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734 A meeting of the Board of Governors of the Federal Reserve 8.8telll was held in Washington on Friday, April 17, 1942, at 11:00 PRESENT: Mr. Mr. Mr. Mr. Ransom, Vice Chairman McKee Draper Evans Mr. Mr. Mr. Mr. Morrill, Secretary Bethea, Assistant Secretary Carpenter, Assistant Secretary Clayton, Assistant to the Chairman The action stated with respect to each of the matters hereinter r eferred to was taken by the Board: The minutes of the meeting of the Board of Governors of the Pe4rel Reserve System held on April 16, 1942, were approved unani14°484. Telegrams to Mr. Paddock, President of the Federal Reserve Boston, Messrs. Treiber and Post, Secretaries of the Federal Reeerv e Banks of New York and Philadelphia, respectively, Mr. McLarin, 11), ,esid ent of the Federal Reserve Bank of Atlanta, and Messrs. Dillard kid Re.., "Le, Secretaries of the Federal Reserve Banks of Chicago and San Ntici eco, stating that the Board approves the establishment without N40.e , ° by the Federal Reserve Bank of San Francisco on April 14, by the p ti -ederal Reserve Banks of New York, Atlanta, Chicago, and San Franc() ell April 16, 1942, and by the Federal Reserve Banks of Boston . tIticl 4delphia today, of the rates of discount and purchase in their '-ag schedules. Approved unanimously. 735 4/17/42 -2- Memorandum dated April 16, 1942, from Mr. Nelson, Assistant Secre tarY, recommending that Fred Parquette be appointed as a guard &tithe S ecretary's Office on a temporary basis for an indefinite period, 11:thsalarY at the rate of $1,380 per annum, effective as of the date 11Pon . "filch he enters upon the performance of his duties after having NI8SaA satisfactorily the usual physical examination, with the under8'4141,14_ 'mlig that if his work is satisfactory during the first six months Or his aPPointment a further recommendation will be submitted asking that "ls salary be increased to $1,500 per annum. Approved unanimously. Letter to Mr. Fill, Vice President of the Federal Reserve Bank a delphia, reading as follows: t "In accordance with the request contained in your let" 14 of April 10, the Board approves the appointment of ! e t1I'lce H. Griffith as an assistant examiner for the Fedal Please advise us of the eReserve Bank of Philadelphia. ffective date." Approved unanimously. Letter to Mr. Peyton, President of the Federal Reserve Bank eaPolis, reading as follows: let "In accordance with the request contained in your er,ter of April 7, the Board approves the appointment, rie-Lective April 16, 1942, of Roger K. Grobel as an exami' 1 for the Federal Reserve Bank of Minneapolis. tin wrou are correct in the assumption that the designaa 11 of Mr. Tillander as Chief Examiner does not require qroval of the Board since his appointment as an examiner 8 been approved." Approved unanimously. 'Mt; 4/17/42 —3-. Letter to the board of directors of "The First State Bank ot Rotchkiss, Colorado", Hotchkiss, Colorado, stating that, subject toco nditions of membership numbered 1 to 3 contained in the Board's Regillation HI the Board approves the bank's application for memberthe Federal Reserve System and for the appropriate amount or st°cIt in the Federal Reserve Bank of Kansas City. Approved unanimously, together with a letter to Mr. Leedy, President of the Federal Reserve Bank of Kansas City, reading as follows: "The Board of Governors of the Federal Reserve System , approves the application of 'The First State Bank of : o tchkiss, Colorado', Hotchkiss, Colorado, for memberin the Federal Reserve System, subject to the conprescribed in the enclosed letter which you are ,equested to forward to the Board of Directors of the tr , Istitution. Two copies of such letter are also en) one of which is for your files and the other cr which you are requested to forward to the State Bank °mmissioner for the State of Colorado for his information. "Since the amount of estimated losses classified in s"e report of examination for membership is relatively 1M411) the usual condition regarding the elimination of e°8ses has not been prescribed. It has been noted, howthat the amount classified was to have been charged v4f or otherwise eliminated within 30 days from the date examination." itiente Telegram prepared for the signature of Mr. Draper to the Presof all the Federal Reserve Banks, reading as follows: "It is apparent that many bankers assume that 100 cent guarantees of war production loans by War Deare available when desired by financing instiit°-°ns- While the War Department has not stated that ci will not make any 100 per cent guarantees, it is ' ear that it is the Department's policy to make such Per' 737 4/17/42 -4guarantees only in exceptional cases. If 100 per cent guarantees are demanded in other than extreme cases, some orther means of financing war production may have to be ound. Without any formal announcement, it is suggested that in your contacts with banks and other lending instiutlons you advise them as to the War Department's attitude respecting 100 per cent guarantees." Approved unanimously. Letter to the Presidents of all Federal Reserve Banks, readt. as follows: "We have received from the War Department a memorandum from Brigadier General W. D. Styer for the Commanding General, Services of Supply, setting forth specimen siguatures of each of the officers named in General Styer's memorandum of April 6, 1942. We are enclosing herewith a Photostat of the memorandum, the original of which is be14g retained in the Board's files. "There