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I 956 Minutes of actions taken by the Board of Governors of the ?ed., .0a Reserve System on Thursday, December 7, 1950. The Board litet 14 the Board Room at 4:35 p.m. PRESENT: Mr. McCabe, Chairman Mr. Eccles Mr. Szymczak Mr. Vardaman Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Carpenter, Secretary Sherman, Assistant Secretary Thurston, Assistant to the Board Thomas, Economic Adviser to the Board Leonard, Director, Division of Bank Operations Vest, General Counsel Young, Director, Division of Research and Statistics Solomon, Assistant General Counsel Garfield, Adviser on Economic Research, Division of Research and Statistics Jones, Chief, Consumer Credit and Finances Section, Division of Research and Statistics Pawley, Economist, Division of Research and Statistics T. Smith, Economist, Division of Research and Statistics 112. Arthur Phelan, Vice President of the Federal Reserve ti4tot ,41 -"York, Mr. Dale M. Lewis, Assistant Vice President of the ?kkieral 4eserve Bank of St. Louis, and Mr. E. A. Heath, Assistant 4, 44d Assistant Secretary of the Federal Reserve Bank of Chicago, 4831sting the Board temporarily in connection with work reto selective credit controls, also were present. There was presented a draft of statement to be made tomorrow (44i an McCabe before the Joint Committee on Defense Production ailed 'watchdog Committee") provided for under the Defense 12/7/50 -2- Prodliction Act of 1950. The draft had been prepared subsequent to thediscussion at the meeting on November 14, 1950. The statement was read, changed, and approved unanimously in the following form: The Board of Governors of the Federal Reserve tev:lcomes this opportunity to report to your iil 'r on its regulation of consumer credit and dicularly automobile instalment credit, as authort ij by Title VI of the Defense Production Act of l9 th "At the outset, I should like to emphasize IV the Board has viewed its stewardship under the bil?1180 Production Act in the light of its responsihellties for monetary and credit policies that will serP maintain a stable value for the dollar and pre5.1a strong economy. In carrying out its respond-ties under the Act, the Board, of course, has ;,,, ais1 an-d-Q ueen guided by the observations of the House t uenate Banking and Currency Committees concerning h4 inflationary role of consumer and mortgage credit ' current conditions, made in their respective e1 , re cirts on the Defense Production Act. ' as . "The Federal Reserve has acted to carry out its ob-ilgnment in the light of its understanding of the yo;',e.”ives that Congress had in mind. As long as the responsibility with the Federal Reserve We ac uelieve you will expect us to do our duty in c°1';lance with the objectives of the Congress. arid Ipuring the period the Congress was deliberating from4cting on the Defense Production Act of 1950 -.LulY 19 to September 1 -- business and consumer Mar j e6s were being swept by hysterical buying, prices varpractically all sectors of the economy were adelrZng sharply, and inflationary pressures were genY1_ rampant. The Congress, the Administration, and: public were very apprehensive about these fohel-oPments both because they threatened the very tendations of our free enterprise society and because their adverse effects upon our preparedness efforts. /, System Were assure you that we at the Federal Reserve bam, verY deeply concerned. In the light of this --Zround, the intent of Congress with respect to 1958 : 11-t1e VI of the Defense Production Act seems to tivelT. Let me here state briefly my beliefs in 18 .respect: 4.0 I believe the Congress at that time ; 1 ,s deeply conscious of the concern felt by " American public over the value of their ri? ..ojaars, and wished to take every practical to steP preserve the integrity of our money. that'2 I believe also the Congress intended adequate taxes and general and specific redit controls should be the first reliance n m aintaining the value of the dollar. I believe the Congress intended that the estPwers to regulate consumer and real e:Zate credit should be used to the fullest ' de ent practicable, as a means of limiting fill1.111d 1 to the available supply in the affected e'ds, thus restraining further price in„re I I believe also that the Congress had im .,n nd that the use of these powers, in oig demand, would help in the transfer gon ! lesources from the