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 Federal Reserve System on Wednesday, December 12, 1951. PRESENT: Mr. Mr. Mr. Mr. Mr. Mr. Martin, Chairman Szymczak Evans Vardaman Norton Powell Mr. Carpenter, Secretary Mr. Sherman, Assistant Secretary Mr. Kenyon, Assistant Secretary Minutes of actions taken by the Board of Governors of the Federal Reserve System on December 11, 1951, were approved unanimously. Memoranda dated December 10, 1951, from Mt. Leonard, Di— l'ector, Division of Bank Operations, recommending increases in the basiC annual salaries of the following employees in that Division, effective December 23, 1951: Salary Increase Narne From To Title uOhn R. Chief, Reserve Bank Budget Farrell $8,560 $81360 and Expense Section ? l arlic J. Callahan u,, ' 3,910 4,035 Clerk 'k'''s• Alice C. Fry 3,255 3,175 Statistical Clerk 3,110 3,255 Eleanor I. Klein Statistical Clerk Approved unanimously. ilemorandum dated December 7, 1951, from Mr. Young, Director, -on of Research and Statistics, stating that Mrs. Viola A. 1c)(t ance Clerk in that Division, had applied for retirement in accord— , wIth provisions of the Federal Reserve Retirement System, of— as of the close of business December 310 1951. Noted. 2398 12/12/51 -2- Memorandum dated December 11, 1951, from Mr. Kelleher, Assistant Director, Division of Administrative Services, recommendthe reinstatement of Thomas V. Kopfman, who had been on military leave, as Clerk in that Division, with basic salary at the rate of 43,190 per annum, effective as of the date upon which he enters upon the performance of his duties after having passed the usual physical eX atiination. Approved unanimously. Memorandum dated December 10, 1951, from Mr. Carpenter, Secreta of the Board, recommending for reasons stated therein that the Present assignment at the Federal Reserve Bank of Atlanta of Mrs. 11114red E. Pilger, Supervisor, Federal Open Market Administrative 411(1Subject Files, Files Section, Office of the Secretary (approved 1):the Board on November 6, 1951), be extended to January 71 1952, 141th the understanding that she would be continued on the Board's iparoll during the period of this assignment, that the Board would )111tinlle to defray her travel expenses, including per diem at the l'ate of $9.00, and that the 1951 budget of the Office of the Secretary wo,a ci be increased by an amount sufficient to cover travel expenses atIcl Per diem to the end of 1951. Approved unanimously. • 12/12/51 -3- Letter to Mr. Whittier, Federal Reserve Agent of the Federal Reserve Bank of Philadelphia, reading as follows: "In accordance with the request contained in Mr. Wilgus' letter of December 3$ 19511 the Board of Governors approves, effective December 11 19511 the payment of salaries to the following named members of the Federal Reserve Agent's staff at the rates indicated: Annual Salary Title Name J. Frank Rehfuss Assistant Federal Reserve Agent $3, 00 Elmod J. Braker Alternate Assistant 41368 Federal Reserve Agent Glendon M. Burr Alternate Assistant 51820" Federal Reserve Agent Approved unanimously. Letter to Mr. Sproul, President of the Federal Reserve Bank t New York, reading as follows: "Reference is made to your letter of December 5, 19511 requesting the Board of Governors to approve an increase in the salary structures of the Federal Reserve Bank of New York and the Buffalo Branch. "Subject to the proper clearance with the Wage and Salary Stabilization Boards and the approval of your Board ?f Directors, the Board of Governors approves the followIng minimum and maximum salaries for the respective grades, effective December 271 1951: Head Office Maximum Salary Minimum Salary Grade -777700 -7760 -7 1 2 2,820 2,100 3,180 2,340 3 3,480 2,580 4 3,800 2,820 5 4,200 6 3,120 600 3,420 41 7 5,100 3,800 8 5,600 4,100 9 0.01.1••••.001.0 - 12/12/51 Grade 10 11 12 13 14 15 16 1 2 "Head Office Minimum Salary 4,500 14,900 5,300 5,800 6,400 y lloo 7,900 Buffalo Branch $ 1,680 1,860 3 21040 4 6 7 8 9 lo 11 12 13 2,280 2,520 2,760 3,000 3,300 31600 31900 4,300 4,700 5,200 14 15 16 5,700 6,200 7,000 5 Maximum Salary f 6,100 61600 7,200 7,800 8,600 91600 10,600 $ 2,280 2,520 2,760 3,060 3,360 3,700 14,100 4,500 14,900 5,300 5,800 61400 7l000 7,600 81400 9,400 "The Board approves the payment of salaries to the employees, other than officers, within the limits specified for the grades in which the positions of the respective emPleyees are classified. It is understood that allemployees Whose salaries are below the minimum of their grades as a result of the structure increase will be brought within the appropriate range as soon as practicable and not later than March 1, 1952." Approved unanimously. Letter to Mr. Davis, First Vice President of the Federal 11" I've Bank of Philadelphia, reading as follows: "Reference is made to your letter of December 3, 1951, requesting the Board of Governors to approve an increase of 12/12/51 -5- " approximately five per cent in the salary structure of the Federal Reserve Bank of Philadelphia. "The Board of Governors approves the following minimum and maximum salaries for the respective grades for the Federal Reserve Bank of Philadelphia, effective December 1, 1951, provided the necessary clearance for such structural adjustment is received from the Salary and Wage Stabilization Boards: