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1530 A meeting of the Board of Governors of the Federal Reserve 8Ystem was held in Washington on Saturday, August 1, 1942, at 11:00 a.m. PRESENT: Mr. Mr. Mr. Mr. Mr. Eccles, Chairman Ransom, Vice Chairman Szymczak McKee Draper Mr. Morrill, Secretary Mr. Bethea, Assistant Secretary Mr. Carpenter, Assistant Secretary The action stated with respect to each of the matters hereinreferred to was taken by the Board: The minutes of the meeting of the Board of Governors of the ?oder , al. Reserve System held on July 31, 1942, were aproved unanimously. Memorandum dated August 1, 1942, from Mr. Leonard, Director of the DiVision of Personnel Administration, stating that the custodial 811417 act (H.R. 6217), which was approved today, (1) increased the saiari I range of the first eight custodial grades and the first two sub131.*"688ional grades under the Classification Act of 1923 to the ranges '73et r-- "I4 in the memorandum, and (2) raised all the grades of guards °Ile grade. ht be no The memorandum recommended that, in order that there delay in moving to meet the objectives of the legislation, al.t1,11.es of all employees of the Board in the custodial grades (the cl has no ' 11c)l employees in the first two subprofessional grades) now re- eet'qng less than the new minimumsestablished by the amendment be inel'e4884 to those minimums, effective August 1, 1942. The increases 1741ehl701-11(1 be approved by the Board under this recommendation were as Naowe: 1531 8/1/42 -2Name Salary Increase From To Desi(4nation 119197..116:9mbers' Offices Xamii-TF. ubrision. of Hamilton Bank Qp2Tations , Wesley B, Collins Messenger $1,140 !ii 1,320 Messeir.er 1,260 1,320 =414:2112.11_of Personnel Administration Maid Substitute Maid AII1Y P. French 1,080 1,200 0.00 per A.00 per working working day day In connection with Mr. Leonard's memorandum there was also subzitted a memorandum dated August 1, 1942, from Mr. Morrill, stating that there Were certain employees in the Secretary's Office whose compensatil was below the minimum rate for the corresponding grade prescribed by the custodial salary act and that it was felt their salaries should he adjusted to the minimum of the respective grades in order to be in With the compensation paid for comparable work in other Government NOi ncies. For that reason, it was recommended in the memorandum that the s alaries of the following employes be increased to the amounts 012T0site their names, effective August 1, 1942: Name 2%.8' ohx DelaPleY Blash 1'°/'11.8 Mayhew ! 41.11. C. Ektit , 1 P. ' 4alitz)17I3an S -qa ullivan Carmen ?ank '4141e1Constable es Derrick 'e 14nor, Jr. :(,1 gq1 Parquette Snouffer Designation Salary Increase From To Painter General Mechanic Gardener Plumber Acting Captain of the Guard* Senior Guard Guard Guard Guard Guard Guard Guard 1,560 1,620 1,800 1,800 1,560 1,380 1,380 1,380 1,380 1,380 1,380 11T2,040 1,680 1,680 1,860 2,200 1,680 1,500 1,500 1,500 1,500 1,500 1,500 1532 8/1/42 -3- Name !ranklin Taylor 4. chn F. Horrigan Rerbert E. Becke ?ereY Riston ,clward W. Cook "dalana Bertolini ' lice X. Bardales -Lela M. Beach ,ene D. Carroll v4-a ar R. Cooke ,.a.rah P. Corbin 11,silde E. Ellis rrY T. Enrico ;!!77 B. liarshall ,,,le`•-7 C. McNeill ‘lara Mock i.n01^0t4 .,i11111 MaeRogers Shelton 1-g2le L. Spicer p:mecta Steiner Sunderraan X. Wiklirnd Desiation Guard Guard Guard (to report about August 6, 1942) Assistant Foreman of Laborers Laborer Charwoman** Charwoman Charwoman Charwoman Charwoman Charwoman Charwoman Charwoman Charwoman Charwoman Charwoman Charwoman Charwoman Charwoman Charwoman Charwoman Charwoman Salary Increase To From $1,380 $1,500 1,380 1,500 1,380 1,620 1,080 .55 per .50 per .50 per .50 per .50 per .50 per .50 per .50 per .50 per .50 per .50 per .50 per .50 per .50 per .50 per .50 per .50 per 1,500 1,680 1,200 hr. 1,200 hr. 1,200 hr. 1,200 hr. 1,200 hr. 1,200 hr. 1,200 hr. 1,200 hr. 1,200 hr. 1,200 hr. 1,200 hr. 1,200 hr. 1,200 hr. 1,200 hr. 1,200 hr. 1,200 hr. 1,200 hr. 1,200 Reco mmended salary applies only during the period in which Mr. **-T-.74.,ers°11 holds the position of Acting Captain of the Guard 4J-e to be changed from Assistant Supervisor of Charwomen ' The memorandum