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Minutes of actions taken by the Board of Governors of the Ural Reserve System on Wednesday, December 20, 1950. PRESENT: Mr. Mr. Mr. Mr. Mr. McCabe, Chairman Szymczak Evans Vardaman Norton Mr. Carpenter, Secretary Mr. Sherman, Assistant Secretary Mr. Kenyon, Assistant Secretary Minutes of actions taken by the Board of Governors of the 44er'ea Reserve System on December 19, 1950, were approved unanimously. Memorandum dated December 15, 1950, from Mr. Bethea, Director r the Division of Administrative Services, recommending that Wesley 8, 0 c4lins, a messenger in the Division of Bank Operations, be trellsferred to the Division of Administrative Services as an operator (cillMicating devices), with an increase in his basic salary from $2 ' 652 to $2,770 per annum, effective as of the date upon which he eclelices the performance of his duties. The memorandum also Stected that the Division of Bank Operations has been consulted and is 4greeable to this transfer as soon as a satisfactory replacement e411be obtained. Approved unanimously. Memorandum dated December 18, 1950, from Mr. Sloan, Assistant Dire etor of the Division of Examinations, recommending that the te i 1on of Thomas B. Abernathy, an Assistant Federal Reserve Exctin ilaer in that Division, be accepted to be effective, in accord- 12/20/50 -2- 821 "with his request, at the close of business December 20, 1950. Approved unanimously. Memorandum dated December 19, 1950, from Mr. Bethea, Director or Division of Administrative Services, recommending the appoint°f Joseph W. Wright as a photographer (offset) in that Division, °Ilet temporary indefinite basis, with basic salary at the rate of $3,10-n per annum, effective as of the date upon which he enters upon the Performance of his duties after having passed the usual physical Etrtlirlation. Approved unanimously. Letter to Mr. Erickson, President of the Federal Reserve of Boston, reading as follows: "In accordance with your letter of December 12, 1950, the Board of Governors approves a suPPlemental payment to the Retirement System of the Federal Reserve Banks by the Federal Reserve Bank of Boston of approximately $1,)83 Oil behalf of William D. McRae, Chief Examiner." Approved unanimously. Telegram to Robert C. Tait, Stromberg-Carlson Co., Rochester, y Qrk, reading as follows: "Board of Governors of Federal Reserve system aPpointed you director of Buffalo Branch of .:ederal Reserve Bank of New York for three-year rrm beginning January 1, 1971, and will be pleased 60 have your acceptance by collect telegram. "It is understood that you are not a director 211 a bank and do not hold public or political office. 6hould your situation in these respects change during 12/20/50 -3- "the tenure of your appointment, it will be appreciated if you will advise the Chairman of the Board cr Directors of the Federal Reserve Bank of New York." Approved unanimously. Letter to Mr. McCormick, Federal Reserve Agent of the ,a1 Reserve Bank of Richmond, reading as follows: "In accordance with the request contained in Mr. ',leach's letter of December 15, 1950, the Board of ' 30vernors approves, effective January 1, 1951, the PaYment of salaries to the following members of the Federal Reserve Agent's staff at the rates indicated: Name Title Annual Salary Head Office Robert L. Shepherd $4,000 Asst. Federal Reserve Agent George E. Thompson, Jr. Alt. Asst. Federal 3,660 Reserve Agent J. Gillette Turner Alt. Asst. Federal 3,960 Reserve Agent Baltimore Branch Eugene L. Shipley 2,880 Federal Reserve Representative Agent's Alfred A. Stewart, Jr. Federal Reserve 6,000 Representative Agent's Charlotte Branch T. Wesley 4,860 Federal Reserve Bagby Agent's Representative Wilifred W. Keller 4,44o Federal Reserve Agent's Representative" Approved unanimously. Letter to Mr. Caldwell, Federal Reserve Agent of the Reserve Bank of Kansas City, reading as follows: "In accordance with the request contained in Mr. „, Johns's letter of December 14, 1950, the Board Ov-E_ Governors approves, effective December 1, 1950, n0 Payment of salaries to the following members of 12/20/50 "the Federal Reserve Agent's staff at the rates indicated: Title Name Annual Salary Head Office Maurice Allendoerfer Assistant Federal $4,896 Reserve Agent 5,724 Kenneth B. Self Alternate ,issistant Federal Reserve Agent Paul V. Wysong 6,144 Alternate Assistant Federal Reserve Agent Denver Branch 5,088 William R. Young Federal Reserve Agent's Representative R. B. Fisher 4,896 Federal Reserve Agent's Representative Oklahoma City Branch David E. Chase 5,088 Federal Reserve Agent's Representative Lee G. Cox 5,028 Federal Reserve Agent's Representative Omaha Branch 5,088 Federal Reserve William F. Fairley Agent's Representative Earl O. Streeter 4,908 Federal Reserve Agent's Representative" Approved unanimously. Telegram to Ralph R. Sundquist, 1716 West Yakima Avenue, l'e 'ktraa, 4ashington, reading as follows: "Board of Governors of the Federal Reserve System has appointed you director of Seattle Branch of Federal Reserve Bank of San Francisco for two-year term beginning January 1, 1951, and will be pleased to have your 4eceptance by collect telegram. "It is understood that you are not a director of a bank and do not hold political or public office other than serving on a local school board. Should your situation in these respects change during the tenure Or Your appointment, it will be appreciated if you yill advise the Chairman of the Board of Directors of the Federal Reserve Bank of San Francisco." Approved unanimously. 