The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
2311 A meeting of the Board of Governors of the Federal Reserve 8Yetela was held in Vtashington on Saturday, Deceraber 19, 1942, at 11:00 PRESENT: Mr. Mr. Mr. Mr. Mr. Eccles, Chairman Szymczak McKee Draper Evans Mr. Mr. Mr. Mr. Morrill, Secretary Bethea, Assistant Secretary Carpenter, Assistant Secretary Clayton, Assistant to the Chairman The action stated with respect to each of the matters hereinreferred to was taken by the Board: The minutes of the meeting of the Board of Governors of the eral Reserve System held on December 18, 1942, were approved unani- 01181y. .41 Memorandum dated December 19, 1942, from Mr. Morrill, submitting t he resignation of James W. Arnold as an elevator operator in the Se el'eta -rYi s Office, to become effective as of the close of business on Neetiab er 29, 1942, and recommending that the resignation be accepted or that date. The resignation was accepted. Telegram to Mr. Young, President of the Federal Reserve Bank Or Chic ago, reading as follows: "Retel 17. Board approves the salary of E. C. Harris „e Vice President of Federal Reserve Bank of Chicago at .1;te of $15,000 per annum for period ending March 31, 1943. r-Lease advise as to the date when his appointment will a 2342 12/19/42 -2- "become effective." Approved unanimously. Telegram to Mr. Peyton, President of the Federal Reserve Bank eaPolis, stating that, subject to conditions of membership num- berpd to 3 contained in the Board's Regulation H, the Board approves the 415131j-cation of the "Citizens Bank of Montana", Havre, Montana, for Nther.1,2 -4"-LP in the Federal Reserve System and for the appropriate Amount Of st °c- in the Federal Reserve Bank of Minneapolis. The telegram re- rilleeted that the Federal Reserve Bank advise the applicant bank of the ' . tlarciI 8 aPproval of the application and conditions of membership preBerl') d, together with necessary instructions as to the procedure for .4ee°111PlishinP• membership, and stated that a letter containing detailed ake e regarding such approval would be forwarded to the applicant bank t4ro ugh the Reserve Bank. The telegram contained the following additi04 41 statement: "while the new bank seems to have favorable prospects the management has been seasoned in successful operation : 11 the community, one of the principal reasons for the formaof the bank appears to have been the demand for an in:,Pendent bank. Furthermore, the information submitted in; 1 cates that some animosities may have arisen in connection : olth the organization of the new bank. Such a condition is, course, unfortunate and unfavorable possibilities are inent. The application has been approved with the underthat you will follow the situation closely after uank has been admitted to membership." t Z Approved unanimously. P. .4p Letter prepared for the signature of Chairman Eccles to Mr. A. ini, Chairman of the Board of Transamerica Corporation, San 2343 12/19/42 -3- 46zeisco, California, reading as follows: "I have yours of November 25 in which you acknowledge receipt of my letter of November 13 respecting the position Of the Board in the matter of expansion of banking institutions in the Transamerica group. "I could not possibly agree with you that the Board, the Federal Deposit Insurance Corporation, and the Comptroller of the Currency have entered upon a course of arbitrary a4d discriminatory action where Transamerica is concerned nor could I possibly agree that any policy has been declared and put into effect without any opportunity for the inter!sted parties to be heard. I believe that you are fully informed as to the Board's position and of all the facts IT0n which it is based, and I am convinced that continued 1.1scussion would only involve us in lengthy arguments as to the correctness of your impressions regarding the soundness °f the Board's position and the sincerity of its motives. 0wever, any time you or any of your senior associates are 14 Viashington, I shall be glad to arrange further conferences on this matter." Approved unanimously. Letter to Mr. Hale, Vice President of the Federal Reserve Bank ot San Francisco, reading as follows: 1 "This is with reference to your letter of December 3, ,942, enclosing copies of correspondence with Ir. T. P. ',,,oats, President of the Production Credit Corporation of berkeley. It is our understanding that Mr. Coats proposes ..hat section 8(i) of Regulation W be amended so that a 4'°an to a person engaged in agriculture, for general agrienitural purposes, would be exempt even though for the purP?se of purchasing a listed article provided the purchase °I the listed article is certified by the lender to be necessary to maintain or increase production of livestock °r essential commodities. A similar change is proposed fOr section 2(i). "In studying Mr. Coats' letter, we note that he menions automobiles, cooking stoves, refrigerators, water PnMPs, and wearing apparel as the items which he has in Inind in connection with this proposed amendment. He apparntlY feels that in certain circumstances a loan to purchase ! uhese articles would be a loan for general agricultural 2344 12/19/42 _4_ Purposes. We presume that what he is thinking of is that the inability to obtain some of these goods may impair the efficiency of the farmer. Perhaps in some cases the situaion is that a particular man is not able to engage in farm-trig because his family would have to have these articles in order to move to the farm. "This concept of 'general agricultural purposes' is broader than we have ever employed in interpreting this Phrase. In our opinion, it would include purchases of articles actually used in agricultural production but not the ordinary consumers' goods. It would seem that under Mr. Coats' view all goods and services purchased by a farmer's family would be producers' goods since they would all, to some extent, contribute to his efficiency in producing crops. "If this view were adopted generally, then all goods PUrchased by the family of a person engaged in any type of business would be for business purposes. If the business then was essential, directly or indirectly, to the war effort, Pl.irchases of these families should likewise be exempted. 