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137 A meeting of the Board of Governors of the Federal Reserve rstelA was held in Washington on Friday, August 24, 1945, at 10:30 a,ra. PRESENT: Mr. Mr. Mr. Mr. Eccles, Chairman Ransom, Vice Chairman Szymczak Draper Mr. Carpenter, Secretary Mr. Connell, General Assistant, Office of the Secretary Mr. Morrill, Special Adviser Mr. Thurston, Assistant to the Chairman The action stated with respect to each of the matters herein- after referred to was taken by the Board: The minutes of the meeting of the Board of Governors of the Pederal Reserve System held on August 23, 1945, were approved unani- Nielv kiarci Telegrams to Messrs. Clouse and Keesee, Secretaries of the Reserve Banks of Cleveland and Richmond, respectively, Mr. 'Vice President of the Federal Reserve Bank of Chicago, Mr. *art 3 Secretary of the Federal Reserve Bank of St. Louis, Mr. Ziezier us_ 'Vice President of the Federal Reserve Bank of Minneapolis, '1118, Secretary of the Federal Reserve Bank of Kansas City, Mr. tib ert p resident of the Federal Reserve Bank of Dallas, Mr. Earhart, Sident of the Federal Reserve Bank of San Francisco, stating lia't the °ard approves the establishment without change by the FedRea.— ' 4"ve Banks of St. Louis and San Francisco on August 21, and 1 380 8k4/45 -2- bl/the Federal Reserve Banks of Cleveland, Richmond, Chicago, Minneap01 18, Kansas City, and Dallas on August 23, 1945, of the rates of cliecount and purchase in their existing schedules. Approved unanimously. Memorandum dated August 21, 1945, from Mr. Thomas, Director qtthe Division of Research and Statistics, recommending that the te.11001 --rarY appointment of Miss Marilyn J. Turkal, a clerk in that Division be extended for a period of not to exceed two months when her Pl'e8ent t hree-month appointment expires at the close of business Sept e '1945, and that her basic salary continue at the rate of 6 r 17 91 ' 704 Per annum, plus supplemental compensation of $255.60 for over- qme on the basis of a 44-hour workweek. The memorandum stated that e of the nature of her appointment Miss Turkal would continue t° be -4-e-Laided from membership in the Federal Reserve Retirement Approved unanimously. Letter prepared for the signature of Vice Chairman Ransom to -' R. Nathan, Chairman of the Reconversion Working Committee, 8t°n, D. C., reading as follows: , This is in response to your letter of August 23 Ste„,ch You stated that at the last meeting of the ;trig Committee of the Reconversion Working Committe0was decided to appoint a Subcommittee on Area rrie-t,Lstics, of which Mr. Philip M. Hauser of the Com' l ee Department will be Chairman, and on which the 1381 8/2 4/45 —3— "AFederal Reserve, in addition to Labor, National Housing gency, War Manpower Commission, and War Production Board, ' 43gether with the Bureau of the Budget (Observer) will be re presented. "We shAll be glad to cooperate and to that end Mr. 0. Bergelin, Economist in the Board's Division of 1.1..esearch and Statistics, who is the head of the Regional " research Section of the Division, will serve as the Board's epresentative on this Subcommittee. We are advising Mr. qauser accordingly." Approved unanimously. Letter to Mr. George W. Taylor, Chairman of the National War tabor to arc', reading as follows: iv "This refers to the telephone conversation between Asia of your Board's staff, and Messrs. Leonard and Cher-C:rY of our staff in which we were advised that the Na111(Ina1 War Labor Board is prepared to revoke General Order , 0;19 and inquiring whether the cancellation of such ' er Would be agreeable to the Board. It is understood hat this action is taken under Executive Order No. 9599 ated August 18, 1945. "In connection with this matter it is understood that sa. employers may, by voluntary action, make wage or 'arY increases without the necessity of obtaining ap— ' f' l I °val therefor, upon the condition that such increases, the case of products or services being furnished un— r contract with a Federal procurement agency, will not ricrease the costs to the United States. si "In connection with the applicability of this provi— pe,°,11 to Federal Reserve Banks, under the provisions of the t 'eral Reserve Act and other statutes, the Federal Reserve :ks act as fiscal agents for several Government agencies, 002, 1 as the Treasury Department, Reconstruction Finance : Na r°1,','ation, Commodity Credit Corporation, and War and uePartments. In 311 cases the work performed by the ag eral Reserve Banks for the Government Departments and Percles is pursuant to the provisions of the law. The sp eral Reserve Banks receive reimbursement from the re : asellre agencies for most of the costs incurred in acting 'lscal agents. In no case are the services contracted j g 1382 8/24/45 'for and in most