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412 A meeting of the Federal deserve Board was held in the office of the Federal Reserve Board on Friday, December 20, 1929 at 11:15 a.m. PESENT: Governor Young Mr. Platt Miller Mr. James Mr. Cunningham Mr. McClelland, Asst. Secretary Mr. Smead, Chief, Division of Bank Operations. The Governor stated that special order of business for this meeting wculd be consideration of a report of the Committee on Salaries and Expenditures dated December 20th, recommending approval of salaries proposed for employees (exclusive of officers) for the year 1930 by the board of directors of all Federal Reserve banks except New York and Richmond, recommendations from A WhOM have not yet been received. Mr. Smead, on behalf of the Committee on Salaries and Expenditures, reviewed the salaries proposed by the several Federal Reserve banks. After discussion, upon motion, it was voted to approve all salaries submitted by the Federal Reserve banks, covered in the report of the Committee on Salaries and Expenditures. Mr. 3mead also presented, with the approval of the Committee on Salaries aM Expenditures, a memorandum dated December 9th on the subject of Personnel Classification Plans for Federal Reserve Banks and Branches, reading as follows: "The personnel classification plans requested in the Board's letter Of April 18, 1929 have been received for all Federal Reserve banks and branches, except Baltimore and Charlotte. qe have gone over these plans very carefully and now have reports ready for submission to the committee on five head offices aria seven branches and the two agencies of the Atlanta bank as follows: Boston NOW York Cleveland Cincinnati Pittsburgh Chicago Detroit Atlanta Birmingham Jacksonville Lashville New Orleans Savannah Havana 413 12/20/29 -2- "The plans for the other banks and branches provide for a number of salary ranges about which more information should be obtained before they are presented to the 3oard. The additional information will be obtained either by correspondence or in conference with the officials of the banks. "In the past the Board has authorized the Federal reserve banks to make adjustments in the salaries of employees receiving 2,500 or 'less without first securing the Board's approval but has required the banks to get its approval of all salaries in excess of .2,500 before they become effective. It is therefore felt that the committee should have before it at this time a separate list of all jobs at each bank and branch for which a maximum salary in excess of 2,500 has been provided in the classification plans. Such lists for the above mentioned banks and branches are attached hereto. In order to further assist the committee in passing upon these salary plans we have calculated the average present salary, the average of minimum proposed salaries and the average of maximum proposed salaries for these banks and branches, as follows: P. R. Bank or Branch Average : Average :of proposed present : minimum salarv : salaries ITEAD OFFICES Boston NOW York Cleveland Atlanta Chicago 1,624 1,564 1,510 1,510 BitilCHES Cincinnati Pittsburgh Birmingham Jacksonville Nashville New Orleans . Havana Savannah Detroit 1,384 1,551 1,281 1,395 1,199 1,088 1,116 1,140 1,523 Average : of proposed : maximum salaries 1,399 1,415 1,369 O.* 1,229 1,281 1,167 1,034 1,030 1,020 1,415 Present salary is : : Above pro- : Below pro7 : posed mini- : posed maxi: mum average : mum average 1,714 1,784 1,754 1,668 1,688 1,568 1,694 1,421 1,528 1,361 1,256 1,251 1,200 1,721 95 141 .f?265 160 170 158 177 52 114 32 54 86 120 108 184 143 140 133 162 168 135 60 198 236 225 "Of the positions provided for by the Boston bank I would suggest that the following three be designated as 'appraised.' 1. Officers' assistant Present <A,000 Proposed minimum ,3,000 Proposed maximum „;5,500 - 414 12/20/29 -3- "The position of 'officers' assistant' is peculiar to the Boston Dank and is no doubt due to the existing organization of that bank. The present salary of ,A,000 has been approved by the Board and it seems to no that any further changes in this salary should be specifically approved by the Board instead of allowing the bank to retain the rosition and promote the employee therein from time to time within an authorized range. Present 2. Statistical and Analytical. Function a.Manager of Statistics(Financial) bellanager " " (industrial) 4,500 Proposed minimum 4,000 Proposed maximum 6,000 6,000 "The Boston bank has what amounts to two chiefs in its Statistical and Analytical Function, whereas each of the other Federal reserve banks, except New York, operates with one chief. There is some question as to whether both positions should be authorized, each with a maximum salary of .6,000. I would suggest, therefore, that these positions be designated as 'appraised, at least for the time being. "The salary ranges for all the other jobs in the five banks, seven branches and two agencies covered by this memorandum seem to be reasonable and I would recommend favorable action thereon. "The plans for all of the Federal reserve banks and branches, except Cleveland and its branches, have been submitted in accordance with the form agreed upon by the committee consisting of a representative from each Federal reserve bank. The Cleveland bank felt that owing to its present set-up it preferred to provide a maximum salary only for each job instead of both a maximum and a minimum. In view of the apparent reasonableness of the Cleveland plan, I would suggest that it be approved but that Cleveland be advised that the Board may call upon it at some future time to provide a minimum salary for each job. The Cleveland plans also provide for higher maximum salaries for male than for female employees in a number of positions. "The plan for the head office of the Federal Reserve Bank of New York was originally approved in Jannary 1926 and all changes therein since that date have received the approval of the Board. The bank was requested to resubmit its plan on forms used by other banks, however, and it will be necessary to advise that bank of the conditions under which the plans are now being approved. "The Board's letter of April 18 asking the banks to submit these plans stated that the Board expected the salary ranges to be in substantial accord with the salaries paid for similar work by local banks. It is suggested therefore that in advising the banks of the action taken on their personnel plans the Board state that the plans have been approved with the understanding that the salary ranes provided are consistent with salaries paid for similar work by local banks. 