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1123 A meeting of the Board of Governors of the Federal Reserve Systern Was held in Washington on Friday, August 9, 1946, at 10:30 a. PRESENT: M. Mr. Eccles, Chairman Mr. Szymczak Mr. Draper Mr. Carpenter, Secretary Mr. Morrill, Special Adviser Mr. Thurston, Assistant to the Chairman Mr. Vardaman was absent for the reasons stated in the minutes of the Board of Governors of the Federal Reserve System for August 6, 1946. The action stated with respect to each of the matters hereinafter referred to was taken by the Board: Telegrams to Mr. Clarke, Assistant Counsel and Assistant Secretarb. -4 of the Federal Reserve Bank of New York, Mr. Blair, Secretary of the Federal Reserve Bank of Cleveland, Mr. Dillard, Vice President of the Pederal Reserve Bank of Chicago, Mr. Stewart, Secretary of the Fedet'al Reserve Bank of St. Louis, Mr. Powell, First Vice President of the ll'ederai Reserve Bank of Minneapolis, Mr. Caldwell, Chairman of the Feder41 Reserve Bank of Kansas City, and Mr. Mangels, Vice President of the Peclers1 the Reserve Bank of San Francisco, stating that the Board approves establishment, without change by the Federal Reserve Bank of San 4arleisco on August 6, and by the Federal Reserve Banks of New York, Cleve144, C hicago, St. Louis, Minneapolis and Kansas City on August 8, 1946, Of the rates of discount and purchase in their existing schedules. Approved unanimously. 414,41,11 Telegram to Mr. Leach, President of the Federal Reserve Bank of reading as follows: 1124 8/9/46 "Reurtel August 9. Effective August 10, 1946, Board aPproves establishment of following effective minimum buying :ates on bankers' acceptances: 3/4 per cent for maturities P to 90 days, 7/8 per cent up to 120 days, and one per cent uP to 180 days. Reestablishment of all other rates now in effect at your Bank also approved by the Board." Approved unanimously. Memorandum dated July 31, 1946, from Mr. Smead, Director of the Division of Bank Operations, recommending that the basic annual salaries tlf the folloting employees in that Division be increased to the amounts shoml, effective August 11, 1946: Proposed Increase _Name To From Title 411, Margaret K. Benson, Catherine Lee rer, Rita S. Sran, Evelyn Collins, Wesley B. ,C,(311kaing, Gerald M. k,044e11, J.J. Conover, Esther VI. Daniels, Mortimer B. Goheen, Loretta M. Marjorie F. 411-1 lican, Thelma CS //erlid, Esther ,°,41/Iner, Carl M. r. William E. * S Clerk Clerk Clerk Clerk Messenger Technical Assistant Technical Assistant Clerk Technical Assistant Senior Clerk Senior Clerk Clerk Clerk—Stenographer Clerk Messenger $2,895.60 2,243.52 3,021.00 2,895.60 2,093.04 7,341.60 5,654.40 2,770.20 7,341.60 3,397.20 3,397.20 2,770.20 2,770.20 2,168.28 2,093.04 $3,021.00 2,318.76 3,146.40 3,021.00 2,168.28 7,581.00 5,905.20 2,845.44 7,581.00 3,522.60 3,522.60 2,845.44 2,845.44 2,243.52 2,168.28 Part time in Office of Administrator for War Loans and part time in Division of Bank Operations. Approved unanimously. Memorandum dated August 7, 1946, from. Mr. Bethea, Director of the t, lvision of Administrative Services, recommending that Mrs. Joyce S. ../c1 be appointed to the position of Stenographer in that Division, at a8 alarY of 4;2,394.00 per annum, effective as of the date upon which she enters upon the performance of her duties after having passed the 1125 81/K6 -3- usual AYsical examination. The memorandum also stated that Mrs. Reid would become a member of the Federal Reserve retirement system. Approved unanimously. Letter to Mr. Neely, Chairman of the Federal Reserve Bank of nta, reading as follows: Re"At the completion of the examination of the Federal serve Bank of Atlanta made as of May 10, 1946 by the Board,s examiners, a copy of the report of examination l'Alas left for your information and that of the directors. coPy was also furnished to President McLarin. "The examiners' references to the successful efforts 111?.de to eliminate or reduce certain personnel and operations dlfficulties have been noted with considerable interest and nc ed,ouragement. V:e hope that further progress can be effectThe Board will appreciate advice that the report has been considered by your Board of Directors. Any comments ?01.1 may care to offer regarding discussions with respect to examination or as to action taken or to be taken as a result of the examination will also be appreciated." Approved unanimously. Letter to Mr. Clerk, President of the Federal Reserve Bank of ancisco, reading as follows: "The Board of Governors approves the payment of salat;les to the following officers of the Federal Reserve , ank of San Francisco and its Branches for the period eptember 1, 1946, through April 30, 1947, at the rates ?