added that the proposed change in compensation °D the Der charwomen also involved a change from an hourly basis of 5 hours A., to El full-time basis of 44 hours per week; that it was proposed, tclr th reasons stated in the memorandum, to increase the salaries of the 1,1 Woraen now on the char force as it did not seem desirable immedi'EA iv , " bo discharge three of them to reduce the force to 14 which is all tlat w°111d be required on a full-time basis and which would be conZiaer ea as a standard force; that it was believed the present force be further reduced by voluntary resignations; and that inasmuch 1533 Y3,142 118 —4- the labor force was short two men at the present time the services °t the three additional charwomen could be used to good advantage. Mr. Leonard's memorandum made the further statement that the '111°P°sed increases would unbalance the salary differentials between employees within grades, and that a study of these discrepancies Wa8bei ng made and recommendations for adjustments would be submitted l'()111Ptly to restore the balance. The salary increases recommended in the two memoranda and the arrangement with respect to the charwomen were approved unanimously. Memorandum dated July 31, 1942, from Mr. Paulger, Chief of the tilrision of Examinations, recommending that the salary of Miss Elnyr we°111e, a secretary in that Division, be increased from $2,000 to ' Per annum, effective August 1, 1942. Approved unanimously. Memorandum dated Tilly- 27, 1942, from Mr. Goldenweiser, Director t the D ivision of Research and Statistics, recommending, with the con- the or the Secretary's Office, that Edward D. Rogers, a laborer in " 4 atter office, be transferred to the Division of Research and Sta8tics t1 as a messenger on a continued temporary basis for an indefinite Nrtoa, With an increase in his salary from $1,200 to $1,320 per annum, "tecti e as of August 1, 1942. Approved unanimously. 1534 8/1/42 Memorandum dated truly 28, 1942, from Mr. Paulger, Chief of the Division of Examinations, submitting the resignation of Thomas P. Howard as a Federal Reserve Examiner, to become effective as of the close of 11114inass on Xuly 31, 1942, and recommending that the resignation be accepted as of that date. The resignation was accepted. Letter to Mr. Phelan, Assistant Vice President of the Federal Rese ve Bank of New 'York, reading as follows: "In your letter of June 22, 1942 (Inquiry No. 20), you asked for our views regarding the applicability of Regulation W to charges by hotels to the accounts of guests or tenants, including those arising from operations incidental to the primary purposes of hotels. "In the usual cases, and for the purposes of the Regulation ) it would not appear that hotels are 'engaged in' any Of the businesses covered by section 3. "The Board agrees with your view that a charge solely for room rent does not constitute a 'charge account' since ':ne transaction involves the sale of a service rather than the sale of an 'article, whether listed or unlisted.' The lile is true of charges for the sale of other services, e.g., _!1"bar) tailor, storage, etc., assuming that the value of u.lr material involved would be insignificant in comparison With the total cost of the service. "According to the facts disclosed in your letter, the lric idental articles or services sold by hotels, or to be : °11sidered as sold by hotels although made available through eTIcessionaires or independent contractors, and which may be lrrged to guests' hotel accounts ordinarily do not include ',”ed articles. Accordingly, it is the Board's view that, (T.sss it appears that a hotel is engaged in the business ., eletlY or indirectly of making charge sales of listed aj ' de eles, charges to guests' hotel accounts for such incitOtal articles should not be considered as affected by restrictions of the Regulation. "You indicate that a hotel may make a cash advance to aa R11.4s 4-u pay on -) behalf of a guest for a C.O.D. delivery by " 4- -al merchant, or purchase theatre or railway accommodations for a guest, the amounts thereof being charged to the r 1535 8/1/42 -6- account. However, it is doubtful whether hotels, a practical matter, hold themselves ready to so accommodate all guests in this