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Minutes of actions taken by the Board of Governors of the
Federal Reserve System on Friday, April 2, 1954. The Board met in
th Board Room at 10:00 a.m.
PR2SENT:
Mr. Martin, Chairlan
Mr. Szymczak
Mr. Evans
Mr. Vardaman
Mr. Mills
Mr. Robertson
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Sherman, Assistant Secretary
Kenyon, Assistant Secretary
Thomas, Economic Adviser to the Board
Leonard, Director, Division of Bank
Operations
Vest, General Counsel
Young, Director, Division of Research
and Statistics
Myrick, Assistant Director, Division
of Bank Operations
Hackley„ Assistant General Counsel
Governor Mills, Chairman of the System Committee on the Discount
end Discount Rate Mechanism which was established pursuant to action of
the
Board on June 9, 1953, referred to the report on the discount mechanism
which had been prepared under the direction of the Committee, commenting
that the report met with the approval of the other members of the Committee
4% Coleman, Chairman of the Federal Reserve Bank of Chicago, and Mr. Wil—
'
(1
Ms, President of the Federal Reserve Bank of Philadelphia) and that
°Pies had been sent on March 29 to each member of the Board and to the
C •
halrman and President of each Federal Reserve Bank with a covering letter
/*Itch stated that a suggested procedure for consideration and disposition
(If the report would be forwarded shortly.
Governor Mills suggested that
528
4/2/54
-2-
the Board members review the report carefully and that a second letter
be sent to each Chairman and President requesting that as a first step
each Reserve Bank submit comments to the Chairman of the Committee by
aY 3, with the thought that the various comments and suggestions could
then be collated and the material sent to the members of the Board and
to the Chairmen and Presidents by the latter part of May, after which
consideration could be given to what further steps should be taken.
Governor Mills also suggested that if this procedure were followed, the
Board might -wish to set aside time for discussion of the material with
the Reserve Bank Presidents at the time of the meeting of the Presidents?
Conference in June.
The procedure suggested by
Governor Mills was approved unanimously. In this connection, unanimous approval was given to a letter
for the signature of the Chairman
to the Chairman and President of
each Federal Reserve Bank (except
Chairman Coleman and President Williams) reading as follows, with
the understanding that copies of
the letter would be sent to Messrs.
Coleman and Williams for their information:
On March 291 there was sent to each Chairman and each
President a copy of the report on the discount mechanism
which had been prepared under the direction of the System
Committee on the Discount and Discount Rate Mechanism, the
members of which are Chairman Coleman of the Federal Reserve
Bank of Chicago, President Williams of the Federal Reserve
Bank of Philadelphia, and Governor Mills, who has served
as Chairman of the committee. That letter stated that we
shortly would forward to you a suggested procedure for the
consideration and disposition of the report.
529
4/2/54
-3--
This report points to a basic revision of the Board's
Banks By
Regulation A, Discounts For and Advances To Member
it
made,
were
on
a
revisi
Federal Reserve Banks. If such
a
at
only
aken
undert
be
would seem clear that it should
bank
member
of
time, such as the present, when the level
discounts was relatively low.
rThe Board has discussed various procedures for furthe
t
discoun
the
on
ing System consideration of the report
Federal
mechanism and suggests that as a first step each
suggesee's
committ
the
on
t
Reserve Bank review and commen
Banks
e
Reserv
dual
indivi
the
by
tions. If such comments
the
of
an
Chairm
the
to
ded
forwar
could be completed and
comvarious
e
the
collat
then
could
he
committee by May 3,
to
ments and suggestions and send copies of the material
and
the members of the Board of Governors and the Chairmen
hoped
Presidents of the Federal Reserve Banks. It would be
that the collated material could be sent out by the latter
part of May, after which consideration could be given to
what further steps should be taken in getting System consideration of the report.
