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290 Minutes of actions taken by the Board of Governors of the Pecteral Reserve System on Wednesday, February 201 1952. PRESENT: Mr. Martin, Chairman Mr. Szymczak Mr. Evans Mr. Vardaman Mr. Powell Mr. Mills Mr. Robertson Mr. Carpenter, Secretary Mr. Sherman, Assistant Secretary Mr. Kenyon, Assistant Secretary Minutes of the meeting of the Board of Governors of the Federal Reserve System with the Federal Advisory Council held on February 19, 1952) were approved unanimously. Minutes of actions taken by the Board of Governors of the Pedern1 Reserve System on February 19, 1952, were approved unanimously. Memorandum dated February 14, 1952, from Mr. Marget, Di- l'ect", Division of International Finance, recommending that the l'ealignation of Eleanor W. McNeill, Clerk-Stenographer in that Divibe accepted to be effective, in accordance with her request, at the close of business February 220 1952. Approved unanimously. Letter to Mr. Hill, Vice President, Federal Reserve Bank of 1144 adelphia, reading as follows: "This will acknowledge receipt of your letter of February 15, 1952, requesting that the Board approve 2/20/52 -2- "the appointment of William L. Ensor as an Assistant Examiner for the Federal Reserve Bank of Philadelphia. "It is noted that Mr. Ensor is indebted to the First National Bank, Wilkes-Barre, Pennsylvania, secured by a mortgage on his home; that the indebtedness is being reduced regularly and that when the opportunity is afforded, he will endeavor to have the obligation reMoved from the member bank. "The Board approves the appointment of William L. Ensor as an Assistant Examiner for the Federal Reserve Bank of Philadelphia, with the understanding that he Will not be authorized to participate in any examinations of the First National Bank of Wilkes-Barre, Pennsylvania, until his indebtedness to the bank has been liquidated or otherwise eliminated." Approved unanimously. Telegram to Mr. Armistead, Vice President, Federal Reserve Ballk of Richmond, reading as follows: "Relet February 180 1952. Board approves designation of Jesse H. Ellsworth as special assistant eXaminer for the Federal Reserve Bank of Richmond." Approved unanimously. Letter to Mr. Slade, Vice President, Federal Reserve Bank of Francisco, reading as follows: "In accordance with the request contained in your letter of February 15, 1952, the Board approves the appointment of George W. Thomas as an Assistant Examiner for the Federal Reserve Bank of San Francisco." Approved unanimously. Ce3 2/20/52 —3— Letter to Mr. Slade, Vice President, Federal Reserve Bank of San Francisco, reading as follows: "In accordance with the request contained in your letter of February 151 1952, the Board approves the appointment of Coad C. Shaw as an Assistant Examiner for the Federal Reserve Bank of San Francisco." Approved unanimously. Letter to Mr. Strathy, Secretary, Federal Reserve Bank of Richmond, reading as folloms: "The Board of Governors approves the reappointments of Messrs. J. G. Holtzclaw, Overton D. Dennis, Ross Puette, Walker D. Stuart, and John L. dhitehurst, as members of the Industrial Advisory Committee for the Fifth Federal Reserve District to serve for terms of one year each, beginning March 1, 1952, in accordance with the action taken by the Board of Directors of the Federal Reserve Bank of Richmond, as reported in your letter of February 15, 1952." Approved unanimously. Letter to Mr. Gilbert, President, Federal Reserve Bank of °alias) reading as follows: "The Board of Governors approves the reappointments of Messrs. Charles R. Moore, Lawrence S. Pollock, Ira T. Moore, Jake L. Hamon, and Will K. Stripling as ,members of the Industrial Advisory Committee for the Eleventh Federal Reserve District to serve for terms c)f one year each, beginning March 1, 1952, in accordance with the action taken by the Executive Committee of the Board of Directors of the Federal Reserve Bank of Dallas, as reported in your letter of February 14, 1952." Approved unanimously. 293 2/20/52 -4Letter to Mr. A. Baker Nicholson, The National Metropolitan Bank Of Washington, Washington, D. C., reading as follows: turhis will acknowledge your letter of February 4 requesting information with reference to the Reserve SYstem and its plan of action in the event of an enemy attack for inclusion in a thesis you are preparing for ;itle Graduate School of Banking on the subject 'Atomic Warfare from the Banker's Point of View'. 