production of civilian wili'(: 8 to the production of military goods with unnecessary price inflation. Aet ,,!uring the period when the Defense Production 1950 was under study by the Congress, the Board twea:"8 staff, in collaboration with officials of the bra;Vederal Reserve Banks and their twenty-four cNt?rs, carried on intensive studies of the consumer the business, including numerous consultations with ad aicr segments of the trade. In all, some 750 t' tiorie consultations were involved in this pre-regulaexPloration. Officers of the twelve Reserve Banks witl,lieteda total of 725 of these regional conferences ject trade groups and businessmen prospectively sub0 consumer credit regulation. The Board and its c°nsulted on 25 different occasions with such including the major national trade associations 'ected Qotls, evidence of the way in which the Board has ci.2i ed with the interested public while making de! 1 . regarding Regulation W3 I should like to quote trom°4 'il.e October issue of the official magazine of the cie;,1 °11-al Automobile Dealers Association. The auto --ers said: 1959 —4— "I N.A.D.A. officials did a great deal of ; )l'it and cooperated closely with the Federal teeerve Board during the period that the new 4egulation W was being drafted. They compiled atr ci presented data showing that the terms snolaid not be so strict that they would work a needless hardship on persons who have the greatest need for reliable transportation. I N*A.D.k. is continuing its frequent con's ," with the Board, which has been working on interpretations necessitated by special Problems that have arisen.' atilt "Against this broad background of study and conconnnion, a draft of the regulation was prepared and red by the Board after submission to all of the Fed ro Reserve Banks. Thus, the Board was ready for : I al action once authority to regulate consumer credit enacted into law. the "The Board issued RegulationW on September 8 within tion11°11r after the President signed the Defense Producda - Act of 1950. The regulation was made effective ten thY esmilater on September 18. This interval was considered Of 1,-11-1-11111M period for placing the regulation in the hands tio; iegistrants and enabling them to adjust their opera; c()ri 's to it. The Board's decision as to the terms of the 8ieller credit regulation was based on the practical conclem tion that the regulation should restrain consumer and credit growth in the most volatile segment of namely, the instalment financing segment° how "Taking the field of instalment credit as a whole, .41J9-er, the initial minimum downpayment and maximum ty requirements under Regulation W were only modrestrictive in relation to practices generally llsecia4-1-ing in the instalment financing trade. In the cal' field, particularly for older models, and also 14;cille appliance lines, the regulatory terms were more bat ral than those practiced by the conservative trade. theai.euPplied by the trade indicated that the bulk of rrieb4l'an5actions being written on new and late model autoir and on other items of relatively high unit price ritor months just prior to the regulation were somewhat the-4 -Liberal as to downpayment, maturity, or both, than sllh'Iltroductory terms of the regulation. Information gatsequently obtained by the System's own field investicr has confirmed this basic finding. the announcing the new Regulation 11 to the press, Board expressly stated that, if the terms established 12/7/50 -5u not provide an adequate restraint on consumer ZInand, as well as on further rapid inflationary exP t , nsion of instalment credit, the Board was prepared t eexamine its regulation and establish more stringent ta,:i4s. On October 13, five weeks after the issuance of Noe ginal regulation, the Board announced Amendment : 10 1 to Regulation W establishing, effective October 16, downpayments and maximum maturities substantially 8`41-cter than those which became effective on September had ,Ihis action was taken three days after the Board tai4:1-ssued Regulation X, to be effective October 12, esrig 1 ng dgwnpayment and maturity terms on mortgage crs„. l-t to finance newly constructed houses. The attached table compares the new terms of Regulation Ar with those Pr°vided in the initial regulation. i "IGNIMUM DOWN PAYMENTS AND MAXIMUM MATURITIES UNDER REGULATION W Listed articles and loans ""'''"'""""""n".""N"''..."..................