cases there is no written agreement be— tween the Government agency and the Federal Reserve Banks. The few agreements which have been entered into were for the purpose of covering certain details of operation and methods of reimbursement. In no case, in our opinion, are the services rendered under the fiscal agency rela— lonships 'furnished under contract' within the meaning or Intent of Executive Order No. 9599. "In the light of the foregoing, it is assumed that .11?.der the provisions of Executive Order No. 9599 and Na— il°hal War Labor Board Order No. 40, voluntary increases Bn wages and salaries of employees of Federal Reserve 11ks may be made without the approval of the National War Labor Board, even though all or part of the salary 'Jai the employee may be reimbursed by the Government on :count of fiscal agency functions. Accordingly, the l'ancellation of General Order No. 19 would be entirely 'greeable to the Board of Governors." Approved unanimously. Telegram to Mr. Peyton, President of the Federal Reserve Bank °I'llinneepolis, stating that, subject to conditions of membership num— belseci 1 to 3 contained in the Board's Regulation HI the Board approves the aplaication of the "Billings State Bank," Billings, Montana, for taerrthel‘8111-P in the Federal Reserve System and for the appropriate amount -13ek in the Federal Reserve Bank of Minneapolis. The telegram l'ecillested that the Federal Reserve Bank advise the applicant bank of t4 t c'' e rdl e approval of the application and conditions of membership Dr'"Iiibed, together with necessary instructions as to the procedure Talplishing membership, and stated that a letter containing de— • e-4thrice regarding such approval would be forwarded to the ap-4ealat bank throuo.h the Reserve Bank. 1383 8/24/45 -5Approved unanimously, together with a letter to the Federal Deposit Insurance Corporation, reading as follows: "The Board of Governors of the Federal Reserve Systoday approved the application of the Billings State ! , lI'ank, Billings, Montana, for membership in the Federal a serve tions. System subject to compliance with certain condiThe bank has not yet opened for business and it Proposes to open as a member bank." tem Letter to The National City Bank of New York, New York, New York, reading as follows: "This refers to the letter of August 14, 1945, from President C. V. Sheehan of your bank requesting an lepxtens4 -Lon of the time within which you may establish traaches at Cairo and Alexandria, Kingdom of Egypt. The i°e 'rcl of Governors of the Federal Reserve System granted permission on September 23, 1944, for the establishrit of! such branches with a proviso that they be estab; 1shed and opened for business on or before October 1 "The Board of Governors of the Federal Reserve SysThextends to October 1, 1946, the time within which fo, l!ational City Bank of New York may establish and open of 'uusiness branches at Cairo and Alexandria, Kingdom of %Pt, in accordance with the provisions of its Order September 23, 1944." tern . Approved unanimously, for transmission through the Federal Reserve Bank of New York. Letter to Mr. Swanson, Vice President of the Federal Reserve Bank eaPolis, reading as follows: and "Reference is made to your letter of August 16, 1945 04 jto previous correspondence in regard to the absorption, by tune 16, of the Kootenai Valley State Bank, Troy, Montana, ,First State Bank of Libby, Libby, Montana. is understood that the deposit liabilities of the -nai Valley State Bank, which amounted to approximately t 8/24/45 -6- "8390,000 at the time of the examination of the bank as of April 28, 1945, were assumed by the First State Bank Of Libby and that the assets acquired by the Libby bank 321 the transaction consisted entirely of cash assets. J-/:l the circumstances, the Board concurs in your concluslon that there was no change in the general character (q. the business or in the scope of the corporate powers exercised by the First State Bank of Libby within the Teaning of condition of membership numbered 1 to which It is subject. "No reference is made in your letter as to whether ,1-1r counsel was satisfied as to the legal aspects of itjtransaction or whether approval of the State author, 1 1;?s was obtained, and your advice on these two points i"-L. be appreciated. In this connection your attention ,8 Called to the Board's letters X-7482 and X-9743 (Loose'ear Service #3490 and #3537)." Approved unanimously. Letter prepared for the signature of Vice Chairman Ransom to WhitneY Stone, President of Stone & Webster, Inc., New York, New York, r eading as follows: "This is in reply to your letter of August 2 in reg Xd t° a plan which your Corporation has had under conIIIT'eration for furnishing certain appliances to consumers 4c1. er a leasing arrangement. You requested us to