'The Board of Governors has given attention to this problem and has approved plans to preserve the its" records of the Board and to provide for a ccontinuance of its essential functions in the event of a laster. As you will recognize, these plans involve certain elements of confidentiality. However, we may say that the program for preservation of records, which ill!'dY has been put into effect, includes the microof minutes and storage of the films and copies r important records at locations outside the city Of W ashington. Essential functions will be carried on a plan which provides for a relocation of operalint'der r,1°ns in the event of serious damage to the Board's 'illarters and a redelegation of duties assigned to certain mhere of the Board's staff. Arrangements also have been made for designated Reserve Bank personnel to assume, 4 necessary in the event of an emergency, duties in con' !tionwith certain service functions, including the uuerdistrict settlement operation and the currency 'unction. "The Federal Reserve Banks likewise have given consideration to this matter and have been coordinating their plans under the leadership of a senior officer of °Ile of the Banks who was appointed for that purpose by the Conference of Reserve Bank Presidents. To our knowledge, however, none of the Banks have released to date any statement with regard to the details of their programs." Z V oilutt t Approved unanimously. 294 2/20/52 -5Telegram to the Director General, The Bank of Mexico, Mexico CitY, reading as follows: "Our delegates Havana meeting will be glad to P4r ittPate in exploration of question economic inin general terms including especially relationship of this project to proposed Training Center foT' Economic and Financial Statistics under sponsor"-P Organization American States. Believe such 0AP1oration necessary before there can be consideration of details your plan." Approved unanimously. Letter to the Honorable Jack K. McFall, Assistant Secretary, DePartment of State, Washington, D. C., reading as follows: "This will acknowledge your letter of February 7, P52, relating to the matter of foreign decorations oestowed upon military personnel and civilian employees of the United States Government. We note that the DePartment of State has been seeking a solution which might enable action to be taken upon requests for Conconsent for acceptance of such decorations iaind that, to facilitate Congressional action, the Foreign fslations Committee has requested the Department to obtain 4r°131 each interested executive department and agency cer4ai11 statements of procedure, suggestions, and comments. i This Board has not adopted any regulations pertainang sPecifically to the subject although in the case of 2Y tender of a decoration by a foreign government we g°111d, of course, be guided by the provisions of the Act °f January 31, 1881. of "Reviews made pursuant to the President's memorandum st January 6, 19500 have disclosed only a very few inances in which members of the Board or members of the 8, 8:aff have been tendered any such decoration, and none 'nee the year 1947. In the circumstances we would not j P esume to express an opinion as to which of the alternalIrs Procedures suggested in the attachment to your letter 295 2/20/52 -6"would be most satisfactory. "We trust that the current discussions may result in a solution which will prove acceptable to the Congress and to the executive departments and agencies primarily concerned, and we would anticipate no difficulty in con1°1ning our practices to any principles which might be adopted as a result of these discussions." Approved unanimously. Letter to the Honorable Clyde Doyle, House of Representatives, IVashington, D. C., reading as follows: "In response to your letter of February 13, 1952, !nd Pursuant to the telephone conversation you had with aolr f George S. Sloan, Director of the Board's Division „„Examinations, there are enclosed charts and other ,,•Laxormation compiled by the Federal Deposit Insurance IrrPoration with respect to defalcations in insured 2:11ks• The Comptroller of the Currency and the Board V.I. Governors furnish information to the FDIC for purses of this compilation concerning defalcations, rePorted to the Attorney General of the United States, o ccurring in national and State member banks. As indi! ated on the charts, the FDIC considers this information .,,„fidential but authorization was requested and received 40r its release to you. "It is believed and sincerely hoped that the increasing number of disclosed defalcations is the result of !!!? effective means of detection both because of improved inods and availability of more supervisory and trained k personnel since the war years. As explained by telecurrent statistics are not maintained with respect 1.0 amounts of defalcations as reported because the first ePorted figures may expand as investigation proceeds or :ontract as recoveries are effected and it is felt that uch figures would be misleading. "Bank supervisors, bankers' organizations, and the ai negement of individual banks are constantly concerned Zft_h this problem with a view to detection and, most 'Yortantly, prevention. The monetary hazard, great as r r t 294; 2/20/52 —7— is, may be largely covered by fidelity insurance but the loss in terms of human suffering of the defaulters, relatives and other innocent persons is incalculable, n°t to mention the effect upon prestige of individual banks. "Current efforts to improve internal controls and audit procedures should have a most salutary effect." Approved unanimously. Memorandum dated February 182 19520 from the Office of