If you believe this suggested procedure offers a satisfactory way of handling the report at this stage, I shall
appreciate it if the comments of your Bank can be sent to
reach Governor Mills by May 3.
of a
Chairman Martin read, as a matter of information, a copy
letter which the Bureau of the Budget sent to the House Committee on
Government Operations on March 31, 1954, expressing its views on
an
Bill H.R. 7602, which would direct the Comptroller General to make
tee, and
audit of the Board of Governors, the Federal Open Market Commit
the Federal Reserve Banks and their branches for the year ended Deceman
ber 311 1953. The letter, a copy of which had been sent to Chairm
Ilartin with a covering letter of the same date signed by Mr. Roger A*
j°11es, Assistant Director for Legislative Reference, took the position that the proposed legislation was unnecessary and undesirable.
It
530
4/2/54
—4-
recommended, therefore, against enactment of H.R0 7602.
Chairman Martin also stated that he had received a telephone call
from Mr. Erickson, President of the Federal Reserve Bank of Boston, who
reported, for the Board's information, that the board of directors of
the Boston Bank had authorized him to make a one-month trip to Europe
beginning May 122 1954.
While President Erickson indicated that he
Illould take advantage of the opportunity to visit certain foreign central
banks and commercial banks, it was understood that the trip would be
Primarily of a personal nature.
Pursuant to the understanding at the meeting on March 31, 1.9542
Mr. Leonard had prepared drafts of two letters to Mr. Young, President
er the Federal Reserve Bank of Chicago, one dealing with the question of
decentralization of operations in the Seventh Federal Reserve District
through the establishment of additional Reserve Bank branches and the
Other dealing with authorization to the Federal Reserve Bank of Chicago
te negotiate with the owners for the purchase of certain properties in
the same block as the Bank's head office building to provide for expan3
ion of facilities.
Governor Evans stated that following the discussion at the meeton March 312 he had a conversation with President Young, who was in
the Board's offices that day, at which time he told Mr. Young that the
kand appreciated the decentralization survey which the Reserve Bank had
4/2/54
-5-
made and considered it a good report, that the Board agreed with the
advisability of the Reserve Bank's proceeding with negotiations for
the adjoining properties in Chicago, including, if deemed advisable,
the taking of options, but that in addition the Board was inclined to
favor the establishment of branches in Des Moines, Iowa, and Indianapolis, Indiana, and felt that further study should be given to the question of establishing a branch in Milwaukee, Wisconsin.
Governor Evans then stated that the Chicago building program had
been up for consideration for about two years, that the question whether
the Bank should remain at its present location or whether a building
Should be provided at another location was settled by determining to re14ain at the present location and add to the building, and that an undecided question was whether additional branches should be established in
the district. He said that this question had been discussed at various
times with representatives of the Chicago Reserve Bank and that he felt
the time had arrived for the Board to make a decision.
It was Governor
4anst feeling that additional branches should be established, and he suggested that the following letter, rather than the draft prepared by Mr.
Leonard regarding the possible establishment of branches, be sent to the
Chicago Bank:
The report of the decentralization survey, forwarded
with your letter of March 112 has been carefully reviewed
by the Board. You and your staff are to be complimented
on the information you forwarded in response to our request.
532
4/2/54
-6-
We agree with you that the congestion at your Bank
needs relief and we want to be as helpful as possible in
helping you to work out a program toaard this end. Therefore, in a previous letter we suggested that you ascertain
the price of the adjacent property.
It seems to us that the number of banks and the volume
of business in your territory requires the establishment of
new branches at Des Moines, Iowa, Indianapolis, Indiana,
and possibly at Milwaukee, Wisconsin. The establishment of
these branches would materially reduce the load on the head
office and would be consistent with the general governmental
policy of scattering facilities subject to damage in the
event of an enemy attack. If these branches were established,
it would represent a further step in the decentralization of
the System. It mould bring the branches closer to the member banks they serve and through their directors and officers
would bring the System and its operations closer to the general
public, which is not too familiar with the Federal Reserve
System. If branches were established at Des Moines and Indianapolis, they would rank among the larger branches in the
System and would be larger than more than half of the present
branches.