„ Maximum Minimum down payment 1/ maturity icr cent months Sept.1 Sept.1 Oct. 16Oct.15 Oct.16Oct.15 14beteci articles: 33 1/3 33 1/3 ;148senger automobiles ;Nor appliances '11/11iture and floor coverings 10 15 lifte improvement Materials, articles, and services I.0418: 10 10 y 15 25 2/ T° Purchase listed articles linclassified (4) __ (4) __ 21 15 18 15 18 15 30 30 (4) (4) 18 15 , :emptions: Sept. 1B-Oct. 152 listed articles costing 1ess than - "beginning Oct. 161 those costing less $100, $50. than V Inci radios, television, refrigerators, food freezers, !po;lol-3es u cooking stoves, ranges, dishwashers, ironers, graphs, elling machines, clothes driers, sewing machines, sucilon cleaners, room-unit air conditioners, and dehumidifiers. ancludes heating, plumbing, and other household fixtures. equirements same as on instalment sales of the respective articles. et j I 96i -6"I should like to make entirely clear three 1 439eCt8 of the Board's Amendment No. 1 to Regulation 1 t , First, the Board's amendment action was taken in ; light of the total economic and credit situation. i was taken not primarily because of developments tlb/ the specific fields during this period but because b e magnitude of the general inflationary problem more clear. It reflected the Board's appree ," h„ il lion over the continuing strong inflationary trends 'he economy generally as well as over the continuing °ng consumer demands for durable goods and accom, par pi."Ylng expansionary trends in instalment credit. s gures i, , ba. now available show that loans of commercial exPanded 5.7 billion dollars from the end of p;"0 to October 25 of this year -- the largest loan exin such a short period of time in the country's ;TrY. More than 25 per cent of the loan expansion weuhe direct or indirect result of growth in conb;'el' credit and another fifth was due to a rise in pahk.holdings of real estate mortgages. This loan exwas accompanied by a further increase in bank tot: ligs of corporate and municipal securities. The eXpansion of bank holdings of loans and nonbOnment securities was the immediate cause of a 3 4-10/1 dollar increase in the economy's already large , la PlolY of money. we, "Second, the Board was seriously concerned, as " other agencies of Government, over the undesirable arl.'de ndering effects of inflationary pressures gen37- on the rearmament, stockpiling, and industrial e : fer Ision programs. Appropriations for national dePln.7.e were able to buy far less this fall than contemed when Congress passed them. abat "Third, the Board took its action only after con11 with other interested agencies of Government. etr "I should now like to report on what I think the ge„ects of Regulation Vi have been. To report first in prrral terms, the regulation has limited the rise in in , the durable goods field; it has limited someof the further expansion of the money supply; because prithese two effects, it has limited the advance of "generally; and, lastly, it has removed some of thee kat Pressure which would have hampered diversion of reserials and manpower to the military effort. These Illts have been of great benefit to the American Pe°Ple. : -7"Let us now examine the effects of the regIllion in the automobile field, with which your trrings are particularly concerned. At the time Congress was deliberating the Defense Production Act new cars were not generally available at list i.e., unloaded of extra equipment or special :t, -T'llms3 to the great bulk of the people who wanted 1,-,°.q them. With respect to used cars, average m:ril prices of a representative popular priced 1949 1 car rose from approximately $1430 in June to to in August. On the average, monthly payments $63vq the 1949 model used car had risen from $56 to mob!, It is clear that inflation in the retail autowh 4e markets was impinging adversely on both those 1„° bought higher priced cars and those who bought ' wer priced cars. -Lod "Let us look at the retail automobile market to :irs compared with August. New cars are available , buying public at list prices, without required e%Cie a as °I' premiums. On the basis of advertised prices, oht-1°Pu1ar priced 19)49 model used car could be purpare ,d in leading cities in November for $1280, cornwith $1635 in August. The buyer of such a oo'el had to pay one-third down or $427 in November ilhraPazed with one-third down or $545 in August. The iriPaid balance in August was on the average paid off 21 Note months at