81nce so large a share of the country's workers would qualify arld since this share must grow, the adoption of such a prineiPle would in large measure nullify Regulation A. We have received several suggestions to the effect that purchases of aUtomobiles by defense workers be exempted since they provide necessary transportation facilities. We have not con,eidered it advisable to act on these suggestions. It is a basic principle of the regulation that the incurrence of debt should be discouraged and that debt which is incurred hould be paid off rapidly. It has been our experience that he People who have requested these concessions have been !ble to find some other way of handling their problem as, ror example, in the case of the automobile, the purchase ) .f a less expensive car. In view of the situation we are 6b face in the future, we believe that the individuals them.,?lves will be much better off if they incur only those ob'lgations which they can take care of within a short time. "We appreciate that this matter may be of considerable imPortance and we suggest that, if Mr. Coats wishes to pure the matter further, it might be desirable for him to Iliscuss the subject with the Farm Credit Administration so hat the latter may be in a position to bring the problem i° us on the basis of a nation-wide examination of the issues 441volved. "We are enclosing an extra copy of this letter, which, it You wish, you may give to Mr. Coats." Z 1 Z Approved unanimously. 2345 12119/42 -5- Letter to Mr. R. Leslie Kelley, Editor of the Kelley Blue Book, LOS A 4ageles, California, reading as follows: . "This is in reply to your letter of December 14, in Which you refer to the Board's letter of March 212 1942 /lotifying you of the designation of the Kelley Blue Book lor use, in the territory specified in the Board's letter, for purposes of the Board's Regulation lk during the balance of the calendar year 1942. "The Board has now determined to continue this desig— nation in effect for the calendar year 1943. This designa— ion continues subject to revocation at any time by the soloard, and to the other conditions set forth in the Board's letter of March 212 1942." Approved unanimously, together with similar letters to the following guidebook publishers notifying them of the Board's decision to continue in effect for the calendar year 1943, for purposes of Regu— lation IN, the designation of the automobile appraisal guides published by them as shown: Guide Publisher 11 2ed Car Statistical Bureau, Inc. ;Lerican Auto Appraisal "Isconsin Automotive Trades Asso— „„ ciation i ?rthwest Publishing Company ational Used Car Market Report, Inc Market Analysis Report American Auto Appraisal Official lidisconsin Automobile Valuation Guide Northwest Used Car Values Official Blue Book New and Used Car Guide Editions A and B Blue Book National Used Car Market Report — Executive Edition "Retail sales values" for Zones Nos. 1, 22 3, 4, 5, and 6 4ational Automobile Dealers Asso— ciation Rep -(Ircling & Statistical Corpora— tion Red Book National Used Car Market Report N.A.D.A. Official Used Car Guide Editions for Districts B, EF, G, S.E. Michigan, H, J, K, L, and 0 Official Automobile Guide, Price Edition 2346 12/19/42 Telegram to the Presidents of all the Federal Reserve Banks, rear14--uig as follows: "All Presidents are agreeable to meetings beginning January 25. It seems likely that practical procedure would be to hold meeting of Federal Open Market Committee on MonY, January 25, meeting of Chairmen of Victory Fund Committees on Tuesday, January 26, and joint meeting of Presidents arid Board of Governors on ednesday, January 27. Therefore, Meeting of Federal Open Market Committee has been called to ?onvene at 10:00 a.m. on Monday, January 25, with understandlag that other meetings on successive days will be held as al?ove indicated. In order to plan meetings to be as effective as possible it will be appreciated if you will wire me Your earliest convenience the specific topics which you uelleve should be discussed from the standpoint of their Portance and that you be prepared if requested to lead the dlscussion of any topic you suggest. In this connection you 4aY wish to consider desirability of preparing memoranda on eh subjects, including particularly problems connected with bletory Fund campaigns, and furnishing copies to all other ' residents and to Board in advance of meetings. "All available single rooms and sufficient number double ?°m8 to take care of all Presidents at Carlton Hotel begin"Ing morning January 25 have been reserved. Please advise if desire reservation held for you and your anticipated time °f arrival and departure." V f Approved unanimously. Thereupon the meeting adjourned. 411Aro Chairman.
@FedFRASER