Maximum Minimum Grade Salary Salar 1 13 0 1710 2 2040 1500 2400 1740 3 2820 2040 4 3240 2340 5 6 3700 2700 4200 3060 7 8 3480 9 3900 4300 10 I 6400 11 7100 12 = 7800 5800 13 148600 15 16 7g) 9600 10500 7700 "The Board approves the payment of salaries to the employees, other than officers, within the limits specifled for the grades in which the positions of the respective employees are classified. It is assumed that all employees whose salaries are below the minimum of their grades as a result of the structure increase will be brought within the appropriate range as soon as practicable and not later than March 1, 1952." Approved unanimously. Letter to Mr. Leedy, President of the Federal Reserve Bank ce Xansas City, reading as follows: "Reference is made to your letter of November 26, 1951, requesting the Board of Governors to approve an 12/12/51 -6- "increase of approximately six per cent in the salary structure of the Federal Reserve Bank of Kansas City. "The Board of Governors approves the following minimum and maximum salaries for the respective grades for the Federal Reserve Bank of Kansas City, including the Branches, effective January 1, 1952, provided the necessary clearance for such structural adjustment is received from the Salary and Wage Stabilization Boards: Maximum Minimum SalarGrade Salary loo 1 $1366- 2 3 4 5 6 7 8 9 lo 11 1740 1920 2160 2400 2700 3060 3)420 3730 426o 4740 5340 5940 666o 7440 8340 12 13 14 15 16 2340 2640 2940 3300 3660 408o 1456o 5100 5760 6420 7200 8040 9000 10080 11280 "The Board approves the payment of salaries to the employees, other than officers, within the limits specifed for the grades in which the positions of the respective employees are classified. It is assumed that all employees whose salaries are beloa the minimum of their Fades as a result of the structure increase will be Drought aithin the appropriate range as soon as practicable and not later than March 1, 1952." Approved unanimously. (3r Letter to Mr. Gilbert, President of the Federal Reserve Bank „ -a-"-as, reading as follows: "Reference is made to your letter of December 4, • . 951, requesting the Board of Governors to approve an .Lhcrease of 3'.25 per cent in the salary structure of the 12/12/51 -7- "Head Office and El Paso and Houston Branches of the Federal Reserve Bank of Dallas. "The Board of Governors approves the folloming minimum and maximum salaries for the respective grades, effective November 1, 1951, provided these rates are approved by your Board of Directors and contingent upon the approval Of the Wage and Salary Stabilization Boards: Head Office, El Paso, Houston Maximum Minimum Grade Salary_ Salary ..-$1983 $106 1 2169 2 1610 3 4 5 6 7 8 9 10 11 12 13 ih 15 16 1796 1982 X 2 223o 2478 2787 3035 3h69 3820 4233 4749 5059 5885 6608 712h 2974 3346 3717 4.4a6.3407 5163 5679 6402 6815 7951 8880 9706 "The Board approves the payment of salaries to the employees, other than officers, within the limits speci'lied for the grades in which the positions of the respective eMPloyees are classified. It is assumed that all employees Whose salaries are below the minimum of their grades as a 1sult of the structure increase will be brought within ,i e appropriate range as soon as practicable and not later flan February 1, 1952. "It is understood that no change will be made in the salary structure for the San Antonio Branch at this time." 4 Approved unanimously. Letter to the Honorable Maple T. Han, Chairman, Federal Deposit nce Corporation, Washington, D. C., reading as follows: 12/12/51 -8- "There is enclosed a copy of a proposed bill to amend section 9 of the Federal Reserve Act and section 5155 of the Revised Statutes which has for its purpose certain modifications in the capital requirements for membership in the Federal Reserve System and for the establishment of out-of-town branches by national banks and State member banks. This proposed bill was submitted by the Board to the Bureau of the Budget some months ago, and in a letter dated August 6, 1951, the Bureau advised the Board that there would be no objection to the submission of this legislation to Congress. "Since that time, it has been suggested that the Proposed bill be modified to provide in effect that a national bank may not establish an out-of-town branch unless it meets the capital requirements prescribed by State law for the establishment of out-of-town branches 1DY State banks. The Board wishes to recommend the bill With this modification to Congress when it reconvenes in January; and we have been advised informally by the Bureau of the Budget that this change in the bill will not make it necessary for the Board to resubmit the bill to that Bureau for further clearance. "There is enclosed a memorandum as to the reasons for which this change in the bill is considered desirable; and if you should have any comments regarding this matter Are shall be glad to have them at your early convenience." Approved unanimously. Letter to Mr. Samuel E. Neel, Washington Counsel, Mortgage 13411kers Association of America, 1001 15th Street, N. W., dashington, 1)4 C°, reading as follows: , "This refers to your letter of November 6, 1951, r Mr. Noyes and to your subsequent conversations with " 34 concerning the application of RegulationW to mortgage lenders. With your letter you enclosed a copy of letter to you from Mr. C. Armel Nutter, President of the Nutter Mortgage Service, with offices in Philadelphia and Camden. 