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2334 A meeting of the Board of Governors of the Federal Reserve 83rateill Was held in Washington on Friday, December 18, 1942, at 12:00 noon. ?RESENT: Mr. Mr. Mr. Mr. Mr. Mr. Eccles, Chairman Ransom, Vice Chairman Szymczak McKee Draper Evans Ar. Morrill, Secretary Mr. Bethea, Assistant Secretary Mr. Carpenter, Assistant Secretary Mr. Thurston, Special Assistant to the Chairman Mr. Dreibelbis, General Attorney There were presented telegrams to Messrs. Treiber, McCreedY, 44Y8 3 and Dillard, Secretaries of the Federal Reserve Banks of New York, cielPhie, Cleveland, and Chicago, respectively, Mr. Caldwell, Chair4411 00 1 the Federal Reserve Bank of Kansas City, Mr. Gilbert, President °1 th e Federal Reserve Bank of Dallas, and Mr. Hale, Secretary of the ?Net. heserve Bank of San Francisco, stating that the Board approves the _ eetablishment without change by the Federal Reserve Bank of San Ise° on December 15, and by the Federal Reserve Banks of New York, Naa cielPhial Cleveland, Chicago, Kansas City, Dallas, and San Francisco or 'h JJec ember 17, 1942, of the rates of discount and purchase in their ex- tetiv,.0 schedules. Approved unanimously. Chairman Eccles related briefly for the information of the MR111— °f the Board the substance of conversations which he had hau with 2335 12/18/42 —2— Secretary of the Treasury Bell and Messrs. Buffington and Shields "4 Treasury staff with respect to the desirability of determining the 1, ' asis upon which quotas might be fixed for Federal Reserve districts inc4alection with future offerings of Government securities, ana ex111'essed the opinion that in order to get the best results in future fi44neing campaigns a formula should be worked out. He also said that the 44"8417 representatives had informed him that investigators for the i'la81117had maae spot investigations in some of the Federal Reserve listricts and had learned what was already known to the Victory Fund °°Inikittees C°4tittees e that in the limited time available the organizations of the had not been extended fully or uniformly in the current cam— into the smaller towns of from 5,000 to 15,000 people and that by . °11(13-ng the activities of the organization aggressively to include the 'coMmunities a very large amount of funds might be tapped for in— Veatrap„ The in Government securities other than Series El F, and G bonds. Negestion was also made by the Treasury, Chairman Eccles said, that Illthe interval between large financing operations the Treasury might em1(1. ' a concern specializing in investigations to work through the Chairman °t the victory Fund Committees in each district to check the effectiveness t he camPhign, and that, in addition, the Treasury might prepare a man— which would be set forth the different types of organizations and Proe eclIll'es that had been found to be effective. 14/'. McKee referred to, and questioned whether in view of devel— the Board should sena at this time, the following draft of letter 2336 12/18/42 —3— had been prepared in the office of Chairman Eccles to Mr. Henaerson, Admi . nlstrator of the Office of Price Administration: "On the eve of the inauguration of nationwide ration banking) i , desire to assure you of the continued cooperation of the coard of Governors of the Federal Reserve System in the program. "I am mindful of the added buruen thus placed uoon the Peri al Reserve and the commercial banks while they are already ! Lruggling with a serious man-power problem. However, the job 'las to be aone in any event and the banks can handle it with greater efficiency and consequently with less additional manand equipment than could any other available organiza1°n. Therefore, the banks should consider this an opportunitY to make an additional contribution to the country's war !tfert on the home front. I am confident that they will do 6ne job willingly and efficiently." Chairman Eccles stated that the letter had been prepared at the Ntles+ -- of Mr. Kroeger of the Office of Price Administration, under Ilic)se direction the plans for nationwide ration banking were being forr41114tecl, with the thought that it would be sent to Mr. Henderson promptly, 1311t that in the meantime the resignation of the latter had been announced 41(1 he was inclined to think that action on the letter should be deferred 44tii the Plan had been more definitely worked out. It was also stated that ' l eqUests had been made of the Comotroller of the Currency and the Nd etial Deoosit Insurance Corporation for similar letters but that it was 114der'8.tood that these requests had not yet been acted upon. The members the ,_ 'uard were in agreement with the suggestion that action on the iqter be deferred for the time being. lettta At this point, Messrs. Thurston and Dreibelbis withdrew from the ) and the action stated with respect to each of the matters here1 "qtei, referred to was then taken by the Board: 2337 12/18/42 The minutes of the meeting of the Board of Governors of the Pecteral Reserve System held on December 17, 1942, were approved unan41011817. Memorandum dated December 18, 1942, from Mr. Leonard, Director Or the Division of Personnel Administration, reading as follows: "CAUSE FOR MEMORANDUM: On December 15, Congress passed a joint resolution which, it is understood, will be signed the first of next week, and which: t. 1. Authorizes payment of overtime, with certain excep1°ns, 'to all civilian employees in or under the United States Government, including Government owned or controlled °rganizations.' (Information as to the rates follows later in this memorandum under 'Comments'.) 