After considering all phases of the question, the Board
favors the establishment of branches at Des Moines and Indianapolis as soon as practicable, leaving the question of
a branch at Milwaukee for further study. This is an important
question and we would appreciate your Board reviewing the entire matter again. If a meeting with our Board would be helpful to your directors, it would be a pleasure to meet with
them.
Governor Vardaman then suggested certain amendments to the draft
Of letter regarding the establishment of branches which had been submitted
by Mr. Leonard, and Governor Robertson read a draft he had prepared which
would treat in one letter the matter of additional branches and the acquisition of additional property for expansion of the head office premises.
During a discussion which followed, Governors Szymczak and Mills
stated that they would favor the two letters drafted by Mr. Leonard and
C:riC)
a.1ei
that they would also be agreeable to amending the draft concerning the
establishment of branches to incorporate most of the suggestions made
by Governor Vardaman.
Chairman Martin said that he had not yet reached a definite concluto favor
sion on the branch question, stating that while he was inclined
the establishment of additional branches in the Chicago District, he was
not prepared to reach such a decision at this meeting or on the basis of
the information now available to the Board.
In Chairman Martinis opinion,
the manner in which the problem was handled was most important and a good
deal more groundwork was needed before the Board reached a decision that
branches should be established despite a contrary recommendation by the
Chicago Bank°
the meeting on
He reiterated the view he had expressed at
such as this was inMarch 31, that centralization of control in a matter
consistent with the general approach to decentralization, where feasible,
of responsibility throughout the Federal Reserve System. As to the proPosed letters to the Chicago Bank, Chairman Martin said that he would not
Mr. Leonard,
°bject to the draft regarding additional branches as submitted by
°r to a letter incorporating the changes suggested by Governor Vardaman, or
to one similar to that proposed by Governor Robertson.
However, he would
11ot approve a letter such as that proposed by Governor Evans which implied
that the Board had made a decision that additional branches should be established.
of letter was based
Chairman Martin's opposition to that type
on his strong feeling that further discussion of the whole problem with the
clireetors of the Chicago Bank was required before a decision was reached,
and that the matter should not be closed to such further discussion by a
534
4/2/54
—8-
decision at this meeting.
Chairman Martin also expressed the view that
Ilith the prospect of a continuing expansion of business activity in the
Chicago area, the present head office quarters would not be adequate even
if additional branches were established. For that reason, he felt that the
Chicago Bank should proceed with negotiations for the acquisition of properties which would permit an enlargement of the head office building.
Chairman Martin's
Governor Evans stated that he did not agree with
Position because the question of the establishment of branches had been gone
make a decision was
very thoroughly and all of the information needed to
the position set out
already at hand. He felt that the Board should follow
favored establishment
in his proposed letter, indicating quite clearly that it
Of the branches but extending to the Chicago board the opportunity to have a
full discussion of the question with the Board of Governors if they so desired, as set out in the last paragraph of his suggested letter. However,
he would not interpose any further objection to the suggested substitute
letter but he felt it did not accelerate a sound and prompt solution of the
Problem at the Chicago Bank.
After further discussion, upon motion
by Governor Mills, unanimous approval was
given to letters to President Young in the
following form, with the understanding that
copies would be sent to Chairman Coleman and
with the further understanding that the views
would
of the Board, as stated in the letters,
Colebe transmitted by telephone to Chairman
man and President Young today:
The report of the decentralization survey forwarded with
Your letter of March 11 has been reviewed. The Board appreciates the study and the effort that have been devoted to the
survey, It is understood that the report, submitted in resPonse to the request contained in the Board's letter of
5,15
4/2/51.1
-9-
Chairman Martin's
January 4, 1954, also serves as the answer to
and the Board
ents
Presid
suggestion at the Joint Meeting of the
and branch
ct
distri
on March 5, 1953, that reviews be made of
s should
change
any
r
whethe
boundaries with a view to determining
be made
report on decentraliYour covering letter accompanying this
of establishing
matter
the
zation states that it is apparent that
have further
should
ct
additional branches in the Seventh Distri
in your
that,
states
12
consideration; but your letter of March
no
are
there
that
sion
conclu
Opinion, the survey leads to the
h
DisSevent
the
in
es
branch
Persuasive reasons to establish new
with
ent
this
agreem
full
in
not
trict at this time. The Board is
conclusion.
