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vT421.1 Minutes of actions taken by the Board of Governors of the Federal Reserve System on Monday, February 12, 1951. PRESENT: Mr. Mr. Mr. Mr. Mr. Mr. McCabe, Chairman Szymczak Evens Vardaman Norton Powell Mr. Carpenter, Secretary Mr. Sherman, Assistant Secretary Mr. Kenyon, Assistant Secretary Minuteu of actions taken by the Board of Governors of the Federal Reserve System on February 9, 19)1, were approved unanimously. Memorandum dated January 30, 19)1, from Mr. Young, Director of the Division of Research and Statistics, recommending an increase 14 the basic salary of Homer Jones, Chief of the Consumer Credit and l'in.,- - Jaces Section in that Division, from $101)00 to $1017)0 per annum, effective February 18, 19)1. Approved unanimously. MeLorandum dated February 9, 1951, from Mr. Horbett, Assistant tirector of the Division of Bank Operations, recommending increases in the _.c ba81 annual salaries of the following employees in that Divisicn, effectiv e February 181 191: 11 ikrae -6.3/1 41,1 (1 J. Collier P. Smith Durkan -1116all L. Trott ie Ttl Technical Asst. Analyst Analyvt Secretary to Mr. Horbett Approved unanimously. Salary Increase From To 77700 1I,725 4,8)0 4,07) 4,20o 3,950 4,075 322 2/12/51 -2Memorandum dated February 7, 1951, from Mr. Young, Director Of the Division of Research and Statistics, recommending that the resignation of Mrs. Laura Gilman Saunders an economist in that Division, be accepted to be effective, in accordance with her request, at the close of business February 5, 1951. Approved unanimously. Memorandum dated February 7, 1951, from Mr. Sloan, Assistant Director of the Division of Examinations, recohmending that the resiEnation of William R. Corkhum, an Assistant Federal Reserve Examiner in that Division, be accepted to be effective, in accordance with his request, at the close cf business February 12, 1951. Approved unanimously. Memorandum dated February 7, 1951, from Mr. Horbett, Assistant Director of the Division of Bank Operations, recommending that the tellTarary indefinite appointment of Miss Jean T. Powell a statistical elerk in that Division, be extended on a permanent basis, effective hbl ' IlarY 18, 1951, with an increase in salary from $2,650 to $2,730 " 13 annum, effective February 18, 1951. Approvedunanimously. Letter to Mr. Kimball, Vice President of the Federal Reserve 41/2k of New York, reading as follows: "Reference is made to your letter of January 31, 19)1 advising that, as a result of the salary increases 4)fp 1«,1, -3- 2/12/51 "approved by the Board of Governors, the 1951 head office budget for salaries of employees will be increased by $702,486 and for Retirement System contributions by $73,966. Appropriate notations with regard thereto are being mode in the Board's records." Approved unanimously. Letter to Mr. Gidney, President of the Federal Reserve Benk f Cleveland, reading as follows: "This will acknowledge your letter of January 25, 1951, requesting the Board of Governors to review informally increases which the directors recommend in the salaries of certain officers at. the Head Office and the Branches, effective January 1, 1951. "While it had been the intention of the Board to review these salaries in advance of the usual time, General Regulation No. 5 issued by the Wage Stabilization Board specifies that merit and/or length-ofservice increases may be made only at the time salaries would 'normally be reviewed'. Since it has been customary for the Board to consider the salaries of Officers in April of each year to be effective May 1, it appears that it will be necessary, unless subsequent regulations permit otherwise, for the Board to defer any consideration of the adjustments Proposed in your letter of January 25 until April." Approved unanimously. Letter to Mr. Earhart, President of the Federal Reserve 4a3 of Sal Fr(Incisco, reading as follows: "This will acknowledge your letter of January 23) 1951, requesting the Board of Governors to approve increases in your salary structures to be effective January 1, 1951. "Because of the recent action of the Government In controlling salaries, it will be necessary for the Board to defer consideration of the proposed structure ediustment. The regulations which have been issued by the Government) while permitting certain increases within !q'24 2/12/51 -4- "established salary scales, have not yet indicated under what circumstances adjustments will be permitted in salary structures. You may be assured that when the necessary clarification of the Government order is received, your request will be promptly presented to the Board of Governors for action." Approved unanimously. Letter prepared for the signature of the Chairman, to all Banks, to be dated February 13, 1951, reading as follows: "The fight to protect the buying power of the dollar is everybody's business and every individual in the Nation can do something about it. For that reason I unreservedly endorse the educational program recently mapped out by the Consumer Credit Committee of the American Bankers Association. I hope that you Will help to see that these very practical suggestions get the widespread attention which they deserve. "As a Nation we must come to grips with the Problem of preventing further increases in the cost of living. The greatest result of all will come if everyone of us will take the leadership in the Practice of thrift and economy in our personal lives, in our businesses and in Government at all levels. "This is no time to splurge, to borrow thoughtlessly, to be extravagant, to spend unnecessarily. Let us not underestimate the force of voluntary selfrestraint. We know that hoarding and extravagance can be contagious. So can restraint. "Inflation is not inevitable -- but the best efforts of all of us are necessary to keep its destructive forces in check." Approved unanimously. Letter to Honorable Melvin Price, House of Representatives, %181311112gton, D. C., reading as follows: "This is in reference to the letter which you referred to the Board on January 25, 1951, from Mr. 2/12/51 -5- "William A. Cochran concerning regulations on mortgage credit. "The first matter which Mr. Cochran raises military housing - is one which comes under the jurisdiction of the Housing and Home Finance Agency rather than the Board of Governors. We are, therefore, sending a copy of Mr. Cochran's letter to that agency for consideration. "The second point concerns the down payment requirements effected by this Board's Regulation X and the companion restrictions issued by the Housing and Home Finance Agency. The down payment requirements in the Board's regulation range from 10 per cent in the case of houses valued at less than $5,000 to 50 per cent in the case of houses valued at more than 045250. Thus it is only for the higher priced homes that down rayments must be 50 per cent. "The terms of the regulations were determined after intensive study by experts in the field of home financing. Not only did representatives of Governmental agencies concur in the terms, but prominent businessmen with a wide knowledge of home financing were consulted and their judgments considered. "It is the expectation of the Board and the Federal Housing authorities that the regulation will reduce the volume of housing construction from the record levels of 1950. It has been suggested that It would be desiral)le if the production of new housing units this year could be cut to about 850,000. Should the regulation have that effect, such a level of construction would still compare favorably with the high level of construction activity in other ,years since World War II. "Please do not hesitate to call upon us if 'we can be of further service." Approved unanimously. Memorandum dated February 12, 1951, from Mr. Hooff, Assistant C°11118e1, recommcinding that there be published in the law department "the February issue of the Federal Reserve Bulletin statements r 2/12/)1 -6- in the form attached to the memorandum with respect to the following: Trust Powers of National Banks Amendments to Regulation F Consumer Credit Automobile Appraisal Guides Loan Guarantees for Defense Production Amendment to Form of Guarantee Agreement Real Estate Credit Amended Regulation X Maximum Maturity Real Estate Brokers Approved unanimously. Secretary.
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