-1:Idicated, which are the rates fixed by the Board of D lrectors as reported in your letter of August 1, 1946: Name Title Annual Salary Head Office H. Armstrong Ronald T• Symms J. A. Randall Assistant Cashier Assistant Cashier Assistant Cashier 6,500 7,000 6,500 1126 8/9/46 —4— Name Title Annual Salary Head Office (Cont) R. C. Milliken John A. OiKane Oliver P. Wheeler Assistant Cashier Assistant General Counsel Director of Research 5,500 7,000 9,500 Los Angeles Branch W. N. Ambrose Fred C. Bold M. McRitchie C. H. lhatkins E. R. Barglebaugh Managing Director Assistant Manager Assistant Manager Assistant Manager Assistant Manager 13,000 9,000 7,000 7,000 5,800 Portland Branch D. L. Davis D. E. Bent J. P. Blanchard Managing Director Assistant Manager Assistant Manager 12,000 6,000 5,500 Salt Lake City Branch W. R. W. 0. L. E. M. H. Partner Everson Scott Barnard Managing Director Assistant Manager Assistant Manager Assistant Manager 10,000 7,000 5,600 5,300 Seattle Branch C. B. D. R. R. A. E. H. Shaw Russell Simms Morrill Managing Director Assistant Manager Assistant Manager Assistant Manager 12,000 7,000 6,300 6,500 Approved unanimously. Memorandum dated June 26, 1946, from the Division of Bank °Per • atIons submitting the triennial reviews made by the Federal Reserve laarlits aS of December 31, 1945, covering member banks in outlying sections Of r_ 'serve cities and Chicago authorized to carry lower reserves on 1127 8/9/46 —5— deP"its than are required to be carried by other banks located in 811ch cities. The reviews were made by the Reserve Banks in compliance Ivith the Board's letters of October 5, 1933 and December 16, 1940. The ille111°I'andurn stated (1) that each Federal Reserve Bank had recommended conti -nuance of the existing reserve status of the member banks in its district which had been granted permission to carry reduced reserves and (2) that it was the recommendation of the Division that each of the Reserite Banks be advised that the Board had considered the Bank's rilendatien and had decided that the member banks having permission to Maintain reduced reserves might continue to do so until further notice. When the memorandum from the Division of Bank Operations was tosen ial Mr. Vardaman, he suggested that the procedure calling for trreviews be changed to provide for a review in connection with the exalzan ation of each member bank which had been granted permission to car.n, reduced reserves and a letter to the Presidents of the Federal Reaerv e Banks had been prepared by the staff to carry his suggestion into effect. The recommendation contained in the memorandum from the Division of Bank Operations was approved unanimously, together with the following letter to the Presidents of the Federal Reserve Banks which had been prepared in accordance with Mr. Vardaman's suggestion: "This letter is for the purpose of amending the outanding instructions of the Board to the Federal Reserve its with respect to permission granted to banks in outYlng districts of reserve and central reserve cities to earrY reduced reserves, and supersedes the Board's letters i7 1128 8/9/46 -6- October 5, 1933 and December 16, 1940 (X-7629 and 8-2461 P.R.L.S. #6050). "As a matter of general policy, the Board is disposed 10 ..c) grant permission to any member bank located in an outl'Ying district of a central reserve or reserve city to ?arrY reduced reserves provided the character of its pusiness is typical of banks located in and serving priarilY outlying communities of such cities. In submitting the application of a member bank for permission to carry reduced reserves, a full statement (including the informaion called for in items 1 to 5 and 8 to 10 below) should °e furnished of the facts upon which your Bank bases its re commendation. "In accordance with the Board's letter of