The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
I aiitl; A meeting of the Board of Governors of the Federal Reserve SYstern - was held in Washington on Thursday, December 14, 1944, at 10130 a.m. PRESENT: Mr. Mr. Mr. Mr. Mr. Eccles, Chairman Ransom, Vice Chairman McKee Draper Evans Mr. Morrill, Secretary Mr. Carpenter, Assistant Secretary Mr. Clayton, Assistant to the Chairman The action stated with respect to each of the matters herein- attel, referred to was taken by the Board: The minutes of the meeting of the Board of Governors of the Nierel Reserve System held on December 13, 1944, were approved unani— kolisiy. Memorandum dated December 11, 1944, from Mr. Goldenweiser, DiIseetor, becau Of the Division of Research and Statistics, recommending that, °I' illness, Miss Ruth Brooks, an administrative clerk in that : 1114 87" be granted leave from November 23, 1944, to January 2, 1945, C11 Ire, with the understanding that she will utilize her accumulated 41411a : beceilib leave through November 29 and sick leave from November 30 through Igaire er 3, 1944, and that the remainder of her leave will be taken as without pay. corkla The memorandum recommended further that the Board Ile to make its contributions to the retirement system on Miss •ooka behalf during her leave without pay provided she continues 41 contributions for the same period. Approved unanimously. 1v14/44 -2— Memorandum dated December 8, 1944, from Mr. Paulger, Director q the Division to allow of Examinations, recommending that the Board continue a per diem of $7 for the period January 1, 1945, to December 3111o) ' 45, inclusive, for Board examiners while they are in a travel atatue . ln connection with the examination of Federal Reserve Banks, With the understanding that should conditions become more nearly norblq anY time during the period and apparently justify a return to a. t6 Pe ' 1,-em the whole subject would be reviewed and a report submitted to R 11- "oard, Approved unanimously. 't the Ifemorandum dated December 8, 1944, from Mr. Bethea, Director 0 81on of Administrative Services, recommending that the fol- '41g increases in basic annual salaries of employees in that Division be al)pr °ved, effective December 16, 1944: Designation ?N. Leo Stioilff rlard „, er "Orden Guard Guard Salary- increase From To $1,620 1,560 $1,680 1,620 Approved unanimously. or Me morandum dated December 9, 1944, from Mr. Bethea, Director the bi -vleion of Administrative Services, recommending that, effective th e date tJett upon which he enters upon the performance of his duties Ving passed satisfactorily the usual physical examination, PI'ice be appointed as a laborer in that Division on a tem-ls for an indefinite period with basic salary at the rate is 12/14/44 —3— 2°° Per annum and with the understanding that he will become ' Or41 a raelther of the Board's retirement system. Approved unanimously. Memorandum dated December 13, 1944, from Mr. Bethea, Director the . nlvision of Administrative Services, recommending that, effective a8 of the date upon which she enters upon the performance of her kities after having passed satisfactorily the usual physical examinat44, . Illee Leone Klaprat be appointed as a telegraph operator in that on a temporary basis for an indefinite period with basic aala 1.7 at the rate of $1,860 per annum and with the understanding that vitt -4- become a member of the Board's retirement system. Approved unanimously. 't th Memorandum dated December 11, 1944, from Mr. Bethea, Director e 01-111sion of Administrative Services, recommending, for the reasons 4tat ed in the memorandum, that Mrs. Frances B. Florence, a clerk-sten- a.Phe ?b in that Division, be granted leave from December 26, 1944, to 111`117 28, 1945, ated with the understanding that she will utilize her ac- and accrued annual leave to .10:30 a.m. on January 11, 1945, that t he remainder of her leave will be taken as leave without pay. The ke recommended further that the Board authorize the con- °n of Mrs. Florence's death benefits under the retirement system t, ' 1‘the Period of her leave of absence without pay with the understand- t} he would make appropriate contributions therefor. Approved unanimously. 