manner or to such an extent that the hotels should be considered as 'engaged in' the extension of the resulting credit as a business. It is the Board's view, therefore, that such casual or incidental Operations, alone, do not constitute a business of the type covered by the Regulation." Approved unanimously, with the understanding that a copy of the above letter would be sent to the Presidents of all the Federal Reserve Banks. Telegram to Yr. Hale, Vice President of the Federal Reserve Bank Of San Francisco, reading as follows: "Replying your recent communications concerning apPlications of Standard Oil Company of California and Union °IA Company of California for cycle billing concession under fection 12(m) of Regulation W and requesting comments of Iloard with respect to questions presented. "To the extent that questions involve clause (1) in the first paragraph of section 12(m) they are perhaps to be de termined by the Board as a matter of interpretation but the extent that they involve findings of impracticabilltY under clauses 2(A) and 2(B) they are within the province (n the Federal Reserve Bank and as to these the Board's cornare to be taken as suggestive and not as controlling. "Your original letter is correct in stating that the Se Was not intended to apply to situations like that .°11tlined in Standard Oil letter. Standard Oil Company would not appear to qualify under clause (1) in the first l!lragraph of section 12(m). Company indicates that retail :ccounts are billed on one date and two groups of wholecele accounts are billed on other dates. But clause (1) aall8 for grouping within the retail accounts, since these are the only charge accounts that are affected by the regu! r ti°11. The wholesale accounts would not appear to be afected since there are no restrictions on credit sales of 'oullieted articles in any kind of account and credit sales ,t listed articles at wholesale would be exempt under sec- or "Referring to clauses 2(A) and 2(B) the description telthe company's system of authorization given in your be'L?eram of July 23 may not suffice to show that it would 411Practicable for the company to conform with section 536 8/1/42 -7- "5(c) and still keep billing period on twentieth-of-month basis. Reason is that you may find system to be able to Provide for notifying retail dealers concerning customer accounts that are in default by end-of-month criterion. It might be mentioned also that from the facts available there would appear to be some doubt that the company would gain any advantage from its own point of view if it were Permitted to operate under section 12W rather than section 5(c) . "Re Union Oil, since company does not sell listed articles on credit cards, you may find that determination ce whether any account is in default would not be significant problem for this company, since such determination is 11?t necessary except in connection with credit sale of listed article. In absence of any such problem you will naturally wish to ascertain how it can be that company's Present system makes it 'impracticable' for company to operate under section 5(c)." Approved unanimously. Letter to Mr. Powell, First Vice President and Secretary of the Pmer al Reserve Bank of Linneapolis, reading as follows: "Reference is made to your letter af July 28, 1942, r aegarding the Governmental Requirements Plan for the hanling of requests for priority assistance. "In connection with the question raised in your letter, it would not seem that the Federal Reserve Banks ,8110111d include in their estimates any equipment furnished to them by any Government departments or agencies. The e as-timates of the Reserve Banks should, however, include Y equipment to be purchased or rented by them even though reimbursement is to be obtained from a Government `4aPartment or agency. :It is realized that the Reserve Banks are not in a Posi+ to anticipate requirements when services are re":(ilested by Government departments without advance knowlge. In such cases supplemental forms PD-408 may be olbzitted by your Bank and we will transmit them promptly to the War Production Board." j Approved unanimously. Thereupon the meeting adjourned. 1537
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