the rate of $63 per month. In r the balance was required to be paid off in months or at the rate of $67 per month. alim "A great proportion of the cars bought by conit ?I's in the United States are used cars. In 1949 estimated that 6.9 million used cars were bought 014ecnsumers as compared with 4.5 million new cars. It ;cal's Predominate in the holdings of the population,. in ' 4 8 estimated that 69 per cent of the passenger cars or °Pe ration are more than three years old. The man in alrerage income typically buys a used car. In helpto keep used cars at a reasonable price and to e at new cars readily available at effective prices seyZ below the list, Regulation W has been of great d,eaTce to the American consumer. It has done a great alm- to combat the price inflation which seemed last to be getting completely out of hand. 36 At. the present time about 20 million out of our whenlirIllion privately owned cars are prewar cars and Sold as used cars have a price of around $500 or 0 4 NI . 12/7/50 Iti -8- Before imposition of Regulation W, if a Izcillzohaser bought a $450 car on a basis of one-third et°111, he paid $150 cash and paid off the balance at /e of $24 to $28 per month, depending on whether -: no;maturity was 15 or 12 months. Regulation W has chu affected the typical terms of payment for these : aPer oars. One-third down and 12 or 15 months to dealers will finance on these terms, are : 0 44. permitted. Good usable cars for performing a great Portion of the daily travel of the public conte e to be available under Regulation W on purchase 11m of about $25 a month or less. These are the oita rs *which are customarily bought and used by large ' 8 of our working population who are looking torb.?1 riansportation and not for the latest style and get. adg marl,. "Supply developments in the retail automobile it 'n'elt following the introduction of Regulation W and 4.1.! subsequent tightening are of course not all 14611.butable to the regulation. Some buying that eruld otherwise have been done this fall was acceltr,d and done in the summer months. The fall is aW14-callY a season of declining automobile travel pr"80ftened demand for cars. The industry has been cill:tring new models and this fact has no doubt in1,410 -1/44 some deferment of new car buying by purchasers 1)01,4:would otherwise be in the market. But the imlyit rit fact for these hearings is that the market ,8gulation W is less inflationary and more competi4.11 'Ne than it was. It is more of a buyers' market ni 888 of a sellers' market. It is in every respect g' oth°l'e normal market situation. Despite the role of con!r influences, I believe that Regulation Whas co 'Illiuted significantly to this more healthy market. ,ion. lewo nInventory of new cars was at an abnormally low Thi-4- when consumer credit regulation was inaugurated. hi4 enabled manufacturers to go ahead full tilt at ' re. e levels of output despite the regulation. In peal;Int. Weeks production has been down from earlier rates) the lower level reflecting primPrily model e8 s but the current rate of output of about 12011L 00 cars a week is still, historically speaking, a. . high rate. Some inventory accumulation by cleaaenr tol,:rs has recently taken place, but new car invertfor the new car dealer trade as a whole is still 12t7/50 -9- 'flv 6 above traditional relationships with sales. TheI latest retail sales reports with respect to cars indicate that November sales were proba -LY one-tenth above a year ago. Sales a year irego were in large volume. The rise in retail ina nt0 or of new cars probably tapered off consicer-q in November. "The foregoing observations relate to the. market as a whole. The situation wall Ivary for different makes of cars, and among indiutlal dealers. Such differences are matters for competition and not regulation to iron out. Regd affects the general terms of sale on X Credit trw mob. , i-un respect to the size of the current auto- of Ile inventory: trade sources estimate inventory 0114new oars at about 500,000 on November 1. With Igut at an annual rate of over 6 million cars now, ! 