12114/44 —4— Memorandum dated December 13, 1944, from Mr. Bethea, Director qthe n. ulvision of Administrative Services, recommending, for the 8041.8 stated in the memorandum, that the Board extend to December 31 '1944, inclusive, the authorization granted on October 17, 1944, t0 rbeimburse the Western Union Telegraph Company for the services of Itt88MIlriel Pace, at the rate of $160 per month, who has been assigned to the Board,s telegraph office in the absence of regular operators. Approved unanimously. Letter to Mr. McCreedy, Assistant Vice President and Secretary (It the Federal Reserve Bank of Philadelphia, reading as follows: "The Board of Governors approves 1411"7 to Mr. William D. Cobb, Assistant Bank of Philadelphia, for the 945 to 4-Y45 April 30, 1945, inclusive, at Per annum, which is the rate fixed by rectors as reported in your letter of the payment of sal— Cashier, Federal period January 1, the rate of $6,000 your Board of Di— December 7, 1944." Approved unanimously. Letter to Mr. Gidney, President of the Federal Reserve Bank of C4Ireiand, reading as follows: in "This is in reply to your letter of December 2 advis— _,..g that, upon recommendation of the Boards of Directors Ile Cincinnati and Pittsburgh Branches, the directors ouf l! e Federal Reserve Bank of Cleveland have adopted a 0i8olution increasing, subject to the approval of the Board tr Governors, the number of directors at the Cincinnati anch and the Pittsburgh Branch from five to seven. toe. In view of the action taken by your director, the in ru -1 interpose no objection to the proposed increase aa the number of directors at the two Branches. It is t1,8L4!led that the amendments to the bylaws to provide for 'e Increase will become effective January 1, 1945. 12/14/44 —5— s, "It is noted that, in order to provide for orderly , 1 6aggering of terms, one of the directors at each of the l uranches appointed by the Bank for terms beginning January ! 1945 will be appointed for a 2—year term and the other ;all be appointed for a 3—year term. The Board will fol— tow a similar procedure in making its appointments to the boards of the two Branches." Approved unanimously. Letter to Mr. Rouse, Vice President of the Federal Reserve Bank (ItliewYork, reading as follows: 1,144. s refers to your letter dated November 25, 1944, i;614 which was enclosed a letter dated November 15, 1944, e°111 J. P. Morgan & Co. Incorporated, applying for permis— :ft under the provisions of section 25 of the Federal Re— Act, to invest $850,000 in the capital stock of Morgan la le. Incorporated, a corporation organized under the co w8 of the State of New York, which application was ac— thmPanied by your favorable recommendation. It is noted State of New York has granted the Banking Board of the it4t 8 approval in the matter. is "The Board of Governors of the Federal Reserve System t4 Prepared to grant the requested permission upon condi441'11 that Morgan & Cie. Incorporated shall deliver to you ninety days from the date of this letter two copies c)f the enclosed agreement duly executed by the appropriate 0ffic ers of Morgan & Cie. Incorporated and that J. P. dCo. Incorporated agree to consummate the proposed investment in the capital stock of Morgan & Cie. an!°rporated not later than July 1, 1945. Upon receipt of a 1"11Y executed copy of such agreement, the Board will write 1fl etter directly to J. P. Morgan & Co. Incorporated grant— letterrested permission and will forward a copy of such to you. sir,,"The agreement provides that Morgan & Cie. Incorporated : a. 4-1- not establish any branches or agencies except with the Veroval of the Board. The letter of application from J. P. 121 & Co. Incorporated shows that the establishment of a braa, all-e—en. in Paris, France, of Morgan & Cie. Incorporated to illteeed to the business of the firm of Morgan & Cie. is an egral part of the plan for the operation of Morgan & Cie. I8; 12/14/44 -6'i.corporated. In the circumstances, the Board will also a letter directly to Morgan & Cie. Incorporated grantng Permission for it to establish a branch at Paris, France, 11).rovided such branch is established not later than July 1, 1945, and the Board advised in writing by Morgan & Cie. ncorporated that such branch has been established and Opened for business. u "In the Board's letter of April 23, 1942, to J. P. t°rgaa & Co. Incorporated, advising the institution of approval of its application for membership, it was b '''ted that the provisions of condition of membership numone are applicable to the operations of subsidiary ,Y111ates of a member bank as well as to the operations O the bank itself. Since Morgan & Cie. Incorporated was 't that time dormant, the proposal for it to become active