December 16) 1940, 8-246, the Federal Reserve Banks have made reyiews at three-year intervals and have furnished the -board with reports and recommendations covering member b anks in their respective districts located in outlying ,!ections of central reserve and reserve cities (except ilew York City) which have permission to carry lower reon deposits than are required to be carried by her banks located in such cities. The Board wishes t° change the procedure with respect to these reviews and will appreciate it if in place of the triennial review each Federal Reserve Bank hereafter will review the situation with respect to each such member bank upon comPletion of the examination thereof if it is a State bank and upon receipt of the first report of examination in each calendar year if it is a national bank. If, upon completion of such review, the Federal Reserve Bank is °f the opinion that the permission to carry reduced reserves should be revoked or that it is a border-line case which should be brought to the Board's attention for consideration, it is requested that the Federal Reserve Bank submit its recommendation to the Board, together with the rusraorandum reviewing the bank's situation. Upon receipt °f the recommendation of your Bank, the matter will be 2onsidered and you will be advised of the Board's decision. -Li', however, the Federal Reserve Bank is satisfied that the Permission to carry reduced reserves should be continued, it will be sufficient if a statement to that effect, together with the memorandum reviewing the bank's situation, iB placed in the Federal Reserve Bank's files. 1129 8/9/46 -7- "When a case is referred to the Board for considers.it is requested that, in addition to such other data and comments as the Reserve Bank may deem it desirable to 171.1bmit with its recommendation, the following information With regard to the subject member bank be furnished the Board: (I) Demand deposits excluding interbank (2) Time deposits excluding interbank (3) Number and amount of interbank deposit accounts (4) Total deposits (5) Number, amount, and nature of large accounts included in items 1 and 2 above (6) What change, if any, there has been since the previous review in the general character of the bank's business, or in the economic character of the district in which the bank is located (7) What change, if any, there has been in ownership or operating policies of the bank (8) 1:I-tether the bank has established any branches in the downtown financial section of the city or elsewhere (9) Distance of the bank from what is generally regarded as the downtown business and financial district of the city (10) Distance of the bank from nearby banks, and whether such banks have permission to carry reduced reserves "If, in the period between the reviews provided for ve, a member bank which has permission to carry reduced abc ' il:eserves establishes a downtown branch or if there is t'rought to your attention any change in the character of Its business which might warrant revocation of the permis- 1 1130 8/9/46 -8It • 810n to carry reduced reserves, the facts in the case sllould be brought to the Board's attention promptly with such recommendation as you may wish to make." Letter to Mr. H. M. Weitzenhoffer, Equitable Finance Co., 813Perrine Building, Oklahoma City, Oklahoma, reading as follows: "This refers to your letter of July 29, 1946, which raises a question about the Statement of Transaction provided for in section 4(d) of Regulation W. "The dollar figure in this section was left at $6 intentionally in order to prevent misrepresentation and consequent avoidance of down payment in cases where articles which actually have a cash price of $10 are treated as costing less than that amount. If there is no record °f what has happened, avoidance is facilitated. "In case the item is actually priced at $6 to $101 the statement may be completed without showing any down Payment if such in fact has not been obtained. Our investigations have indicated that almost all merchants Use for their own ourposes some sort of statement which can be adapted to give the information required by the re gulation." Approved unanimously. Thereupon the meeting adjo Secretary. Chairman.
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