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1072 A meeting of the Board of Governors of the Federal Reserve 87etem was held in Washington on Thursday, August 28, 1941, at 11:30 a.m. PRESENT: MT. Ransom, Vice Chairman Mr. Szymczak Mr. Draper Mr. Morrill, Secretary Mr. Carpenter, Assistant Secretary Mr. Clayton, Assistant to the Chairman The action stated with respect to each of the matters hereinafter referred to was taken by the Board: Memorandum dated August 25, 1941, from Mr. Wyatt, General Cotineel, re commending that, because of approaching confinement, Mrs. 41" Bs Boiseau, a stenographer in the Office of General Counsel, be gl7anted leave of absence without pay November12, 1941, to February 9, 1942, inclusive, and that during her absence the Board continue to 414 its co ntributions to the Retirement System on her behalf with the tindersta the period. nding that she will continue her own contributions during Approved unanimously. 4441tof Telegram to Mr. Caldwell, Chairman of the Federal Reserve ICansas City, reading as follows: an, fective immediately, Board of Governors approves /001ntment of H. G. Leeoi,y as President and Henry 0. orlang as First Vice President of Federal Reserve Bank enci.' 4n8a5 City for unexpired portion of five-year term clirl eri eg„ February 28, 1946, and salaries fixed by your " )rs for them in new positions at rates of 1.8,000 "(I $13,50° per annum, respectively. Board also approves, 1073 8kV41 -2- effective immediate ly, designation of D. W. 'Woolley as Vice President to have supervision of examination department and salary fixed by your directors for him in new position at rate of :'1',7,500 per annum. Approved unanimously. Telegram to the Presidents of all of the Federal Reserve Banks reading 8.8 follows: lows "Reg. W-5. An inquiry which may be stated as fol- has been received under Regulation W: 'Pursuant to an established bona fide business practice a finance company issues and sells notes which are secured by instalment sales obligations trusteed under a collateral trust agreement. It is not feasible for a purchaser of the collateral trust notes to examine the underlying obligations held by the trustee. Suppose one of the underlying instalment obligations failed to comply with the requirements of Regulation VT and such noncomPliance, although unknown to the purchaser of the collateral trust notes, showed on the face Of the underlying instalment obligation. Would the Purchase of the collateral trust note in ; case, or the receipt of payments on T7athe constitute a violation of Regulation ' les_ The regulatio n does not apply to the purchaser unlico "The he is a person required by section 3(a)(1) to be acceneed- If he is such a person, the payments received, to the question as stated, arise out of the collater iritej:rer than the underlying obligation cih l da asiniez the regulation does not apply to aro,"Even if the transaction were such that the payments lat-e out of the underlying obligation rather than the colpiZal trust note the receipt of payments by the registrant wolo, asing the note secured by such underlying obligation pot be contrary to the regulation if when he made the someuase the underlying obligation did not on its face show faci, no or if he did not at that time know some the'" D'Y reason of which the extension of credit on which linderlYing obligation was based failed to comply with 1.074 V28/41 -3"the regulation. In this connection it will be noted that while 4(f) requires that extension of instalment sale credit be evidenced in the prescribed manner, this does not require that the obligation or claim referred to in section 3(a)(2)(B) shall contain all the prescribed information, since under section 4(f) the evidence of the Underlying transaction which must contain the necessary nformation, or have such information attached, may be a separate instrument or record and need not be the same as the obligation or claim referred to in section 3(a)(2)(B)." Approved unanimously. Telegram to all Federal Reserve Banks reading as follows: .L "Reg t-6. The classification mechanical refrigerrs includes frozen food cabinets of the specified capa. :Lt%f but does not include milk coolers, assuming that they vire not designed for household use." Approved unanimously. Telegram to all Federal Reserve Banks reading as follows: "'g. 'N-7. Tumbler clothes driers are not included of the classifications of listed articles." Approved unanimously. Telegram to the Presidents of all of the Federal Reserve Banks reach_ -4-ng as follaws: : 2 1Reg. t-8. In connection with section 9(d) of Regulati-"" exempting contracts made before September 1, ques: t °_ne have been received as to whether orders received '°ugh the mail by a mail order company come within the 1 ntl°n if the orders are postmarked prior to September at4 "ln the usual course of business are not filled until been that date. The standing practice of the company has Of .1.,t0 fill all such mail orders according to the terms to `'lle catalog, subject only to the right of the company ellj efllee to fill the order for certain specified reasons " as unsatisfactory credit standing of the customer. 4 1075 11/28/41 —4— "If such orders are received in good faith pursuant to an outstanding catalog and without personal solicitation, It ls the view of the Board that those postmarked before September I may be deemed to be exempted under section 9(a) even though in the usual course of business they are not filled until after that date." Approved unanimously. Letter to Mr. Earhart, Cashier of the Federal Reserve Bank of karrancisco, reading as follows: "Reference is made to your letter of August 25, 1941 regarding the recent amendment to the 'Memorandum of Procedure Adopted by the Presidents' Committee for Uniform Tr eatment of alployees of the Federal Reserve Banks who Y be called for Military Service', and inquiring whether Paent of one month's unearned salary or such portion thereofc as he may be entitled to under the original procedure may be made to employees voluntarily entering the atary or naval service with the intention of not retiZgetr=lys .ervice beyond the termination of the na- Tt Z t , "In adopting the amended procedure for employees enering military service, it was contemplated that the same wo;1,.?fits, including the payment of unearned compensation, ,;"4 be accorded all employees covered under the second ‘'engraph of the memorandum of procedure, including those '111Inf under Clause D. "As you have indicated, there may be cases where emmay not return to work for the bank, even though m1114'ullY intended to do so at the time of leaving for rY service; however, it is believed that, subject to excl'iseretion of each bank, such contingency should not of lilde an employee from receiving the benefits at the time ' eaving for military service." c Approved unanimously. Letter to Mr. Donald S. Thompson, Chief of the Division of Re °earch and Statistics of the Federal Deposit Insurance Corporation, 2.e4ct, 44.E18 falOWS: "Referring to your letter of August 25, there is 1076 8/28/41 -5- "no objection to your using the call report data for State bank members of the Federal Reserve System as of June 30, 1941, in the statement for the press on the condition of 411 insured commercial banks which you plan to release on or about September 2." Approved unanimously. Thereupon the meeting adjourned. hi Secretary. Vice Chairman.
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