12/20/50 Letter to Mr. McLarin, President of the Federal Reserve 1381at of Atlanta, reading as follows: "Reference is made to your letter of December 8/ 1950, in which you advised that it appears expenses for certain functions at your head office and branches will exceed the 1950 budget estimates as follows: Functions New Atlanta Binning- Jackson- Nashville ville Orleans ham General Overhead 10,500 Postage and expressage 6,000 4,000 Consumer Credit 13,880 4,200 4,7oo 4,635 5,675 Real Estate 5,170 1,320 1,525 1,370 1,450 Credit Currency and Coin 19,500 29,000 Check Collection 6,700 Federal Reserve Note Issues 1,900 "The Board accepts the revised figures as sub/flitted and appropriate notations are being made in the Board's records." Approved unanimously. Letter to Mr. Attebery, Vice President of the Federal Bank of St. Louis, reading as follows: "Reference is made to your letter of November 24, 1950, and a subsequent telephone conversation 1-th Mr. Gales, relating to certain costs in connection vith rehabilitating and imprcving the 'Nugent property' ' l/hich the St. Louis Bank feels should be charged to Profit Ana Loss rather than capitalized as a part of the carrying value. These items of expenditure now referred to are similar to those made in the initial Phase of the remodeling which the Board authorized ?cAlr Bank to charge off in its letter of March 14, 1947, "In closing out the 'Other real estate' account, 12/20/50 -6- "the Board authorizes the charging to Profit and Loss of those items of expenditure in Projects labeled f2 and #3 as requested in your letter and as set forth below: Completion of Garage, Remodeling, Project .1/3 Project #2 Land Im_rovements $ 3,664.58 Cost of Wrecking $ 5,746.66 15,220.39 Proceeds from Sale Of Salvage 1,098.39 Cr. 8,211.03 RePairs and Alterations 37,733.39 Architect's Fees — 12,868.43 Abandoned Project #2 0-3,957.69 $68,388.40 Total "It is noted from your letter and attachments that the items 'Land Improvements' and net 'Costs of l4recking' will be i 'ncluded in costs as reported on assumed that a separate is F°rm F. R. 320a, 8na it report will continue to be submitted for this building after the carrying values are transferred to the 18enk Premises block on Form F. R. 34. "Referring to the next to the last paragraph of Your letter, it will be satisfactory to accrue dePredation on the gross book value, after charge-offs, Of the remodeled building at the same rates as on the Main. building." Approved unanimously. Letter to the Presidents of all Federal Reserve Banks, 4e4ing as follows: "We are enclosing a copy of the semi-monthly report of Member Bank Deposits, Reserves, and, lilorrowings from Federal Reserve Banks (form F. R. -3), which has been reprinted to show at item 7 he breakdown of country banks in centers having &I Population under 15,000 according to the 1950 census. A supply of these forms is being forwarded 114der separate cover. "Please continue the breakdown according to the 1940 census through December 1950, and use the 1950 2 12/20/50 -7- "census starting with the report covering the first semi-monthly period in January 1951. As soon as practicable, please forward the item 7 breakdown for monthly periods in 1950 revised on the basis of 1950 populations, together with the list of places shifted from one population grouping to the other. These data will be needed for the Year-ago figures in the semi-monthly release, Deposits, Reserves, and Borrowings of Member Banks, in the Bulletin table showing deposits of country member banks in large and small centers, and in a4Y supplements to Banking and Monetary Statistics similar to the table on page-72 where 1940 figures were shown on both bases." Approved unanimously. Letter to Mr. Kline, Counsel of the Federal Reserve Bank Or t. Louis, reading as follows: "This refers to your letter of December 7, 1950, regarding the propriety of a practice proposed to be followed by a member bank under which the bank would accept, in the case of savings accounts, deposits by Zeal without presentation of the passbook. "It is understood that the member bank proposes to include in its passbooks relating to savings dePosits provisions to the effect that deposits may be Ille.de by mail and that the depositor at any subsequent time may present his passbook so as to permit the e4isting balance, as affected by such deposits, to be reflected by entries therein and that every six months following the last such presentation (in the event a Period of such length should occur), the bank will a statement to the depositor showing the existing status of his account. It is also understood that the ellik has advised that all provisions of Regulations and- (4, concerning withdrawals from savings deposits Will be observed. "While the definitions of the term 'savings decontained in the Board's Regulations D and presentation of the passbook upon withdrawals by any person other than the depositor himself, it is not required that the passbook be presented when t 12/20/50 -8- "deposits are made in a savings account. Also, while the regulation requires that withdrawals made upon Presentation of the passbook shall be entered at the time