that if branches
Your report on decentralization indicates
apolis, they would
were to be established at Des Moines and Indian
the basis of
rank among the larger branches in the System. On
erations, the
the statistical data and on broad policy consid
branches at Des
Board is inclined to favor the establishment of
Milwaukee. Therefore,
Moines and Indianapolis, and possibly at
date,
the Board requests that your directors give, at an early
establishment of
further consideration to the question of the
the Board of
such branches. Should your directors so desire,
personally with them.
Governors will be glad to discuss the matter
Bank be authorized
Your letter of March 11 requests that the
the property adof
se
purcha
to negotiate with the owners for the
two other properjoining the Reserve Bank on the west and of the
ties in the block.
ized negotiation
The Board's letter of January 4, 1954 author
. The
for the properties and that authorization is still in effect
adjoin
the
se of
letter referred to a program involving the purcha
iThe
author
properties.
ing property and either of the other two
r, covers negotiations
howeve
s,
ilitie
zation to explore the possib
for all three properties.
in the Board's
In accordance with the procedures outlined
authorization contained
letter of December 1, 1953 (S-1518), the
of options
in the Board's letter of January 4 permits the taking
n witheratio
consid
at reasonable figures on the properties under
s,
howsuch
option
out prior approval of the Board. Exercise of
the
with
ance
ever, does require such prior approval in accord
which the purchase of
established procedure of many years under
of the Board
real estate by a Reserve Bank is subject to approval
of Governors.
536
4/2/54
-10-
The Board will be glad to consider any specific proposals which result from your negotiations.
on March 16,
As indicated by Governor Robertson at the meeting
1954, a draft of letter to Mr. Harry J. Harding, President of the IndePendent Bankers Association, Twelfth Federal Reserve District, Pleasanton,
California, had been prepared in response to Mr. Harding's letter of
ting certain data
March 3, and his follow-up letter of March 23, reques
regarding bank holding companies.
The draft of letter, copies of which
had been sent to the members of the Board prior to this meeting, read as
follows:
and March 23,
This is in reply to your letters of March 3,
g companies.
holdin
1954, requesting certain data regarding bank
are in force
there
There are at this time 77 cases in which
nt to Secpursua
determinations made by the Board of Governors
the
for
es
provid
tion 301 of the Banking Act of 1935, which
g
holdin
exemptions, to which you refer, from the existing
n 23A
Sectio
of
company affiliate statutes except the provisions
n
betwee
ons
relati
of the Federal Reserve Act regarding financial
of
five
In
ates.
affili
member banks and their holding company
affiliates, and
these 77 cases there are two holding company
are all holding
which
s
another case includes three organization
the 77 cases
ingly,
Accord
company affiliates of the same bank.
of these
-nine
Twenty
include 84 holding company affiliates.
banks.
lves
holding company affiliates are themse
the same
You inquire whether the exemptions were all for
exempts
law
the
know,
you
reason or for several reasons. As
0• not
H
any organization which is determined by the Board 0
holdto be engaged, directly or indirectly, as a business in
banks, banking
ing the stock of, or managing or controlling,
In making
ies."
compan
trust
associations, savings banks, or
course,
of
have,
ons
decisi
s
such determinations, the Board'
stances of each parbeen based upon all of the facts and circum
the
determinations
for
s
reason
ed
ticular case, and the detail
tive cases.