1 dealers generally in the best financial conion of the automobile industryls history, and it the use of materials already ordered curtailed, Aould seem that inventories are not excessive. throl, It has been argued that Regulation W will ha„ men out of work. But to date unemployment a;been at a low level and employment has reached th:"' high level. If some unemployment does develop, an :.Principal cause will be the dislocations that (Ill evitable in the transition to military pro' - 1411 "T, and not Regulation N. has, is sometimes claimed that RegulationlV the vrevented the American working man from buying po automobile that he needs to provide his transtjtation. It is said that Regulation W favors n141,, ch as against the poor, that it bars from the the low income man with his credit and leaves ti , 44.4,-Lgh income man free to buy with his cash. The pen:',A is that Regulation Whas helped rather than 1-ted the person of moderate or low income. It he) 7 ki. 138 him where he is most in need of help --- in at Pocket book. Cars, new or used, are available aiivariolls prices to meet the budgets of practically cc:Isi.workers who want or need cars. And these cars Of ; " q less than they would have cost in the absence ' oth egulation W. Furthermore, prices are lower for e1 'articles listed in the Regulation, and also ro, ;,articles not listed, than they would have been 'lout the Regulation. The American consumer is 1965 12/7/50 -10"better off as a result of Regulation Ac "We must of course bear in mind that the b borrower is getting credit, not a gift. This credit Zst be paid back--and with finance charges added, In other words, when the consumer increases 8 -1'8 expendable income of today by borrowing, he is, t the same time, reducing his expendable income of nl,rrrow. The thing that limits the man of low inc(I come his income. He doesn't get something for a;,?.ulg by borrowing to go into the market to bid 'bg-Lalst goods. He merely others for a limited supply of 8 helps to push up the price of that limited in PPlY of goods and increases the burden that he 3t meet out of his same income. encourage the man of low income to do that ' ca er present conditions is to encourage him to endige in a contest where he is at the greatest possible 8ad more vantage. The wealthy can always meet high prices easily than can those of lower incomes. Price at exactly the field where the man of low income is thegreatest disadvantage. Under current conditions, creditncome man will find that the bait of easier is carried on a hook of higher prices. silm "It is of the very essence of regulation of concohri credit that the business of those financing as'umers will be affected. If their business were absFeat under Regulation W as it would be in the -nee of the Regulation, then there would be no po.Int the b t0 having the regulation. Any contraction of usiness of these financing agencies is not an ehd, coll 60 be desired as such. But it is a necessarY sacs?quence of limiting demand by these means. The arel''fices of those called into the Armed Services 11°t in themselves desirable but they are necessary. hate 'BY and large the consumer finance agencies Of T, Proved themselves extremely adaptable. In time tritce they have facilitated demand which has conto our great production and to our high 4 ' .13 mard of living. In war they have proved their siZitY to adapt themselves to new conditions and bY till a day when they can again serve their *410 function. °tiers, l that "Are must continually remind ourselves, andcanl t 1311,1r can not get something for nothing. We ab -°r° goods than can be produced. To weaken or °1ieh Regulation W will not produce more goods. If I et -11:!! are to succeed in maintaining stable prices 71u preserving confidence in the value of the 7 1 11arl we must make a determined effort to mop ail sources of excess buying power which tend "alop e the demand for goods greater than availmakle suPplies. Otherwise, we know from past exri l'.'ence what to expect. "In conclusion, I would like to make this Po.nt clear: that selective credit controls inainng Regulation K will not of themselves check th ot the inflationary forces. More fundamental grn selective credit controls is an adequate prokiff°f fiscal and general controls that restrains tovs;YPes of bank credit and thereby curtails the cu. dollar volume of private expenditures." In h the discussion of the foregoing statement, connection with thete Was also presented a statement on current defense production, 1411`Itictlary pressures, and selective credit regulations prepared bY a + "e chrlical group of interested agencies in cooperation with the l'4eareh staff of the Board of Governors of the Federal Reserve &/.41.t6ra and concurred in by Mr. Symington, Chairman of the National 4Qtirity Re sources Board. It was agreed that Chairman McCabe would read or present for the record the statement, making clear that it was prepared by the staff of the interested agencies and that Mr. Symington concurred in it. At this Point all of the members of the staff with the ex- c 1011 °fIlessrs. Carpenter and Sherman withdrew, and the action 41;eq_. 