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196
A meeting of the Board of Governors of the Federal Reserve
SYstem was held in Washington on Tuesday, February 121 1946, at 10:45
a.m.
PRESENT:
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Eccles, Chairman
Ransom, Vice Chairman
Szymczak
McKee
Draper
Evans
Mr. Carpenter, Secretary
Mr. Hammond, Assistant Secretary
Mr. Connell, General Assistant,
Office of the Secretary
Mr. Morrill, Special Adviser
Mr. Smead, Director of the Division
of Bank Operations
Mr. Vest, General Attorney
Further reference was made at this meeting to the letter dated
O
ctober
8
of
232 1945, from Mr. McLarin, President of the Federal Reserve
Atlanta, requesting approval of the proposed purchase by the
84tik of a
building site in Jacksonville for construction of a new
Ilranch Bank
building at sometime in the future.
Accompanying Mr.
licLa.rin's letter was an excerpt from the minutes of the meeting of
the board
of directors of the Bank held on October 12-13, 19452 which
stated that
the Bank proposed to purchase a site for $125,000, provide('
ar
rangements can be made with the Federal Public Housing Authority for
the release of the leases covering said property and held
hY the
Authority, for a sum not in excess of the Authority's
tized
conversion investment existing at the time the Bank obtains
197
2/12/46
—
P"session of the property (as of September 1, 1945, the conversion
investment balance was $26,000.00), the terms of the sale to be, in
addition to the customary terms involved in the sale of real estate,
that the owners will receive 10/26th of any savings the Officers
rilight be able
to realize in obtaining the release of the leases for
leee than the unamortized balance of the FPHA's conversion investment
e..Iting at the time possession is taken by the Bank, and the owners
11111 also
have the right to demolish the buildings on the premises
and
retain the salvage derived therefrom."
Before this meeting there had been circulated among the members
°I* the
,a
Board memorandum dated January 10, 1946, from Mr. Szymczak
reviewing the matter in the light of the additional information re—
from the Bank since the Board's letter of December 7
: 1945.
In a discussion of the matter Chairman Eccles stated that he
Ivolad be
oPposed to the proposed purchase for the reason that the
134nit
1942 acquired a lot adjoining the present building which in
the .
311dgment of the directors would provide for necessary expansion,
44
(1 whi
oh was now regarded by the directors as unsatisfactory because
°1r the
arrangement of the present building and the high cost of eng it; that since the Bank could not build for four or five
Years
11° Purpose would be served by acquiring the site now at pres—
ellthi
gh real estate prices, as other sites would be available when
the
be
ti
the
came for the construction of a new building if that should
.
-clsion; and that it was not possible at this time to say
198
2
/
12/46
-3What the future requirements of the Branch would be.
Mr. McKee expressed agreement with Chairman Eccles' views.
It was pointed out in the discussion that the matter was being considered by the Board on the basis of only the acquisition of
the
11 r4 site, and that it was not proposed at this time to dispose
Of the present building as had previously been suggested.
In response to an inquiry by Mr. Szymczak as to the need for
onal space by the Jacksonville Branch and whether the purchase
Ce
of the new site was high, Mr. Smead stated that the volume of
(1113Elations of the Branch would continue at a level which would warrant
Pl'°Ifiejori for more space, and that the difficulty in the present build141"a8 the inadequacy of the vault facilities which would have to be
ell4rged and which were so located as to make enlargement impracticable,
anc1 certain
undesirable construction features principally floor height
41b1"talities and a roof construction which would make an addition of
ories
unreasonably expensive.
He also said that while he was not
jar enough with real estate prices in Jacksonville to say that
the
price of the new site was reasonable, the price was less than
l'°Perty had
been selling for in the area in recent years and was conIL.dare.b4r less than the recent sale price of property two blocks away.
Alering a second inquiry, Mr. Smead stated that even after the ter44lai°1 of the
large military activities in the Jacksonville area
the
th
°Pel
'
ations of the Branch would be much larger than could be housed
the
Present building.