respec
the
of
facts
are as diverse as the detailed
ed
detail
reasons
the
of
all
ize
Without attempting to summar
involve
cases
the
of
some
cases,
s
Nhich appear in the variou
537
-11banking operations which are purely incidental to the nonbanking operations which constitute the principal business
of the controlling organization. There are cases also where
the stocks of the banks are held for the purpose of invest
stocks
bank
the
where
cases
ment rather than control, and
are owned by the holding company affiliates solely in a fiinvolve group
duciary capacity. Moreover, some cases do not
to regulate.
ed
intend
was
banking such as the law apparently
to know that,
you
to
st
intere
of
be
Incidentally, it may
in each determination made pursuant to Section 301 of the
right to reBanking Act of 1935, the Board has reserved the
the parvoke the exemption in the event of changed facts in
ticular case.
operations of
With respect to the extent of the banking
ll
the holding company affiliates in relation to their over-a
ences
differ
activities, there is likewise a wide range of
the holdamong the various cases. As mentioned above, 29 of
other
the
ing company affiliates are themselves banks. At
bankthe
n
extreme would be the cases mentioned above wherei
activi
pal
princi
ing operations are purely incidental to the
comfor
basis
ties. In some cases it is difficult to find a
principal
paring the extent of the banking operations with the
g comholdin
activities of the holding companies, such as the
able
charit
or
pany affiliates which are labor unions, or church
organizations.
controlled
Of the 77 cases mentioned above, there is one
in six
banks
lled
bank in 69 cases, and there are two contro
of
each
In
cases.
cases and three controlled banks in two
lled
contro
one
than
the eight cases in which there is more
same State.
bank, the respective controlled banks are in the
deposits
and
number
The following tabulation shows the
fied
classi
cases,
77
the
of the controlled banks included in
according to type of bank:
Aggregate deposits
December 31, 1952 1/(in thousands)
ape of controlled bank Number
1l,064,067
48
National
731,943
33 2/
State member
52,595
4
Nonmember insured
I/
2
Nonmember uninsured
,60
$1,848
ri
Totals
banks which began
3
for
ed
includ
beposits as of a later date
.
1952
31,
er
Decemb
operations subsequent to
deposits.
2/Inc1udes 3 trust companies having no
ts.
2/trust companies having no deposi
D
538
4/2/94
Although you requested information as to the total assets
of the banks in each of the above groups, we have given the
figures for deposits because it seems to us that they are more
fully informative as to the types of controlled institutions,
there being included, as indicated above, several trust companies
Which do not have deposits. These figures regarding controlled
banks, of course, do not include the number or deposits of the
29 banks which are holding company affiliates controlling other
banks. Some of these 29 banks are large institutions which
control other banks purely in a fiduciary capacity or control
trust companies whose business, being confined chiefly or entirely to trust business, supplements the activities of the
controlling commercial banks.
Throughout the information and data given above regarding
controlled banks, the meaning of control is that which is indicated in the existing statutory definition of the term "holding company affiliate." Unless there is an existing or prospective holding company affiliate relationship within the meaning of that definition, no determination would be made by the
Board.
Regarding the matter of developing a list of companies
holding or controlling 15 per cent or more of the stock of two
or more banks, we note that you have information from the Comptroller of the Currency and from Supervisors of State Banks indicating 70 such cases. You mentioned that Chairman McCabe,
in testifying on S. 2318 in 1950, indicated that there were 83
known situations, and you inquired whether the Board has made
any recent survey of the corporate control of banks along this
line.
The 83 known situations to which Mr. McCabe referred in
1950 included a number of cases in which a bank held or controlled 15 per cent or more of the stock of only one other bank.
These cases presumably would not be in your current list, but
they were included in the data drawn up at that time because
the definition of "bank holding company" in S. 2318 included
• • • any company which is a bank and which directly or indirectly owns, controls, or holds with power to vote 15 per
centum or more of the voting shares of one or more other banks. •
Although we constantly make use of available data, we do
not have what We would consider to be a complete list of all
companies, or corporations, which hold or control 15 per cent or
more of the stock of two or more banks. Moreover, We feel some
doubt that a complete list, or a correct list, could be made
539
4/2/54
-13-
without a great deal of investigation and analysis.
