. 6tate Department notified. " T Approved unanimously.
@FedFRASER