The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
Minutes of actions taken by the Board of Governors of the
Federal Reserve System on Tuesday, February
3, 1953. The Board met
in the Board Room at 10:00 a.m.
PRESENT:
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Martin, Chairman
Szymczak
Evans
Vardaman
Mills
Robertson
Carpenter, Secretary
Sherman, Assistant Secretary
Thurston, Assistant to the Board
Leonard, Director, Division of
Bank Operations
Mr. Vest, General Counsel
Mr. Cherry, Legislative Counsel
Mr. Daniels, Chief, Reserve Bank Operations
Section, Division of Bank Operations
Mr.
Mr.
Mr.
Mr.
There was presented a request for proposed travel by S. H. Bass,
Chief of the Fiscal Section, Division of Administrative Services, to go
tcl Richmond, Virginia, on February 5, 193, in connection with the placeItteAt or records in the Board's storage cabinet at the Federal Reserve
13114k of Richmond under the defense planning program.
Approved unanimously.
Before this meeting there had been sent to the members of the
13°41'd a memorandum prepared in the Division of Bank Operations under date
Of
4alluary 30, 1953, regarding building programs at Federal Reserve Bank
breal
cues. The memorandum referred to the limitation contained in Sect1
04 10 of the Federal Reserve Act, stating that of the $10 million
2/3/53
-2-
authorized by Congress in 1947, about
$8 million had been approved by
the Board for specific projects and largely spent on "building proper"
costs, and that approximately $2 million had been earmarked for an adat the the Angeles Branch of the Federal Reserve Bank of San
l'rancisco.
The memorandum also stated that replies from the Federal
Reserve Banks to the Board's letter of June 27, 1952, listed proposed
blinding programs (either new buildings or major alterations) for sixteen of the twenty-four branches.
These proposals reflected the great
growth in activities at the Reserve Banks and branches and the fact
that most of the present buildings were constructed or purchased 25 to
30 years ago.
Rough estimates of the total cost of "building proper"
4't the proposed 16 projects indicated a total of approximately $18.2
including an allowance of $238 thousand for the Los Angeles
4ddition over and above the $2 million earmarked from the existing $10
authorization.
The memorandum went on to suggest the desirability
°r l'eqUesting that Congress authorize an additional $25 million of exIn the aggregate for "building proper" costs of branch constructic)
;and presented two possible approaches for obtaining the additional
legislation, namely, (1) raising the present authorization of $10 million
to $35 million and (2) obtaining legislation to spend $25 million subseto a specified date.
The memorandum also transmitted drafts covering
2/3/73
-3-
these two methods, as contained in a memorandum dated January 31, 1953,
from Mr. Vest.
Chairman Martin expressed the view that it would be desirable to
take necessary
steps toward getting legislation along the lines proposed
On the grounds that the building programs for the Federal Reserve Bank
bIllnches were in some cases urgent and that at the present time the Board
haa no authority for proceeding with additional needed projects.
The Chairman then called upon Mr. Cherry who stated that, on the
basis of conversations with staff members of the Senate and House Banking
eIld Currency Committees, he was inclined to believe that there would not
be much opposition to a proposal for additional authority along the lines
-16..gested although there might be proposals for placing restrictions on
the use of such authority, such as specifying the general design of build/11gs and time of construction in relation to unemployment.
Mr. Vest, in response to the Chairman's question, stated that
14 his judgment it would be preferable to request a simple amendment
to the present law which would amend the second proviso contained
in the
414th Paragraph of Section 10 of the Federal Reserve Act as amended
('S.C. Title 12, Section 522) by striking out "10 million" and inserting
14 lieu thereof whatever other figure was agreed upon.
There followed a discussion of the basis on which a $2
million
14erease in authority had been suggested, including consideration of
2/3/53
-4-
vhether a smaller amount might be adequate, of the procedure that might
be followed in bringing to the attention of the Chairmen of the Banking
and Currency Committees the views of the Board with respect to the need
for such legislation, and of the timing of construction of branch buildIf additional authority were granted for such expenditures.
During
the discussion, Governor Vardaman suggested that it might be desirable
for Chairman Martin to discuss the matter informally with the Chairmen
the Senate and House Banking and Currency Committees before any forrequest was submitted for such legislation.
At the conclusion of the discussion, it was agreed unanimously that
Mr. Leonard should assemble detailed
information along the lines discussed
with respect to the proposed building
programs for Chairman Martin's use in
discussing the matter with the Chairmen of the Senate and House Banking
and Currency Committees.
Messrs. Leonard and Daniels withdrew from the meeting at this
Poitt,
Mr. Vest stated that a letter dated February 2, 1953, had been
received from the Bureau of the Budget asking the Board to report on a
ProPosed bill which the Housing and Home Finance Agency had submitted
to the Bureau for clearance as to whether it was in accordance with the
14"cgram of the Administration.
Mr. Vest stated that the bill proposed
t° take obligations of the Federal Home Loan Banks eligible as security
238
2/3/53
°r advances made to member banks by the Federal Reserve Banks.
These
o
bligations, Mr. Vest said, were consolidated Federal Home Loan Bank
b°11d8 of which about $276 million were now outstanding.
He added that
at the
present time the Secretary of the Treasury had authority to purchase up to $1 billion of such bonds, that such authority apparently had
riot been used, and that the purpose of the proposal to make them eligible
ae collateral for advances to member banks appeared to be to increase
the attractiveness of the bonds as investments.
There ensued a general discussion during which some of the members of the Board indicated doubt as to the desirability of making such
b°11418 eligible as collateral for borrowing by member banks under Section
13 Of the Federal Reserve Act.
During the discussion, Chairman Martin
ellggested that Mr. Vest take the matter up with Mr. Riefler, Assistant
to the Chairman, and other interested members of the staff for the pur114°E3e of preparing a draft of letter to the Budget Bureau for considerati°11 by the Board.
This suggestion was approved
unanimously.
The meeting then adjourned.
During the day, the following addi-
ti"ea actions were taken by the Board, with all of the members present:
Minutes of actions taken by the Board of Governors of the Federal
4eerve System on February 2, 1953, were approved unanimously.
23(4
2/3/53
-6Memorandum dated February 3, 1953, from Mr. Allen, Director,
Division of
Personnel Administration, recommending the appointment
Of Frances Mader Frank as a Substitute Nurse in that Division, with
coMpensation at the rate of $13 per working day, effective February
3) 1953.
Approved unanimously.
Telegram to Mr. Shuford, Vice President and General Counsel,
Pederal Reserve Bank of Dallas, reading as follows:
"The Board interposes no objection to the production
Of the records listed in your letter of January 28, 1953,
and testimony with respect thereto by an appropriate officer
Of the Dallas Federal Reserve Bank in connection with matters
to be presented before the Grand Jury involving alleged wrongful cashing of certain United States savings bonds."
Approved unanimously.
@FedFRASER