is also enclosed a photostat of a letter ad:tressed to the Board by the Honorable Robert P. Patterson, Under Secretary of War, dated April 14, 1942, modifying ..116 instructions which were issued by the War Department 1; 1.0 the Federal Reserve Banks under date of April 8, 1942; iud for your convenience in determining the changes made n the instructions, there is enclosed a mimeographed Copy of such instructions in the form referred to in Mr. rat a terson's letter. You will note that the instructions p.! m°dified refer to financial contracting officers who r i assigned to duty in the Services of Supply, War Dement, Washington, D. C. In this connection, there is enclosed a photostat of a memorandum which we have re'elved from Colonel E. T. Comegys, Chief, Advance Payment 41 1 ° Loan Section, stating that the financial contracting A'Iicers designated in General Styer's memorandum of sPril 6, 1942 fare assigned to duty in the Services of uPPlY, War Department, Washington, D. C." Approved unanimously, together with a letter to Mr. Hays, Vice President and Secretary of the Federal Reserve Bank of Cleveland, in the following form: 738 4/17/42 -5"This refers to your wire of April 16, 1942, raising certain questions with respect to authorizations given by the War Department in connection with the execution of guarantees, the making of loans, etc., under Executive Order No. 9112. 4.. "With respect to your question regarding the authen`11c#7 of authorizations for the execution of guarantees are sent out over the Leased Wire System, the folng procedure will be adopted. As we have previously aavised you, the War Department has furnished us with 1)ecimen signatures of those officers who were designated in Brigadier General Styer's memorandum of April 6, 1942, 8 financial contracting officers with authority to au the execution of guarantees, the making of loans, under Executive Order No. 9112. Before advising Y°11 by wire of an authorization for the execution of a iveu.arantee given by an officer of the War Department, we 111 ccmpare the signature of the officer with the specirnen signature of such officer on file with us and will .„!!tisfY ourselves that the authorization has been given . one of the duly designated financial contracting of,ftleers of the War Department. We will forward you by the original of the authorization, retaining a tflotostat of such authorization in the Board's files. 7ile we have not yet contacted the Navy Department and tr United States Maritime Commission with respect to b"ls matter, it is assumed that a similar procedure will worked out in connection with authorizations given Officers of those agencies. "We have communicated to the War Department your s uggestion that a standard wording be adopted in intoV the Reserve Banks which would authorize aQs execution of a 'Guarantee Agreement' in the standard 119roved form, rather than wording which simply authores a Reserve Bank to issue a guarantee with respect to u _Particular loan; and the War Department has advised informally that this suggestion will be adopted." r Z 7 Letter to the Presidents of all Federal Reserve Banks, read48 follows: "We expect to discuss with the War Department in the ree near future the type of reports it will want to °sive Peri4.0 . from the Federal Reserve Banks currently and dically with respect to loans guaranteed by the -6"Federal Reserve Banks as fiscal agents of the United States on behalf of the ';:ar Department. Pending the Preparation of forms on which such information will be leP°rted, it will be appreciated if you will mail to the Board a report in duplicate on Form F. R. 577 Coveni each loan guaranteed. A copy of this form is enclosed and a supply is being forwarded to you under separate cover." Approved unanimously. Letter to Mr. McLarin, President of the Federal Reserve Bank of Atlanta 3 reading as follows: Ar,,4,"This will acknowledge receipt of your letter of 4- 14, 1942 addressed to Governor Draper, with re' gal'el to certain questions as to guarantees on behalf !f the War Department. We have conferred with a reprtative of the War Department with regard to this d-tter and have been advised as follows: 8t "With respect to your first question, we undercoard that the War Department does not at this time ghl .itemPlate furnishing you with printed forms of the santee agreement but anticipates that each Federal ese„e Bank will prepare a supply of these for its own ttae. be , However, in view of the possibility that it may viett .esirable, in the light of experience, to make rey0111°118 in the form at some time in the near future, t' illaY wish to make use of mimeographed forms for the being. r ot "Regarding your second question, a standard form w aPPlication for the use of all Reserve Banks in xi'a matter has not been prepared by the War Department. " secPerience should indicate that such a form is neca I:171 the War Department will be glad to prepare at a ri tier date a standard form of application with the ; stance of the Reserve Banks. In the meantime, it tionUggested that a Reserve Bank obtain such informaeaci, as it deems necessary in the circumstances of " case. Part : IVith regard to your third question, the War Dent does not anticipate that there will be many Nt1111-nv0lving a participation between a financing inever 'Ion and the Var. Department. It does expect, how't° Prepare as soon as possible a standard form 740 4/4/42 -7.certificate for use in cases where the War Department 18 called upon to take over a portion of a loan in accordance