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500 A meeting of the Board of Governors of the Federal Reserve Systern was held in Washington on Tuesday, April PRESENT: Mr. Mr. Mr. Mr. Mr. Mr. 9, 1946, at 10:30 a.m. Eccles, Chairman Ransom, Vice Chairman Szymczak Draper Evans Vardaman Carpenter, Secretary Hammond, Assistant Secretary Morrill, Special Adviser Thurston, Assistant to the Chairman Vest, General Counsel Leonard, Director, Division of Personnel Administration Mr. Thomas, Director, Division of Research and Statistics Mr. Bethea, Director, Division of Administrative Services Mr. Mr. Mr. Mr. Mr. Mr. It was stated that Mr. Vardaman had been appointed by the President as a member of the Board for the 14-year term from February 1, 1946, and that he had taken his oath of office as a member Of the Board on April 4, 1946. Mr. SzTmczak said that in accordance with the procedure approved at the meeting of the Board on January 31, 1946, the matters presented in the letters under date of January 23, 1946, from Leslie L. Perry, Administrative Assistant of the National Association for the Advancement of Colored People, and under date of Xanuary 24, 1946, signed by Charles R. Norris as personnel representative for the colored employees of the Board and by several Negro employees, were discussed by Mr' Leonard with Norris and the heads of the divisions of the Board's 501 4/9/46 -2- staff; that the matters had been considered by the Personnel Committee in the light of these discussions, and that it was the recommendation of the Personnel Committee (1) that all signs designating toilet facilities as white or colored be removed and that the Negro employees be permitted to use any toilet facilities available generally to other employees of the Board; (2) that the Negro employees be permitted to use the facilities in the large cafeteria; and (3) that it be made clear that it has been and continues to be the policy of the Board to make appointments to, and advancements in, its staff solely on the basis of merit and only of the persons best qualified for the positions to be filled, having due regard for veterans' preference. It was also suggested, Mr. Shymczak said, that instead of making formal replies to the two letters referred to, Mr. Leonard talk to Norris and the representative of the Association for the Advancement of Colored People telling them what the Board's position was, and that the Personnel Committee call together the heads of the divisions of the Board's staff for the purpose of advising them informally of the Board's position. The whole matter was discussed in the light of the procedures followed in other departments and agencies of the Government and the attitude of Congress as indicated by recent debates on proposed legislation, and all of the members of the Board, with the exception of Mr. Draper, indicated agreement with the recommendations of the Personnel 502 4/9/46 -3- Committee. Mr. Draper stated that before a decision was reached to make the facilities of the large cafeteria available to the colored employees, he would like to submit the matter to all of the employees of the Board for a vote. This suggestion was considered and it was the view of the other members of the Board that the question was one for decision by the Board and not one on which the views of the amPloyees would be helpful or controlling. Thereupon, Mr. Draper stated that he would be willing to approve the recommendations of the Personnel Committee. At the conclusion of the discussion it was understood that a statement would be prepared which would carry the recommendations of the Personnel Committee into effect and that the statement would be presented for action at the meeting of the Board on April 12, 1946. Messrs. Thurston, Thomas and Bethea left the meeting at this Point. Before this meeting, there were sent to each member of the Board copies of merLoranda dated April 3 and 4 from Mr. Leonard to Mr- Szymczak with respect to communications from the Federal Reserve Banks of New York and Chicago with which were submitted the salaries proposed by the boards of directors for officers of the respective Banks (other than the Presidents and First Vice Presidents whose salaries had been approved previously) for the year beginning April 1, 1946. At this meeting Mr. Szymczak stated that yesterday he and Mr. Vardaman had discussed the proposed salaries and that it was felt that 503 4/9/46 -4- the two Banks, in proposin g that account be taken of developments affecting salary schedules since 1941 which would justify rather general salary increases, had raised the question whether all of the Federal Reserve Banks