It seems to us that such a list must be based on
actual or beneficial ownership rather than record
ownership of stock, otherwise, cases would be missed
where an individual nominee is the record owner of
stock which is actually owned by a company or corporation and, conversely, cases would be erroneously
included where a nominee company is the record owner
of stock which is beneficially owned by, say, a personal trust.
Referring to the last paragraph of your letter,
the one bank in Wyoming with approximately $310001000
of deposits is still included in our figures. It is
listed in the statistical table of 34 holding company
groups as of December 311 19521 under First Security
Corporation, Ogden, Utah (page 45, Part 1, Hearings
before the Committee on Banking and Currency, United
States Senate, on S. 76 and S. 1118--June 10, 111 and
121 1953).
We trust that the information herein contained
will be helpful to you in the study you are making.
With the thought that the information might be of
interest to the Committees on Banking and Currency
of the Senate and the House of Representatives,
copies of this letter are being sent to the respective Chairmen of those Committees.
Approved unanimously.
Messrs. Leonard, Vest, Myrick, and Hackley then withdrew
from the meeting.
Prior to this meeting there had been circulated to the members
Of the Board a memorandum from Mr. Thomas dated March 2h, 195h, discussing
1r411-ous matters relating to the Fourth Meeting of Technicians of Central
Barlks of the American Continent, to be held during the period May 3-114,
1954, with the first week's sessions in Washington and the remaining
4/2/54
-lb-
sessions in New York. The memorandum, which commented on the agenda
ror the meeting, the procedure to be followed in discussing the papers
submitted by the participating institutions, and the program of entertainment, recommended that the following be designated as members of
the Board's delegation to the meeting:
Chairman Martin (Chairman of the delegation)
Governor Szymczak
Mr. Thomas, Economic Adviser to the Board
Mr. Young, Director, Division of Research
and Statistics
Mr. Marget, Director, Division of International Finance
Mr. Dembitz, Assistant Director, Division
of International Finance
Mr. Olson, Economist, Division of International Finance
Mr. Kenyon, Assistant Secretary of the Board
(Secretary of the delegation)
The plans for the meeting
as set forth in the memorandum
were noted without objection and
the persons named above were
designated as members of the
Board's delegation to the meeting.
24, 2.954,
Governor Robertson referred to a memorandum dated March
rrom Mr. Allen, Director, Division of Personnel Administration, regarding
by
the procedure for making national agency checks on persons employed
of certain
the Board of Governors and for making informal clearances
?ederal Reserve Bank personnel when such clearance appeared to be in the
national interest. The memorandum, which had been in circulation among
the members of the Board, pointed out that pursuant to action of the
4/2/54
-15-
Board on October 12, 1953, a letter was sent to the Civil Service Cornstating, for reasons given in the letter, that the Board wished
to continue to make the national agency checks on all persons employed
by the Board. The memorandum further stated that in the past it had
been possible for the Board to make its own checks because the Federal
141reau of Investigation had been willing to honor requests sent direct
from the Board to the Bureau, but that a form letter from the Bureau
dated March
4, 1954, a copy of which was attached to the memorandum,ad-
1)1sed that under procedures now set 1113 by the Civil Service Commission,
411 such requests must be routed through the Civil Service Commission.
The possibility of an exception having been explored with the Civil
Service Commission and the Federal Bureau of Investigation without succees by the Division of Personnel Administration, the memorandum stated
that in the absence of objection by the Board, the Division planned to
send requests regarding new employees to the Civil Service Commission.
After Governor Robertson and other members of the Board had stated
leasens why they felt it would be desirable for the Board to continue to
'
illake its on national agency checks on Federal Reserve personnel, it was
slIggested that Chairman Martin discuss informally with Mr. Philip Young,
Clh airman of the Civil Service Commission, whether the present arrangeCould be continued without interfering unduly with the practices
°f the Commission.