41-th Wilo respect to each of the matters hereinafter referred to take 4 by the Board* 12/7/50 -12Minutes of actions taken by the Board of Governors of the Peder.., ' 4. Reserve System on December 6, 19501 were approved unanimously. Memorandum dated December 61 19501 from Mr. Young, Director °tt111B714 'vision of Research and Statistics, recommending an increase the b asie salary of Miss Ruby S. Andrews, a clerk in that Difr°111 $31275 to $3,355 per annum, effective December 101 Approved unanimously. Letter ot tievf to Mr. Sproul, President of the Federal Reserve Bank 3 reading as follows: me,'The Board of Governors approves the payA 1 salary to Mr. Howard D. Crosse as an Ba'stant Vice President of the Federal Reserve of New York at the rate of $121000 per annum 195ithe period December 11 1950, through March 31, 1950)nas requested in your letter of November 21, Approved unanimously. Letter to Mr. Sproul, President of the Federal Reserve Bank ot ' 4 1 Yo reading as follows: er4 ,"In a letter dated today the Board of Govapproved the payment of salary to Mr. or c1 D. Crosse as an Assistant Vice President ' 4/ Federal Reserve Bank of New York. apion4 4The Board of Governors also approves the ?e4-4-ntment of Mr. Crosse as an Examiner for the era? Reserve Bank of New York." Approved unanimously. 4111t Letter to Mr. McLarin, President of the Federal Reserve "Atl-anta, reading as follows: I 9G8 12/7/50 -13100,,,, "As requested in your letter of December 11 the Board of Governors approves a payment uelhe Federal Reserve Bank of Atlanta to the ki "al Reserve Retirement System of approximately on behalf of Mr. J. S. Hamilton provided "en payment is approved by your Board of Directors." 1„: „")U, W Approved unanimously. Letter to Mr. Diercks, Vice President of the Federal Reserve 411k Of "411cago, reading as follows: "In accordance with the request contained atm3r°11r letter of November 281 19501 the Board app the appointment of Herman Henry Longfield 13„;!la assistant examiner for the Federal Reserve Chicago. of 4.,"please advise us as to the effective date ' 4e appointment." Approved unanimously. .erire Letter to Mr. Koppang, First Vice President of the Federal 'atik of Kansas City, reading as follows: su "The Board of Governors approves, as retli ed in your letter of November 291 1950, at-41!aYment of salary to the following employees ja '":"'9 rates indicated for the period beginning - QxY 1, 19511 through June 301 1952: ' Salary Name $1992 Maude Lindenberg Roy Shaw 2772 3000 Hallie Crutcher Ida Kennedy 2616 4500" J. V. Refregier (Omaha Branch) Approved unanimously. Na_ ‘'eral Letter to Mr. Weigel, Assistant Vice President of the Reserve Bank of St. Louis, reading as follows: 1 '69 -14t "Reference is made to your letter of lecember 1, 1950, advising that effective January 19511 the Blue Cross organization at Louisville 1111 make available to its members two optional : P a Lans which provide increased allowances for room :board during hospitalization. You state that ,e Maximum additional cost to the Bank will be 'pproximately $600 per annum. Pro "The Board will interpose no objection to the Posed expenditure." Approved unanimously° tiolis Letter to Mr. Leach, Chairman of the Committee on Collecaild Accounting, Conference of Presidents, Federal Reserve Bank "4°11d, reading as follows: 19s "This refers to your letter of December 4, co °, in which you advise that the Presidents' , rerence Committee on Collections and Accounting ren P :tlY appointed a Subcommittee of Counsel on 0,( ria ctions and would like for the Board to desigme,! a member of its staff to serve as an Associate yo'sr of the Subcommittee. The Board agrees with delir , suggestion in this regard and, accordingly, assIgnates its General Counsel, George B. Vest, Associate Member of the Subcommittee." Approved unanimously. Letter to the Presidents of all Federal Reserve Banks, g as follows: of "As heretofore stated, except in the case bel, r4srgencies the Board of Governors does not to .",el.re that extensive alterations or improvements tak-cederal