should be advised that salaries of officers should be considered on that basis or should continue to be based on the consideration of the merits of individual cases without regard to increased living costs or other general factors. The memorandum with respect to official salaries at the Federal Reserve Bank of New York stated that other matters presented by the proposals of that Bark were (1) whether any officer of the Bank Other than the Presiden t and First Vice President should receive a salary in excess of $25,000, the maximum established for the Presidents Of 10 of the Federal Reserve Banks, and (2) the action to be taken with respect to the salary of Vice President Williams in view of the previous discussions and the Board's letter of March 22, 1946, to Mr. Rum' regarding the continuation of the present part-time arrangement with Mr. Williams. Mr. Szymczak stated that he would be willing to recommend that the salaries proposed by the Federal Reserve Bank of New York be ap- proved but that there were questions with respect to the following proposed salaries to which the Board might wish to give special consideration: Narne Title L. Werner Knoke Vice President Proposed Increase From To 20,000 22,500 504 4/9/46 -5- Name Title Proposed Increase From To ,••••••••• Walter S. Logan Arthur Phelan Robert G. Rouse ✓ice President and General Counsel Vice President ✓ice President $25,000 $27,500 15,000 21,000 18,000 24,000 The New York proposals were discussed on the basis of the policies followed by the Board in the past with respect to official salaries at the Federal Reserve Banks and Mr. Leonard stated that with the possible exception of the salary of $27,500 proposed for Mr. Logan, all of the increas es approved by the directors of the Bank were within the salary pattern that had been in effect at the Bank for a number of years. It was stated that the salary of Mr. Khoke had not been increased since 1939, that with the ending of the war the foreign work Of the Bank and particularly its relations with the new international organizations would increase greatly in volume and importance, and that the salary proposed for Mr. Knoke was justified. Mr. Draper stated that Mr. Phelan had done an excellent job in handling the Regulation V program in the New York District under which the Bank had processed over four billion dollars of guarantees and that in his opinion the increase proposed for Mr. Phelan should be approved. Chairman Eccles said that Mr. Rouse was doing a good job in handling the open-market operations of the System and that the Board might well approve the increase proposed for him with the understanding 505 4/9/46 -6- that the salary for the position which he now occupies would not be permitted to exceed $25,000. Mr. Szymczak stated that he would prefer not to approve the increase proposed for Mr. Logan on the basis of a policy that the Vice President and General Counsel of the Bank should not receive more than the salary of the Presidents of 10 of the Federal Reserve Banks and that, therefore, $25,000 should be regarded as the maximum salary for that position. It was also suggested that the advice to the New York Bank of the Board's action on salaries should state that approval of Mr. William's salary did not modify the Board's views with respect to the continuation of the part-time service of Mr. Williams as expressed in the Board's letter of March 22, 1946, to Chairman Ruml. All of the members of the Board indicated agreement with the above comments, whereupon, Upon motion by Mr. Szymczak, official salaries at the Federal Reserve Bank of New York were approved unanimously as follows, for the period April 1, 1946 through March 31, 1947, it being understood that the Bank would be advised that for the reason stated by Mr. Szymczak the Board was not willing to approve a salary at the rate of $27,500 for Mr. Logan but approved for him a salary at the rate of $25,000 per annum if fixed by the directors at that rate: Name Edward O. Douglas T. Wilson Tones Herbert H. Kimball L. Werner Knoke Arthur Phelan Harold V. Roelse Robert G. Rouse Vice Vice Vice Vice Vice Vice Vice Title President President President President President President President Annual Salary 2.4,000 17,000 15,000 22,500 18,000 16,000 24,000 506 4/9/46 Name Tohn H. Williams Valentine Willis Reginald B. Wiltse Todd G. Tiebout Rufus T. Trimble Loren B. Allen Harold A. Bilby Felix T. Davis Norman P. Davis Silas A. Miller Horace L. Sanford William F. Sheehan Otto W. Ten Eyck William F. Treiber Sohn H. Wurts William F. Abrahams Dudley H. Barrows Curtis R. Bowman Harry M. Boyd Wesley W. Burt Tames T. Carroll Paul R. Fitchen Marcus