This suggestion was approved
unanimously.
("1
4/2/54
-16Governor Mills, who had been serving as alternate to Chairman
Martin on the Committee on Retirement Policy for Federal Personnel
established pursuant to Public Law
555, 82d
Congress, stated that Mro
B• Eliot Kaplan, Chairman of that Committee, had called him on the
telephone yesterday and said that the Committee planned to present
to the Congress shortly a report which would recommend, among other
things, that persons who were members of the Civil Service Retirement
%tem also be made subject to the Old Age and Survivors Insurance
coverage of the Social Security System.
Governor Mills went on to
Nr that Mr. Kaplan inquired what position the Board would wish to
take with respect to its employees in the event the Committee made a
Commendation covering Board employees.
Governor Mills expressed the
\rieVT that the Board should not voice an opinion regarding any change
in the Board Plan of the Retirement System of the Federal Reserve Banks
at the present time, it being his judgment that there was time for the
Beard to study the matter more fully.
There was unanimous agreement
with Governor Mills' suggestion.
There were presented telegrams to the Federal Reserve Banks of
Boston, New York, Philadelphia, Atlanta, and San Francisco stating that
the Board approved the establishment without change by the Federal ReBank of Boston on March 29, by the Federal Reserve Bank of San Franon March 31, and by the Federal Reserve Banks of New York, Philaand Atlanta on April 1, 1954, of the rates of discount and pur1.1aee in their existing schedules.
Approved unanimously.
543
4/2/54
-17Chairman Martin reported that he had received a telephone call
fr°m Mr. Harold E. Talbott, Secretary of the Air Force, 4ho expressed
the hope that the Board would not approve the establishment of branches
in Spain by United States banks or banking corporations without allowing him to comment. Chairman Martin said he told Secretary Talbott
that the Board would be glad to give him an opportunity to express
his views in connection with any such applications.
At this point Messrs. Kenyon and Young withdrew from the meeting and Messrs. Allen, Director, Division of Personnel Administration,
and Hackley, Assistant General Counsel, entered the room.
Governor Vardaman referred to the report he made to the Board
°n January 21, 1954, regarding Ir. Boothe, Administrator, Office of
Defense Loans, and the fact that he had suffered a heart attack. Governor Vardaman stated that Mr. Boothe had had another attack yesterday
and had been taken to the hospital and that it was not known at this
time when he would be able to return to the office.
Governor Vardaman
commented upon the current volume of work in the Office of Defense Loans
and recommended that, for reasons which he stated, Mr. •J. J. Connell,
Technical Assistant in the Office of Defense Loans, be designated Acting
Administrator, Office of Defense Loans, on a temporary basis.
Governor
Vardaman also stated that it would be desirable to have some other
Person become familiar with the procedure for handling defense loans
so that the work could be carried along satisfactorily in the event
111'. Connell were to be absent, and he suggested that the Board authorize
4/2/54
-18-
Mr. Connell to work with Mr. Allen and Mr. Hackley with a view to recomMending some member of the Board's staff, preferably from the Division
of Examinations or the Division of Bank Operations, who could assist
in the Office of Defense Loans on a part-time basis and become familiar
with the work of that office. He also stated that in due time he would
ask the Board to make some adjustment in Mr. Connell's compensation.
Following a brief discussion,
during which Governor Vardaman emphasized that Mr. Connell's appointment would be on a purely temporary
basis, unanimous approval was given
to his suggestions that (1) Mr. Connell be designated Acting Administrator of the Office of Defense Loans
on a temporary basis effective Monday,
April 5, 1954, and (2) that Mr. Connell
be authorized, in consultation with
Mr. Allen and Mr. Hackley, to explore
the possibilities of obtaining someone to assist in the Office of Defense
Loans.
The meeting then adjourned. During the day the following additional action was taken by the Board with all of the members present:
Minutes of actions taken by the Board of Governors of the Fed"al Reserve System on April
1, 1954, were approved unanimously.
@FedFRASER