of the withdrawal and that any other withdrawal shall be entered as soon as practicable thereafter, there is no comparable provision with respect to entries of deposits in the passbook. "The regulations provide that a savings deposit shall be 'evidenced' by a passbook and contemplate that deposits, as well as withdrawals, will be entered in the passbook in due course. However, on the basis Of the facts stated and with the understanding that the requirements of the regulations with respect to vithdrawals of savings deposits will be observed, it is the Board's view that deposits with respect to the proposed practice is followed by a member ballk may properly be regarded as savings deposits Under Regulation D and Regulation Q." Approved unanimously. Letter to the Presidents of all Federal Reserve Banks, Ile84111g as follows: "A question has been received concerning the aPPlication of Regulation W to the sale of a listed article where payment is fully or partially made in he form of a note payable to the purchaser of the article and. arising from his sale of an interest 14 a business. "In such a case, the note, whether or not payable 14 instalments, should be regarded as a trade-in flder section 6(j) and treated as such for the purposes "Part 4 and Part of the Supplement. This would also in the case of the endorsement or other 'ransfer of stock, bonds, or other security, whether or not negotiable." Approved unanimously. Letter to the Presidents of all Federal Reserve Banks, Nai as follows: 12/20/50 -9- "The following relates to the Board's letter i174 (W-88), dated October 23, 1950. "Notwithstanding the wording 'of the same make .43.24 model', if the only change in the obligation ,14'6 the acceptance of a replacement article for the 'aMaged article as collateral, the first two Paragraphs of W-88 would apply and the old obligation could be rewritten in the amount of the unpaid balance and for the unexpired Portion of its original terrns. However, if additional credit is involved so that the rewritten obligation constitutes a consolidation of the old credit with new credit, the rewritten obligation would be subject to section 8( h) and the first two paragraphs of ruling W-88 would not apply. The amount of any additional credit involved is immaterial even though it is such as might result from an increased ulsurance premium on the replacement article." Approved unanimously. Letter to Mr. Strathy, Vice President of the Federal lie8erv e Bank of Richmond, reading as follows: "This refers to your letter of December 8 en08ing a copy of a letter from Mr. Gottschalk, xecutive Secretary, Maryland Savings and Loan League, Joaltimore, Maryland, regarding the treatment of ound rents under Regulation X. In view of the t!st Paragraph of Mr. Gottschalk's letter, we suggest b!,Lat Your Baltimore Branch offer to consult with "1M recording this matter and submit to us the ,1711/8tance of any additional information or arguments ! ::hat Mr. Gottschalk may present in any such interview. ile we question whether a further interview here in ;'ashington would be needed, nevertheless if Mr. °ttschalk, when conferring in Baltimore, specifically requests a conference with us here, members of the Board's staff will, of course, be glad to arrange a mutually ?°11venient time. Mr. Gottschalk should be assured that the Board has given this matter very careful .ct°nsideration but that it is willing to consider ihe Matter further and to reexamine its decision h4 the light of such additional considerations as e may present to the Baltimore Branch." r n 12/20/50 -10Approved unanimously. Letter to Honorable John Taber, House of Representatives, 14481114g-ton, D. C., reading as follows: "Thank you for calling our attention to the re.. oPening of Sampson Naval Training Station and !ts probable effect on the demand for housing in jc_he vicinity. As the country moves more and more r a war footing, we have been receiving a grow" . 1€ number of inquiries as to whether credit restrictions will be eased in areas of defense indUstries and military establishments. "I can assure you that the Board is anxious to contribute its maximum efforts to the defense 131 ' °gram, and is giving the question serious consi deration." Approved unanimously. Letter to Honorable J. Hardin Peterson, Chairman, Commission oil the Application of Federal Laws to Guam, House of Representatives, Sh1ton D. C., reading as follows: "This will acknowledge receipt of your recent letter addressed to Chairman McCabe requesting the rclesignation of a representative of the Board of 7 ernors with whom members of the Commission on s e of Federal Laws to Guam, or its ,:daff, might communicate from time to time with e i_sPect to laws administered by this Board and application to nlleir ktuaza. present or possible future Z "In response to your request, the Board is Pleased to designate for this purpose Mr. Alfred !* Cherry, Assistant Counsel, who will be glad to be of whatever assistance he can in connection With this matter." Approved unanimously. 2077 1Memorandum dated December 18, 1950, from Mr. Sloan, Assistant Director of the Division of Examinations, recommending that per diem "u of subsistence be paid to Assistant Federal Reserve Examiner - 1, Fisler for the period December 1 to December 15, 1950, Approved unanimously.
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