The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
Minutes of actions taken by the Board of Governors of the l'eclerea Reserve System on Tuesday, August 23, 1949. PRESENT: Mr. Mr. Mr. Mr. Mr. Eccles, Chairman pro tem. Szymczak Draper Vardaman Clayton Mr. Sherman, Assistant Secretary Minutes of actions taken by the Board of Governors of the Petzie 1111 Reserve System on August 22, 1949, were approved unanimously. Memorandum dated August 1), 1949, from Mr. Thomas, Director or 4, "ue Division of Research and Statistics, recommending an inereas e in the basic salary of Thomas Lee Smith, an economist in thiA ni -- vision, from $8,1)0.40 to $8,389.80 per annum, effective SeDteraber 4, 1949. Approved unanimously. Memorandum dated August 22, 1949, from Mr. Bethea, Director r the Division of Administrative Services, recommending that RayXolb, an analyst in the Division of Bank Operations, be trezsr elsred to the Division of Administrative Services as Chief, Ititie Tabulation Section, with basic salary at the rate of $5,232 Der -11111114111, effective September 4, 1949. The memorandum also stated 1114t th e tivision of Bank Operations was agreeable to this transfer. Approved unanimously. Letter to Mr. Leach, President of the Federal Reserve Bank - 404 1 8/23/49 -2- cbr Richmond, reading as follows: "This refers to Mr. Wallace's letter of August 9, 1949, and enclosures, and previous correspondence with regard to the question whether the service of Mr. James M. Johnston aS a member of the firm of Johnston, Lemon & Company and as !! director of The National Bank of Washington, Washington, is prohibited by section 32 of the Banking Act of 1933 "The information furnished the Board through your lank shows that the gross profits of the firm of Johnston, ! Lemon & Company from underwriting for the calendar years 1945 to 1948, inclusive, averaged 50.5 percent of the total profits and commissions of the firm reported in such nformation, comprising gross profits from sales of securi! 4.es for the firm's own account, commissions received from ' brokerage transactions (not including transactions in which he commissions were paid to others) and the gross profits I'M underwriting. If the commissions paid to others are .lacluded in the total, the profits from underwriting for he Past four calendar years would average 43.6 percent. T1 the basis of these facts alone, it appears that the lirM is primarily engaged in the type of business described in section 32. "It will be appreciated if your bank will advise Mr. Prn+ who has been representing Mr. Johnston in this matof the Board's views and advise him that before the 43,0ard expresses a definite opinion it will afford Mr. !°hriston or Mr. Frost an opportunity to present any addi6io1ial information to your bank for transmission to and c°11sideration by the Board of Governors." Approved unanimously. Letter to Mr. Hubert B. Lake, Cashier, The Tucker County ktat 'arsons, West Virginia, reading as follows: "This will acknowledge receipt of your letter of AugUst 10, 1949, with respect to the trade practice con'srence called by the Federal Trade Commission for Sep! - ember 15 in Washington on the subject of deceptive Packing' practices in the instalment financing of auto- 1405 8/23/49 -3"Matters affecting credit conditions are, of course, Of special interest to this Board, and the vesting in the 30ard of responsibility for the administration of Regu12 ! , 4 ti°71 W was in accord with the Board's credit functions. !Idle Regulation W required the disclosure of certain :acts connected with instalment financing, such disclo; Ire was not required in detail. The requirements with respect to the disclosure of facts were essentially for ,2 r Purpose of aiding in the administration of the basic 4Xvisions with respect to the volume of credit outsuch as the down payment and maturity provisions. "The proposal of the Federal Trade Commission appears to follow the usual procedure of the Commission in connec°11 with its responsibility for the prevention of 'unfair vadeceptive acts or practices in commerce', and apparently majnot relate to down payments, maturities, or other such :jers of credit regulation. Inasmuch as banks are among the , institutions engaged in automobile financing, the • t e 'rd felt that some member banks might be interested in he oPportunity to participate in the September 15 conIt also seemed that some might wish to contritoward the attainment of a uniform approach to the Problem and „ a healthier competitive situation for all -. ncerned. vie "We naturally are glad to have the benefit of your on these matters, and we hope that the above may be or e°me assistance to you in this connection." 1 Approved unanimously. Letter to Mr. Eugene R. Black, President, International Bank t°1 'Re c°11structi011 and Development, reading as follows: Your letter of August 18, 1949, you state that the -1.flational Bank has received various inquiries with respe(: t° the present applicability of the margin requireglla• rs °f Regulation T of this Board to securities issued or sliteed by the Bank. You ask to be advised whether or • the Ir°1-1 are correct in your understanding that, in view of :” of June 29, 1949 (Public Law No. 142 - 81st Congress), sect are-* *Lties issued or guaranteed by the International Bank 40w exempted securities for the purposes of Regulation T. 1406 /2.3A9 -4"The Board is pleased to advise you that it agrees "4. tth Your understanding with respect to the matter; ;rt as a result of the enactment of the Act of June i;' 1949 (Public Law No. 142 - 81st Congress) securiee issued or guaranteed by the International Bank : ' 1 Reconstruction and Development are now classified ! t exempted securities under section 2(e) of Regula11 T; that such securities are now in the same cate;11 7 under such regulation as are Government, State pe :Illunicipal bonds; and that, accordingly, the specific ,lcentage limitations prescribed by such regulation respect to maximum loan value and margin requiretent8 are no longer applicable thereto." c Approved unanimously. ADD
@FedFRASER