2. a. Requires the heads of the departments or agencies whose employees are affected by the joint resolution to 'present to the Director of the Bureau of the Budget such inforIllation as ne shall require for the purpose of justifying the Umber of employees in their respective departments or agencies.t b. Gives the Director of the Bureau of the Budget the right to order the reduction of personnel of a department agency by such number as he finds to be in excess of the 'Airlimum requirements of the department or agency. (Failure to furnish such information or to comply with an order of the Director of the Bureau of the Budget to reduce personnel voids the authorization for payment of overtime.) 3. Suspends for the period during which the joint reslution is in effect the provisions of the Saturday half hol' daY law. This resolution, which is admittedly a stopgap, is retr , odctIve to December 1, 1942, and terminates on April 30, or such earlier date as Congress by concurrent resolu1 1011 may prescribe. ' IFLECOMMENDATIONS: , "1. That the employees of the Board be paid overtime bee-Lnning December 1, 1942, on the basis provided in the joint esolution "2. That the present official hours of 44 per week be ! eintained until January 1, 1943, pending review of the sittion and determination of the general practice of the other bgencies, unless the situation is changed by an announcement the president. 2338 12/18,42 —5-- "COMMENTS ,Laes of overtime: Overtime is payable only on that part °f the employee's basic salary not in excess of $2,900, and the overtime paid cannot cause his aggregate compensation to exceed $5,000. "Overtime is figured as one and one-half times the basic rate of compensation for hours worked in excess of 40 hours Per week. Actually, however, the overtime for a 44 hour week araounts to approximately 10.7 per cent of the regular salary, .4110 for a 48 hour week to approximately 21.5 per cent, since the basic pay for one day is figured at 1/360 of the annual salary. At a meeting of the Council of Personnel Administra10n yesterday, at which Mr. Young, of the Budget Bureau, ; ' ..ead the discussion regarding the resolution, he stated that 'he legal effect of the resolution would be to require a .!turday work day of not less than 7 hours. He stated that "ere would be no discretion (for those azencies whose hours are governed by law) to require less than 7 hours work on 8 aturaay. "Mr. Young said that an effort would be made immediately to achieve the 48 hour week in Government, and it would probablY come through an order from the White House. "He stated that it was the hope to keep overtime payments to Payments for the regular official hours above 40 per week, 24d to avoid fluctuating amounts of overtime from day to day. ? also stated, however, that overtime should be paid for addi4 °nal hours beyond the official hours required when such overWas required by one authorized to do so." Z The recommendations contained in the memorandum were approved unanimously. Letter to Mr. Davis, President of the Federal Reserve Bank of Lo reading as follows: "In accordance with your request the Board of Governors "Proves the changes in the personnel classification plan of . 11e Federal Reserve Bank of St. Louis, as submitted with your "Letter of November 28, 1942." Approved unanimously. Letter to the board of directors of the "Winnetka Trust and gs Bank", Winnetka, Illinois, stating that, subject to conditions 2339 12/18/42 —63t membership numbered 1 to 6 contained in the Board's Regulation H, theBoard approves the bank's application for membership in the Federal Reserve System and for the appropriate amount of stock in the Federal Reserve Bank of Chicago. Approved unanimously, together with a letter to Mr. Young, President of the Federal Reserve Bank of Chicago, reading as follows: "The Board of Governors of the Federal Reserve System !proves the application of the 'Winnetka Trust and Savings ' 3'ank t, Winnetkal Illinois, for membership in the Federal Reserve System, subject to the conditions prescribed in the elosed letter which you are requested to forward to the ioard of Directors of the institution. Two copies of such tetter are also enclosed, one of which is for your files Vld.the other of which you are requested to forward to the ,k al . cia.tor of Public Accounts for the State of Illinois for nls information. "Since the amount of estimated losses as shown in the fePort of examination for membership is relatively small, 6he usual condition of membership requiring the elimination losses has not been prescribed. It is assumed, however, hat proper provision for losses will be made as a matter c3f sound banking practice. "While the volume of trust business is small and the l !ecounts are reported to be efficiently administered, it "'s been noted that there is no duly appointed trust comrnittee and no record in the minutes regarding supervision °4 the trust department by the bank's board. There will ?robably be no difficulty in getting the bank to revise trust operations, so that the collective judgment of he board or a committee will be obtained." r Letter to the Federal Deposit Insurance Corporation, reading follows: of section 12B of the Fed "Pursuant to the provisions -eral Reserve Act as amended the Board of Governors of th c e Federal Reserve System hereby certifies that the Ilrwensville State Bank Curwensville Pennsylvania, became member of the Federal Reserve System on December 17, 1942 2340 12/18/42 -7and is now a member of the System. The Board of Governors ?f the Federal Reserve System further hereby certifies that, ,r1 connection with the admission of such bank to membership 1 the Federal Reserve System, consideration was given to following factors enumerated in subsection (g) of sec— 'Ion 12B of the Federal Reserve Act: 1. The financial history and condition of the bank, 2. The adequacy of its capital structure, 3. Its future earnings prospects, 4. The general character of its management, 5. The convenience and needs of the community to be served by the bank, and 6. Whether or not its corporate powers are con— sistent with the purposes of section 12B of the Federal Reserve Act." Approved unanimously. Thereupon the meeting adjourned. hr) Chairman.
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