International or foreign banking obviously comes within jus Purview of the condition. Therefore, you may advise si P- Morgan & Co. Incorporated that the grant of permisi8Q to invest in the stock of Morgan & Cie. Incorporated co to be interpreted as carrying with it permission under ndition of membership numbered one for Morgan & Cie. Ina?rPorated to engage in international or foreign banking contemplated by the provisions of section 25 of the cleral Reserve Act, subject to any agreements entered to with the Board thereunder. "In connection with this matter, however, it will be a , „greoiated if you will call to the attention of the proper re sentatives of J. P. Morgan & Co. Incorporated that ofrlan & Cie. Incorporated will continue to be an affiliate P. Morgan & Co. Incorporated, and the member bank be expected to comply with the provisions of section , the Federal Reserve Act with regard to the submission (12f Publication of reports of this and any other affiliates mo addition to any reports which may be called for from tjgar). & Cie. Incorporated under the provisions of subsecsm' (cl) of Paragraph 6 of the Agreement. st ,"Special Regulation No. 15 of the Banking Board of the L? of New York by subsection (3) of section (a) of Para: gr Ph , 3., Investment of Funds, provides that Morgan & Cie. a °rporated may invest in so much of the capital stock of : other corporation as may be specifically authorized by °111tion of the Banking Board of the State of New York. pl tease inform the representatives of Morgan & Cie. Inr*Porated that when application is made to the Banking X Ve L g 1_872 12/14/44 —7— "Board for permission to invest in the capital stock of uY other corporation, a copy of such application is to be „rnished simultaneously to the Federal Reserve Bank of i:Iew York for transmission to the Board of Governors for lts information. b "The Board has considered your suggestion that there e incorporated in the agreement a provision that the character and scope of the business of Morgan & Cie. Incorporated t,"a11 not be broadened or changed without first obtaining ir approval of the Board. In this connection, however, has been the Board's long standing practice, in order to permit American foreign banking corporations to compete rfectively in foreign countries, to give latitude to the ; r?veloPment of their business abroad and not to prescribe olgid restrictions or in too much detail but to prescribe nlY general rules for their guidance. Also the right to re s strict the operations of Morgan & Cie. Incorporated is pPecifically reserved to the Board by the provisions of l agraph 8 of the agreement so that any restrictions ' ,,e' a `c'eemed necessary, should unsatisfactory tendencies develop, Exn be imposed to meet the need for corrective action. areePt for Bankers Company of New York whose operations a4.1imited solely to holding stock in a British fiduciary ha'lliate, none of the agreements presently in operation chs a provision requiring the Board's permission for a poange in the character and scope of the subscribing corberation's business and no apparent need therefor has then developed as a result of their operations. For e reasons the Board has not included in the agreement a" Provision of the type suggested. e , "Please have two copies of the enclosed agreement a'eouted on behalf of Morgan & Cie. Incorporated by its ,PrcPriate officers and forward the original executed elD :!PY thereof to the Board of Governors. The other exCopy of the agreement should be retained for the records of the Reserve Bank. When the agreement has been itecuted and the Board's formal permission has been granted, a bill be appreciated if you will supply a copy of the u:Leement to the Superintendent of Banks of the State of " York for his information and files." p Approved unanimously. 873 12/14/44 —8— Letter to the Presidents of all the Federal Reserve Banks read.; as follows: "For your information there is enclosed a copy of wlre received from the Federal Reserve Bank of San rrancisco, dated December 6, 1944, regarding amending gil.arantee agreements to provide for lower guarantee fees wlthout adopting the 1944 V guarantee form. c "There is also enclosed a copy of a memorandum re— ?lved from the War Department, dated December 11, 1944, l'grled by Colonel Paul Cleveland, Chief, Advance Payment gnd Loan Branch, in reply thereto." a Approved unanimously. Thereupon the meeting adjourned. Secretary. Chairman.
@FedFRASER