Reserve Bank buildings should be underatl,!fl, or new Federal Reserve Bank buildings conin times of pronounced inflationary conor when there are substantial shortages ha 'abor and construction materials. The Board ops_L reviewed its policy in this respect in the light 'he needs of the Defense Production Program, and 970 12/7/50 -15- 011„ i.""er present conditions does not favor such con-:ruction unless the need therefor is of an emerigt'no,Y, as distinguished from an urgent, character. ec°rding1y, letter S-1109 of May 6, 1949 (F.R.L.S. 11.., °53) is cancelled. The last two paragraphs of 0?.letter, which are still of continuing applicat are included in this letter as the following ' -aragraphs. em "There is no objection, of course, to the nikoYment of architects to prepare preliminary 1;113 for contemplated head office and branch huildb;g,construction or alterations. The Board should a informed, however, concerning the details of any wiT"ents made with the architects for such plans, ti;n agreements should include a provision that th :Federal Reserve Bank is not obligated to retain of- azchitect for any work beyond the preparation 11,2rel1minary plans, but that if he is retained the Cuient for such work will be taken into account final fee. No commitment should be entered the preparation of detailed plans and rc,f1fications until the preliminary plans have been ' lewed by the Board. In submitting preliminary pi °falls and estimates of cost for the construction n1,4 Federal Reserve Branch bank building or a major c-3"'erat ion or addition thereto, it will be appre.b f:,',d if the information includes the data called # in letter S-1003 dated December 5, 1947 (F.R.L.S. 1-) that "The above does not relate to normal maintenance, ls, to such repairs and alterations as are 96-rgeable to 'Repairs and alterations' on Form F. R. ()" to minor replacements chargeable to the apterPrlate allowance for depreciation. However, alOf ,Ils and improvements, including replacements, riot ' t_major character, and new construction, should 11, ue undertaken without prior consideration by the Approved unanimously. krIk Letter to Mr. Earhart, President of the Federal Reserve or cm Francisco, reading as follows: -1„ -16"This refers to your letters of August 29, Septemberi 8, and October 24, 1950, and the final Plans and specifications for the proposed addition the Los Angeles Branch building. "While recognizing the need for additional 13, allit space and working quarters in the Los Angeles .0'2.11ch building, as outlined in your letters, the a,iarcl feels that it would not be appropriate to go ead with the project at this time, even on a part1 01 basis similar to that planned in 1946. In 8 connection, there is enclosed a copy of the c)afd ts letter with respect to building construction bz 'the Reserve Banks, which is being sent today to ase Presidents of all Reserve Banks. In addition, 1101,, indicated in the Board's letter of November 10, ;'_?Y, it may be necessary to obtain additional legbefore such construction could be authorized, buir, on the basis of present cost estimates for not programs completed or under way, there would exe ue enough leeway under the existing $10,000,000 br,11113 bion for the aggregate building proper cost of Lo-neh bank buildings to permit completion of the pr84 Angeles Branch addition as well as certain other c'de?ts regarded by the Board as of greater urgency. 4How long the existing situation will obtain is, of wilrfr'se, not possible to determine, but the Board to glad to reconsider the need for an addition Los Angeles Branch building when the situation is 'uOre favorable." r Approved unanimously. tkik or Letter to Mr. Erickson, President of the Federal Reserve Boston, reading as follows: 80a "The enclosed circular letter outlining the Pecirdis policy on building construction by the . : 41 Reserve Banks is being sent to all Pres1de 41 - 0 Your Bank's building program was considered in 47,!'e light of this policy, and there is no change e authorization, contained in the Board's letter of aj. °1rember 7, to proceed with the building exten' 4-1 and remodeling." Approved unanimously. ;72 -17Memorandum dated November 30, 1950, from the Division of Perso, 'lel Administration, recommending that effective January 1, 1951 '4-0-persons employed by the Board on a temporary basis be in the Board Plan of the Federal Reserve Retirement System. Approved unanimously.
@FedFRASER