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1077 A meeting of the Board of Governors of the Federal Reserve 4r8teill Was held in Washington on Friday, August 29, 1941, at 11:30 aon. PRESENT: Mr. 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 hereinreferred to was taken by the Board: Telegrams to Messrs. Sanford, Post, and Hays, Secretaries of theD ,ederal Reserve Banks of New York, Philadelphia, and Cleveland, respfttiveliy, Mr. Tialden, First Vice President of the Federal Reserve Bank qlUchmond, Messrs Dillard, Stewart, and Powell, Secretaries of the Federal Reserve Banks of Chicago, St. Louis, and Minneapolis, respectlIrelY, Mr. Caldwell, Chairman of the Federal Reserve Bank of Kansas elt and*. Hale, Secretary of the Federal Reserve Bank of San Franqsco, stating that the Board approves the establishment without change bY the Federal Reserve Banks of St. Louis and San Francisco on August 4) by the Federal Reserve Banks of New York, Cleveland, Richmond, eilleaRo, St. Louis, Minneapolis, and Kansas City on August 28, 1941, 4" bY the Federal Reserve Bank of Philadelphia today, of the rates qdLiscount and purchase in their existing schedules. Approved unanimously. It wa 8 suggested that, in accordance with the established proteckre of assignments to individual members of the Board of various 1078 8/29/41 sithjects for primary attention, Mr. Szymczak be designated as Mr. Ransom's alternate in connection with matters relating to consumer "It requiring attention or action by the Board. Approved unanimously. Letter to Mr. Mehornay, Office of Production Management, read14 as follows: "Governor Draper has asked me to respond on behalf of the Board to your letter of August 28 in regard to your invitation to Mr. Milford to join the Defense Contract Ser- 'dee. "Mr. Milford is a highly valued officer of the Fed! ral Reserve Bank whose services have become increasingly portant in carrying out responsibilities which have de„loPed in connection with the defense program. The Fedvral Reserve Bank, however, desires to cooperate with you r e has very kindly granted Mr. Milford leave of absence a period up to three months to enable him to serve in the r e desired capacity, with the understanding that the arta iIngement will be reconsidered before the expiration of that Period, if either you or the Bank wish to do so. The :Ilk would like to have Mr. Milford divide his time between your and that of the Baltimore Branch if this can be eund Without hindranc erta king ng, your undertak of to the success , e„ it is understood that you are agreeable to this kind of —operation. 7 :The Board of Governors has asked me to advise you that lt has been glad to cooperate with you by giving Its 'APProval to this arrangement.” Approved unanimously, together with a letter to Mr. Leach, President of the Federal Reserve Bank of Richmond, reading as follows: ti_ "With regard to Governor Draper's telephone conversakrn...with you and my subsequent telephone conversation with 2 You will find enclosed a copy of a letter of Allglarticie of 14,.. 28 nfrom Mr. R. L. Mehornay to Mr. Milford, a copy 1), -' Uehornay's covering letter of August 28 to Governor ' 413"2 and a copy of our reply of this date to Mr. Mehornay. 1079 8/29/41 -3- “It is understood that the Federal Reserve Bank of tachmond is granting Mr. Milford leave of absence, with pay, for the purpose stated in the correspondence and the Board aPProves this action of the Federal Reserve Bank of Richmond.” Letter to Mr. Meyer, Assistant Cashier of the Federal Reserve Bank of Chicago, reading as follows: "The Board of Governors approves the change in the personnel classification plan of your Bank as requested ln your letter of August 25, 1941." Approved unanimously. Letter to the board of directors of "The State Bank of Salem", Saler', Indiana, stating that, subject to conditions of membership numbered 1 to 3 contained in the Board's Regulation H, the Board approves thebankts application for membership in the Federal Reserve System kiI for the appropriate amount of stock in the Federal Reserve Bank of 8t, Approved unanimously for transmission through the Federal Reserve Bank of St. Louis. Letter to the board of directors of the "Bank of Lincoln County", kei betTY, Missouri , stating that, subject to conditions of membership Ntber ed 1 to 3 contained in the Board's Regulation H and the following 4Pecial condition, the Board approves the bank's application for memberV 14 the 14 the D Federal Reserve System and for the appropriate amount of stock Reserve Bank of St. Louis: "4. At the time of admission to membership such bank shall 2ave a paid-up and unimpaired capital of not less than ;525,000." 