point 0 , ?IllY problems involved therein under Regulation V or ' el-xecutive Order under which it was adopted. ti "We understood from your very excellent presentacaz that your plan was tentative and subject to modifisubl:°n. As presented in your letter, it might not be th Ject to the Regulation in its existing form. However, t.exact import of the plan, for example, as to the concae 1°ns under which the user might at some stage become the adc, ?wner, would be governed by the documents as finally th:PLed, Which were not submitted with your letter, and saj;fore any opinion expressed at this time would neces-'Y be subject to review. "Moreover, it is apparent that there will be rapid 1385 8124/45 —7— "Changes in the situation as to the production of consumer goods for which there is a pent—up demand, which cannot be appraised with assurance at this time, and the question Whether and to what extent the Regulation or the Executive Order under which it was drawn should be modified in one direction or another can only be determined in the light Of later developments." Approved unanimously. Letter to Mr. Sanford, Assistant Vice President of the Federal Ileserv„ ' Bank of New York, reading as follows: A "This 10)1 acknowledge with thanks your letter of 811gu8t 20 informing us that Messrs. Abdul Kasam Golshan— w°2°Pg and Enayetullah Neshvad of the Bank Melia Iran, ti, ere making your Bank a visit. We hope you will assure Se gentlemen that if they wish to visit Washington, We trust te they will not fail to let us know, for we shall e happy to have them call at the Board's offices." Approved unanimously. Uemorandum dated August 22, 1945, from Messrs. Smead and Bethea, bl'ecto, --8 of the Divisions of Bank Operations and Administrative Serv— tees ' l espectively, reading as follows: ye, "In view of numerous additions to the Par List this particularly since June 30 in the States of Nebraska ;4_K1 Tennessee, it is recommended that the 'Federal Reserve ri!r List' be reprinted in full as of September 1, 1945, ustead of issuing the usual cumulative monthly supplement of that date; and that, in the discretion of the Divi— °f Bank Operations, the scheduled January 1946 annual be omitted entirely or printed in a later month of the alYear, depending on the number of additions to and with— shnals from the Par List. These recommendations are made e;Ilect to the receipt of favorable replies from the Fed— azkinReserve Banks in response to the attached telegrams g for their views on the proposal. Z 1336 8/24/45 —8— "The last annual issue of the Par List cost $1,626.22. cost of reprinting now will not be known unless and un— a definite bid is requested and received from the printer, Presumably the cost will not be much greater. However, ln the last two months there have been a number of requests ,f_or additional copies of the January 1945 Par List, which ;lave been scaled down at our suggestion because of the -Llikited stock remaining. Consequently, it is quite pos— sible that the Reserve Banks and member banks will require 11°Tie copies than have been furnished in the past. In the of replies from the Federal Reserve Banks to the at— telegrams, it may be desirable, for example, to 'der as many as 30,000 copies of the recommended September rePrint, or 5,000 more than the number of copies of the printed in January 1945. If so, the cost will be ue increased somewhat. Ofl, "The total annual cost of printing the Par List and supplements, including shipping and mailing charges, e about $2,000. If the recommended September 1 reprint aPproved, however, the cost this year will be about Under existing practice this cost would be treated p:Aa reimbursable expense and billed against the several b;'?ral Reserve Banks after the end of the year, on the .6-1818 of the number of copies of the Par List sent to ore Federal Reserve districts. Some districts, do 0°11ree, receive many more copies of the Par List than el 0!thers. In our opinion the cost of the Par List, in— julT?-ng reprints and supplements, is not large enough to Re ifY allocation of the cost to the respective Federal ' ve Banks. Accordingly, we recommend that the cost of-el atielPrinting and mailing the Par List, including reprints thd,!uPplements, beginning January 1945, be absorbed in ' cr "'card's expenses, and that the Board authorize an in— bilrse in the appropriate account classifications of the thiget of the Division of Administrative Services to cover is 8 expense for the current year. If this recommendation : ti PProved, provision will be made for similar expendi— atines ln 1946, and each year thereafter, in the regular ual budget of the Division of Administrative Services." T l e Approved unanimously. 1387 8/24/45 _9_ Thereupon the meeting adjourned. Chairman.
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