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Minutes of actions taken by the Board of Governors of the Federal Reserve System on Friday, February 4, 1949. The Board met in the Special Library at 10:30 a.m. PRESENT: Mr. Mr. Mr. Mr. Eccles, Chairman pro tem. Szymczak Draper Clayton Carpenter, Secretary Sherman, Assistant Secretary Morrill, Special Adviser Thurston, Assistant to the Board Riefler, Assistant to the Chairman Thomas, Director of the Division of Research and Statistics Mr. Vest, General Counsel Mr. Nelson, Director of the Division of Personnel Administration Mr. Baumann, Assistant General Counsel Mr. Mr. Mr. Mr. Mr. Mr. There were presented telegrams to the Federal Reserve Banks "New York, Philadelphia, Atlanta, Chicago, St. Louis, and Kansas 01tY stating that the Board approves the establishment without change by the Federal Reserve Bank of St. Louis on February 2, and by the l'eeral Reserve Banks of New York, Philadelphia, Atlanta, Chicago, '4118as City on February 3 of the rates of discount and purchase 846 1M their existing schedules. Approved unanimously. Hz. Clayton stated that, purslinut to the understanding at the Illeeting on JanuAry 28, 1949, he had talked with Secretary of 41/°r Tobin and Mr. Tyson, Solicitor in the Department of Labor, colice riling the proposed labor legislation which would repeal the d.7)' 2/4/49 Taft-Hartley Act including the exemption of Federal Reserve Banks fl'om the National Labor Relations Act, that Secretary Tobin stated he would not oppose an amendment to the bill continuing the exempti°4 provided under the Taft-Hartley Act, but that he did not feel he could sponsor it. Mr. Clayton said he then talked with Senator '11c)mas, Chairman of the Senate Labor Committee, who referred him to Senator Murray, as the Chairman of the subcommittee handling the bill) that before he had an opportunity to talk with Senator Murray, he received a telephone call from Mr. Coburn, an assistant to Senatot. Murray, who stated that Senator Thomas had mentioned his (Mr. el84't".l e) call and that the subcommittee would like to know when the, zoard would send someone to testify before the subcommittee and that the time for appearance of a Board representative had been set tcYr 9:30 a.m. on Saturday, February 5, 1949. He added that a draft r statement had been prepared for presentation at that time, but that the question was whether it would be better to try to get a Statement in the legislative history of the new legislation that tliPederal Reserve Banks were exempt from the provisions of the 11"4°11a1 Labor Relations Act regardless of the specific exemption 14 the Taft-Hartley Act, or whether there should be an appearance before the etPtion be subcommittee for the purpose of requesting that an exIncluded in the new bill. It was Mr. Clayton's view that the latter course would be the safer one to pursue. Oecv-la -4r01_* 2/4/49 It was the consensus of the members of the Board present that since it was not at all clear that it would now be possible 4/ get a statement in the legislative history of the new bill exentPting the Federal Reserve Banks, a request for continuation of the exemption in the Taft-Hartley bill should be made, and that 141's Clayton should appear before the subcommittee in response to 118 request and present such parts of the statement that had been PrePared as he saw fit. It was also the consensus that before tes- Ping, Mr. Clayton should call Mr. Pace, Director of the Budget, " °II the telephone and inform him that he had been asked to present the tatter to the subcommittee, that he had discussed the proposed elalkotion with Secretary Wain who had stated that he would not opP°86 it, and that he wanted to inform Mr. Pace of the position the 11°4411/as taking and the procedure it was following in the matter. Upon motion by Mr. Clayton and by unanimous vote, he was authorized to follow the procedure set forth above. During the discussion, Mr. Young, Associate Director of the aion of Research and Statistics, entered the meeting. ' Mr. Nelson lett the meeting at this point. Mr. Riefler stated that he had informed Chairman McCabe by tia41511cme of a request received from the Senate Banking and Currency ;541ellittee under date of January 28, 1949 for a report on S.J. Res. 9 °Provide for the establishment of a National Monetary Commission, 2/4/49 -4- that Chairman McCabe had stated he would prefer to defer making a l ePlY until his return but that if it seemed desirable to make a ' 'ePlY before that time he would suggest that the response state l that it was the Board's understanding that the report of the Hoover C°1111111esion would have recommendations in this field, that the Board 4E4 not yet received a copy of that report, and that it would like to have an opportunity to study it before taking a position as to lilletaler a National Monetary Commission should be established. Upon motion by Mr. Clayton, it was agreed unanimously to defer making a report until after Chairman McCabe had returned. Mr. Clayton stated that staff representatives of the Housing "some Finance Agency had requested Mr. Young and members of the tart of the Division of Research and Statistics to furnish a memotaricittz discussing the question whether proposed local housing au4V bonds that would be issued to carry out the public housing ' iltc)grain recently recommended by the President should be tax exempt. .