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270 tem wa A meeting of the Board of Governors of the Federal Reserve Sysheld in Washington on Friday, February 19, 1943, at 11:00 a.m. PRESENT: Mr. Mr. Mr. Mr. Mr. Eccles, Chairman Ransom, Vice Chairman Szymczak McKee Evans Mr. Mr. MT. Mr. after Morrill, Secretary Bethea, Assistant Secretary Carpenter, Assistant Secretary Clayton, Assistant to the Chairman acuion stated with respect to each of the matters hereinThe4referred to was taken by the Board: The minutes of the meeting of the Board of Governors of the Fed°serve System held on February 18, 1943, were approved unanimously. Te legrams to Mr. Paddock, President of the Federal Reserve Bank "Bost °11, Messrs. Treiber and McCreedy, Secretaries of the Federal Reserve Batiks of New York and Philadelphia, respectively, Mr. McLarin, ?resident of the Federal Reserve Bank of Atlanta, and Messrs. Dillard 1 ¼e Se cretaries of the Federal Reserve Banks of Chicago and San P4Ileise°, res pectively, stating that the Board approves the establishrit without change by the Federal Reserve Bank of San Francisco on FebbY the Federal Reserve Bank of Atlanta on February 17, by the 444.1 Reserve Banks of New York, Philadelphia, Chicago, and San Franelee° on February toclay., 18, 1943, and by the Federal Reserve Bank of Boston Or the rates of discount and purchase in their existing schedules. Approved unanimously. 271 2/19/43 Memorandum dated February 18, 1943, from Mr. Morrill, recommendirlethat the Board accept the resignation of Mrs. Lillian C. Fisher as 4 kitc hen helper in the Secretaryt s Office, effective as of 8:45 a.m. c>ri Pebruary 18, 1943. The resignation was accepted. Letter to Mr. Koppang, First Vice President of the Federal Re3erve Bargc of Kansas City, reading as follows: a "In accordance with your request, the Board of Governors tflPr°ves the discontinuance of the position of 'Supervisor of orel A,ucliting Department' and the establishment of the position 4133i8tant Auditor' described in the revised page 15 of 2e Personnel Classification Plan of your Bank forwarded with tour letter of February 13, 1943." Approved unanimously. Or 13 Letter to Mr. Mercer, Vice President of the Federal Reserve Bank °"(14 reading as follows: poll "This refers to your letter of January 15, 1943, to Mr. Viaal' ir*cip relating to the eligibility of Anacostia Bank, tem. rigt°/12 D. C., for membership in the Federal Reserve SysBoard has been advised by Mr. C. B. Upham, Deputy 194T'roller of the Currency, in a letter dated February 16, bardc3 that it is the opinion of his office that a national 0 , 4 ?uld be chartered and authorized to begin business in ? less-;Ying district of Washington, D. C., with a capital of n $200,000 but not less than $100,000. itnpm _It -3 understood that Anacostia Bank has paid-up unBoa ; cled capital in the amount of $142,000. Accordingly, the reow; 18 0f the opinion that, in so far as technical capital kenVements are concerned, Anacostia Bank is eligible for ership,H Approved unanimously. 272 2/19/43 -3Letter to Mr. McRae, Chief Examiner at the Federal Reserve Bank Of '"8t°1-1.1 reading as follows: "This refers to your letter of January 27, 1943, and enClosed copies of correspondence and opinion of your Counsel relat. ing to the question whether section 32 of the Banking Act or 1933 Of StateIs applicable to Mr. Richard Saltonstall as a partner Street Research and Management Company, Boston, and as a director of Second National Bank, Boston. en "It is noted that Counsel for your Bank in the opinion doc. elosed with your letter expressed the view that the statute of-8 not apply to the relationship in question. On the basis the information submitted, the Board sees no reason to rfert with this opinion. of t,,You will, of course, readily understand that each case meritttlskind must depend upon its own facts and that a statewhi 21) general principles is not feasible. Among the facts %Ice:: undoubtedly influenced your Counsel, and which influe‘44.,'Ile Board in agreeing with his opinion, is the fact that k,ne State Street Research and Management Company is not C0-44-shing advice exclusively to the State Street Investment wnirPoration but is also furnishing it to two other companies, si , p 11 indicates that it is not, for practical purposes, a ccel-i:e entity with the Investment Corporation. Perhaps the sult1r1ct0 may be illustrated by saying that a different reporatial . ght be reached if it appeared that a management corder, 1°n, as a separate legal entity, was used merely in orenable former directors, officers or employees of an retanh s •tnlent company to serve the management corporation, but f°r all practical purposes their former relationships Lhe invest ment company." Approved unanimously. Teie gram to the Presidents of the Federal Reserve Banks of Nvel 11 Richmcmd, Atlanta, Chicago, St. Louis, Minneapolis, Dallas, : 414 8 F114neisc0, reading as follows: tiRete Ing Comm!! kaLee, to letter from Mr. Rounds, Chairman of Retirement dated December 21, 1942, and action of recent SAlcient5t