199
2/12/46
—4—
Mr. Ransom said that the directors of the Bank were willing
to concede that the program proposed in 1942 was unsatisfactory in
larkY respects, but that the purchase of the new site had been very
thoroughly
studied by the branch directors as well as the directors
cr the
Atlanta Bank and it was felt that the Board of Governors, after
th
e consideration that has been given to it since receipt of Mr. McLarin's
lette
-r of October 23, 1945, could rely on the judgment of the direc—
tors.
At this point Mr. Thurston came into the meeting.
Chairman Eccles made it clear that he was not taking the posi—
tion that it might not be desirable eventually to sell the present
bwading and
build a new one, but rather that it would be a mistake
to "claire land at this time when it was known that it would not be
P"eible
to erect a new building for several years.
At the conclusion of the discussion,
Mr. Szymczak moved approval of the request
of the Federal Reserve Bank of Atlanta for
authority to purchase the new site in Jack—
sonville in accordance with the action of
the Atlanta directors referred to above,
With the understanding that no action would
be taken by the Bank at this time to sell
the present building.
This motion was put by the chair and
carried, Messrs. Eccles and McKee voting
nnoH
There was also presented a memorandum dated
February 4, 1946,
4°14
k4,YMczak to which was attached a letter from Mr. Clerk,
200
2112/46
-5-
President of the Federal Reserve Bank of San Francisco, under date
°r
January 30, 1946, requesting approval of the purchase at a total
1311ce of $160,000 of a site in Portland for the erection of a branch
14111ding in that city at Some appropriate time.
The letter from Mr.
Clerkwas read and attention was called to the statement made therein
that
on the assumption that the Board intended to take no action to
disp-sv
+
ablish the Portland office or curtail its activities the executive committee of the Reserve Bank felt that it should no longer delay
Irlding a suitable location in Portland for a future branch building.
The members of the Board concurred in a comment by Chairman
Ecq
es that no action would be taken in the foreseeable future to dise°ntinus the
branch.
He questioned, however, whether the present was
the ti4le to acquire property in view of the fact that it would be a
ec)nsiderable time before a building could be erected.
The suggestion was made that Mr. Clerk be advised that the
1/°ard
assumed that the branch will be continued, but in view of the
t4et that it
would be considerable time before a building could be
Lt questioned whether the present was the time to acquire a
ite
'that the Board would interpose no objection to the Bank
ing oPtions on
tak-
the property at a price not to exceed that stated
4°1re'Subject to the submission of appraisals which would justify
the Price,
and that the Board would discuss the matter with him when
201
2/124446
-6he wain Washington for the forthcoming Presidents' Conference.
Upon motion by Mr. Szymczak this
suggestion was approved unanimously.
Reference was then made to a memorandum dated February 6,
19463 from
Mr. Vest, General Attorney, recommending (1) that the
Board
a
authorize the preparation and printing of 20,000 copies of
revised edition of the Federal Reserve Act at an approximate cost
of $15,000, one
half of the copies to be paper bound and the remainder
buckram bound
except a few hundred copies which would be punched
for in
in the Loose Leaf Service or a separate loose-leaf
binder, and
(2) that the appropriate item of the budget of the Divi-
8411 of Administrative Services be increased to take care of the
Printing
costs.
Mr. Vest stated that the Act was last revised in 1935, and
vie,
4
of the numerous changes in the law since that time and the
11141kIT su
ggestions that had been made that a new edition be printed,
tL viras
felt that should be done.
Upon motion by Mr. Evans, it was
unanimously voted to approve the recommendations made by Mr. Vest with the
understanding that the printing would
be delayed to include all important legislation enacted at this session of Congress
and that before the copies were ready for
distribution a recommendation would be
made to the Board as to the procedure to
be followed in such distribution.
202
2/12/46
-7—
At this point Messrs. Smead and Vest withdrew from the meet-
arig.