A. Harris William A. Beinl -7Title Vice President Vice President Vice President Asst. General Counsel Asst. General Counsel Assistant Vice President Assistant Vice President Assistant Vice President Assistant Vice President Assistant Vice President Assistant Vice President Chief Examiner Assistant Vice President Assistant Vice President and Secretary Assistant Vice President Manager, Security Custody Department Manager, Cash Department Manager, Credit Department and Discount Department Manager, Savings Bond Redemption Department Manager, Government Bond Department Manager, Planning Department Manager, Cash Custody Department Manager, Securities Department Manager, Personnel Department Annual Salaa ;$22,067 17,000 16,000 15,000 14,000 10,500 11,500 11,000 11,500 14,000 12,000 14,000 12,000 13,000 11,000 7,500 10,000 8,000 8,500 10,000 8,500 7,000 9,500 8,000 *This approval does not modify the Board's views with respect to the conti nuation of the part-time service of Dr. Williams as expressed in Chairman Eccles' letter of March 22, 1946 to Chairman Ruml. During period of part-time service to the bank, the salary paid Mr. Williams will be at a rate eaual to that proportion of his regular annual salary which the number of days a week spent by him at the bnnk bears to 5. It is understood that under this arran gement when Mr. Williams serves on s Part-time basis of less than 5 days a week his daily pay will be at the rate of one-fifth of his weekly salary at the regular annual rate, that when he serves on a full-time basis of five or more days a week he will continue to be paid his weekly salary at the regular annual rate, and that overtime will not be paid When he works more than 5 days a week. 507 4/9/46 -8- Name Peter P. Lang Daniel T. Liddy Michael T. McLaughlin Spencer S. Marsh, Jr. Franklin E. Peterson Ralph V. Scheffer Charles N. Van Houte n Roy E. Wende ll Harold M. Wessel Tohn T. Clarke William H. Dillistin Donald T. Cameron Insley B. Halsey W. George T. M. Monroe Smith Snow Doll Myers Annual Salari. Title Acting Manager, Foreign Department $7,500 Manager, Foreign Depart8,500 ment Manager, Collection Department 7,500 Manager, Accounting Department 7,500 Manager, Bank Relations Department 8,000 Manager, Check Department 8,500 Manager, Safekeeping Department 9,500 Manager, Government Check Department 7,500 Manager, Foreign Funds Control Department 8,000 Assistant Counsel and Assistant Secretary 8,500 General Auditor 16,000 Assistant General Auditor 11,000 Buffalo Branch Managing Director 11,000 Cashier 8,000 Assistant Cashier 7,200 Assistant Cashier 6,000 Approval was also given to the payment of salary to MT. Brome, who had resigned as Assistant Counsel and Assistant Secretary effective April 30, 1946, for the period April 1 through April 30, 1946, at the present rate of $8,500 per annum. The salaries proposed for the officers of the Feder al Reserve Bank of Chicago were reviewed in the light of the previ ous discussions With respect to Increases proposed for Vice Presidents Sihler and Ne tterstrom at the head office and Harris at the Detroit Branch. Mr. Leonard's memorandum stated that the salary of $15,000 which Mr. Harris was now receiving wAs the largest salary paid any prese nt fficer in charge of a Branch of a Federal Reser ve Bank; that if the 1 508 4/9/46 increase of 01,500 proposed by the directors for MT. Harris was approved he would be receiving a larger salary than had previously been paid a Branch officer; that the reason given for the suggested increase was that President Young expected MT. Harris to participate in the formulation of policies of the head office and spend more and more time in Chicago; and that on the basis of the considerations set forth in the memorandum the salary of a thoroughly qualified officer in charge of one of the larger branches filling his position with distinction might well approximate in Some cases that of a senior Vice President at the head office. All of the members of the Board indicated agreement with this position. It was noted that an increase of $1,000 to the rate of $11,000 Per annum was proposed in the salary for Mr. Diercks as Assistant Vice President and Chief Examiner but that no mention was made of any intention on the part of the Bank to fill the existing vacancy in the 14eition of Vice President in Charge of Examinations. Reference was Illade to the informal efforts of members of the Board to get the Bank to appoint a qualified officerto fill this vacancy and to the apParent reluctance of President Young to make a recommendation and it wes agreed that while Mr. Diercks was a satisfactory person for the 14sition of Chief Examiner and