„ ""qed that in its letter to the Bureau of the Budget dated Jan4/ 1949, commenting upon the proposed legislation, the Board took a Position opposing tax-exemption for such bonds, and that a Illeria0 ein --um had been prepared in the Division of Research and Sta- tiai-i 'es, under date of January 19, 1949, discussing the problem and —j tIQ'eSR-1 —116 a conclusion along the same lines as the Board's letter. 2/4/49 -5Mr. Young stated that the staff representatives who called from the Housing and Home Finance Agency had asked for technical help so that they might be prepared to answer questions which might be raised at the time the legislation was considered by Congress 48 to why the bonds should not be tax exempt, that such inquiries were anticipated because there was some sentiment for making them tt4 exempt, and that they felt the effect upon the rate that local 11(144eing authorities would have to pay if the bonds were not tax eltemPt would be an important consideration in answering such re- Following a discussion of the matter, upon motion by Mr. Draper, Mr. Young was authorized unanimously to send the memorandum of January 19, 1949, to the staff of the Housing and Home Finance Agency with the statement that its transmission was authorized by the Board. At this point Messrs. Riefler, Thomas, Vest, Young, and XU withdrew and the action stated with respect to each of the 44tter5 hereinafter referred to was taken by the Board: Minutes of actions taken by the Board of Governors of the ral Reserve System on February 3, 1949, were approved unanimously. ' Memoranda dated February 4, 1949, from Mr. Carpenter, recomt4el/dirig the appointments of Miss Kathleen Jane O'Connor and Mrs. 1111th natson Osterhout Franta as file clerks in the Secretary's 211 2/4/49 Office, -6on a temporary basis for a period of six months, with basic salarY at the rate of $2,724 per annum each, effective as of the clates upon which they enter upon the performance of their duties eleter having passed the usual physical examination. Approved unanimously. Letter to Mr. Willett, First Vice President of the Federal Ikeserve Bank of Boston, reading as follows: "The job evaluation data requested by the Board's letter of November 9, 1948, which was submitted with Your letter of January 12, 1949, as well as the information relative to the present community wage rates, have been reviewed with much interest. "The Board of Governors approves, as requested, the payment of above-maximum salaries to the following employees at the rates indicated: Annual Name Salary George L. Campbell $3155 Josephine Fucarile 2400 Catherine Macheras 2400 1316 Mary M. Foley "It is understood that the salary approved for 141es Foley is based on her service of 62.5 percent of full-time service. "Since your latest salary survey indicates that the Fart -time employees in your Cafeteria are receivng salaries which, in comparison with the local marare quite favorable, the Board of Governors feels wlat to further increase these salaries above the grade maximums is not desirable at this time." Approved unanimously. Letter to Mr. Weigel, Assistant Vice President of the Federal serve „„ .*'ank of St. Louis, reading as follows: 212 2/4/49 _7_ "Reference is made to your letter of January 21, 1949, requesting approval of a new scale of minimum Slid. maximum salaries for the respective grades under the Job Classification and Salary Administration Plan at the Federal Reserve Bank of St. Louis and its Branches. "The Board of Governors approves, effective February 1, 1949, the following minimum and maximum salaries for the respective grades at the Federal Reserve Bank of St. Louis and the Little Rock, Louisville and Memphis Branches: "Grade Minimum Salary Maximum Salary 1 $1,320 $1,800 2 1,440 1,920 1,620 2,160 3 4 1,800 2,460 1,980 2,700 5 6 2,220 3,000 2,460 3,300 7 8 2,760 3,700 3,060 9 41100 lo 3,360 4,600 11 3,700 5,000 12 4,1co 5,500 13 4,600 6,200 14 5,300 7,200 15 6,loo 8,200 16 7,200 9,700 "The Board approves the payment of salaries to emV'°Yees, other than officers, within the limits specified 'or the grades in which the positions of the respective emPloyeeo are classified. It is assumed that all emP1°Yees whose