with its guarantee to a financing institution." Approved unanimously. Letter to Mr. Hale, Vice President and Secretary of the Federal nank of San Francisco, reading as follows: "Receipt is acknowledged of your letter of April 3 rercling the question whether a bank which discounts instalment is reauired by section 3(a)(2)(B) of Regulation W to as :scertain certain whether the price at which the article was sold con=to the limitations contained in Port 4(b) of the Supt "A few days ago, the Board advised another Federal Reserve Bank that section 3(a)(2)(B) does not require a finance nParlY to obtain and consult the appropriate Appraisal Guide itiorder to verify the dealer's calculation of the credit ;le (Part 3(b)(2) of the Supplement), and the same principle the question raised in 'Our should be applied in answering letter." r iT Approved unanimously. Letter to Mr. Hale, Vice President of the Federal Reserve Bank or san F l'ancisco, reading as follows: "This is in reply to your letter of April 9 with reto the application of Part 3(b) of the Supplement to Reg la ziation W to a case in which the automobile for which the a 13%1312-j-sal guide value' is being determined is equipped with aulo or heater or other special accessories. cllicie'The form of letter that the Board used in notifying 10_ book publishers of their designations included the fol"lag paragraph: It is noted that the (date) issue of Ycnir publication states that the values shown for the various models may be increased somewhat if the particular car is equipped with a radio or heater. The 'estimated average retail values' to be used for purposes of Regulation W should be 74 I 4117/42 -8— "values without any such additions for cars having a radio or heater, and it is suggested that your statement regarding sueh extra equipment be accompanied by the information that such additions should not be included in determining maximum credit values for purposes of Regulation W. Your publication also specifies an amount that may be added for cars with overdrive or automatic transmission as extra equipment; there is no objection to the inclusion of such amount in determining maximum credit values for purposes of Regulation W. (This paragraph to go only to publishers who recommend adding for radios or heaters.) "Of the letters to publishers located on the Pacific the letter to the publisher of the 'Official Guide' h'Llcluded the foregoing paragraph with the reference to eaters deleted because the March-April issue of that pubdid not include any additional value for heaters. e letter to the publisher of 'Northwest Used Car Values' rlti°ned 'radio or heater or 6 wheel equipment'. The letter : l to the publisher of the 'Kelley Blue Book' included the agraph with the first two sentences changed to read as °1101;s: 00e St) 4 'It is noted that the March-April 1942 issue of your publication states that the values shown for the various models should be increased if the particular car has special equipment. The "estimated average retail values" to be used for purposes of Regulation 11 Should be values without any such additions for radios or heaters, and it is suggested that your statement regarding such extra equipment be accompanied by the information that slich additions for radios or heaters should not be included in determining maximum credit values for purposes of Regulation W.' 4._ "It is recognized that some confusion may develop durthe month of April because of the fact that some of the books that are in effect during this month were pub!" before the appearance of Amendment No. 3 of Regulation go'rld therefore carry quotations for extra equipment which 11°t comply with the paragraph quoted above. It seems 74 4/17/42 -9- however, that after May 1 there will be no further c4tficulty on this point." Approved unanimously. Letter to the Presidents of all the Federal Reserve Banks, readas follows: st "Effective with the call for reports of condition of Inp,Ie bank members as of April 4, 1942, the published state- ? of State bank members and their affiliates submitted F. R. 105e and 220a, respectively, should be ax.X1d filed at your Bank. This supersedes in part the ,3-nstructions contained in the memorandum accompanying the rardls letter of December 221 1938 (8-136), which required 4611 reports to be forwarded to the Board. re "AnY differences found betv.een such statements and the a4c/rts on forms F. R. 105 and 220 should be called to the d4,,ention of the banks concerned. If there are important i.fer 7ences, which in your opinion might warrant republicaI) the pertinent information should be forwarded to the rdWith your recommendation." C Approved unanimously. Letter to the Comptroller of the Currency, reading as follows: wit, It is respectfully requested that you place an order " the Bureau of Engraving and Printing, supplementing the Reorder of June 14, 1941, for the printing of Federal . riaj rve notes of the 1934 Series in the amounts and denoma.1°ns stated for the Federal Reserve Bank of Philadelphia: Denomination $10 20 Number of sheets Amount 175,000 50,000 $21,0001000 12,000,000" Approved unanimously. Mr. Morrill suggested that the Board authorize the payment of the or lineheons served in the Board's dining room today to Mr. James F. 74 -101*/4Y, Gove nor of the Federal Home Loan Bank System, and Mr. John H. .44Y, Chairman of the Federal Home Loan Bank Board. Approved unanimously. Thereupon the meeting adjourned. e f)geA, §Pro M'A)jt-c Secre ary.
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