The action stated with respect to each of the matters hereinfter referred to was then taken by the Board:
The minutes of the meeting of the Board of Governors of the
Pede4:al Reserve System held on February 11, 1946, were approved unani11101181y
Memorandum dated February 7, 1946, from Mr. Thomas, Director
°I* thR-,
n.
ivision of Research and Statistics, recommending that George
Cleaver be appointed as an Economist in that Division on a tempor
7 basis for an indefinite period, with salary at the rate of g2,980
13" annum, effective as of the date upon which he enters upon the performa
nee of his duties after having passed the usual physical examination.
The memorandum stated that Mr. Cleaver would become a member of
the
p
ederal Reserve Retirement System unless he still has funds in the
Civil ,
°ervice Retirement System from his former employment in the War
tePartftent.
Approved unanimously.
Memorandum dated February 8, 1946, from Mr. Bethea, Director
°t the n-lvision of Administrative Services, recommending that the apPoilitm_
ent of Mrs. Violet Herrmann, a cafeteria helper in that Division,
be Made
Permanent, without change in her present salary at the rate of
'704
Per annum, effective as of the expiration of her present temporary
203
2112/46
-8-
aPPedfltment on February 12, 1946.
Approved unanimously.
Memorandum dated February 11, 1946, from Mr. Bethea, Director
of the
Division of Administrative Services, recommending that Mrs.
411(1re7 U. Phillips be appointed as a cafeteria helper in that Divi81°11 °n a temporary basis for a period of not to exceed two months
salarY at the rate of $1,440 per annum, effective February 12,
1946. The
memorandum stated that it was not contemplated that Mrs.
P411 4
"Ps Would become a member of the retirement system during her
tertrn,
'
rarY appointment.
Approved unanimously.
Letter to Mr. Williams, President of the Federal Reserve Bank
or ?hiladelphia,
reading as follows:
"Receipt is acknowledged of your letter of February
,
advising that the Directors have accepted with regret
-une resignation of Mr. Frank J. Drinnen as First Vice
President effective February 28, 1946.
It is noted that in view of the circumstances the
Ja.rectors have decided to make a supplemental payment to
Retirement System for the account of Mr. Drinnen under
the
'he
authorization contained in the Board's letter S-741,
arid that they have granted him a leave of absence without
Pay from
February 28, 1946, until April 21, 1946, when he
Mal become 55 years of age."
1
Approved unanimously.
Letter to Mr. Laning, Vice President and Cashier of the Federal
11 ersi.
e Bank of Cleveland, reading as follows:
204
2/12/46
-9-
"In view of the circumstances described in your letter of February 1, 1946, the Board approves payment of salaries to the following employees at the rates indicated,
which are in excess of the amounts permitted under the
standing authorization:
Annual
Salary
Name
Title
Miss Florence C. Gale
Secretary to
$2,875
Junior Officer
Miss Dorothy Druckenbrod
Secretary to
3,048
Junior Officer
Mr. William Stenhouse
Honcash Collection
Runner
2,415"
Approved unanimously.
Letter to Mrs. Robert Matherson, Brooklyn, New
aS
reading
f011OWS:
"Chairman Eccles has asked me to reply to your letter of
February 2, 1946. We understand from your letter
tchat You have already been in communication with the Seties and Exchange Commission.
'The Board of Governors of the Federal Reserve Systern
Len
'is anxious to do everything within its power to aid
, economy of the country and also to avoid unnecessary
h'sses to investors. You will, of course, recognize,
ylaw. that it must operate within the authority granted
b°wever,
of "The Board has certain powers regarding the amount
c credit that may be used to finance transactions in serities. However, it has no authority with respect to
"e general practices of stock brokers or the kind of
uestion with which we understand you to be concerned.
n the circumstances, therefore, the Board is not in a
Position to help you.
ter 4.Chairman Eccles and the Board appreciate your inesu and wish to thank you for your comments. They
'
egret very much that they cannot be of assistance with
Your problem."
j
l
Approved unanimously, together with
a letter to the Securities and Exchange
Commission, Philadelphia, Pennsylvania,
205
2/12/46
-10-transmitting copies of the letter from Mrs.
Matherson and the above reply from the Board.
Thereupon the meeting adjourned.
Chairman.
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