1080 8/29/41 —4— Approved unanimously for transmission through the Federal Reserve Bank of St. Louis. Letter to Mr. Palmer, Coordinator of the Division of Defense 4118ing coordination, Office for Emergency Management, Executive Office of the President, reading as follows: , ing "Referring to your letter of August 26, 1941, regardprocedure and forms to be used in connection with e the d esignation of 'defense housing' by the Defense Housing 1C3oordinator for the purposes of section 6(e)(2) of the °ard ts Regulation W, I am pleased to advise you that the Pr and forms indicated in the attachments to your .Letter will be entirely agreeable to the Board. "The Board, and the Federal Reserve Banks and branches, be glad to be of all possible assistance in facilitat4.11g public information with respect to these procedures." Approved unanimously. Telegram to all Federal Reserve Banks reading as follows: in "neg. W-9. The classification household furniture eludes lamps designed for household use." Approved unanimously. Te legram to all Federal Reserve Banks reading as follows: W-11. Question has been raised as to effect lajePtember 1 holiday upon the effective date of Regutect°n 11. Fact that this is holiday does not alter efbe ty? date of regulation which becomes effective at gllnlng sI O.L. business on September 1." Approved unanimously. Letter ,_ Lo the Presidents of all of the Federal Reserve Banks g 48 or t f011OWS: "Under separate cover, we are sending you ten copies he volume entitled Banking Studies, just published. 1081 8/29/41 -5- "Upon request, we shall be glad to send you additional copies without charge for the use of members of your staff. "It is our plan to furnish copies of the volume free, upon request, to members of the staff of the Federal Reserve Banks, to Member of Congress and Governs ment Departments, to State Banking Departments, to libraries and educational institutions, to foreign central banks and governments, and to the press. "For the most part, however, it is planned to sell the volume rather than distri bute it free. The price be 4.50 for single copies and 75 cents a copy in quantities of ten or more. 4. "As in the case of the Chart Books, it is the ind.entio ered' n to make a charge to member bas banks for copies orby them; but should you wish to distribute copies ° some of your member banks at your own expense, it is Bot considered that this would be in conflict with the oardts policy." ;; Approved unanimously. Memorandum dated August 28, 1941, from Mr. Baumann, Assistant COutis el reading as follows: "In conversations with Mr. Pollard and me on Tuesday, Milford Zimmerman, of the Department of Justice, inconcerning the possibility of obtaining from the Board 0 information concerning silver owned on March 2, 1934/ 1) sometime within a few months thereafter, by Wells Fargo 2 1 and Union 13 , Trust Company, San Francisco, a State member 17. iThe information is desired in connection with.a slat between the Government and an individual which 1:-Late to a Federal tax on silver transfers. The bank 8 catZt,, Party to the suit but comes into the picture beamount of the tax turns on the question whether Oi ba2mrch 2, 1934, the taxpayer sold certain silver to the th7cra'and contracted to purchase other silver, it being tie L/overnment's position that there was no sale. Invesbarcrs report an apparent desire on the part of the to aid the taxpayer, a customer of the bank. the 1, The Board has in its files reports of condition of a8 of March 5 and June 30, 1934, and a report of Mr 1082 8/29/0. -6mamination as of May 1, 1934. These reports contain no reference to silver bullion owned by the bank. Since the Departm ent of Justice wishes to prove that there was no sale to the bank, this presumably is the information it is seeking. However, there is other information in these reports and a subsequent report of examination which might have some bearing on silver transactions of the bank and perhaps would aid in the investigation, although not to prove the Government's case. "The Board can legally furnish the information to the Departme nt of Justice and it has been the policy to furnish information to it when requested in connection with criminal Prosecutions. There is greater question as to whether such c?nridential information should be furnished for use in ,c_1711 actions , particularly where it appears that the memo?r bank might object to such action. However, it is be-teved that, within certain limits at least, the Board rould coopera te with the Department of Justice in matters -Ln which the Government has an interest. t, "The Departm ent of Justice seldom requests informa,t°n in connection with civil actions. However, in one zrtance, in 1936, there was a formal request by the AtneY General to inspect certain reports of examinations. The matter was disposed of informally, the pertinent inmkealzation being given to a representative of the Depart°f Justice with the understanding that it would be treated no t, , as strictly confidential and that its source would inver ti=d,the purpose being solely to assist in the pos "With the Board's permiss ion, I will attempt to dissu e of this matter in the same manner. With respect to a sr!ti°n Mr. Zimmerman made to the effect that he might wig at ,, 60 inspect examine rs' work sheets or other documents 174 une Fect tl Reserve Bank of San Francisco, I will ada h1i , if permission to do so is requested, it will be nee able essarY first to ascertain what information is avail„ s and that, if any is furnished, it will be on the ' / 1 44e basis as that in the Board's files." Approved unanimously. Thereupon the meeting adjourned. 6)-iCexyALA,11)t--AA)--(14 Secre ary. APProveci: Vi Chairman.
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