the salary proposed by the directors for him in that position would be justified, proper supervision of the e xamination work of the Bank, which was the second largest in the 509 4/9/46 -10- System, required that the position of Vice President in Charge of Examinations be filled by a well qualified individual, and that, therefore, the Board should continue to press for action by the Bank to appoint such an officer. Upon motion of Mr. Szymczak, official salaries at the Federal Reserve Bank of Chicago were approved unanimously as follows for the period April 1, 1946 through March 31, 1947: Name Neil B. Dawes J. H. Dillard John K. Langum Otto J. Netterstrom Arthur L. Olson Alfred T. Sihler Paul C. Hodge William C. Bachman Wilford R. Diercks Mark A. Lies Louis G. Meyer P. L. Purrington Wm. W. Turner Allan M. Black john J. Endres John W. Crervy Orville C. Barton Edward D. Bristow Phil C. Carroll Walter A. Laurence Hopkins H. Tones C larence T. Laibly Frank A. Lindsten Harold X. Newman Ingolf Petersen Xesse G. Roberts Carl M. Saltnes Edward A. Heath Title Annual Salary Vice President 0_3,000 Vice President 15,000 Vice President 10,000 Vice President 15,500 Vice President 15,000 Vice President 16,500 General Counsel 10,500 Assistant Vice President 10,500 Assistant Vice President 11,000 Assistant Vice President 9,000 Assistant Vice President 9,000 Assistant Vice President 9,000 Assistant Vice President 10,000 Cashier 10,500 Auditor 11,000 Assistant General Counsel 8,000 Assistant Counsel 6,450 Assistant Cashier 5,500 Assistant Cashier 6,500 Assistant Cashier 8,500 Assistant Cashier 7,500 Assistant Cashier 7,500 Assistant Cashier 9,000 Assistant Cashier 8,000 Assistant Cashier 6,500 Assistant Cashier 8,500 Assistant Cashier 8,000 Assistant Cashier and Assistant Secretary 7,000 510 4/9/46 -11- Annual Salary Title Detroit Branch Ernest C. Harris 1/ $16,500 Vice President Harlan J. Chalfont 12,000 Manager Harold L. Diehl 8,000 Cashier R. W. Bloomfield 7,500 Assistant Cashier Wm. T. Cameron 7,500 Assistant Cashier Arthur J. Wiegandt 7,000 Assistant Cashier Kenneth E. Haefele Assistant Counsel and 6,500 Assistant Cashier Vice President Head Office assigned to Detroit Branch. Mr. Szymczak inquired whether the other Federal Reserve Banks Should be advised of the basis upon which the official salaries of the Federal Reserve Banks of New York and Chicago had been considered by the Board. It was stated that the salary lists received from the Federal Reserve Banks of Boston and Cleveland, which would be submitted to the Board for action at a later date, appeared to have been considered by the directors on substantially the same grounds as at New York and Chicago but that the directors of the Federal Reserve Bank of San Francisco had acted solely on the basis of merit in individual cases without regard to higher living costs or other factors which had been taken into account by the Federal Reserve Banks of New York and Chicago. It was agreed unanimously that the San Francisco Bank should be advised informally of the basis upon which the New York and Chicago salaries had been considered by the Board. At this point Messrs. Vest and Leonard withdrew from the meeting. 511. 4/9/46 -12The action stated with respect to each of the matters here- inafter set forth was then taken by the Board: The minutes of the meeting of the Board of Governors of the Federal Reserve System held on April 8, 1946, were approved unanimously. Memorandum dated April 8, 1946, from Mr. Bethea, Director of the Divis ion of Administrative Services, recommending that Mrs. Anna M. Utz be appointed to the position of charwoman in that Division on a temporary basis for a period of two months, at a salary of 41/440 per annum, effective as of the date upon which she enters Upon the performanc e of her duties, after having passed the usual Physical examination. The memorandum also stated that Mrs. Utz Will not become a member of the retirement system during her temporary appointment. Approved unanimously. Memorandum from Mr. Thomas, Director of the Division of Research and Stati stics, dated April 4, 1946, submitting the resignation of Mr. G. L. Bach, an Economist in that Division, who has been on military leave since April 25, 1944, and recommending that the resignation be accepted, effective at the close of business April 1, 1946, the day prior to his entrance upon duty at the Department of Commerce, and that proper lump sum payment be made to Mr. Bach for the annual leave remaining to his credit at that time. 512 4/9/46 -13The resignation was accepted as recommended. Thereupon the meting adjourned.
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