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1.38 Minutes of actions taken by the Board of Governors of the Pecl --. eu. 4c Reserve System on Monday, February 2, 1948. PRESENT: Mr. Mr. Mr. Mr. Mr. Szymczak, Chairman pro tem. Eccles Draper Vardaman Clayton Mr. Mr. Mr. Mr. Carpenter, Secretary Sherman, Assistant Secretary Morrill, Special Adviser Thurston, Assistant to the Board Minutes of actions taken by the Board of Governors of the Fed- erai Re serve System on January 30, 1948, were approved unanimously. Letter to Mr. Earhart, President of the Federal Reserve Bank C)r Yrancisco, reading as follows: "Reference is made to your letter of January 16, 1948, regard to an employee at one of the branches who is to i retire for disability and requesting the Board's con1144tion that dismissal payments are authorized in such Cases. ti "Because there is no reduction for age in the computa°11 of °f a disability retirement pension, the provisions f 905 do not include cases of involuntary separation or disability. Ina You are aware, of course, that supplemental benefits Y be granted under S-849 dated May 7, 1945 in cases of l-untary separation for disability and that any exceptionalre case which in the opinion of the Board of Directors merits a supplemental payment may be presented tile Board of Governors for consideration." Approved unanimously. ktat or Letter to Mr. Woolley, Vice President of the Federal Reserve Kansas City, reading as follows: swam "Reference is made to your letter of January 24, 1948, toa,A;tting certified copies of resolutions adopted by the of Directors of The Kinsley Bank, Kinsley, Kansas, 139 2/248 -2"sicrn-p • .-1,ying its intention to withdraw from membership in the Federal Reserve System and requesting waiver of the six months' notice usually required. In view of the Reserve Bank's favorable recommendation, the Board of Governors waives the usual requirement of six months? notice, as requested. Accordingly, upon surrender ( : b!! 'the Federal Reserve Bank stock issued to The Kinsley Bank, Kansas, the Federal Reserve Bank is authorized to i cancel such stock and make appropriate refund thereon. It b: a eumed that the bank wishes the termination of its mem,:"rehi•P to coincide with the acceptance for continuance of tnsurance by the F.D.I.C. If formal application for conmonthof insurance is made, the bank will have four is from the date of this letter to accomplish terminaon of its membership (F.R.L.S. #3548). ep"Please advise the Board of Governors when cancellation iS r 4.J•ective and refund is made. The Certificate of Membersued to the bank should also be obtained, if possible, forwarded to the Board. The State banking authorities ,,._°11-14 be advised promptly when the bank's withdrawal from TembershiP has been effected and given reasons therefor, lf desired.n 2c1 Approved unanimously. Letter to Mr. Wiltse, Vice President of the Federal Reserve Bank of .Y°rIcl reading as follows: tha "This refers to your letter of January 27, 1948 stating ilott due to a severe heart attack Mr. Bernon S. Prentice will tw be Permitted to attend to business matters for at least ero l!eeks and asking that the Board postpone further considsu on of Mr. Prentice's section 32 status until he recovers ently to be able to discuss the matter. gu "The Board of course will be glad to accede to such reci ! e ..t. It will be appreciated, however, if you will inquire ' to 60th situation in two or three weeks and advise the ard regarding the matter." Approved unanimously. . vizor Letter to Mr. Herbert V. Prochnow, Acting Secretary, Federal Ad- C°unoil, First National Bank of Chicago, Chicago 90, Illinois, 44,141.11 g as follows: 140 2/2/48 -3-"This letter is in response to yours of January 17, ,,/48/ requesting a list of the items which the Board of ernors may wish to have placed on the agenda for dis, 1 -on at the meeting of the Federal Advisory Council to Ir e eld in Washington on February 15-17, 1948. The Board uld like to have the Councilts views on the following questions: "1. It is estimated that after the first quarter of this calendar year, the Treasury will Pay into the market for current expenditures and debt redemption more than it will receive from taxes and sales of securities. This excess of PaYments, which may amount to as much as to.2 billion in the second quarter, together with a continued gold inflow, which may equal half a billion dollars a quarter, and purchases by the Federal Reserve Banks of additional securities from nonbank investors and from banks needing reserves, will add considerably to bank reserves. "In the opinion of the Council, what measures should be adopted to restrict the use of these additional reserves for further expansion of bank z Ita. Should Congress grant authority to raise existing reserve requirements (as distinguished from the special reserve plan) of member banks and to impose correspondingly higher reserve requirements on nonmember banks, with the understanding that the additional reserves required of nonmember banks will be held with the Federal Reserve Banks? The Federal Advisory Council joined in a similar recommendation on December 31, 1940. "b. Should the present policy with respect to support of the Government securities market be maintained regardless of further inflationary developments? "c. Or, should the Federal Open Market ComTittee sell securities in the market in an amount sufficient to absorb additional reserves which will come into the market after the first quarter and permit Government bonds to decline to whatever extent may be necessary? 141 2/2/48 —4— "2. Should discount rates be increased further? If so, how much? What should be the timing of such action? "3. What measures are being taken by banks to restrict credit under the A.B.A. voluntary program and what results are being obtained? "4. Are there any areas in which loans being made by banks involve greater credit risks than have been the case in the period since the war? 'The Board Room will be available for any meetings the Council and ,, may wish to have on Monday and Tuesday, February 16 Bo 441 including the joint meeting of the Council and the , lard on the 17th. The Blue Room will be set up for 15 Places for luncheon on Tuesday, February 17, and the material t'leiquested in the fourth paragraph of your letter will be at e Mayflower when you arrive on February 14. ar,_ If there is anything else we can do to assist in the ''''ngements for your meeting, please let me know." Approved unanimously. 4PP'°ved
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