salaries are below the minimum of their t!edes as a result of the structure increase will be _aought within the appropriate range as soon as practicable and not later than April 30, 1949." Approved unanimously. Of pail Letter to Mr. Gilbert, President of the Federal Reserve Bank as, reading as follows: "Reference is made to your letters of January 18 January 28, 1949, requesting approval of two new 21_3 2/4/49 -8- "Scales of minimum and maximum salaries for the Dallas district; one for the Head Office, El Paso and San Antonio Branches, and another for the Houston Branch. "The Board of Governors approves, effective January 13, 1949, the following minimum and maximum salaries for the respective grades at the Head Office and Branches: "Head Office, El Paso and San Antonio Branches Maximum Salary Minimum Salary Grade $1,860 $1,380 1 2,040 1,500 2 2,220 1,620 3 2,340 4 1,740 1,86o 2,520 5 2,760 6 2,040 3,000 2,220 7 8 2,460 3,300 3,700 2,760 9 4,100 10 3,060 4,600 11 3,420 12 5,100 3,800 13 5,700 4,200 14 6,700 5,000 15 5,900 7,900 16 8,900 6,600 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Houston Branch $1,440 1,560 1,740 11800 1,980 2,100 2,340 2,580 2,880 3,180 3,540 4,000 4,400 5,300 6,200 6,900 $1,920 2,100 2,340 2,400 2,640 2,820 3,120 3,480 3,900 4,300 4,800 5,400 5,900 Loa) 8,300 9,400 2/4/49 -9- "The Board approves the payment of salaries to employees, other than officers, within the limits specified for the grades in which the positions of the respective employees are classified. It is assumed that all employees whose salaries are below the minimum of these grades as a result of the structure increases will be brought within the appropriate range eS soon as practicable and not later than April 30, 1949. "Upon the basis of the community salary surveys it appears that the new wage structure will be under the community market at Houston and El Paso. It is believed that this situation should be watched closely and should not be continued if the community markets remain at their present level." Approved unanimously. Letter to Mr. John R. Reeves, Attorney, 7240 Wisconsin Avenue, hthesda, Maryland, reading as follows: "This is with further reference to your letter of January 10, 1949, regarding Regulation W, which we have previously acknowledged. "You ask, in effect, whether certain proposed transactions, which you describe as follows, would be subject to the provisions of Regulation W: 'I have a client who desires to rent Bendix washers under lease agreements which will require the lessee to continue the lease in effect for at least four weeks and will require that this rental be paid in advance. At any time after four weeks the lessee will be permitted to terminate the rental agreement. My client also proposed to publish a standard list price at which used washing machines one year or more old will be sold. There Will be no option given to the lessee to purchase the equipment but he will be in exactly the same Position as any other prospective purchaser desiring to buy used washing machines at the standard published list price. There will also be no requirement that the lessee retain the equipment for longer than four weeks. Should the lessee at any time desire to purchase the equipment then under the lease the purchase price will be subject 21 C 2/4/49 -10- "to agreement between the parties at the time the lessee indicates his desire to purchase the equipment.' "The answer to your question necessarily depends on all the circumstances of the case, including not only the provisions of any written agreement between the Parties but also any other facts that would throw light on the situation. There is enclosed a copy of an interpretation published at P. 1471 of the December 1948 Federal Reserve Bulletin which illustrates one type of rental-purchase arrangement which is subject to the regulation. Your client's proposed transactions would seem to have some similarity to those in the December ruling Ana, although we cnnflot be certain from the facts that you have submitted, there would seem to be a probability that your client's proposed transactions would be subject to the regulation. "As indicated on the inside of the front cover of the enclosed copy of Regulation W, the regulation is administered on a decentralized basis through the Federal Reserve BeJaks. It is believed that questions can usually be answered more expeditiously if they are submitted through the Federal Reserve Bank of the district, which in your Zsse is the Federal Reserve Bank of Richmond, Richmond, v irginial and if you should have further questions with tesPect to the regulation we would suggest that they be Submitted to that Bei* rather than to the Board." Approved unanimously. Approved: Chairman pro tem.
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