415 12/20/29 -4"It is also recommended that each bank be advised that: 1. The bank is authorized to hire any employee, and to promote or demote such employee without first securing the Board's approval, with the understanding that the salary paid to an ennloyee must not exceed, without the Board's specific approval, the maximum salary provided in the classification plan for the position occupied. 2. No change should be made in the personnel classification plan without the approval of the Federal Aeserve Board. 3. The Board will require the banks to submit to it for approval on or about January first of each year a statement showing the salary paid each employee of the bank." After covering named in with discussion, upon motion, the classification plans the Federal deserve banks, branches and agencies the above memorandum were approved in accordance Smead's recommendations. The Governor then announced that in accordance with the authority granted him at the meeting on December 22nd he yesterday approved action taken by the board of directors of the Federal Reserve Bank of Kansas City establishing.a Ii rediscount rate of 4 1/2'73 on all classes of paper of all maturities effective today, • Upon motion, the rate of 4 1/2;; established by the Kansas City directors on all classes of paper of all maturities, effective December 20th, was formally approved, Mr. Platt voting "no". Telegrams dated December 19th from the Chairman of the Federal Reserve Bank of Richmond and the Deputy Chairman of the Federal Reserve Bank of San Prancisco and letter dated December 19th from the Secretary of the Federal Reserve Bank of New York, all advising that their boards of directors at 1eetin6z on the date stated made no changes in the banks' existing schedules Of rates of discount and purchase. Without objection, noted with approval. Telegram dated December 19th from the Deputy Chairman of the Federal Reserve Bank of San Francisco, advising of the reappointment of Messrs. D. W. 416 12/20/29 TWOhy, M. -5- A. Arnold, Charles H. Barton, J. C. Ainsworth and F. J. Belcher, Jr. aS directors of the Spokane, Seattle, Salt Lake City, Portland and Los Angeles Branches, respectively, all for terms of two years beginning January 1, 1930. Noted. Letter dated December 19th from the Chairman of the Federal Reserve Bank Of New York, advising of the appointment of Mr. Lewis G. Harriman as director Of the Buffalo Branch for a term of three years beginning January 1, 1930, to succeed Yr. Harry T. Ramsdell. Noted. Letter dated December 19th from the Chairman of the Federal Reserve Bank Of iiichmond, advising of the reappointment of Messrs. C. G. Osburn and U. J. Roddey, Sr.,• as directors of the Baltimore and Charlotte Branches, respectively, for terms of three years beginning January 1, 1930, and the reappointment of Messrs. A. H. Dudley and Hugh Leach as managing Directors of the respective Branches for the year 1930. Noted, Letter dated December 19th from the Chairman of the Federal Reserve Bank Of Richmond, advising of the reelection of Mr. John Poole as member of the Federal Advisory Council from the Fifth District during the year 1930 and the designation of Mr. Charles E. Rieman as alternate. Noted. • Telegram dated December 19th from the Assistant Federal Reserve Agent 4t San Francisco, advising that subject to confirmation by the Board, Ex4111tner H. A. Sonne has been granted a leave of absence of sixty days with°t pay, beginning December 16th, to assist the Chief National Bark Examiner - 417 1 12/20/29 -6- Of the District. :oted, without objection. Memorandum dated December 19th from the Fiscal Agent, recommending, on the basis of the budget for the year 1930, that to cover expenses for the first six months of the year the Board levy an assessment on the Federal deserve banks Of eighty-nine thousandths of one percent (.00089) of their total paid-in capital and surplus as at the close of business December 31, 1929. Upon motion the following resolution was adopted: "Whereas, under Section 10 of the act approved December 23, 1913, and known as the Federal deserve Act, the Federal Reserve Board is empowered to levy semi-annually upon the Federal reserve banks in proportion to their canital stock and surplus an assessment sufficient to pay its estimated expenses, including the salaries of its members, assistants, attorneys, experts and employees for the half-year succeeding the levying of such assessment, together with any deficit carried foraard from the preceding half-year; and walereas, it appears from estimates submitted and considered that it is necessary that a fund equal to eighty-nine thousandths of one per cent of the total paid-in capital stock and surplus of the Federal reserve banks be created for the purpose hereinbefore described, exclusive of the cost of engraving and printing of Federal reserve notes; Now, therefore, "Be It Resolved, That pursuant to the authority vested in it by law, the Federal Reserve