12/12/51 -9- "Briefly, the above correspondence raises the question whether institutions lending money on real estate mortgage security are subject to the registration provisions of Regulation W. "In general, registration under the regulation is necessary in the case of any person or institution engaged in the business of extending instalment credit, as indicated in section 2(a) of the regulation, unless all such credit extended is exempted from the regulation. The facb that the nonexempted instalment credit extended may be a relatively small part of the total credit extended by a particular lender does not relieve him of registration and other requirements of the regulation. It should be noted that under the present regulation, the mere fact that an instalment credit, as defined in the regulation, is secured by a real estate mortgage is immaterial, as is the fact that the particular institution also may be subject to Regulation X. Consequently, banks and savings and loan associations are examples of institutions whose businesses are such as to require registration under both regulations, since some of their transactions are subject to one regulation and some to the other. "Some of Mr. Nutter's misunderstanding in this connection may arise from the fact that under the original 1941 version of Regulation W, instalment credit secured by a first lien on improved real estate was specifically exempted. It may also be due in part to the fact that, except for the period April 1, 19/12 to October 15, 1945, instalment credit for residential repairs, modernization or improvements, as such, was not subjecl, to the regulation until the reinstitution of the present regulatlon in September of 1950. As of June 11, 1945, however, the first-lien test for exemption was repealed. Since that time the regulation has contained a purpose test along the lines of present section 7(h). A reason for this change was the fact that some instalment credit secured by real estate was used for purposes other than the construction or purchase of residential structures. "We believe that the foregoing will be of assistance in determining the responsibility for registration under R?gulationlaby mortgage lenders. Of course, the applicatlen of the regulation in particular cases necessarily 12/12/51 —10- "depends upon the facts and circumstances of the individual situations in the light of detailed provisions of the regulation. "As you know, the Board's staff is always available for discussions of such matters, and will be glad to discuss with you any further aspects of the matter at any time mutually convenient." Approved unanimously, with a copy to the Federal Reserve Bank of Philadelphia. Letter to Mr. Leedy, President of the Federal Reserve Bank Of Kansas City, reading as follows: "Receipt is acknowledged of your letter of November 26, 1951, enclosing a report of an investigation of the Pettyjohn Motor Company, Inc., Monte Vista, Colorado, and your letter of November 29, 1951, enclosing a report of an investigation of the PaytonNash Company, North Kansas City, Missouri. "Both reports describe violations which on the basis of the information submitted appear to be flagrant and wilful. "In the circumstances it appears that these are both cases in which it would be desirable to complete the investigation in order that the Board may be in a Position to decide what action it should take. Accordingly, it will be appreciated if you will have the investigators make customer contacts and forward reports thereof to the Board." Approved unanimously. Telegram to Mr. Scheffer, Manager, Real Estate and Consumer 4E1°Itt Department, Federal Reserve Bank of New York, reading as follows: 'Reuriet November 26 with respect to applicability of Regulation X to a building being constructed as an enlargement to American Can Company manufacturing plant, facilities in Baltimore, Maryland. , 240" 12/12/51 -11- "After fully considering the matter in the light of the correspondence which you forwarded, we agree with your view and are also inclined to feel the construction in question is a 'nonresidential structure' as defined in Section 2(r) of the regulation, particularly because 20 per cent of the floor space in the new building will be devoted to actual manufacturing operations and the remaining 80 per cent to storage of unsealed cans and raw materials while in the present manufacturing plant 45 per cent of the floor space is Utilized in the actual production of cans and 55 per cent for storage purposes. In cases of such warehousetype structures, while the guiding principles contained in the Board's interpretation letter, X-32 (5-1271), may be of some help, the final decision must rest on the facts in each case, interpreted in the light of normal business operation in the industries concerned." Approved unanimously. Memorandum dated December 5, 1951, from the Division of l'ersonnel Administration recommending that the Board's employees be given time off on December 24 and 31, 1951 without charge to 4111111a1 leave, with the understanding that this time would be made 11P on the following Saturdays, December 29, 1951, and January 5, 1952, Approved unanimously. Secretary.
@FedFRASER