the 81)licitor Qf the recommending that, in accordance with the recommendation Federal Reserve Bank of San Francisco, the matter of National Stoll"(Partnership), Salt Lake City, Utah, a registrant under Regu- 41413111ff, Consumer Credit, be referred to the Department of Justice t°1—the institution of such criminal proceedings as that Department keit deem appropriate. Approved unanimously. Mbmorandum dated February 19, 1952, from the Office of the 80licitor recommending that, in accordance with the recommendation l'ederal Reserve Bank of Kansas City, the matter of C 8c. E 3 tolter Great Bend, Kansas, a registrant under Regulation W2 Con- credit, be referred to the Department of Justice for the in1°4 of such criminal proceedings as that Department might deem 4PPr°Priate. Approved unanimously. 04_1": 14 2/20/52 -8Order for proceedings pursuant to Section 8(b) of Regulation W) Consumer Credit, prepared as a step in carrying out the la°4rd l8 action of February 11, 1952, relating to Kirschner Brothers, a Partnership, Philadelphia, Pennsylvania, reading as follows: "UNITED STATES OF AMERICA A+ BEFORE THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM a meeting of the Board of Governors of the Federal Reserve SYstam held at its offices in the City of Washington, D. C., on the 20th day of February, A. D., 1952. matter of JACOB KiRs ORDER FOR PROCEEDCHNER/ BENJAMIN KIRSCHNER, and IS ATI^wm xigua KIRSCHNER, d.b.a., INGS PURSUANT TO INER BROTHERS, a partnership, 8(h) OF SECTION 1.717 phii Aorth 54th Street, lvania.REGULATION IN) CONSUMER CREDIT Penns the The Federal Reserve Bank of Philadelphia has advised icirt!Tard of Governors of the Federal Reserve System that Jacob nes'enzler, Benjamin Kirschner and Isadore Kirschner, doing busia8 Kirschner Brothers, a partnership, hereinafter severally thatl, the Registrant, has filed a Registration Statement with ored2;ahk pursuant to Sec. 2(h) of Regulation W) consumer ot t."'I issued by the Board of Governors pursuant to Section 601 has he TIA --tense Production Act of 1950, as amended; and that Bank to shuransmitted information to the Board of Governors which tends Ilemil "that since September 18, 1950, the effective date of 1 tra 7 tati°/ and contrary to the provisions thereof, the Regismade instalment sales of television receiving sets, Re - r-Le refrigerators, and other articles listed in that ation in violation of the terms of that Regulation. II set 4. The information reported to the Board of Governors, as the i'i°rth in Section I hereof, tends, if true, to show that Septe:f,istrant, in instalment sales of listed articles since ' - er 18, 1950, has violated Regulation W: A.3(n Section a);not obtaining the down payment required by 298 2/20/52 -9lin JJ. BY not obtaining the down payment at or before the time of delivery of listed articles as required by Section 3(o); C. By accepting trade-ins instead of cash as part or the down payment on sales of listed articles, contrary I'? the provisions of Part 5 of the Supplement in force at the ' 11,1e of such sales. ! ‘ 3. By making and arranging instalment credit arising from 4. ""e sales of listed articles by a method of evasion and 04 : ollmvention of the requirements of the Regulation within the fonng of Section 6(h)(3), in that it secured instalment loans of '4te customers and applied the proceeds to the sale prices the listed articles in excess of the maximum allowable for such articles, and described said transactions as Cash sales. 1 E. av n-- failing to make, keep and preserve records , Rree4-evallt to establishing compliance with the requirements of „6u-Lationwl as required by sections 3(b), 6(c), and 8(a), ioularly as to dates of deliveries of listed articles and caaMtaining erroneous records with notations therein of ales which were in fact instalment sales. to E urle or more of the violations alleged in Paragraphs A mor_, inclusive, hereinabove occurred in connection with one or the sales of listed articles by the Registrant to the 4-Lowing persons: Leon M. Baylor Horace Allen Mack Arnold Moses Case John Edwards Asa Brown Sumpers Bradford William Howell Leon M. Brown Raymond Mayo Vince Camiolo Thomas Rodway Anthony Capona Alice Stewart Thomas F. Carr, Jr. Alison Yard Phillip Connor Jack Klazer Sam Dock Tillie & Russell Greco John John Johnson C. Marscher mia 0, other persons involving like violations. III pro,, The Board deems it necessary and appropriate that `'eedings be instituted to determine: t, A. Whether the statements set forth in Sections I and 'reor, are true; All V 2/20/52 -10. "B. Whether it is necessary or appropriate in the Public interest to suspend the license of the Registrant Pursuant to Section 8(h) of Regulation W. IV It is hereby ordered that a hearing for the purpose n taking evidence on the questions set forth in Section III , 1;eroof be held before the Board or before a trial examiner rsignated by the Board at a time and place to be fixed by he Board. (signed) S. R. Carpenter, Secretary." Approved unanimously.
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