rement Conference recommending payment to the cillire7i 13Y the Board and the Reserve Banks of $2,162,95 reeftitei.;,:° bring the annuity accumulation account to a 3 that per -' as of February 28, 1943, we have been advised 273 2/19/43 —4— "some —anks p have authorized payment of their respective Shares contingent as is appropriate on payment by all Banks nd the Board. Please wire whether your Bank expects to ake its payment and, if decision has not been reached, date Whenk such decision is anticipated. All Reserve Banks will r advjseä whether payment is to be made as soon as informa— Q-cn is available." I Approved unanimously. M morandum dated February 15, 1943, from Mr. Smead, Chief of the Ds vlsion of Bank Operations, and Mr. Wyatt, General Counsel, sub— tittin g the following letter to the Presidents of all the Federal Reserve 1184k8: 'hi now r Ts is to advise you that the Board of Governors has eceived an executed copy of the self—insurance agree— a revised and agreed upon by the temporary insurance its meeting in Washington on November 19-20, fe1942 rom each Federal Reserve Bank and, pursuant to pro— ti;fTs of Section XII, the agreement will become effec— ,nt ben , days after the date of this letter. lett -ror your information there is enclosed a copy of a c i er on this subject written today to Mr. Hugh Leach, cier haj an, Committee on Operations, Conference of Presi— of the Federal Reserve Banks." The letter to Mr. Leach read as follows: eon , he Board of Governors has now received an executed Pon c't the self—insurance agreement, as revised and agreed bY the temporary committeeon insurance at its meeting serv..asington on November 19-20, 1942, from each Federal Re— the - 'ank and, pursuant to the provisions of Section XII of t agreement, is this day notifying all Federal Reserve auto that effect. appro In notifying you on December 11, 1942, of the Board's t appr,!al of the insurance agreement, the Board stated that i staild!ed the agreement in the form submitted, with the under— lng that the Conference of Presidents would instruct the °t 4,..tlee Committee to consider without delay the extension 30, 194 overage, as suggested in the Board's letter of March dents ' 42, to Mr. Day, Chairman of the Conference of Presi— — Conf “ discussing this matter with the Presidents at their eren . 82vm cz ee in Washington on January 26, 1943, Governor w-Lple. eated and I stated that a review of past experience indi— early to the Board that the self—insurance agreement 274 2/19/43 —5— "should be extended promptly to practically all risks now o covered by purchased insurance, unless there are some legal aios thereto, and that, in the Board's opinion, presentlarge tified. expenditures for purchased insurance are not jus, °Ile Board understands the Committee appointed pursuant to Section VII of the insurance agreement will be inructed to study this matter promptly and to bring in a a P°rt as early in 1943 as practicable, which will contain ijeview of the problems involved in extending the self' in uraace agreement to cover risks now covered by purchased tisurance and recommendations with respect to the substitu°fl wi of self-insurance for ',Purchased insurance. The Board aPPreciate receiving a copy of the instructions given 'au the Insurance Committee on this subject." Approved unanimously, and Mr. Smead was aesignated as the Board's representative to attend the meetings of the Insipance Committee created by the agreement. Meraorandum dated February 18, 1943, from Mr. Carpenter, submittitto cs, for the reasons stated therein, the following telegram to Mr. " 8 -ford A iissistant Vice President of the Federal Reserve Bank of New York: 1:1 "Our conversations re foreign exchange files requested ther.!Presentative of Department of Justice. Board approves be Oanof the two packages of files in question to the wicrtment of Justice with the understanding that the files as be kept intact and that they will be returned as soon are°88ible in the same order and arrangement in which they DenatZleased. Please have authorized representative of the oris-ument receipt for the files. Also please advise this lee as soon as they are returned." Approved unanimously. Memorandum dated February 12, 1943, from Mr. Carpenter, stat41g) l'or the reasons set forth in the memorandum, that it was assumed that ist et with the approval of the Board to omit from the policy record : r1914.2 anY r eference to the Board's action on November 20, 1942, in '11Prellitlg the issuance by the Federal Reserve Banks of approximately 275 2/19/43 -6- 46 )000100U of Federal Reserve Bank notes. Approved unanimously. Memorandum dated February 18, 1943, from Mr. Wingfield, Assist— extG eral Attorney, recommending that there be published in the March isalle of the Federal Reserve 3ufletin statements in the form attached to th dum with respect to the followingsubjects: Loans to Executive Officers; and Foreign Funds Control. Approved unanimously. Thereupon the meeting adjourned. Secretary PPr Chairman.
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