Board hereby levies an assessment upon the several Federal reserve banks of an amount equal to eightynine thousandths of one per cent of the total paid-in capital and surplus of such banks as of _December 31, 1929, and the Fiscal Agent of the Board is hereby authorized to collect from said banks . such assessment and execute, in the name of the Board, receipts for payments made. Such assessments will be collected in two installments of one-half each; the first installment to be naid on January 1, 1930, and the second half on :March 1, 1930." Draft of letter to all Federal Reserve banks advising that in accordance with the provisions of Section 21 of the Federal Reserve Act, at least one examination of each 2ederal Reserve bank will be made during the year 1930 On dates to be selected later; the letter also advising of the resignation 418 12/20/29 -7- Of Mr. James F. Herson as Chief Examiner and requesting that the banks give all Proper assistance in making the examinations directed by the Board to Frank J. Drinnen who will be examiner in charge pending the appointment Of a successor to "v.lr. Hers on. Approved. Letter dated December 18th from the Deputy Governor of the Federal Reserve Bank of New York, advising of conditions in the bill and Government aeourities markets and System operations since December 11th; the letter stating that the Open Mark3t Investment Account increased ,45,000,000 to 0222,675,000 daring the meek, that the outright holdings of the New York bank show a temporary increase of ,i 9,000,000 and holdings under sales contract an increase of ,„23,375,000 during the meek and that bills show a net decrease °f li116,000,000 - an increase of „10,000,000 in outright holdings being offset .bY reductions of ,,11,000,000 in Foreign Suspense Account and ,J5 000,000 in bills held under sales contract agreement. Noted. The Governor then submitted draft of reply to letter dated December leth from the Secretary of Commerce, advising of the desire of the President to set up a committee of expert Government statisticians to take steps to Illeke better use of existing economic statistics for the information of the resident and the administration generally, as well as business men and the Public, and possibly to supplement the regular series of monthly statistics by aaditional special inquiries or to undertake special analyses and correlations of exi5tin,3 statistical data; the proposed reply designating, in accordance with an illvitation contained in the letter, Messrs. Goldenweiser and Smead to represent 419 -8- 12/20/29 the Board at a meeting to be held at the Department of Commerce on Londay, December 23rd. Upon motion, the reply submitted by the Governor was amended and approved. The Assistant Secretary then presented draft of a letter to 1:,r. F. N. Shepherd, 2;xecutive Manager of the American Bankers Association, prepared by Lr. Laller, in accordance with the request of the Board at the meeting on December 17th,replying to Mr. Shepherd's letter of December 11th, and requestiru; further consideration in the lic:ht of recent credit developments Of the recommendation made in a resolution adopted by the Association at its recent convention, for an investigation by the Federal deserve System in cooperation with bankers and stock exchange authorities of the development and Significance of the so-called brokers loans figures. pared After discussion, upon motion, ..the letter by Mr. Miller was approved. pre- Letter dated December 18th from the Undersecretary of the Treasury, advising that the Treasury is in hearty accord with the action taken 'oy the recent Conference of Governors in voting that the payment of old series Federal eserve notes in the denominations of to y100, inclusive, be discontinued on January 2, 1930, and authorizes the sane procedure with respect to old series United States currency of the same denominations; the letter also requesting, as regards old series National bank notes outstanding,that the Board inaugurate such measures with the cooperation of the Treasurer of the United States, as will insure the receipt for redemption of 6,000,000 daily, on an average, on and after January 2nd. Noted with approval and referred to the Governor with power. 420 12/20/29 The Governor then submitted a revised draft of the letter to all Federal Reserve banks considered at the meeting yesterday advising of the indefinite postponement of the effective date of the amendments to Regulation J., adopted by the -Joard on October 15th; the revised letter statinp: that likewise the effectiveness of the principles of uniformity regarding check collections,aoproved by the Board on October 15th, is indefinitely postponed Pending determination by the Board of the question of interpretation raised by Governor Harding of the Boston bank. After brief dismission, action on the proposed letter was deferred. REPORTS OF STANDING COTZIT 'LEES: Dated, December 20th, Recommending a change in stock at a Federal Reserve bank as set forth in the Auxiliary Minute Book of this date. Recommendation approved. Dated, December 16th, Recommending action on an application for admission of a state bank, subject to the conditions stated in the individual report attached to the application, as set forth in the Auxiliary Minute Book of this date. Recommendation approved. Dated, December 18th, Recommending approval of the application of 1:4r. Rogers Caldwell for permission to serve at the same time as director of the Fourth & First National Bank of Nashville, Tenn., as director of the Commercial National Bank & Trust Company of New York City and as director and officer of the Bank of Tennessee, Nashville, Tenn. Approved. The meting adjourned, at one o'clock. Assistaht Secretary. II Approved:
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